“We exceeded expectations on all of the metrics we provided guidance on during last quarter’s call and during the quarter in which we became a public company our team remained focused on our core mission to serve customers.” – Bandwidth CEO David Morken

RALEIGH – Communications provider Bandwidth (Nasdaq: BAND) topped analysts’ expectations for revenue in the fourth quarter for 2017 and its forecast for 2018 also topped what was expected, leading CEO David Morken to praise the results. He also disclosed a $4 million settlement in a dispute with Verizon over services and noted that the Raleigh company continues to add employees.

“We entered into a settlement agreement to resolve our ongoing dispute and litigation with Verizon,” Morken told Wall Street analysts in a conference call to discuss Bandwidth’s earnings on Wednesday. He labeled the settlement as “extremely favorable.”

“Under the settlement agreement Verizon made a $4.4 million lump sum payment to Banwidth in February and we issued Verizon bill credits with respect to amounts previously billed. The settlement also specifies certain terms for our billings to Verizon prospectively. The settlement agreement also results Verizon’s counter claims against Bandwidth.”

Morken also noted the firm has continued to add employees, having boosted employment by 12 percent over the last six months to 378 as of Dec. 31.

“[S]caling our sales headcount” is a top priority for 2018, he noted later in the call.

“Very pleased”

Morken also hailed the financial report.

“We were very pleased with our fourth quarter results, which capped off a strong finish to the year,” Morken said in a statement when Bandwidth disclosed its latest financials after the markets closed.

“During the quarter, the better-than-expected results were driven by ongoing enterprise demand to embed voice, messaging and 911 into software applications.   We remain well positioned to capitalize on the growing market opportunity during 2018 and beyond given our unique combination of our API platform and owned nationwide IP voice network, as well as our significantly strengthened balance sheet to execute our growth strategy.”

Bandwidth, which went public last fall, generated $42.5 million in revenue. It had been expected to post revenue of $41.61 million, according to Zacks.

The company also forecast revenue of between $188 million and $190 million for the current fiscal year. Zacks had forecast revenues between $180 million and some $182 million.

Total revenue is expected to be in the range of $188.0 million to $190.0 million.

Revenue increased year-over-year by nearly $4 million, led by CPaaS [Communications Platform as a Service] at $35 million, an increase of 16 percent, Bandwidth reported.

For the quarter, Bandwidth posted a loss of $600,000, citing changes in federal tax law.

Morken bullish to analysts

In the call with analysts, Morken took a very bullish view.

“We exceeded expectations on all of the metrics we provided guidance on during last quarter’s call and during the quarter in which we became a public company our team remained focused on our core mission to serve customers,” Morken said, according to business news site SeekingAlpha.

“Looking forward we’re excited about a great year ahead in 2018 which is supported by our strong outlook. CPaaS services are empowering new and current enterprise customers to launch and grow voiced and text experiences for consumers and businesses. Our comprehensive software provided communications platform integrates seamlessly with one of the largest IP voice networks in the U.S. that we build and operate. Our software APIs allow enterprises to rapidly migrate launch and scale advanced voice and messaging capabilities within their applications and devices.

“We are the only platform that provides complete communication solutions with integrated 911 services by owning and operating our software platform, IP voice network and 911 services we are able to offer complete solutions, real time quality monitoring, dedicated operating teams and the overall superior customer experiences that enterprises demand. Our combination of unique and valuable assets, amazing team and dynamic culture drive successful execution for all our customers.”

Bandwidth shares closed at $24.09 on Wednesday, up 18 cents and close to its post-IPO high of $24.99.