The lead underwriters on the deal were Morgan Stanley, KeyBanc Capital Markets, and RW Baird. Shares are slated to open for trading later this morning on the Nasdaq.
BAND is a developer of a cloud-based communications platform for enterprises in the United States. Its platform includes a broad range of software application programming interfaces (APIs) for voice and text functionality and its owned and managed, purpose-built Internet protocol (IP) voice network -- one of the largest in the nation.
Companies use BAND's platform to more frequently and seamlessly connect with their end users, add voice calling capabilities to residential Internet of Things (IoT) devices, offer end users new mobile application experiences and improve employee productivity. Its sophisticated and easy-to-use software APIs allow enterprises to enhance their products and services by incorporating advanced voice and text capabilities.
At the core of its platform is its communications software APIs, which allow companies to build products and services on top of BAND's cloud-based, out-of-the-box software. BAND's software APIs include pre-defined functions that are easily customizable for specific use cases without the challenge and expense of building and deploying complex code.
Additionally, its platform collects and analyzes terabytes of call and messaging data records in real-time and provide a seamless integration to CRM and Business Intelligence analytics tools to provide meaningful data driven actionable insights for critical business decisions. Customers can then launch and scale applications and solutions with reliability using BAND's own nationwide IP voice network. Its voice software APIs allow enterprises to make and receive phone calls and create advanced voice experiences.
BAND's customers include Google Voice, Microsoft Office 365 Skype for Business, Dialpad, GoDaddy, Kipsu, Rover and ZipRecruiter, among many others. It does not currently have any consumer or residential customers, although its enterprise customers may utilize its solutions to serve their own consumer or residential customers or end users.
In its prospectus, BAND provided some preliminary results for its 3Q17. Specifically, it guided for total revenue of $40.0-$41.3 million, which would represent growth of 5% at the mid-point. Of this, it estimates that CPaaS revenue will be between $32.3-$33.4 million.
The increase in CPaaS revenue was attributable to an increase in the usage of all its service offerings, particularly its voice and messaging usage, estimated to represent between $5.1 million and $5.6 million of the increase in CPaaS revenue, and additionally its phone number services and 911-enabled phone number services, estimated to represent between $0.5 million and $0.6 million of the increase in CPaaS revenue.
The changes in usage and price are reflected in its dollar-based net retention rate of between 104-106% for the three months ended September 30, 2017 compared to 112% for the three months ended September 30, 2016. BAND estimates that the decline in the dollar-based net retention rate was primarily due to a strategic decision to no longer service a particular customer.
Further, BAND estimates that income from continuing operations will be between $0.3-$1.6 million compared to $4.0 million for the three months ended September 30. The decrease in income from continuing operations is primarily attributable to increased operating expenses of between $3.0-$3.4 million. The most significant driver of this increase in operating expenses is higher general and administrative expenses, primarily due to public company readiness costs.