Ribbon Communications Inc. Reports Second Quarter 2021 Financial Results
Ribbon Communications (RBBN) reported robust financial results for Q2 2021, with revenue of $211 million, marking a slight increase from $210 million in Q2 2020. Adjusted EBITDA surged by 60% year-over-year, while non-GAAP diluted EPS rose 133% to $0.17. The company noted a 10% revenue growth in the first half of 2021 compared to 2020, driven by significant IP Optical wins with major clients. However, sales in India were affected by COVID-19 disruptions. The outlook for Q3 2021 anticipates revenue between $215 million and $225 million, maintaining full-year earnings guidance of $0.49 to $0.54 per share.
- 10% year-over-year revenue growth in the first half of 2021.
- Adjusted EBITDA increased by 60% compared to the same period in 2020.
- Non-GAAP diluted EPS rose 133% to $0.17 in Q2 2021.
- Strong new IP Optical wins expanding customer base.
- Sales in India were impacted by COVID-19 restrictions, affecting revenue predictions.
PLANO, Texas, July 28, 2021 /PRNewswire/ -- Ribbon Communications Inc. (Nasdaq: RBBN), a global provider of real-time communications software and IP optical transport solutions to service providers, enterprises, and critical infrastructure sectors, today announced its financial results for the second quarter of 2021.
Sales for the first half of 2021 were up
"In the first half of the year, we made significant strides on the execution of our strategy, with new major IP Optical wins with Rogers, Optus, Singtel and several others," noted Bruce McClelland, President and Chief Executive Officer of Ribbon Communications. "These customer wins will significantly broaden our presence in this large addressable market and strengthen our foundation, establishing a clear path to growth in 2022 and beyond."
Mr. McClelland added, "Sales in India in the quarter were impacted by the surge in Covid infections and country-wide restrictions. Deployments have partially recovered in recent weeks, but timing of a full recovery in network investment is difficult to predict, so it is important for us to be prudent with our expectations for the remainder of the year."
Financial Highlights1, 2
The following table summarizes the consolidated financial highlights for the three months ended June 30, 2021 and 2020 (in millions, except per share amounts).
Three months ended | |||
June 30, | |||
2021 | 2020 | ||
GAAP Revenue | $ 211 | $ 210 | |
GAAP Net income (loss) | $ 23 | $ ( 8) | |
Non-GAAP Net income | $ 27 | $ 11 | |
GAAP Diluted earnings (loss) per share | $ 0.15 | ||
Weighted average shares outstanding for GAAP diluted earnings (loss) per share | 154 | 144 | |
Non-GAAP diluted earnings per share | $ 0.17 | $ 0.08 | |
Weighted average shares outstanding for Non-GAAP diluted earnings per share | 154 | 151 | |
Non-GAAP Adjusted EBITDA | $ 43 | $ 30 | |
Cash, cash equivalents and restricted cash was
_____________ |
1 GAAP Net income and GAAP Diluted earnings per share for the three months ended June 30, 2021 include a |
2 Please see the reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures and additional information about non-GAAP measures in the section entitled "Discussion of Non-GAAP Financial Measures" in the attached schedules. |
"We were very pleased with the earnings and cash generation in the quarter with both Adjusted EBITDA and Earnings per share well above our targets for the quarter. Sales were slightly less than expected primarily due to the Covid situation in India, while gross margins were stronger due to favorable product mix. Operating expenses trended lower with continued spending discipline and the benefit from several one-time items," said Mick Lopez, Chief Financial Officer of Ribbon Communications.
Customer and Company Highlights
- Strong 1H21 financial results:
10% YoY revenue growth60% YoY Adj. EBITDA growth- Strong gross margins in both business units and continued disciplined expense control
- Significant new IP Optical wins broadening Ribbon's global customer base:
- Rogers Communications selected Ribbon's industry-leading 400G ZR+ optical networking and SDN solutions to upgrade its transport network
- Optus and Singtel Telecommunications multi-service transport network DWDM tender award
- Strong growth in North American markets with 1H21 sales exceeding sales in all of 2020, including Huawei replacement win with US wireless provider
- Continuing portfolio innovation:
- Successful introduction and initial shipments of industry's first 400G ZR+ DWDM metro and long-haul transport solution
- Integral contributor enabling industry to meet US robocalling June 30th deadline with complete portfolio including CallTrust and STIR/SHAKEN solutions
Business Outlook1
The Company's outlook is based on current indications for its business, which are subject to change. For the third quarter of 2021, the Company projects revenue of
1 Please see the reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures and additional information about the non-GAAP measures in the section entitled "Discussion of Non-GAAP Financial Measures" in the attached schedules. |
Upcoming Investor Conference Schedule
- August 10-11, 2021 – Oppenheimer Technology, Internet & Communications Conference (virtual presentation and one-on-one institutional investor meetings).
- August 31-September 1, 2021 – Jefferies Virtual Semiconductor, IT Hardware & Communications Infrastructure Summit (virtual one-on-one institutional investor meetings).
- September 14-15, 2021 – Jefferies Virtual Software Conference (virtual presentation and one-on-one institutional investor meetings).
- November 15-18, 2021 – Needham Virtual Security, Networking & Communications Conference (virtual presentation and one-on-one institutional investor meetings).
Conference Call Details
Conference call to discuss the Company's financial results for the second quarter ended June 30, 2021 on July 28, 2021, via the investor section of its website at http://investors.ribboncommunications.com, where a replay will also be available shortly following the conference call.
Conference Call Details:
Date: July 28, 2021
Time: 4:30 p.m. (ET)
Dial-in number (Domestic): 877-407-2991
Dial-in number (Intl): 201-389-0925
Instant Telephone Access: Call me™
Replay information:
A telephone playback of the call will be available following the conference call until August 11, 2021 and can be accessed by calling 877-660-6853 or 201-612-7415 for international callers. The reservation number for the replay is 137200791.
Investor Relations
Tom Berry
+1 (978) 614-8050
tom.berry@rbbn.com
North American Press
Dennis Watson
+1 (214) 695-2224
dwatson@rbbn.com
APAC, CALA & EMEA Press
Catherine Berthier
+1 (646) 741-1974
cberthier@rbbn.com
Analyst Relations
Michael Cooper
+1 (708) 212-6922
mcooper@rbbn.com
About Ribbon
Ribbon Communications (Nasdaq: RBBN) delivers communications software, IP and optical networking solutions to service providers, enterprises and critical infrastructure sectors globally. We engage deeply with our customers, helping them modernize their networks for improved competitive positioning and business outcomes in today's smart, always-on and data-hungry world. Our innovative, end-to-end solutions portfolio delivers unparalleled scale, performance, and agility, including core to edge software-centric solutions, cloud-native offers, leading-edge security and analytics tools, along with IP and optical networking solutions for 5G. To learn more about Ribbon visit rbbn.com.
Important Information Regarding Forward-Looking Statements
The information in this release contains "forward-looking" statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, which are subject to several risks and uncertainties. All statements other than statements of historical facts contained in this release, including without limitation statements regarding, projected financial results for the third quarter 2021 and beyond, sales trends, and plans and objectives of management for future operations are forward-looking statements. Without limiting the foregoing, the words "believes", "estimates", "expects", "expectations", "intends", "may", "plans", "projects" and other similar language, whether in the negative or affirmative, are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.
Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated in these forward-looking statements due to various risks, uncertainties and other important factors, including, among others, risks related to the continuing COVID-19 pandemic, including delays in customer deployments as a result of rises in cases risks that will not realize estimated cost savings and/or anticipated benefits from the acquisition of ECI; failure to realize anticipated benefits from the sale of our Kandy Communications business ("Kandy"); supply chain disruptions resulting from component availability and/or geopolitical instabilities and disputes; unpredictable fluctuations in quarterly revenue and operating results; failure to compete successfully against telecommunications equipment and networking companies; credit risks; the timing of customer purchasing decisions and our recognition of revenues; macroeconomic conditions; our ability to recruit and retain key personnel; the impact of restructuring and cost-containment activities; litigation; rapid technological and market change; our ability to protect our intellectual property rights and obtain necessary licenses; risks related to cybersecurity and data intrusion; the potential for defects in our products; risks related to the terms of our credit agreement; higher risks in international operations and markets; increases in tariffs, trade restrictions or taxes on our products; currency fluctuations; and failure or circumvention of our controls and procedures.
These factors are not intended to be an all-encompassing list of risks and uncertainties that may affect our business and results from operations. Additional information regarding these and other factors can be found in our reports filed with the Securities and Exchange Commission, including our Form 10-K for the year ended December 31, 2020. In providing forward-looking statements, the Company expressly disclaims any obligation to update these statements publicly or otherwise, whether as a result of new information, future events or otherwise, except as required by law.
Discussion of Non-GAAP Financial Measures
Our management uses several different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall performance of its business, making operating decisions, planning and forecasting future periods, and determining payments under compensation programs. We consider the use of non-GAAP financial measures helpful in assessing the core performance of our continuing operations and when planning and forecasting future periods. Our annual financial plan is prepared on a non-GAAP basis and is approved by our board of directors. In addition, budgeting and forecasting for revenue and expenses are conducted on a non-GAAP basis and actual results on a non-GAAP basis are assessed against the annual financial plan. By continuing operations, we mean the ongoing results of the business adjusted for certain expenses and credits, as described below. We believe that providing non-GAAP information to investors will allow investors to view the financial results in the way our management views them and helps investors to better understand our core financial and operating performance and evaluate the efficacy of the methodology and information used by our management to evaluate and measure such performance.
While our management uses non-GAAP financial measures as tools to enhance their understanding of certain aspects of our financial performance, our management does not consider these measures to be a substitute for, or superior to, GAAP measures. In addition, our presentations of these measures may not be comparable to similarly titled measures used by other companies. These non-GAAP financial measures should not be considered alternatives for, or in isolation from, the financial information prepared and presented in accordance with GAAP. Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures. In particular, many of the adjustments to our financial measures reflect the exclusion of items that are recurring and will be reflected in our financial results for the foreseeable future.
Stock-Based Compensation
The expense related to stock-based awards is generally not controllable in the short-term and can vary significantly based on the timing, size and nature of awards granted. We believe that presenting non-GAAP operating results that exclude stock-based compensation provides investors with visibility and insight into our management's method of analysis and the Company's core operating performance.
Amortization of Acquired Intangible Assets
Amortization amounts are inconsistent in frequency and amount and are significantly impacted by the timing and size of acquisitions. We believe that excluding non-cash amortization of intangible assets facilitates the comparison of our financial results to our historical operating results and to other companies in our industry as if the acquired intangible assets had been developed internally rather than acquired.
Litigation Costs
We have been involved in litigation with a former GENBAND business partner and have reached a settlement with the other party. We exclude the costs of such litigation because we believe such costs are not part of our core business or ongoing operations.
Acquisition-, Disposal- and Integration-Related Expense
We consider certain acquisition-, disposal- and integration-related costs to be unrelated to the organic continuing operations of our acquired businesses and the Company, and such costs are generally not relevant to assessing or estimating the long-term performance of the acquired assets. We exclude such acquisition-, disposal- and integration-related costs to allow more accurate comparisons of our financial results to our historical operations and the financial results of less acquisitive peer companies and allows management and investors to consider the ongoing operations of the business both with and without such expenses.
Restructuring and Related Expense
We have recorded restructuring and related expense to streamline operations and reduce operating costs by closing and consolidating certain facilities and reducing our worldwide workforce. We believe that excluding restructuring and related expense facilitates the comparison of our financial results to our historical operating results and to other companies in our industry, as there are no future revenue streams or other benefits associated with these costs.
Gain on Sale of Business
On May 12, 2021, we sold our QualiTech business, which we had acquired as part of the ECI Acquisition, to Hermon Laboratories, Ltd. As consideration, we received
Interest Income on Debentures
We recorded paid-in-kind interest income on the Debentures, which increased their fair value. We exclude this interest income because we believe that such a gain is not part of our core business or ongoing operations.
(Increase) Decrease in Fair Value of Investments
We calculate the fair value of the Debentures and Warrants at each quarter-end and record any adjustments to their fair values in Other income (expense), net. We exclude these and any subsequent gains and losses from the change in fair value of the Debentures and Warrants because we believe that such gains or losses are not part of our core business or ongoing operations.
Tax Effect of Non-GAAP Adjustments
Non-GAAP income tax expense is presented based on an estimated tax rate applied against forecasted annual non-GAAP income. Non-GAAP income tax expense assumes no available net operating losses or valuation allowances for the U.S. because of reporting significant cumulative non-GAAP income over the past several years. We are reporting our non-GAAP quarterly income taxes by computing an annual rate for the Company and applying that single rate (rather than multiple rates by jurisdiction) to our consolidated quarterly results. We expect that this methodology will provide a consistent rate throughout the year and allow investors to better understand the impact of income taxes on our results. Due to the methodology applied to our estimated annual tax rate, our estimated tax rate on non-GAAP income will differ from our GAAP tax rate and from our actual tax liabilities.
Adjusted EBITDA
We use Adjusted EBITDA as a supplemental measure to review and assess our performance. We calculate Adjusted EBITDA by excluding from Income (loss) from operations: depreciation; amortization of acquired intangible assets; stock-based compensation; certain litigation costs; acquisition-, disposal- and integration-related expense; and restructuring and related expense. In general, we exclude the expenses that we consider to be non-cash and/or not part of our ongoing operations. We may exclude other items in the future that have those characteristics. Adjusted EBITDA is a non-GAAP financial measure that is used by our investing community for comparative and valuation purposes. We disclose this metric to support and facilitate our dialogue with research analysts and investors. Other companies may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.
RIBBON COMMUNICATIONS INC. | ||||||||
Condensed Consolidated Statements of Operations | ||||||||
(in thousands, except percentages and per share amounts) | ||||||||
(unaudited) | ||||||||
Three months ended | ||||||||
June 30, | March 31, | June 30, | ||||||
2021 | 2021 | 2020 | ||||||
Revenue: | ||||||||
Product | $ 113,129 | $ 97,889 | $ 120,862 | |||||
Service | 98,081 | 94,883 | 89,631 | |||||
Total revenue | 211,210 | 192,772 | 210,493 | |||||
Cost of revenue: | ||||||||
Product | 46,641 | 44,445 | 50,579 | |||||
Service | 36,142 | 37,780 | 36,647 | |||||
Total cost of revenue | 82,783 | 82,225 | 87,226 | |||||
Gross profit | 128,427 | 110,547 | 123,267 | |||||
Gross margin: | ||||||||
Product | ||||||||
Service | ||||||||
Total gross margin | ||||||||
Operating expenses: | ||||||||
Research and development | 46,797 | 47,410 | 51,796 | |||||
Sales and marketing | 34,881 | 37,218 | 33,898 | |||||
General and administrative | 12,734 | 15,553 | 15,094 | |||||
Amortization of acquired intangible assets | 17,181 | 15,823 | 14,669 | |||||
Acquisition-, disposal- and integration-related expense | 1,052 | 1,197 | 857 | |||||
Restructuring and related expense | 2,830 | 5,950 | 5,361 | |||||
Total operating expenses | 115,475 | 123,151 | 121,675 | |||||
Income (loss) from operations | 12,952 | (12,604) | 1,592 | |||||
Interest expense, net | (3,048) | (5,819) | (5,400) | |||||
Other income (expense), net | 17,180 | (25,448) | (2,407) | |||||
Income (loss) before income taxes | 27,084 | (43,871) | (6,215) | |||||
Income tax provision | (3,843) | (816) | (2,036) | |||||
Net income (loss) | $ 23,241 | $ (44,687) | $ (8,251) | |||||
Earnings (loss) per share: | ||||||||
Basic | $ 0.16 | $ (0.31) | $ (0.06) | |||||
Diluted | $ 0.15 | $ (0.31) | $ (0.06) | |||||
Weighted average shares used to compute earnings (loss) per share: | ||||||||
Basic | 147,467 | 145,936 | 144,483 | |||||
Diluted | 154,160 | 145,936 | 144,483 | |||||
RIBBON COMMUNICATIONS INC. | ||||||
Condensed Consolidated Statements of Operations | ||||||
(in thousands, except percentages and per share amounts) | ||||||
(unaudited) | ||||||
Six months ended | ||||||
June 30, | June 30, | |||||
2021 | 2020 | |||||
Revenue: | ||||||
Product | $ 211,018 | $ 196,761 | ||||
Service | 192,964 | 171,714 | ||||
Total revenue | 403,982 | 368,475 | ||||
Cost of revenue: | ||||||
Product | 91,086 | 86,558 | ||||
Service | 73,922 | 68,126 | ||||
Total cost of revenue | 165,008 | 154,684 | ||||
Gross profit | 238,974 | 213,791 | ||||
Gross margin: | ||||||
Product | ||||||
Service | ||||||
Total gross margin | ||||||
Operating expenses: | ||||||
Research and development | 94,207 | 94,091 | ||||
Sales and marketing | 72,099 | 64,869 | ||||
General and administrative | 28,287 | 32,299 | ||||
Amortization of acquired intangible assets | 33,004 | 29,003 | ||||
Acquisition-, disposal- and integration-related expense | 2,249 | 13,241 | ||||
Restructuring and related expense | 8,780 | 7,436 | ||||
Total operating expenses | 238,626 | 240,939 | ||||
Income (loss) from operations | 348 | (27,148) | ||||
Interest expense, net | (8,867) | (8,795) | ||||
Other expense, net | (8,268) | (3,251) | ||||
Loss before income taxes | (16,787) | (39,194) | ||||
Income tax provision | (4,659) | (2,227) | ||||
Net loss | $ (21,446) | $ (41,421) | ||||
Loss per share | ||||||
Basic | $ (0.15) | $ (0.31) | ||||
Diluted | $ (0.15) | $ (0.31) | ||||
Weighted average shares used to compute loss per share: | ||||||
Basic | 146,706 | 132,737 | ||||
Diluted | 146,706 | 132,737 | ||||
RIBBON COMMUNICATIONS INC. | ||||||
Condensed Consolidated Balance Sheets | ||||||
(in thousands) | ||||||
(unaudited) | ||||||
June 30, | December 31, | |||||
2021 | 2020 | |||||
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ 112,155 | $ 128,428 | ||||
Restricted cash | 2,646 | 7,269 | ||||
Accounts receivable, net | 219,867 | 237,738 | ||||
Inventory | 46,556 | 45,750 | ||||
Other current assets | 31,739 | 28,461 | ||||
Total current assets | 412,963 | 447,646 | ||||
Property and equipment, net | 49,287 | 48,888 | ||||
Intangible assets, net | 384,352 | 417,356 | ||||
Goodwill | 416,892 | 416,892 | ||||
Investments | 106,012 | 115,183 | ||||
Deferred income taxes | 10,915 | 10,651 | ||||
Operating lease right-of-use assets | 57,869 | 69,757 | ||||
Other assets | 20,698 | 20,892 | ||||
$ 1,458,988 | $ 1,547,265 | |||||
Liabilities and Stockholders' Equity | ||||||
Current liabilities: | ||||||
Current portion of term debt | $ 20,058 | $ 15,531 | ||||
Accounts payable | 57,939 | 63,387 | ||||
Accrued expenses and other | 89,762 | 134,865 | ||||
Operating lease liabilities | 17,974 | 17,023 | ||||
Deferred revenue | 101,471 | 96,824 | ||||
Total current liabilities | 287,204 | 327,630 | ||||
Long-term debt, net of current | 359,333 | 369,035 | ||||
Operating lease liabilities, net of current | 62,615 | 72,614 | ||||
Deferred revenue, net of current | 22,036 | 26,010 | ||||
Deferred income taxes | 17,993 | 16,842 | ||||
Other long-term liabilities | 40,526 | 48,281 | ||||
Total liabilities | 789,707 | 860,412 | ||||
Commitments and contingencies | ||||||
Stockholders' equity: | ||||||
Common stock | 15 | 15 | ||||
Additional paid-in capital | 1,868,066 | 1,870,256 | ||||
Accumulated deficit | (1,199,922) | (1,178,476) | ||||
Accumulated other comprehensive income (loss) | 1,122 | (4,942) | ||||
Total stockholders' equity | 669,281 | 686,853 | ||||
$ 1,458,988 | $ 1,547,265 | |||||
RIBBON COMMUNICATIONS INC. | |||||||
Condensed Consolidated Statements of Cash Flows | |||||||
(in thousands) | |||||||
(unaudited) | |||||||
Six months ended | |||||||
June 30, | June 30, | ||||||
2021 | 2020 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ (21,446) | $ (41,421) | |||||
Adjustments to reconcile net loss to cash flows provided by operating activities: | |||||||
Depreciation and amortization of property and equipment | 8,475 | 8,260 | |||||
Amortization of intangible assets | 33,004 | 29,003 | |||||
Amortization of debt issuance costs | 3,684 | 2,554 | |||||
Stock-based compensation | 9,850 | 6,198 | |||||
Deferred income taxes | 918 | 97 | |||||
Gain on sale of business | (2,772) | - | |||||
Decrease in fair value of investments | 9,171 | - | |||||
Reduction in deferred purchase consideration | - | (69) | |||||
Foreign currency exchange losses | 2,013 | 3,463 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 17,360 | 45,422 | |||||
Inventory | (1,527) | 773 | |||||
Other operating assets | 10,671 | 14,282 | |||||
Accounts payable | (3,508) | (41,515) | |||||
Accrued expenses and other long-term liabilities | (58,536) | 9,111 | |||||
Deferred revenue | 673 | 554 | |||||
Net cash provided by operating activities | 8,030 | 36,712 | |||||
Cash flows from investing activities: | |||||||
Purchases of property and equipment | (10,570) | (14,891) | |||||
Business acqusitions, net of cash acquired | - | (346,852) | |||||
Proceeds from sale of business | 2,944 | - | |||||
Proceeds from the sale of fixed assets | - | 43,500 | |||||
Net cash used in investing activities | (7,626) | (318,243) | |||||
Cash flows from financing activities: | |||||||
Borrowings under revolving line of credit | - | 615 | |||||
Principal payments on revolving line of credit | - | (8,615) | |||||
Proceeds from issuance of term debt | 74,625 | 403,500 | |||||
Principal payments of term debt | (82,147) | (52,400) | |||||
Principal payments of finance leases | (507) | (668) | |||||
Payment of debt issuance costs | (789) | (10,573) | |||||
Proceeds from the exercise of stock options | 24 | 23 | |||||
Payment of tax withholding obligations related to net share settlements of restricted stock awards | (12,064) | (808) | |||||
Net cash (used in) provided by financing activities | (20,858) | 331,074 | |||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (442) | (142) | |||||
Net (decrease) increase in cash, cash equivalents and restricted cash | (20,896) | 49,401 | |||||
Cash and cash equivalents, beginning of year | 135,697 | 44,643 | |||||
Cash, cash equivalents and restricted cash, end of period | $ 114,801 | $ 94,044 | |||||
RIBBON COMMUNICATIONS INC. | ||||||||||||
Supplemental Information | ||||||||||||
(in thousands) | ||||||||||||
(unaudited) | ||||||||||||
The following tables provide the details of stock-based compensation included as components of other line | ||||||||||||
Three months ended | Six months ended | |||||||||||
June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||
2021 | 2021 | 2020 | 2021 | 2020 | ||||||||
Stock-based compensation | ||||||||||||
Cost of revenue - product | $ 93 | $ 27 | $ 39 | $ 120 | $ 66 | |||||||
Cost of revenue - service | 469 | 235 | 159 | 704 | 289 | |||||||
Cost of revenue | 562 | 262 | 198 | 824 | 355 | |||||||
Research and development | 1,160 | 627 | 738 | 1,787 | 1,296 | |||||||
Sales and marketing | 1,752 | 1,874 | 1,011 | 3,626 | 1,763 | |||||||
General and administrative | 1,316 | 2,297 | 1,275 | 3,613 | 2,784 | |||||||
Operating expense | 4,228 | 4,798 | 3,024 | 9,026 | 5,843 | |||||||
Total stock-based compensation | $ 4,790 | $ 5,060 | $ 3,222 | $ 9,850 | $ 6,198 | |||||||
RIBBON COMMUNICATIONS INC. | |||||
Reconciliation of Non-GAAP and GAAP Financial Measures | |||||
(in thousands, except per share amounts) | |||||
(unaudited) | |||||
Three months ended | |||||
June 30, | March 31, | June 30, | |||
2021 | 2021 | 2020 | |||
GAAP Total gross margin | |||||
Stock-based compensation | |||||
Non-GAAP Total gross margin | |||||
GAAP Net income (loss) | $ 23,241 | $ (44,687) | $ (8,251) | ||
Stock-based compensation | 4,790 | 5,060 | 3,222 | ||
Amortization of acquired intangible assets | 17,181 | 15,823 | 14,669 | ||
Litigation costs | - | - | (937) | ||
Acquisition-, disposal- and integration-related expense | 1,052 | 1,197 | 857 | ||
Restructuring and related expense | 2,830 | 5,950 | 5,361 | ||
Gain on sale of business | (2,772) | - | - | ||
Interest income on debentures | (1,196) | (1,459) | - | ||
Decrease (increase) in fair value of investments | (12,074) | 23,900 | - | ||
Tax effect of non-GAAP adjustments | (6,205) | (880) | (3,518) | ||
Non-GAAP Net income | $ 26,847 | $ 4,904 | $ 11,403 | ||
Earnings (loss) per share | |||||
GAAP Diluted earnings (loss) per share | $ 0.15 | $ (0.31) | $ (0.06) | ||
Stock-based compensation | 0.03 | 0.03 | 0.02 | ||
Amortization of acquired intangible assets | 0.11 | 0.11 | 0.10 | ||
Litigation costs | - | - | (0.01) | ||
Acquisition-, disposal- and integration-related expense | 0.01 | 0.01 | 0.01 | ||
Restructuring and related expense | 0.02 | 0.05 | 0.04 | ||
Gain on sale of business | (0.02) | - | - | ||
Interest income on debentures | (0.01) | (0.01) | - | ||
(Increase) decrease in fair value of investments | (0.08) | 0.16 | - | ||
Tax effect of non-GAAP adjustments | (0.04) | (0.01) | (0.02) | ||
Non-GAAP Diluted earnings per share | $ 0.17 | $ 0.03 | $ 0.08 | ||
Weighted average shares used to compute diluted earnings (loss) per share | |||||
Shares used to compute GAAPdiluted earnings (loss) per share | 154,160 | 145,936 | 144,483 | ||
Shares used to compute Non-GAAPdiluted earnings per share | 154,160 | 155,032 | 150,512 | ||
Adjusted EBITDA | |||||
GAAP Income (loss) from operations | $ 12,952 | $ (12,604) | $ 1,592 | ||
Depreciation | 4,249 | 4,226 | 4,786 | ||
Amortization of acquired intangible assets | 17,181 | 15,823 | 14,669 | ||
Stock-based compensation | 4,790 | 5,060 | 3,222 | ||
Litigation costs | - | - | (937) | ||
Acquisition-, disposal- and integration-related expense | 1,052 | 1,197 | 857 | ||
Restructuring and related expense | 2,830 | 5,950 | 5,361 | ||
Non-GAAP Adjusted EBITDA | $ 43,054 | $ 19,652 | $ 29,550 | ||
RIBBON COMMUNICATIONS INC. | |||
Reconciliation of Non-GAAP and GAAP Financial Measures | |||
(in thousands, except per share amounts) | |||
(unaudited) | |||
Six months ended | |||
June 30, | June 30, | ||
2021 | 2020 | ||
GAAP Total gross margin | |||
Stock-based compensation | |||
Non-GAAP Total gross margin | |||
GAAP Net loss | $ (21,446) | $ (41,421) | |
Stock-based compensation | 9,850 | 6,198 | |
Amortization of acquired intangible assets | 33,004 | 29,003 | |
Litigation costs | - | 2,101 | |
Acquisition-, disposal- and integration-related expense | 2,249 | 13,241 | |
Restructuring and related expense | 8,780 | 7,436 | |
Gain on sale of business | (2,772) | - | |
Interest income on debentures | (2,655) | - | |
Decrease in fair value of investments | 11,826 | - | |
Tax effect of non-GAAP adjustments | (7,085) | (3,926) | |
Non-GAAP Net income | $ 31,751 | $ 12,632 | |
(Loss) earnings per share | |||
GAAP Loss per share | $ (0.15) | $ (0.31) | |
Stock-based compensation | 0.06 | 0.05 | |
Amortization of acquired intangible assets | 0.22 | 0.21 | |
Litigation costs | - | 0.02 | |
Acquisition-, disposal- and integration-related expense | 0.01 | 0.10 | |
Restructuring and related expense | 0.07 | 0.05 | |
Gain on sale of business | (0.02) | - | |
Interest income on debentures | (0.02) | - | |
Decrease in fair value of investments | 0.09 | - | |
Tax effect of non-GAAP adjustments | (0.05) | (0.03) | |
Non-GAAP Diluted earnings per share | $ 0.21 | $ 0.09 | |
Weighted average shares used to compute (loss) diluted earnings per share | |||
Shares used to compute GAAPloss per share | 146,706 | 132,737 | |
Shares used to compute Non-GAAPdiluted earnings per share | 154,651 | 136,159 | |
Adjusted EBITDA | |||
GAAP Income (loss) from operations | $ 348 | $ (27,148) | |
Depreciation | 8,475 | 8,260 | |
Amortization of acquired intangible assets | 33,004 | 29,003 | |
Stock-based compensation | 9,850 | 6,198 | |
Litigation costs | - | 2,101 | |
Acquisition-, disposal- and integration-related expense | 2,249 | 13,241 | |
Restructuring and related expense | 8,780 | 7,436 | |
Non-GAAP Adjusted EBITDA | $ 62,706 | $ 39,091 | |
RIBBON COMMUNICATIONS INC. | |||||||||
Reconciliation of Non-GAAP and GAAP Financial Measures - Outlook | |||||||||
(unaudited) | |||||||||
Three months ending | Year ending | ||||||||
September 31, 2021 | December 31, 2021 | ||||||||
Range | Range | ||||||||
Revenue ($ millions) | $ 215 | $ 225 | $ 900 | $ 900 | |||||
Gross margin | |||||||||
GAAP outlook | |||||||||
Stock-based compensation | |||||||||
Non-GAAP outlook | |||||||||
(Loss) earnings per share | |||||||||
GAAP outlook | $ (0.03) | $ - | $ (0.11) | $ (0.04) | |||||
Stock-based compensation | 0.04 | 0.04 | 0.14 | 0.14 | |||||
Amortization of acquired intangible assets | 0.11 | 0.11 | 0.43 | 0.43 | |||||
Acquisition-, disposal- and integration-related expense | 0.01 | 0.01 | 0.03 | 0.03 | |||||
Restructuring and related expense | 0.01 | 0.01 | 0.07 | 0.07 | |||||
(Gain) loss on change in value of debentures* | (0.01) | (0.01) | 0.04 | 0.04 | |||||
Tax effect of non-GAAP adjustments | (0.02) | (0.03) | (0.11) | (0.13) | |||||
Non-GAAP outlook | $ 0.11 | $ 0.13 | $ 0.49 | $ 0.54 | |||||
Weighted average shares used to compute (loss) diluted earnings per share (in thousands) | |||||||||
Shares used to compute GAAP(loss) diluted earnings per share | 148,000 | 148,000 | 148,000 | 148,000 | |||||
Shares used to compute Non-GAAPdiluted earnings per share | 155,000 | 155,000 | 155,000 | 155,000 | |||||
Adjusted EBITDA ($ millions) | |||||||||
GAAP income from operations | $ 1.9 | $ 5.9 | $ 24.4 | $ 34.4 | |||||
Depreciation | 4.2 | 4.2 | 16.9 | 16.9 | |||||
Amortization of acquired intangible assets | 17.3 | 17.3 | 66.6 | 66.6 | |||||
Stock-based compensation | 5.7 | 5.7 | 20.7 | 20.7 | |||||
Acquisition-, disposal- and integration-related expense | 1.9 | 1.9 | 5.3 | 5.3 | |||||
Restructuring and related expense | 1.0 | 1.0 | 11.1 | 11.1 | |||||
Non-GAAP outlook | $ 32.0 | $ 36.0 | $ 145.0 | $ 155.0 | |||||
* | Excludes any estimated future (income) loss related to the revaluation of the debentures and warrants received as consideration from the sale of the Kandy Communications Business. | ||||||||
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SOURCE Ribbon Communications Inc.
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