Ribbon Communications Inc. Reports Second Quarter 2024 Financial Results
Ribbon Communications Inc. (Nasdaq: RBBN) reported its Q2 2024 financial results, showing mixed performance. While revenue decreased to $193 million from $211 million in Q2 2023, the company saw significant improvements in profitability. Net income increased by 21% and Adjusted EBITDA rose by 65% in the first half of 2024 compared to the same period in 2023. The company achieved higher gross margins and lower operating expenses year-over-year.
Despite lower sales, Ribbon projects a strong second half of 2024, driven by growth from U.S. Tier 1, Rural Broadband, Enterprise, and India markets. The company completed a refinancing of its capital structure with a $385 million five-year senior secured credit facility, providing greater liquidity. Ribbon adjusted its full-year 2024 guidance, now expecting revenue between $830 million and $850 million, and Adjusted EBITDA between $105 million and $115 million.
Ribbon Communications Inc. (Nasdaq: RBBN) ha riportato i risultati finanziari del Q2 2024, mostrando una performance mista. Sebbene i ricavi siano diminuiti a $193 milioni rispetto ai $211 milioni del Q2 2023, l'azienda ha registrato miglioramenti significativi nella redditività. Il reddito netto è aumentato del 21% e l'EBITDA rettificato è salito del 65% nel primo semestre del 2024 rispetto allo stesso periodo del 2023. L'azienda ha raggiunto margini lordi più elevati e spese operative inferiori su base annua.
Nonostante le vendite inferiori, Ribbon prevede un forte secondo semestre del 2024, sostenuto dalla crescita nei mercati statunitensi di Tier 1, Broadband Rurale, Imprese e India. L'azienda ha completato un rifinanziamento della sua struttura di capitale con una linea di credito senior garantita di $385 milioni a cinque anni, fornendo maggiore liquidità. Ribbon ha aggiornato le previsioni per l'intero anno 2024, ora prevedendo ricavi tra $830 milioni e $850 milioni, e un EBITDA rettificato tra $105 milioni e $115 milioni.
Ribbon Communications Inc. (Nasdaq: RBBN) reportó sus resultados financieros del Q2 2024, mostrando un desempeño mixto. Aunque los ingresos disminuyeron a $193 millones desde $211 millones en el Q2 2023, la compañía vio mejoras significativas en la rentabilidad. El ingreso neto aumentó un 21% y el EBITDA ajustado creció un 65% en la primera mitad de 2024 en comparación con el mismo período en 2023. La compañía alcanzó márgenes brutos más altos y menores gastos operativos año tras año.
A pesar de la caída en las ventas, Ribbon proyecta un fuerte segundo semestre de 2024, impulsado por el crecimiento en los mercados de EE. UU. de Tier 1, Banda Ancha Rural, Empresas e India. La compañía completó un refinanciamiento de su estructura de capital con una línea de crédito senior asegurada de $385 millones a cinco años, proporcionando mayor liquidez. Ribbon ajustó su guía para todo el año 2024, ahora esperando ingresos entre $830 millones y $850 millones, y un EBITDA ajustado entre $105 millones y $115 millones.
리본 커뮤니케이션즈 Inc. (Nasdaq: RBBN)가 2024년 2분기 재무 결과를 발표했으며, 혼합된 실적을 보였습니다. 2023년 2분기 $211백만에서 $193백만으로 매출이 감소했음에도 불구하고, 회사는 수익성에서 상당한 개선을 보았습니다. 순이익은 21% 증가하였고, 조정 EBITDA는 65% 상승했습니다. 2024년 상반기는 2023년 같은 기간과 비교했습니다. 회사는 연간 기준으로 더 높은 총 마진과 낮은 운영 비용을 달성했습니다.
판매가 감소했음에도 불구하고, 리본은 미국 Tier 1, 농촌 광대역, 기업 및 인도 시장의 성장으로 2024년 하반기에 강력한 실적을 나타낼 것으로 예상하고 있습니다. 회사는 3억 8500만 달러 규모의 5년 만기 선순위 담보 대출 시설로 자본 구조를 재정비하였으며, 더 큰 유동성을 제공합니다. 리본은 2024년 전체 연도 가이드를 조정하여 이제 8억 3000만 달러에서 8억 5000만 달러 사이의 수익과 1억 500만 달러에서 1억 1500만 달러 사이의 조정 EBITDA를 예상하고 있습니다.
Ribbon Communications Inc. (Nasdaq: RBBN) a annoncé ses résultats financiers du deuxième trimestre 2024, affichant des performances mitigées. Bien que les revenus aient diminué à 193 millions de dollars contre 211 millions de dollars au T2 2023, l'entreprise a connu des améliorations significatives en matière de rentabilité. Le bénéfice net a augmenté de 21% et l'EBITDA ajusté a crû de 65% au premier semestre 2024 par rapport à la même période de 2023. L'entreprise a réalisé des marges brutes plus élevées et des dépenses opérationnelles plus faibles d'une année sur l'autre.
Malgré une baisse des ventes, Ribbon prévoit une seconde moitié de 2024 solide, soutenue par la croissance des marchés américains de Tier 1, de la bande large rurale, des entreprises et de l'Inde. L'entreprise a terminé un refinancement de sa structure de capital avec une facilité de crédit garantie senior de 385 millions de dollars sur cinq ans, offrant une meilleure liquidité. Ribbon a ajusté ses prévisions pour l'année 2024, s'attendant désormais à des revenus compris entre 830 millions et 850 millions de dollars et à un EBITDA ajusté compris entre 105 millions et 115 millions de dollars.
Ribbon Communications Inc. (Nasdaq: RBBN) hat die Finanzzahlen für das zweite Quartal 2024 veröffentlicht und zeigt eine gemischte Leistung. Obwohl die Einnahmen von 211 Millionen Dollar im Q2 2023 auf 193 Millionen Dollar gesunken sind, verzeichnete das Unternehmen erhebliche Verbesserungen bei der Rentabilität. Das Nettoeinkommen stieg um 21% und EBITDA bereinigt um 65% im ersten Halbjahr 2024 im Vergleich zum gleichen Zeitraum 2023. Das Unternehmen erzielte höhere Bruttomargen und niedrigere Betriebskosten im Jahresvergleich.
Trotz sinkender Verkaufszahlen prognostiziert Ribbon ein starkes zweites Halbjahr 2024, bedingt durch das Wachstum in den US-Märkten Tier 1, ländlicher Breitbandversorgung, Unternehmen und Indien. Das Unternehmen hat eine Refinanzierung seiner Kapitalstruktur mit einer fünfjährigen, gesicherten Kreditlinie über 385 Millionen Dollar abgeschlossen, die eine höhere Liquidität bereitstellt. Ribbon hat seine Jahresprognose für 2024 angepasst und erwartet nun Einnahmen zwischen 830 Millionen und 850 Millionen Dollar sowie ein bereinigtes EBITDA zwischen 105 Millionen und 115 Millionen Dollar.
- Net income increased by 21% in 1H 2024 compared to 1H 2023
- Adjusted EBITDA improved by 65% to $33 million in 1H 2024
- GAAP and Non-GAAP Gross Margin for Q2 improved 260 and 240 basis points year-over-year
- Operating expenses reduced by $4 million, reaching lowest level since ECI acquisition in 2020
- Completed refinancing with $385 million five-year senior secured credit facility, providing greater liquidity
- Q2 2024 revenue decreased to $193 million from $211 million in Q2 2023
- GAAP Net loss of $17 million in Q2 2024
- Full-year 2024 guidance adjusted downward due to conservative outlook for Eastern European region
Insights
Ribbon Communications' Q2 2024 results present a mixed picture. While revenue declined 8.5% year-over-year to
Key financial highlights include:
- First half 2024 Adjusted EBITDA increased by
65% to$33 million - GAAP Net loss improved from
($21 million) to($17 million) year-over-year - Non-GAAP diluted earnings per share increased from
$0.04 to$0.05
The company's refinancing of its capital structure with a
However, the reduced full-year 2024 guidance, with revenue now expected between
Ribbon Communications' Q2 results reflect broader industry trends and geopolitical challenges. The suspension of product shipments to Eastern Europe due to the Ukraine conflict highlights the ongoing impact of global events on tech companies' operations.
The company's focus on key growth areas is noteworthy:
- U.S. Tier 1 providers (e.g., Verizon Voice Network modernization)
- Rural Broadband expansion
- Enterprise segment
- Indian market
These sectors align with current market dynamics, including the push for 5G infrastructure, increased demand for robust enterprise communications and the rapid digitalization in emerging markets like India.
The mention of "changes in the competitive landscape" presenting opportunities for share expansion is intriguing. This could be related to industry consolidation or competitors facing challenges, potentially allowing Ribbon to gain market share.
However, the lowered full-year guidance suggests caution. The company's ability to capitalize on these opportunities while navigating global uncertainties will be critical for its performance in the latter half of 2024.
Ribbon Communications' position as a provider of real-time communications technology and IP optical networking solutions places it at the forefront of critical infrastructure modernization. The company's focus on voice network modernization, as evidenced by the Verizon project, aligns with the industry's shift towards more efficient, IP-based communications systems.
Key technological trends impacting Ribbon's business include:
- The transition from legacy TDM networks to IP-based solutions
- Increased demand for secure, reliable communications in enterprise settings
- The expansion of broadband infrastructure, particularly in rural areas
- The growing importance of IP optical networking in 5G deployments
The company's ability to address these trends will be important for its future growth. The mention of opportunities arising from changes in the competitive landscape suggests that Ribbon may be well-positioned to capitalize on industry shifts, possibly due to its diverse product portfolio spanning both software and hardware solutions.
However, the ongoing challenges in Eastern Europe highlight the need for geographical diversification in Ribbon's technology deployments. The company's focus on growth in India and other markets could help mitigate regional risks and tap into emerging opportunities in rapidly digitalizing economies.
Net income increased
Continued improvement in gross margin and lower operating expenses
Expect strong second half based on growth from
Revenue for the second quarter of 2024 was
"Earnings increased significantly in the first half of 2024 with Adjusted EBITDA increasing
Mr. McClelland added, "We continue to project a strong second half of 2024 as we ramp the recently announced Verizon Voice Network modernization program and anticipate strong growth in several other areas such as Enterprise,
Financial Highlights1 | ||||||||
Three months ended | Six months ended | |||||||
June 30, | June 30, | |||||||
In millions, except per share amounts | 2024 | 2023 | 2024 | 2023 | ||||
GAAP Revenue | $ 193 | $ 211 | $ 372 | $ 397 | ||||
GAAP Net income (loss) | $ (17) | $ (21) | $ (47) | $ (60) | ||||
Non-GAAP Net income (loss) | $ 9 | $ 8 | $ 7 | $ 5 | ||||
Non-GAAP Adjusted EBITDA | $ 22 | $ 23 | $ 33 | $ 20 | ||||
GAAP diluted earnings (loss) per share | $ (0.10) | $ (0.13) | $ (0.27) | $ (0.35) | ||||
Non-GAAP diluted earnings (loss) per share | $ 0.05 | $ 0.04 | $ 0.04 | $ 0.03 | ||||
Weighted average shares outstanding basic | 174 | 170 | 173 | 169 | ||||
Weighted average shares outstanding diluted | 176 | 175 | 176 | 175 | ||||
1 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. |
"During the second quarter of 2024, we completed the refinancing of our capital structure with a
Business Outlook1
For the third quarter of 2024, the Company expects continued sequential growth in both of our businesses with revenue in a range of
The Company has also adjusted full-year 2024 targets and now expects revenue in a range of
The Company's outlook is based on current indications for its business, which are subject to change.
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 Conference Schedule
- August 27, 2024: Evercore ISI 2024 Semiconductor, IT Hardware & Networking Conference
- August 28, 2024: Jefferies Semiconductor, IT Hardware & Communication Technology Summit
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 and broadband internet. We maintain a keen focus on our commitments to Environmental, Social and Governance (ESG) matters, offering an annual Sustainability Report to our stakeholders. 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 a number of risks and uncertainties. All statements other than statements of historical facts contained in this release, including without limitation statements regarding the Company's projected financial results for the third quarter of 2024 and beyond; plans and objectives for future operations, including cost reductions; the impact of the wars in
Forward-looking statements are based on the Company's current expectations and assumptions regarding its 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. 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, the effects of geopolitical instabilities and wars, including in
These factors are not intended to be an all-encompassing list of risks and uncertainties that may affect the Company's business and results from operations. Additional information regarding these and other factors can be found in the Company's reports filed with the Securities and Exchange Commission, including, without limitation, its Form 10-K for the year ended December 31, 2023 and its Form 10-Q for the quarter ended March 31, 2024. 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
The Company's 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. The Company considers the use of non-GAAP financial measures helpful in assessing the core performance of its continuing operations and when planning and forecasting future periods. The Company's annual financial plan is prepared on a non-GAAP basis and is approved by its 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. The Company defines continuing operations as the ongoing results of its business adjusted for certain expenses and credits, as described below. The Company believes that providing non-GAAP information to investors allows them to view the Company's financial results in the way its management views them and helps investors to better understand the Company's core financial and operating performance and evaluate the efficacy of the methodology and information used by its management to evaluate and measure such performance.
While the Company's management uses non-GAAP financial measures as tools to enhance its understanding of certain aspects of the Company's financial performance, management does not consider these measures to be a substitute for, or superior to, GAAP measures. In addition, the Company's 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 the Company's financial measures reflect the exclusion of items that are recurring and will be reflected in its 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. The Company believes that presenting non-GAAP operating results that exclude stock-based compensation provides investors with visibility and insight into its management's method of analysis and its core operating performance.
Amortization of Acquired Technology (including software licenses); Amortization of Acquired Intangible Assets
Amortization amounts are inconsistent in frequency and amount and are significantly impacted by the timing and size of acquisitions. Amortization of acquired technology is reported separately within Cost of revenue and Amortization of acquired intangible assets is reported separately within Operating expenses. These items are reported collectively as Amortization of acquired intangible assets in the accompanying reconciliations of non-GAAP and GAAP financial measures. The Company believes that excluding non-cash amortization of these intangible assets facilitates the comparison of its financial results to its historical operating results and to other companies in its industry as if the acquired intangible assets had been developed internally rather than acquired.
Litigation Costs
In connection with certain ongoing contract litigation where Ribbon is the defendant (as described in Note 26 to the Company's Consolidated Financial Statements included in its Annual Report on Form 10-K for the year ended December 31, 2023), the Company has incurred litigation costs beginning in 2023. These costs are included as a component of general and administrative expense. The Company believes that such costs are not part of its core business or ongoing operations, are unplanned and generally not within its control. Accordingly, the Company believes that excluding the litigation costs related to these specific legal matters facilitates the comparison of the Company's financial results to its historical operating results and to other companies in its industry.
Acquisition-, Disposal- and Integration-Related
The Company considers certain acquisition-, disposal- and integration-related costs to be unrelated to the organic continuing operations of the Company and its acquired businesses. Such costs are generally not relevant to assessing or estimating the long-term performance of the acquired assets. The Company excludes such acquisition-, disposal- and integration-related costs to allow more accurate comparisons of its financial results to its 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
The Company has recorded restructuring and related expense to streamline operations and reduce operating costs by closing and consolidating certain facilities and reducing its worldwide workforce. The Company believes that excluding restructuring and related expense facilitates the comparison of its financial results to its historical operating results and to other companies in its industry, as there are no future revenue streams or other benefits associated with these costs.
Preferred Stock and Warrant Liability Mark-to-Market Adjustment
The Company recorded adjustments to the fair value of its Series A Preferred Stock and Warrants to purchase shares of the Company's common stock in Other (expense) income, net. Both of these instruments were issued in March 2023 in connection with the Company's private placement and have been classified as liabilities and marked to market each reporting period until the Series A Preferred Stock was fully redeemed on June 25, 2024. The Warrant liability remains outstanding and will continue to be marked to market each reporting period. The Company excluded these gains and losses from the change in the fair value of these liabilities because it believes that such gains or losses were not part of its core business or ongoing operations.
Tax Effect of Non-GAAP Adjustments
The Non-GAAP income tax provision is presented based on an estimated tax rate applied against forecasted annual non-GAAP income. The Non-GAAP income tax provision assumes no available net operating losses or valuation allowances for the
Adjusted EBITDA
The Company uses Adjusted EBITDA as a supplemental measure to review and assess its performance. The Company calculates Adjusted EBITDA by excluding from income (loss) from operations: depreciation; stock-based compensation; amortization of acquired intangible assets; certain litigation costs; acquisition-, disposal- and integration-related expense; and restructuring and related expense. In general, the Company excludes the expenses that it considers to be non-cash and/or not a part of its ongoing operations. The Company may exclude other items in the future that have those characteristics. Adjusted EBITDA is a non-GAAP financial measure that is used by the investing community for comparative and valuation purposes. The Company discloses this metric to support and facilitate dialogue with research analysts and investors. Other companies may calculate Adjusted EBITDA differently than the Company does, limiting its usefulness as a comparative measure.
Conference Call Details:
Conference call to discuss the Company's financial results for the second quarter ended June 30, 2024.
Date: Wednesday, July 24, 2024
Time: 4:30 p.m. (ET)
Dial-In Information:
US/
International: 201-389-0925
Instant Telephone Access: Call me™
A telephone playback of the call will be available following the conference call until August 7, 2024 and can be accessed by calling 877-660-6853 or 201-612-7415 for international callers. The reservation number for the replay is 13747581.
Live (Listen-Only) Webcast:
Available via the Investor Relations website, where a replay will also be available shortly following the conference call.
For more details on financial results, please visit investors.ribboncommunications.com.
Investor Relations
+1 (978) 614-8050
ir@rbbn.com
Media Contact
Catherine Berthier
+1 (646) 741-1974
cberthier@rbbn.com
RIBBON COMMUNICATIONS INC. | ||||||||
Consolidated Statements of Operations | ||||||||
(in thousands, except percentages and per share amounts) | ||||||||
(unaudited) | ||||||||
Three months ended | ||||||||
June 30, | March 31, | June 30, | ||||||
2024 | 2024 | 2023 | ||||||
Revenue: | ||||||||
Product | $ 99,133 | $ 87,610 | ||||||
Service | 93,487 | 92,054 | 93,271 | |||||
Total revenue | 192,620 | 179,664 | 210,618 | |||||
Cost of revenue: | ||||||||
Product | 54,845 | 45,794 | 67,927 | |||||
Service | 33,376 | 35,364 | 33,782 | |||||
Amortization of acquired technology | 6,532 | 6,551 | 7,439 | |||||
Total cost of revenue | 94,753 | 87,709 | 109,148 | |||||
Gross profit | 97,867 | 91,955 | 101,470 | |||||
Gross margin | 50.8 % | 51.2 % | 48.2 % | |||||
Operating expenses: | ||||||||
Research and development | 43,489 | 45,763 | 47,776 | |||||
Sales and marketing | 32,984 | 34,716 | 33,905 | |||||
General and administrative | 14,901 | 15,191 | 14,346 | |||||
Amortization of acquired intangible assets | 6,508 | 6,706 | 7,260 | |||||
Acquisition-, disposal- and integration-related | - | - | 498 | |||||
Restructuring and related | 1,920 | 3,065 | 4,307 | |||||
Total operating expenses | 99,802 | 105,441 | 108,092 | |||||
Income (loss) from operations | (1,935) | (13,486) | (6,622) | |||||
Interest expense, net | (3,879) | (5,987) | (6,766) | |||||
Other (expense) income, net | (9,503) | (7,513) | (2,688) | |||||
Income (loss) before income taxes | (15,317) | (26,986) | (16,076) | |||||
Income tax benefit (provision) | (1,499) | (3,375) | (5,403) | |||||
Net income (loss) | ||||||||
Income (loss) per share: | ||||||||
Basic | $ (0.10) | $ (0.18) | $ (0.13) | |||||
Diluted | $ (0.10) | $ (0.18) | $ (0.13) | |||||
Weighted average shares used to compute income (loss) per share: | ||||||||
Basic | 173,793 | 172,428 | 170,103 | |||||
Diluted | 173,793 | 172,428 | 170,103 | |||||
RIBBON COMMUNICATIONS INC. | ||||||
Consolidated Statements of Operations | ||||||
(in thousands, except percentages and per share amounts) | ||||||
(unaudited) | ||||||
Six months ended | ||||||
June 30, | June 30, | |||||
2024 | 2023 | |||||
Revenue: | ||||||
Product | ||||||
Service | 185,541 | 186,112 | ||||
Total revenue | 372,284 | 396,777 | ||||
Cost of revenue: | ||||||
Product | 100,639 | 129,990 | ||||
Service | 68,740 | 69,087 | ||||
Amortization of acquired technology | 13,083 | 14,828 | ||||
Total cost of revenue | 182,462 | 213,905 | ||||
Gross profit | 189,822 | 182,872 | ||||
Gross margin | 51.0 % | 46.1 % | ||||
Operating expenses: | ||||||
Research and development | 89,252 | 99,080 | ||||
Sales and marketing | 67,700 | 69,304 | ||||
General and administrative | 30,092 | 28,391 | ||||
Amortization of acquired intangible assets | 13,214 | 14,524 | ||||
Acquisition-, disposal- and integration-related | - | 2,140 | ||||
Restructuring and related | 4,985 | 11,244 | ||||
Total operating expenses | 205,243 | 224,683 | ||||
Income (loss) from operations | (15,421) | (41,811) | ||||
Interest expense, net | (9,866) | (13,188) | ||||
Other (expense) income, net | (17,016) | 2,084 | ||||
Income (loss) before income taxes | (42,303) | (52,915) | ||||
Income tax benefit (provision) | (4,874) | (6,869) | ||||
Net income (loss) | ||||||
Income (loss) per share: | ||||||
Basic | $ (0.27) | $ (0.35) | ||||
Diluted | $ (0.27) | $ (0.35) | ||||
Weighted average shares used to compute income (loss) per share: | ||||||
Basic | 173,110 | 169,326 | ||||
Diluted | 173,110 | 169,326 | ||||
RIBBON COMMUNICATIONS INC. | ||||||
Consolidated Balance Sheets | ||||||
(in thousands) | ||||||
(unaudited) | ||||||
June 30, | December 31, | |||||
2024 | 2023 | |||||
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ 64,558 | $ 26,494 | ||||
Restricted cash | 2,850 | 136 | ||||
Accounts receivable, net | 210,954 | 268,421 | ||||
Inventory | 79,216 | 77,521 | ||||
Other current assets | 46,576 | 46,146 | ||||
Total current assets | 404,154 | 418,718 | ||||
Property and equipment, net | 40,824 | 41,820 | ||||
Intangible assets, net | 212,052 | 238,087 | ||||
Goodwill | 300,892 | 300,892 | ||||
Deferred income taxes | 78,067 | 69,761 | ||||
Operating lease right-of-use assets | 33,901 | 39,783 | ||||
Other assets | 35,562 | 35,092 | ||||
$ 1,144,153 | ||||||
Liabilities and Stockholders' Equity | ||||||
Current liabilities: | ||||||
Current portion of term debt | $ 3,500 | $ 35,102 | ||||
Accounts payable | 64,333 | 85,164 | ||||
Accrued expenses and other | 92,847 | 91,687 | ||||
Operating lease liabilities | 12,347 | 15,739 | ||||
Deferred revenue | 99,547 | 113,381 | ||||
Total current liabilities | 272,574 | 341,073 | ||||
Long-term debt, net of current | 333,979 | 197,482 | ||||
Warrant liability | 6,170 | 5,295 | ||||
Preferred stock liability | - | 53,337 | ||||
Operating lease liabilities, net of current | 34,858 | 38,711 | ||||
Deferred revenue, net of current | 16,632 | 19,218 | ||||
Deferred income taxes | 5,616 | 5,616 | ||||
Other long-term liabilities | 30,601 | 30,658 | ||||
Total liabilities | 700,430 | 691,390 | ||||
Commitments and contingencies | ||||||
Stockholders' equity: | ||||||
Common stock | 17 | 17 | ||||
Additional paid-in capital | 1,964,304 | 1,958,909 | ||||
Accumulated deficit | (1,567,127) | (1,519,950) | ||||
Accumulated other comprehensive income | 7,828 | 13,787 | ||||
Total stockholders' equity | 405,022 | 452,763 | ||||
$ 1,144,153 | ||||||
RIBBON COMMUNICATIONS INC. | |||||||
Consolidated Statements of Cash Flows | |||||||
(in thousands) | |||||||
(unaudited) | |||||||
Six months ended | |||||||
June 30, | June 30, | ||||||
2024 | 2023 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ (47,177) | $ (59,784) | |||||
Adjustments to reconcile net income (loss) to cash flows provided by (used in) operating activities: | |||||||
Depreciation and amortization of property and equipment | 6,770 | 7,059 | |||||
Amortization of intangible assets | 26,297 | 29,352 | |||||
Amortization of debt issuance costs and original issue discount | 3,445 | 1,793 | |||||
Amortization of accumulated other comprehensive gain related to interest rate swap | (8,196) | (2,062) | |||||
Stock-based compensation | 8,016 | 11,964 | |||||
Deferred income taxes | (8,104) | (6,946) | |||||
Gain on sale of swap | - | (7,301) | |||||
Change in fair value of warrant liability | 875 | (1,318) | |||||
Change in fair value of preferred stock liability | 8,091 | 1,456 | |||||
Dividends accrued on preferred stock liability | 2,743 | 1,272 | |||||
Payment of dividends accrued on preferred stock liability | (6,686) | - | |||||
Foreign currency exchange (gains) losses | 2,023 | (1,080) | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 56,146 | 21,534 | |||||
Inventory | (4,405) | (2,221) | |||||
Other operating assets | 8,854 | 13,486 | |||||
Accounts payable | (20,541) | (1,740) | |||||
Accrued expenses and other long-term liabilities | (8,407) | 2,343 | |||||
Deferred revenue | (16,422) | 767 | |||||
Net cash provided by (used in) operating activities | 3,322 | 8,574 | |||||
Cash flows from investing activities: | |||||||
Purchases of property and equipment | (5,613) | (4,091) | |||||
Purchases of software licenses | (263) | - | |||||
Net cash provided by (used in) investing activities | (5,876) | (4,091) | |||||
Cash flows from financing activities: | |||||||
Borrowings under revolving line of credit | 44,106 | 30,000 | |||||
Principal payments on revolving line of credit | (44,106) | (30,000) | |||||
Proceeds from issuance of term debt | 342,300 | - | |||||
Principal payments of term debt | (235,395) | (85,029) | |||||
Payment of debt issuance costs | (3,978) | (1,572) | |||||
Proceeds from issuance of preferred stock and warrant liabilities | - | 53,350 | |||||
Payment of preferred stock liability | (56,850) | - | |||||
Proceeds from the exercise of stock options | 17 | 2 | |||||
Payment of tax obligations related to vested stock awards and units | (2,638) | (3,456) | |||||
Net cash provided by (used in) financing activities | 43,456 | (36,705) | |||||
Effect of exchange rate changes on cash and cash equivalents | (124) | (394) | |||||
Net increase (decrease) in cash and cash equivalents | 40,778 | (32,616) | |||||
Cash and cash equivalents, beginning of year | 26,630 | 67,262 | |||||
Cash and cash equivalents, end of period | $ 67,408 | $ 34,646 | |||||
RIBBON COMMUNICATIONS INC. | ||||||||||||
Supplemental Information | ||||||||||||
(in thousands) | ||||||||||||
(unaudited) | ||||||||||||
The following tables provide the details of stock-based compensation included as components of other line items in the Company's | ||||||||||||
Three months ended | Six months ended | |||||||||||
June 30, | March 31, | June 30, | June 30, | June 30, | ||||||||
2024 | 2024 | 2023 | 2024 | 2023 | ||||||||
Stock-based compensation | ||||||||||||
Cost of revenue - product | $ 64 | $ 106 | $ 115 | $ 170 | $ 264 | |||||||
Cost of revenue - service | 274 | 472 | 526 | 746 | 1,061 | |||||||
Cost of revenue | 338 | 578 | 641 | 916 | 1,325 | |||||||
Research and development | 616 | 1,068 | 1,300 | 1,684 | 2,562 | |||||||
Sales and marketing | 954 | 1,157 | 2,142 | 2,111 | 4,271 | |||||||
General and administrative | 1,586 | 1,719 | 2,033 | 3,305 | 3,806 | |||||||
Operating expense | 3,156 | 3,944 | 5,475 | 7,100 | 10,639 | |||||||
Total stock-based compensation | $ 3,494 | $ 4,522 | $ 6,116 | $ 8,016 | $ 11,964 | |||||||
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, | |||
2024 | 2024 | 2023 | |||
GAAP Gross margin | 50.8 % | 51.2 % | 48.2 % | ||
Stock-based compensation | 0.2 % | 0.3 % | 0.3 % | ||
Amortization of acquired technology | 3.4 % | 3.6 % | 3.5 % | ||
Non-GAAP Gross margin | 54.4 % | 55.1 % | 52.0 % | ||
GAAP Net income (loss) | |||||
Stock-based compensation | 3,494 | 4,522 | 6,116 | ||
Amortization of acquired intangible assets | 13,040 | 13,257 | 14,699 | ||
Litigation costs | 1,768 | 951 | 114 | ||
Acquisition-, disposal- and integration-related | - | - | 498 | ||
Restructuring and related | 1,920 | 3,065 | 4,307 | ||
Preferred stock and warrant liability mark-to-market adjustment | 8,210 | 3,499 | 1,410 | ||
Tax effect of non-GAAP adjustments | (3,095) | 3,971 | 2,083 | ||
Non-GAAP Net income (loss) | $ 8,521 | $ (1,096) | $ 7,748 | ||
GAAP Diluted earnings (loss) per share | $ (0.10) | $ (0.18) | $ (0.13) | ||
Stock-based compensation | 0.02 | 0.03 | 0.03 | ||
Amortization of acquired intangible assets | 0.08 | 0.07 | 0.09 | ||
Litigation costs | 0.01 | 0.01 | * | ||
Acquisition-, disposal- and integration-related | - | - | 0.01 | ||
Restructuring and related | 0.01 | 0.02 | 0.02 | ||
Preferred stock and warrant liability mark-to-market adjustment | 0.05 | 0.02 | 0.01 | ||
Tax effect of non-GAAP adjustments | (0.02) | 0.02 | 0.01 | ||
Non-GAAP Diluted earnings (loss) per share | $ 0.05 | $ (0.01) | $ 0.04 | ||
Weighted average shares used to compute diluted earnings (loss) per share | |||||
Shares used to compute GAAP diluted earnings (loss) per share | 173,793 | 172,428 | 170,103 | ||
Shares used to compute Non-GAAP diluted earnings (loss) per share | 176,246 | 172,428 | 175,220 | ||
GAAP Income (loss) from operations | $ (1,935) | $ (6,622) | |||
Depreciation | 3,376 | 3,394 | 3,549 | ||
Stock-based compensation | 3,494 | 4,522 | 6,116 | ||
Amortization of acquired intangible assets | 13,040 | 13,257 | 14,699 | ||
Litigation costs | 1,768 | 951 | 114 | ||
Acquisition-, disposal- and integration-related | - | - | 498 | ||
Restructuring and related | 1,920 | 3,065 | 4,307 | ||
Non-GAAP Adjusted EBITDA | $ 21,663 | $ 11,703 | $ 22,661 | ||
* Less than | |||||
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, | ||
2024 | 2023 | ||
GAAP Gross Margin | 51.0 % | 46.1 % | |
Stock-based compensation | 0.2 % | 0.3 % | |
Amortization of acquired technology | 3.5 % | 3.8 % | |
Non-GAAP Gross Margin | 54.7 % | 50.2 % | |
GAAP Net income (loss) | |||
Stock-based compensation | 8,016 | 11,964 | |
Amortization of acquired intangible assets | 26,297 | 29,352 | |
Litigation costs | 2,719 | 291 | |
Acquisition-, disposal- and integration-related | - | 2,140 | |
Restructuring and related | 4,985 | 11,244 | |
Preferred stock and warrant liability mark-to-market adjustment | 11,709 | 1,410 | |
Preferred stock and warrant liability issuance costs | - | 3,545 | |
Tax effect of non-GAAP adjustments | 876 | 4,759 | |
Non-GAAP Net income (loss) | $ 7,425 | $ 4,921 | |
GAAP Diluted earnings (loss) per share | $ (0.27) | $ (0.35) | |
Stock-based compensation | 0.05 | 0.07 | |
Amortization of acquired intangible assets | 0.14 | 0.18 | |
Litigation costs | 0.02 | * | |
Acquisition-, disposal- and integration-related | - | 0.01 | |
Restructuring and related | 0.03 | 0.06 | |
Preferred stock and warrant liability mark-to-market adjustment | 0.07 | 0.01 | |
Preferred stock and warrant liability issuance costs | - | 0.02 | |
Tax effect of non-GAAP adjustments | * | 0.03 | |
Non-GAAP Diluted earnings (loss) per share | $ 0.04 | $ 0.03 | |
Weighted average shares used to compute diluted earnings per share | |||
Shares used to compute GAAP diluted loss per share | 173,110 | 169,326 | |
Shares used to compute Non-GAAP diluted earnings per share | 175,784 | 175,359 | |
GAAP Income (loss) from operations | |||
Depreciation | 6,770 | 7,059 | |
Stock-based compensation | 8,016 | 11,964 | |
Amortization of acquired intangible assets | 26,297 | 29,352 | |
Litigation costs | 2,719 | 291 | |
Acquisition-, disposal- and integration-related | - | 2,140 | |
Restructuring and related | 4,985 | 11,244 | |
Non-GAAP Adjusted EBITDA | $ 33,366 | $ 20,239 | |
* Less than | |||
RIBBON COMMUNICATIONS INC. | |||||
Reconciliation of Non-GAAP and GAAP Financial Measures | |||||
(in thousands) | |||||
(unaudited) | |||||
Trailing Twelve Months | |||||
June 30, | March 31, | June 30, | |||
2024 | 2024 | 2023 | |||
GAAP Income (loss) from operations | $ 2,105 | $ (2,582) | |||
Depreciation | 13,816 | 13,989 | 14,581 | ||
Stock-based compensation | 17,858 | 20,480 | 22,017 | ||
Amortization of acquired intangible assets | 53,836 | 55,495 | 59,597 | ||
Litigation costs | 3,735 | 2,081 | 291 | ||
Acquisition-, disposal- and integration-related | 2,336 | 2,834 | 5,042 | ||
Restructuring and related | 9,950 | 12,337 | 14,369 | ||
Non-GAAP Adjusted EBITDA | $ 104,634 | $ 72,055 | |||
RIBBON COMMUNICATIONS INC. | ||||||||||
Reconciliation of Non-GAAP and GAAP Financial Measures - Outlook | ||||||||||
(unaudited) | ||||||||||
Three months ending | Year ending | |||||||||
September 30, 2024 | December 31, 2024 | |||||||||
Midpoint (1) | Range | Midpoint (1) | Range | |||||||
Revenue ($ millions) | $ 212.5 | +/- | $ 840 | +/- | ||||||
Gross margin: | ||||||||||
GAAP outlook | 50.09 % | 51.07 % | ||||||||
Stock-based compensation | 0.26 % | 0.24 % | ||||||||
Amortization of acquired technology | 2.90 % | 2.94 % | ||||||||
Non-GAAP outlook | 53.25 % | +/- | 54.25 % | +/- | ||||||
Adjusted EBITDA ($ millions): | ||||||||||
GAAP income (loss) from operations | $ 3.0 | $ 5.9 | ||||||||
Depreciation | 3.8 | 14.4 | ||||||||
Stock-based compensation | 4.7 | 17.2 | ||||||||
Amortization of acquired intangible assets | 12.8 | 50.9 | ||||||||
Litigation costs | 0.9 | 4.6 | ||||||||
Restructuring and related | 2.3 | 17.0 | ||||||||
Non-GAAP outlook | $ 27.5 | +/- | $ 110.0 | +/- | ||||||
(1) Q3 2024 and FY 2024 outlook represents the midpoint of the expected ranges | ||||||||||
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SOURCE Ribbon Communications Inc.
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