A focus on profitability is how Raleigh-based Bandwidth will get through the downturn that could be coming.
That’s according to CEO David Morken, who told analysts this week that the team’s “enduring commitment to operating bottom line discipline” would serve it well in the times ahead.
Bandwidth (Nasdaq: BAND) was largely bootstrapped until going public in 2017 – and will be relying on its lean roots.
“Our leaders are focused on cost management and effective investment … directing resources to initiatives that are most certain to reinforce our success,” he said.
The company is currently in the process of building a huge headquarters campus along Edwards Mill Road in Raleigh. The project was announced in April 2020 – at the time the company said it was part of a $100 million expansion that included creating 1,000 new jobs.
This week, Morken told analysts that in the current economic environment, “there is no such thing as business-as-usual, and macroeconomic factors are likely to impact all of us.”
“The only question is magnitude,” he said, noting that his firm, which develops software to power communication tools for enterprise customers, is well positioned. Not only does Bandwidth work with customers in key industries such as telehealth, the functions its software powers “are mandatory rather than discretionary," Morken said.
“History has shown that these are not just less susceptible to cost-saving measures but are actually essential to achieve them,” Morken said.
Morken also believes that as enterprises cut costs they may embrace the cloud communication solutions Bandwidth provides.
“Businesses everywhere must now do more with less and we enable them to do just that,” he said.
The fact that Bandwidth's larger enterprise customer base is made up of “well-funded, established businesses” is also a factor in its favor, Morken said.
Bandwidth reported $136 million in revenue for its latest quarter as opposed to $121 million during the same time period last year. The company has more than 3,300 customers.
The company's stock was trading above $16 Friday afternoon. The stock price is down 78 percent since the start of the year. It's 52-week high is $130.
