Bandwidth Inc

Bandwidth reported second-quarter revenues of $219.9 million, up 22.2% year on year, exceeding analysts' expectations by 1.4%, and posted the highest guidance raise among the 12 software development stocks tracked. The company, which provides cloud-based communications software and APIs for customers including Microsoft, Google, and Zoom, saw revenue and EBITDA guidance for next quarter beat analysts' expectations, and its stock is up 3.8% since reporting, trading at $54.24. Across the group, revenues beat consensus estimates by 3.2% and next quarter's revenue guidance came in 1.8% above, with share prices up 11% on average since the latest results. Fastly delivered the best quarter in the group with revenues of $183.3 million, up 23.3% year on year and 5.3% above expectations, while Akamai posted the weakest performance, with revenues of $1.1 billion, up 5.4% year on year and 0.6% above estimates. Twilio reported revenues of $1.50 billion, up 22% year on year and 5% above expectations, and PagerDuty reported revenues of $124.4 million, flat year on year but 0.9% above expectations, adding 126 customers to reach a total of 15,506.

Bandwidth Inc. announced an expansion of its collaboration with Salesforce as the first certified carrier to support the global rollout of Salesforce's native Contact Center. Following the North American debut of Salesforce's AI-powered, CRM-native contact center in March, the expanded collaboration will extend availability to more than 25 countries across Europe, the U.K., Australia and New Zealand this fall, with additional markets to follow. Enterprises will connect to the contact center through a bring-your-own-carrier model using Maestro, Bandwidth's platform for intelligent, global communications orchestration, which operates within Salesforce's governed workflows. Salesforce Senior Vice President of Contact Center Gautam Vasudev cited strong customer momentum since the launch, while Bandwidth Senior Vice President and General Manager of Enterprise Ankush Gangwani said the company's Communications Cloud and Maestro make it easier for organizations to rapidly deploy the native Contact Center. Bandwidth is exhibiting this week at Dreamforce 2026 in San Francisco at booth 118.

Bandwidth reported a strong second quarter with revenue growth led by voice and programmable messaging, new million-dollar enterprise deals, and an expanded AI-driven communications platform, including an exclusive infrastructure partnership with Salesforce. The company raised its full-year 2026 revenue and adjusted EBITDA outlook, underscoring the growing importance of AI-enabled communications workloads and large enterprise migrations. The Salesforce Agentforce partnership directly ties Bandwidth's AI infrastructure to a major CRM and contact center ecosystem, potentially reinforcing AI as the primary growth engine and deepening enterprise stickiness. However, investors remain concerned about customer concentration and the risk that large customers slow migrations or reprice contracts. Bandwidth's narrative projects $1.1 billion revenue and $72.9 million earnings by 2029, requiring 11.2% yearly revenue growth and a $70.6 million earnings increase from $2.3 million today, with a fair value estimate of $67.25, representing a 37% upside to its current price.

Shares of enterprise software and SaaS companies, including Appian, Atlassian, Bandwidth, C3.ai, and Dynatrace, soared in afternoon trading after quarterly earnings and upbeat commentary signaled that artificial intelligence is driving growth rather than threatening legacy business models. The sector-wide rally was fueled by strong results from Salesforce, CrowdStrike, and Okta, with Salesforce's AI-powered Agentforce reaching $1.5 billion in annual recurring revenue and Slackbot surpassing 1 million active users in five months. CrowdStrike's CEO attributed momentum to AI expanding the attack surface, while Okta reported that AI-focused offerings drove about 30% of new bookings and increased contract values by roughly 40%. Among the movers, Appian jumped 8%, Atlassian rose 9.1%, Bandwidth gained 10.1%, C3.ai climbed 7%, and Dynatrace advanced 4.3%, with Salesforce surging 20%.

Bandwidth Inc. raised its full-year 2026 revenue guidance to $900-$910 million from $880-$900 million, reflecting expected contributions from recent enterprise wins and AI-driven communications. The company reported second-quarter revenue of $220 million, up 22% year over year, with Adjusted EBITDA rising 27% to $28 million. All five million-dollar-plus customer wins in the quarter included Maestro or AI services, and Bandwidth was selected as Salesforce's exclusive critical infrastructure partner for voice and messaging within Agentforce Contact Center. The raised outlook also includes higher Adjusted EBITDA guidance of $123-$125 million and non-GAAP EPS of $1.71-$1.79. Bandwidth's non-GAAP gross margin improved 100 basis points to 59.4%, and free cash flow was $24 million.

Bandwidth and Deutsche Telekom lead Seeking Alpha's quantitative rankings for communication services stocks as the sector prepares to report second-quarter earnings. Bandwidth earned the highest quant score of 4.99 out of 5 with a Strong Buy rating, driven by strong momentum and revision factors, and its stock has surged over 340% year-to-date. Deutsche Telekom followed with a score of 4.76 and a Strong Buy rating, supported by top marks in profitability and revisions. The broader communication services sector declined nearly 4% in the second quarter, underperforming the S&P 500's 14% gain, and is expected to post 7.1% year-over-year earnings growth on a 13.7% revenue increase, according to FactSet. Among the 105 companies in the sector with market capitalizations above $2 billion, 21 are rated Buy or higher, 72 are Neutral, and 11 are Sell or worse, with Liberty Broadband, Trade Desk, and Kuaishou Technology among the lowest-rated names.

Bandwidth shares have soared 386.6% over the past year, significantly outpacing the industry's 144% growth. The company provides cloud-based communications infrastructure for banks, fintech firms, mortgage lenders, and insurers, supporting workflows like customer authentication, fraud prevention, and contact center operations. Bandwidth trades at a forward price-to-sales ratio of 2.8, well below the industry average of 9.91. Earnings estimates for 2026 have remained static at $1.79 over the past 60 days, while those for 2027 have increased 1.5% to $2.02. The stock currently holds a Zacks Rank #1, or Strong Buy.

Bandwidth stock climbed 14% this week after B. Riley analyst Erik Suppiger raised his price target to $85 per share from $55, maintaining a buy rating. The analyst cited advances in artificial intelligence voice technology that should boost demand for Bandwidth's network infrastructure, and he raised his full-year 2027 estimates accordingly. Bandwidth's first-quarter revenue grew 20% year-over-year to $209 million, with non-GAAP net income up 18%.

Small and mid-cap AI stocks have significantly outperformed large caps in the first half of 2026, with the Russell 2000 and S&P 600 up 20% and 21% respectively, compared to an 8.5% gain for the S&P 500. Five stocks that have more than doubled this year and hold favorable Zacks Ranks are Bandwidth, Arteris, Penguin Solutions, A10 Networks, and Veeco Instruments. Bandwidth, a Zacks Rank #1, operates a conversational AI platform and expects 18.3% revenue growth this year. Arteris, a Zacks Rank #2, provides system IP for AI and automotive chips and projects 34.4% revenue growth. Penguin Solutions, also a Zacks Rank #1, offers AI infrastructure solutions and anticipates 25% revenue growth next year. A10 Networks, a Zacks Rank #2, delivers application networking for AI data centers and expects 11.9% revenue growth. Veeco Instruments, a Zacks Rank #1, makes thin film process equipment for AI hardware and forecasts 20.2% revenue growth.

Shares of MongoDB, Bandwidth, and SentinelOne rose sharply in afternoon trading after the United States and Iran agreed to halt military exchanges, easing fears of a wider Middle East conflict. MongoDB jumped 5.9%, Bandwidth gained 5.6%, and SentinelOne climbed 6.6%. The de-escalation lowered oil prices and reduced inflation concerns, diminishing the likelihood of a Federal Reserve rate hike later in the year. This benefited long-duration growth software stocks, which are highly sensitive to interest rate expectations. The rally was also supported by a chip-to-software rotation triggered by a June 25 report that OpenAI may delay its IPO, reducing fears that AI labs would quickly disrupt incumbent SaaS companies.