Q2 Earnings Highs And Lows: Bandwidth (NASDAQ:BAND) Vs The Rest Of The Software Development Stocks

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Q2 Earnings Highs And Lows: Bandwidth (NASDAQ:BAND) Vs The Rest Of The Software Development Stocks

Let’s dig into the relative performance of Bandwidth (NASDAQ:BAND) and its peers as we unravel the now-completed Q2 software development earnings season.

As legendary VC investor Marc Andreessen says, "Software is eating the world", and it touches virtually every industry. That drives increasing demand for tools helping software developers do their jobs, whether it be monitoring critical cloud infrastructure, integrating audio and video functionality, or ensuring smooth content streaming.

The 11 software development stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 1.6% while next quarter’s revenue guidance was in line.

The Fed cut its policy rate by 50bps (half a percent) in September 2024, the first in roughly four years. This marks the end of its most pointed inflation-busting campaign since the 1980s. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be assessing whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting the economy or a bit too late for a macro that has already cooled too much.

Thankfully, software development stocks have been resilient with share prices up 9.1% on average since the latest earnings results.

Bandwidth (NASDAQ:BAND)

Started in 1999 by David Morken who was later joined by Henry Kaestner as co-founder in 2001, Bandwidth (NASDAQ:BAND) provides thousands of customers with a software platform that uses its own global network to provide phone numbers, voice, and text connectivity.

Bandwidth reported revenues of $173.6 million, up 19% year on year. This print was in line with analysts’ expectations, and overall, it was a strong quarter for the company with an impressive beat of analysts’ EBITDA estimates and a significant improvement in its net revenue retention rate.

"We're pleased to report a very strong first half, making significant progress toward our plan for 2024. In the second quarter, we delivered solid revenue growth while accelerating profitability and cash flow," said David Morken, CEO of Bandwidth.

Bandwidth Total Revenue
Bandwidth Total Revenue

Unsurprisingly, the stock is down 21.8% since reporting and currently trades at $17.80.

Is now the time to buy Bandwidth? Access our full analysis of the earnings results here, it’s free.

Best Q2: GitLab (NASDAQ:GTLB)

Founded as an open-source project in 2011, GitLab (NASDAQ:GTLB) is a leading software development tools platform.

GitLab reported revenues of $182.6 million, up 30.8% year on year, outperforming analysts’ expectations by 3.1%. The business had a very strong quarter with an impressive beat of analysts’ billings estimates and optimistic earnings guidance for the next quarter.

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