BandwidthBAND -0.80%70 Gross Margin % is 37.32% as of Mar. 2026, which is 15% below its 10-year median of 43.77. GuruFocus rates BAND with a GF Score™ of 70/100 and a GF Value™ of $15.94 (Significantly Overvalued). The stock has 5 warning signs investors should review. Among 2,683 Software companies, Bandwidth ranks worse than 52.74% on this metric.
Gross Margin % is calculated as gross profit divided by its revenue. Bandwidth's Gross Profit for the
three
months ended in Mar. 2026 was $77.9 Mil. Bandwidth's Revenue for the
three
months ended in Mar. 2026 was $208.8 Mil. Therefore, Bandwidth's Gross Margin % for the quarter that ended in Mar. 2026 was 37.32%.
Warning Sign:
Bandwidth Inc gross margin has been in long-term decline. The average rate of decline per year is -3.7%.
The historical rank and industry rank for Bandwidth's Gross Margin % or its related term are showing as below:
BAND'
s Gross Margin % Range Over the Past 10 Years
Min: 37.4 Med: 43.77 Max: 47.02
Current: 38.24
During the past 11 years, the highestGross Margin % of Bandwidth was 47.02%. The lowest was 37.40%. And the median was 43.77%.
BAND's Gross Margin % is ranked worse than 52.74% of 2683
companies
in the Software industry
Industry Median: 40.45
vs BAND: 38.24
Bandwidth had a gross margin of 37.32% for the quarter that ended in Mar. 2026 => Competition eroding margins
The 5-Year average Growth Rate of Gross Margin for Bandwidth was -3.70% per year.
Bandwidth (NAS:BAND) Gross Margin % Explanation
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
Bandwidth had a gross margin of 37.32% for the quarter that ended in Mar. 2026 => Competition eroding margins
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Bandwidth Gross Margin % Related Terms
Bandwidth Gross Margin % Historical Data
* Premium members only.
The historical data trend for Bandwidth's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
BAND vs ATEN, FLYW, RAMP: Gross Margin % Comparison
For the Software - Infrastructure subindustry, Bandwidth's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Bandwidth Gross Margin % vs Software Industry
For the Software industry and Technology sector, Bandwidth's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Bandwidth's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Bandwidth (BAND) has a Gross Margin % of 37.32% as of Mar. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on Bandwidth and its competitors. This is 15% below median its historical median of 43.77. Over the past decade, Bandwidth's Gross Margin % has ranged from 37.40 to 47.02. According to the industry distribution chart, Bandwidth ranks #1415 out of 2683 companies in the Software industry, placing it in the top 52.7%.
Is Bandwidth's Gross Margin % too high?
Bandwidth's current Gross Margin % of 37.32% is 15% below median its 10-year median of 43.77. Over the past 10 years, this metric has ranged from a low of 37.40 to a high of 47.02. The Software industry median Gross Margin % is 40.45. Bandwidth's value of 37.32% is 7.7% below this industry median. Based on the distribution chart, Bandwidth ranks #1415 out of 2683 companies in the Software industry, which is below the industry midpoint. Overall, Bandwidth has a GF Score™ of 70/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Bandwidth's Gross Margin % compare to ATEN and FLYW?
According to the Software industry distribution chart, Bandwidth ranks #1415 out of 2683 companies for Gross Margin %. This places Bandwidth in the lower half of its industry. The industry median Gross Margin % is 40.45. Bandwidth's value of 37.32% is 7.7% below this benchmark. Historically, Bandwidth's own Gross Margin % has ranged from 37.40 to 47.02 over the past decade. While the company's 10-year median is 43.77 vs. the industry median of 40.45, Bandwidth has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for a Software company?
The median Gross Margin % among Software companies is 40.45, based on 2,683 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Bandwidth's current Gross Margin % of 37.32% is 7.7% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on Bandwidth and its competitors. For the Software industry, the median Gross Margin % is 40.45 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Bandwidth's current Gross Margin % is 37.32%, which is 15% below median its own 10-year median of 43.77. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Bandwidth stock overvalued right now?
Based on GuruFocus' analysis, Bandwidth (BAND) is currently considered Significantly Overvalued. The stock's GF Value™ is $15.94, compared to a current price of $52.28 — trading 228% above its estimated fair value. The current Gross Margin % is 37.32%, which is 15% below median its 10-year median of 43.77 and 7.7% below the Software industry median of 40.45. Bandwidth's overall GF Score™ is 70/100 with 5 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For Bandwidth (BAND), the current Gross Margin % is 37.32% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Bandwidth (BAND) Overvalued in 2026?
Based on GuruFocus' analysis, Bandwidth stock appears to be overvalued.
The current stock price of $52.28 is trading 228% above its estimated GF Value™ of $15.94.
GuruFocus considers Bandwidth to be Significantly Overvalued.
Key valuation signals for BAND:
Gross Margin %: 37.32% (15% below median its 10-year median of 43.77)
GF Value™: $15.94 vs. price of $52.28 (228% above fair value)
Industry Position: 7.7% below the Software median (#1415 of 2683)
No single metric tells the full story. See the BAND stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Bandwidth Inc is cloud-based communications platform-as-a-service (CPaaS) provider that enables enterprises to create, scale and operate voice or messaging communications services across any mobile application or connected device. Company earns revenue through the sale of communications services offered through Application Programming Interface software solutions to enterprise customers. The majority of its revenue is generated from usage-based fees that includes voice communication and messaging communication that traverse the platform and network.
70GF Score
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