Bandwidth Posts Record $234 Million in Revenue as Forestar Cuts Net Income 32%
Key Facts
Forestar Group reported a 32% decline in net income attributable to the company in the fourth quarter of fiscal 2026, to $59.2 million, or $1.15 per diluted share, compared with $87 million and $1.70 per share a year earlier, according to an earnings release published via Nasdaq on October 29. In the third quarter, Bandwidth posted record revenue of $234 million, up 22% year over year, and adjusted earnings before interest, taxes, depreciation and amortization of $35 million, up 43%, with a 22% margin. Bandwidth Chief Executive David Morken said the company delivered "record results across all key financial metrics." The two companies’ results showed divergent paths on the same day: lower profit and revenue at the land developer, versus revenue growth and a return to GAAP profitability at the cloud communications company. In the economic backdrop, U.S. real gross domestic product grew at an annual rate of 3.4% in the third quarter, compared with 2.2% in the second quarter, according to the U.S. Bureau of Economic Analysis’ advance estimate.
Forestar’s quarterly revenue was $580.8 million, down 13% from $670.5 million in the same quarter of fiscal 2025. The number of lots sold rose 2% to 5,004 from 4,891, meaning the increase in units sold coincided with a decline in quarterly revenue. For fiscal 2026, net income fell 15% to $142.6 million, and revenue declined 2% to $1.6 billion. The company sold 13,545 lots during the year, down 5% from 14,240 lots in the prior fiscal year. Fourth-quarter pretax income also fell 31% to $78.6 million from $113.1 million, according to the earnings release.
Forestar Chairman Donald Tomnitz said demand for new homes was affected by persistent affordability constraints and cautious consumers, while higher mortgage rates added pressure during the fourth quarter. Results included a $10 million pretax gain from asset sales and $7.6 million in real estate impairment charges. In the year-earlier period, the gain from asset sales was $4.5 million, and the company recorded no real estate impairment charges. Forestar ended the fiscal year with total liquidity of $1.3 billion and a net debt-to-total capitalization ratio of 6.7%. Its inventory of owned or contracted lots stood at 84,400 as of September 30, 2026.
By contrast, Bandwidth’s GAAP net income was $5 million in the third quarter, compared with a loss of $1 million a year earlier. Non-GAAP net income reached $20 million, versus $11 million in the comparable period. For the nine months ended September 30, 2026, the company reported revenue of $663 million, compared with $546 million, and GAAP net income turned to $12 million from a loss of $10 million. Bandwidth said customer expansion in the use of its platform contributed to growth, and its sales team added four new deals and expansions each worth more than $1 million. Chief Financial Officer Daryl Raiford said the impact of those deals and expansions would flow gradually into results over the following twelve months.
Bandwidth maintained its fiscal 2026 guidance for revenue of $905 million to $910 million and non-GAAP earnings of $1.73 to $1.79 per share. For fiscal 2027, the company expects double-digit growth in cloud communications revenue, driven by increased demand for voice usage. Forestar expects to deliver 12,000 to 13,000 lots and generate revenue of $1.4 billion to $1.5 billion in fiscal 2027. It said it had $2.2 billion in contracted future revenue. Bandwidth had scheduled its third-quarter earnings call for October 29, 2026, at 8:00 a.m. Eastern time, while Forestar scheduled its fiscal 2027 first-quarter results announcement for January 19, 2027, before the market opened, and its earnings call for the same day at 11:00 a.m. Eastern time.
In its breakdown of GDP, the Bureau of Economic Analysis said faster investment and a shift to growth in government spending supported expansion, along with a contribution from consumer spending. These were partly offset by a decline in exports, while imports rose. Real final sales to private domestic purchasers, which combine consumer spending and gross private fixed investment, grew at an annual rate of 4.9% in the third quarter, compared with 4.6% in the second quarter. The rise in the personal consumption expenditures price index slowed to 2.1% from 5.0%, while the index excluding food and energy slowed to 2.5% from 3.3%. Forestar shares closed at $25.92 and Bandwidth shares at $48.45 on October 28, according to EL7 data. The bureau is scheduled to release its second estimate of third-quarter GDP and corporate profits on November 25, 2026, at 8:30 a.m. Eastern time.