Communications platform-as-a-service company Bandwidth (NASDAQ: BAND) will be announcing earnings results tomorrow before market open. Here's what to look for.

Bandwidth beat analysts' revenue expectations by 7.4% last quarter, reporting revenues of $165.4 million, up 5.4% year on year. It was an exceptional quarter for the company, with a significant improvement in its net revenue retention rate and optimistic revenue guidance for the next quarter.

Is Bandwidth a buy or sell going into earnings? Read our full analysis here, it's free.

This quarter, analysts are expecting Bandwidth's revenue to grow 19.7% year on year to $165.1 million, improving from the 4.9% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.20 per share.

The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Bandwidth has a history of exceeding Wall Street's expectations, beating revenue estimates every single time over the past two years by 4.4% on average.

Looking at Bandwidth's peers in the software development segment, some have already reported their Q1 results, giving us a hint as to what we can expect. Cloudflare delivered year-on-year revenue growth of 30.5%, beating analysts' expectations by 1.4%, and F5 reported a revenue decline of 3.1%, in line with consensus estimates. Cloudflare traded down 16.4% following the results while F5 was also down 9.3%.

Read our full analysis of Cloudflare's results here and F5's results here.

Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 thanks to cooling inflation. The start of 2024 has been a different story as mixed signals have led to market volatility, and while some of the software development stocks have fared somewhat better, they have not been spared, with share prices down 3.1% on average over the last month. Bandwidth is up 11.3% during the same time and is heading into earnings with an average analyst price target of $23.7 (compared to the current share price of $19.7).

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