This Raleigh tech firm could win big if working from home is here to stay
Date Published:The pandemic has boosted the numbers at a growing publicly-traded Raleigh company – and its executives are predicting the “new normal” could increase the need for the communications software it’s delivering.
Raleigh-based Bandwidth (Nasdaq: BAND), which recently announced plans to bring 1,165 high-paying jobs to Raleigh as part of a new headquarters expansion, provides 911, voice calls and text messaging services. And CEO David Morken said Friday on an earnings call that, with the pandemic, need for the services the company provides has increased.
“If you dial into most video conferences these days, and use your phone for audio, you’re likely using a Bandwidth number, and the call is likely delivered on our network,” he said.
Morken said many remote workers are dialing in so they can walk out from behind the screen of their video conference.
“So by dialing in and starting your video, we’re seeing users go ahead and use the video on the screen … but then dial in with their mobile phone and then be able to walk away and still be on the conference whenever they want,” Morken said. “So that’s kind of a new aggressive power user use case that’s favorable for us.”
But it remains to be seen how permanent the changes in customer behavior might be beyond the pandemic.
“Certainly, if behaviors change on a more permanent basis, that would be favorable,” he said. “But we’re looking at what’s in front of us and projecting.”
“I don’t think there’s going back to a normal or what there was pre-pandemic,” added CFO Jeff Hoffman. “Work from home, working remotely, to some degree, is around for, I think, the foreseeable future. And that’s, I think, multiple years, if not permanent. I think we’re trying to find where that new level is, but I think we’re confident it’s higher than what the sort of old normal level would be.”
Bandwidth reported total revenue for the quarter at $76.8 million, driven by a 40 percent year-over-year increase in revenue from its Communication Platform as a Service, which totaled $67.1 million.
Increased usage driven by remote workers during Covid-19 also contributed to the growth, executives said. Hoffman estimated Covid-19 revenue impact in the second quarter was between $4.5 million and $5 million.
The firm also made several key customer wins, Morken said. They include a “five-year, multimillion-dollar agreement to provide CPaaS services to a Fortune 100 company that is one of the nation’s 10 largest banks and one of the largest users of Visa and Mastercard credit cards in the U.S.,” he said.
Bandwidth (Nasdaq: BAND) shares opened trading Monday up to $149.70, but still down from the 52-week high of $156.99.
Original Article Source: Triangle Business Journal