Ribbon Communications Inc. Reports Third Quarter 2021 Financial Results
Ribbon Communications Inc. (Nasdaq: RBBN) reported a 3Q 2021 revenue of $210 million, down 9% year-over-year, affected by $9.5 million in supply chain constraints. Non-GAAP diluted EPS rose 29% to $0.11, while Adjusted EBITDA grew 14% year-to-date to $94 million. The company anticipates Q4 revenue of $240 million to $260 million and EPS between $0.13 and $0.17. Despite challenges, Ribbon aims for growth in 2022 driven by IP Optical Networks and 5G expansion.
- 2% year-to-date revenue growth.
- 14% year-to-date Adjusted EBITDA growth.
- Strong demand for Voice over IP Network Transformation solutions growing 25% year-to-date.
- Projected Q4 revenue of $240 million to $260 million.
- GAAP loss per share increased by $0.40 in Q3 2021.
- Overall GAAP revenue declined by 9% year-over-year.
PLANO, Texas, Oct. 27, 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 third quarter of 2021.
For the first nine months of 2021, sales increased by
"We're excited by our recent IP Optical Networks wins and growth prospects as our funnel of opportunities strengthen and benefit from the breadth of existing Ribbon relationships with customers," noted Bruce McClelland, President and Chief Executive Officer of Ribbon Communications. "We believe these customer wins, along with accelerating investments in fiber networks and 5G technology, position Ribbon for strong growth in 2022 and beyond. While revenues this quarter were impacted by supply chain constraints, we believe our IP Optical product book to revenue ratio of 1.17 times demonstrates growing demand."
Financial Highlights1, 2
The following table summarizes the consolidated financial highlights for the three and nine months ended September 30, 2021 and 2020 (in millions, except per share amounts).
Three months ended Nine months ended September 30, September 30, 2021 2020 2021 2020 GAAP Revenue GAAP Net income (loss) ( ( ( Non-GAAP Net income $ 48 $ 34 GAAP Income (loss) per share ( ( ( Weighted average shares outstanding for GAAP 148 152 147 137 Non-GAAP diluted earnings per share Diluted weighted average shares outstanding for 154 152 155 141 Non-GAAP Adjusted EBITDA
income (loss) per share
Non-GAAP diluted earnings per share
1 GAAP Net income and GAAP Diluted earnings per share for the three months and nine months ended September 30, 2021 include |
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. |
Cash, cash equivalents and restricted cash was
"Our Cloud & Edge business continued to generate strong profitability in the quarter, while we expand our investment in our IP Optical Networks portfolio to address the growing tier 1 service provider opportunity pipeline. We believe this investment will generate future returns as we execute on our cross-sell strategy. We remain confident in the Company's direction as we navigate the impact of supply chain constraints," said Mick Lopez, Chief Financial Officer of Ribbon Communications.
Customer and Company Highlights
- Solid performance despite supply chain disruptions
2% year-to-date YoY revenue growth14% year-to-date YoY Adj. EBITDA growth- Approximately
$9.5 million of shipments delayed to 4Q21 and approximately$3 million in expedited shipping and cost increases in 3Q21 - Building momentum with new IP Optical Networks wins and 1.17x product book to revenue in the quarter
- Viaero Wireless and Viaero Fiber Networks (top 10 mobile network operator) have selected Ribbon's IP Optical portfolio to upgrade their network from microwave and leased services to fiber connectivity
- Dakota Central deployed Apollo and Neptune platform to upgrade their broadband network with increased capacity and 5G backhaul capabilities
- Megafon (2nd largest mobile operator in Russia) selected Apollo DWDM platform
- Leading Swiss utility provider selected Ribbon products including Muse platform and network slicing technology
- Largest European rail network operator implemented Apollo DWDM based backbone
- Introduced new version of Muse featuring enhanced traffic optimization capability and zero-touch provisioning
- Cloud & Edge continues to generate strong and steady profitability with
32% Adjusted EBITDA margin - Strong demand for Voice over IP Network Transformation solutions growing
25% year-to-date YoY - Higher software mix (
68% of product revenue) contributed to segment gross margin of67% in 3Q21
Business Outlook1
The Company's outlook is based on current indications for its business, which are subject to change. For the fourth 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
- November 18, 2021 - Ribbon Spotlight virtual event series to showcase the latest strategic growth opportunities and technology: "IP Wave" for IP Optical Networks and "Telco Cloud" for Cloud and Edge
- November 15 –18, 2021 – Needham Virtual Security, Networking & Communications Conference (virtual presentation and one-on-one institutional investor meetings).
- December 7 – 8, 2021 – Barclays Global Technology, Media and Telecommunications Conference (virtual one-on-one institutional investor meetings).
- December 13, 2021 – Cowen's 12 Days of Networking Series (virtual one-on-one institutional investor meetings).
- January 10 – 14, 2022 – Needham Growth Conference (virtual presentation and one-on-one institutional investor meetings).
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.
Conference Call Details
Conference call to discuss the Company's financial results for the third quarter ended September 30, 2021 on October 27, 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: October 27, 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 November 10, 2021 and can be accessed by calling 877-660-6853 or 201-612-7415 for international callers. The reservation number for the replay is 13723100.
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
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 fourth 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 supply chain disruptions resulting from component availability and/or geopolitical instabilities and disputes; risks related to the continuing COVID-19 pandemic, including delays in customer deployments as a result of rises in cases; risks that we 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") or declines in the value of our ongoing investment in AVCT, the purchaser of the Kandy Communications business; unpredictable fluctuations in quarterly revenue and operating results; risks related to cybersecurity and data intrusion; failure to compete successfully against telecommunications equipment and networking companies; failure to grow our customer base or generate recurring business from our existing customers; credit risks; the timing of customer purchasing decisions and our recognition of revenues; macroeconomic conditions; the impact of restructuring and cost-containment activities; litigation; market acceptance of our products and services; rapid technological and market change; our ability to protect our intellectual property rights and obtain necessary licenses; our ability to maintain partner, reseller, distribution and vendor support and supply relationships; 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 our 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 our 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.
Acquisition-Related Inventory Adjustment
Acquisition-related inventory adjustment amounts are inconsistent in frequency and amount and are significantly impacted by the then-current market prices of such inventory items. We believe that excluding non-cash inventory adjustments arising from acquisitions facilitates the comparison of our financial results to our historical operating results and to other companies in our industry as if the inventory had been acquired by us through our normal channels rather than in connection with our acquired businesses.
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 our 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 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 received as consideration from the sale of our Kandy Communications business (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.
Decrease (Increase) in Fair Value of Investments
We calculate the fair values of the Debentures and the Warrants received as consideration from the sale of our Kandy Communications business (the "Warrants") (prior to September 8, 2021) and the shares of AVCT common stock and Warrants (effective September 8, 2021) at each quarter-end and record any adjustments to their fair values in Other (expense) income, net. We exclude these and any subsequent gains and losses from the change in fair value of this investment 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; acquisition-related inventory adjustments; 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 | ||||||||
September 30, | June 30, | September 30, | ||||||
2021 | 2021 | 2020 | ||||||
Revenue: | ||||||||
Product | $ 111,726 | $ 113,129 | $ 128,926 | |||||
Service | 98,672 | 98,081 | 102,192 | |||||
Total revenue | 210,398 | 211,210 | 231,118 | |||||
Cost of revenue: | ||||||||
Product | 53,494 | 46,641 | 58,545 | |||||
Service | 36,576 | 36,142 | 37,619 | |||||
Total cost of revenue | 90,070 | 82,783 | 96,164 | |||||
Gross profit | 120,328 | 128,427 | 134,954 | |||||
Gross margin: | ||||||||
Product | ||||||||
Service | ||||||||
Total gross margin | ||||||||
Operating expenses: | ||||||||
Research and development | 49,132 | 46,797 | 49,113 | |||||
Sales and marketing | 36,113 | 34,881 | 36,898 | |||||
General and administrative | 12,148 | 12,734 | 16,021 | |||||
Amortization of acquired intangible assets | 17,221 | 17,181 | 16,349 | |||||
Acquisition-, disposal- and integration-related expense | 1,955 | 1,052 | 1,366 | |||||
Restructuring and related expense | 1,767 | 2,830 | 3,290 | |||||
Total operating expenses | 118,336 | 115,475 | 123,037 | |||||
Income from operations | 1,992 | 12,952 | 11,917 | |||||
Interest expense, net | (2,969) | (3,048) | (6,854) | |||||
Other (expense) income, net | (57,702) | 17,180 | 407 | |||||
(Loss) income before income taxes | (58,679) | 27,084 | 5,470 | |||||
Income tax (provision) benefit | (752) | (3,843) | 782 | |||||
Net (loss) income | $ (59,431) | $ 23,241 | $ 6,252 | |||||
(Loss) earnings per share: | ||||||||
Basic | $ (0.40) | $ 0.16 | $ 0.04 | |||||
Diluted | $ (0.40) | $ 0.15 | $ 0.04 | |||||
Weighted average shares used to compute (loss) earnings per share: | ||||||||
Basic | 148,184 | 147,467 | 144,948 | |||||
Diluted | 148,184 | 154,160 | 151,680 | |||||
RIBBON COMMUNICATIONS INC. | ||||||
Condensed Consolidated Statements of Operations | ||||||
(in thousands, except percentages and per share amounts) | ||||||
(unaudited) | ||||||
Nine months ended | ||||||
September 30, | September 30, | |||||
2021 | 2020 | |||||
Revenue: | ||||||
Product | $ 322,744 | $ 325,687 | ||||
Service | 291,636 | 273,906 | ||||
Total revenue | 614,380 | 599,593 | ||||
Cost of revenue: | ||||||
Product | 144,580 | 145,103 | ||||
Service | 110,498 | 105,745 | ||||
Total cost of revenue | 255,078 | 250,848 | ||||
Gross profit | 359,302 | 348,745 | ||||
Gross margin: | ||||||
Product | ||||||
Service | ||||||
Total gross margin | ||||||
Operating expenses: | ||||||
Research and development | 143,339 | 143,204 | ||||
Sales and marketing | 108,212 | 101,767 | ||||
General and administrative | 40,435 | 48,320 | ||||
Amortization of acquired intangible assets | 50,225 | 45,352 | ||||
Acquisition-, disposal- and integration-related expense | 4,204 | 14,607 | ||||
Restructuring and related expense | 10,547 | 10,726 | ||||
Total operating expenses | 356,962 | 363,976 | ||||
Income (loss) from operations | 2,340 | (15,231) | ||||
Interest expense, net | (11,836) | (15,649) | ||||
Other expense, net | (65,970) | (2,844) | ||||
Loss before income taxes | (75,466) | (33,724) | ||||
Income tax provision | (5,411) | (1,445) | ||||
Net loss | $ (80,877) | $ (35,169) | ||||
Loss per share: | ||||||
Basic | $ (0.55) | $ (0.26) | ||||
Diluted | $ (0.55) | $ (0.26) | ||||
Weighted average shares used to compute loss per share: | ||||||
Basic | 147,204 | 136,837 | ||||
Diluted | 147,204 | 136,837 | ||||
RIBBON COMMUNICATIONS INC. | ||||||
Condensed Consolidated Balance Sheets | ||||||
(in thousands) | ||||||
(unaudited) | ||||||
September 30, | December 31, | |||||
2021 | 2020 | |||||
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ 101,212 | $ 128,428 | ||||
Restricted cash | 2,543 | 7,269 | ||||
Accounts receivable, net | 235,710 | 237,738 | ||||
Inventory | 44,789 | 45,750 | ||||
Other current assets | 34,399 | 28,461 | ||||
Total current assets | 418,653 | 447,646 | ||||
Property and equipment, net | 48,557 | 48,888 | ||||
Intangible assets, net | 367,131 | 417,356 | ||||
Goodwill | 416,892 | 416,892 | ||||
Investments | 50,439 | 115,183 | ||||
Deferred income taxes | 10,673 | 10,651 | ||||
Operating lease right-of-use assets | 54,446 | 69,757 | ||||
Other assets | 19,834 | 20,892 | ||||
$ 1,386,625 | $ 1,547,265 | |||||
Liabilities and Stockholders' Equity | ||||||
Current liabilities: | ||||||
Current portion of term debt | $ 20,058 | $ 15,531 | ||||
Accounts payable | 63,253 | 63,387 | ||||
Accrued expenses and other | 94,021 | 134,865 | ||||
Operating lease liabilities | 17,848 | 17,023 | ||||
Deferred revenue | 89,553 | 96,824 | ||||
Total current liabilities | 284,733 | 327,630 | ||||
Long-term debt, net of current | 354,778 | 369,035 | ||||
Operating lease liabilities, net of current | 58,609 | 72,614 | ||||
Deferred revenue, net of current | 21,618 | 26,010 | ||||
Deferred income taxes | 13,477 | 16,842 | ||||
Other long-term liabilities | 39,862 | 48,281 | ||||
Total liabilities | 773,077 | 860,412 | ||||
Commitments and contingencies | ||||||
Stockholders' equity: | ||||||
Common stock | 15 | 15 | ||||
Additional paid-in capital | 1,870,711 | 1,870,256 | ||||
Accumulated deficit | (1,259,353) | (1,178,476) | ||||
Accumulated other comprehensive income (loss) | 2,175 | (4,942) | ||||
Total stockholders' equity | 613,548 | 686,853 | ||||
$ 1,386,625 | $ 1,547,265 | |||||
RIBBON COMMUNICATIONS INC. | |||||||
Condensed Consolidated Statements of Cash Flows | |||||||
(in thousands) | |||||||
(unaudited) | |||||||
Nine months ended | |||||||
September 30, | September 30, | ||||||
2021 | 2020 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ (80,877) | $ (35,169) | |||||
Adjustments to reconcile net loss to cash flows provided by operating activities: | |||||||
Depreciation and amortization of property and equipment | 12,684 | 12,754 | |||||
Amortization of intangible assets | 50,225 | 45,352 | |||||
Amortization of debt issuance costs | 4,227 | 4,915 | |||||
Stock-based compensation | 14,411 | 10,167 | |||||
Deferred income taxes | (3,295) | (2,455) | |||||
Gain on sale of business | (2,772) | - | |||||
Decrease in fair value of investments | 64,745 | - | |||||
Reduction in deferred purchase consideration | - | (69) | |||||
Foreign currency exchange losses | 3,235 | 3,162 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 1,892 | 42,489 | |||||
Inventory | 253 | 6,285 | |||||
Other operating assets | 11,303 | 36,416 | |||||
Accounts payable | 2,194 | (54,489) | |||||
Accrued expenses and other long-term liabilities | (58,661) | 10,143 | |||||
Deferred revenue | (11,665) | (14,253) | |||||
Net cash provided by operating activities | 7,899 | 65,248 | |||||
Cash flows from investing activities: | |||||||
Purchases of property and equipment | (14,279) | (18,685) | |||||
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 | (11,335) | (322,037) | |||||
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 | 478,500 | |||||
Principal payments of term debt | (87,161) | (131,279) | |||||
Principal payments of finance leases | (736) | (971) | |||||
Payment of debt issuance costs | (789) | (14,065) | |||||
Proceeds from the exercise of stock options | 24 | 29 | |||||
Payment of tax withholding obligations related to net share settlements of restricted stock awards | (13,980) | (1,196) | |||||
Net cash (used in) provided by financing activities | (28,017) | 323,018 | |||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (489) | 24 | |||||
Net (decrease) increase in cash, cash equivalents and restricted cash | (31,942) | 66,253 | |||||
Cash and cash equivalents, beginning of year | 135,697 | 44,643 | |||||
Cash, cash equivalents and restricted cash, end of period | $ 103,755 | $ 110,896 | |||||
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 | Nine months ended | |||||||||||
September 30, | June 30, | September 30, | September 30, | September 30, | ||||||||
2021 | 2021 | 2020 | 2021 | 2020 | ||||||||
Stock-based compensation | ||||||||||||
Cost of revenue - product | $ 96 | $ 93 | $ 57 | $ 216 | $ 123 | |||||||
Cost of revenue - service | 492 | 469 | 204 | 1,196 | 493 | |||||||
Cost of revenue | 588 | 562 | 261 | 1,412 | 616 | |||||||
Research and development | 1,223 | 1,160 | 868 | 3,010 | 2,164 | |||||||
Sales and marketing | 1,581 | 1,752 | 1,189 | 5,207 | 2,952 | |||||||
General and administrative | 1,169 | 1,316 | 1,651 | 4,782 | 4,435 | |||||||
Operating expense | 3,973 | 4,228 | 3,708 | 12,999 | 9,551 | |||||||
Total stock-based compensation | $ 4,561 | $ 4,790 | $ 3,969 | $ 14,411 | $ 10,167 | |||||||
RIBBON COMMUNICATIONS INC. | |||||
Reconciliation of Non-GAAP and GAAP Financial Measures | |||||
(in thousands, except per share amounts) | |||||
(unaudited) | |||||
Three months ended | |||||
September 30, | June 30, | September 30, | |||
2021 | 2021 | 2020 | |||
GAAP Total gross margin | |||||
Acquisition-related inventory adjustment | |||||
Stock-based compensation | |||||
Non-GAAP Total gross margin | |||||
GAAP Net (loss) income | $ (59,431) | $ 23,241 | $ 6,252 | ||
Acquisition-related inventory adjustment | - | - | 2,000 | ||
Stock-based compensation | 4,561 | 4,790 | 3,969 | ||
Amortization of acquired intangible assets | 17,221 | 17,181 | 16,349 | ||
Acquisition-, disposal- and integration-related expense | 1,955 | 1,052 | 1,366 | ||
Restructuring and related expense | 1,767 | 2,830 | 3,290 | ||
Gain on sale of business | - | (2,772) | - | ||
Interest income on debentures | (901) | (1,196) | - | ||
Decrease (increase) in fair value of investments | 56,475 | (12,074) | - | ||
Tax effect of non-GAAP adjustments | (5,294) | (6,205) | (11,409) | ||
Non-GAAP Net income | $ 16,353 | $ 26,847 | $ 21,817 | ||
(Loss) earnings per share | |||||
GAAP (Loss) diluted earnings per share | $ (0.40) | $ 0.15 | $ 0.04 | ||
Acquisition-related inventory adjustment | - | - | 0.01 | ||
Stock-based compensation | 0.03 | 0.03 | 0.03 | ||
Amortization of acquired intangible assets | 0.12 | 0.11 | 0.11 | ||
Acquisition-, disposal- and integration-related expense | 0.01 | 0.01 | 0.01 | ||
Restructuring and related expense | 0.01 | 0.02 | 0.02 | ||
Gain on sale of business | - | (0.02) | - | ||
Interest income on debentures | (0.01) | (0.01) | - | ||
Decrease (increase) in fair value of investments | 0.38 | (0.08) | - | ||
Tax effect of non-GAAP adjustments | (0.03) | (0.04) | (0.08) | ||
Non-GAAP Diluted earnings per share | $ 0.11 | $ 0.17 | $ 0.14 | ||
Weighted average shares used to compute (loss) diluted earnings per share | |||||
Shares used to compute GAAP (loss) diluted earnings per share | 148,184 | 154,160 | 151,680 | ||
Shares used to compute Non-GAAP diluted earnings per share | 154,061 | 154,160 | 151,680 | ||
Adjusted EBITDA | |||||
GAAP Income from operations | $ 1,992 | $ 12,952 | $ 11,917 | ||
Depreciation | 4,209 | 4,249 | 4,494 | ||
Amortization of acquired intangible assets | 17,221 | 17,181 | 16,349 | ||
Stock-based compensation | 4,561 | 4,790 | 3,969 | ||
Acquisition-related inventory adjustment | - | - | 2,000 | ||
Acquisition-, disposal- and integration-related expense | 1,955 | 1,052 | 1,366 | ||
Restructuring and related expense | 1,767 | 2,830 | 3,290 | ||
Non-GAAP Adjusted EBITDA | $ 31,705 | $ 43,054 | $ 43,385 | ||
RIBBON COMMUNICATIONS INC. | |||
Reconciliation of Non-GAAP and GAAP Financial Measures | |||
(in thousands, except per share amounts) | |||
(unaudited) | |||
Nine months ended | |||
September 30, | September 30, | ||
2021 | 2020 | ||
GAAP Total gross margin | |||
Acquisition-related inventory adjustment | |||
Stock-based compensation | |||
Non-GAAP Total gross margin | |||
GAAP Net loss | $ (80,877) | $ (35,169) | |
Acquisition-related inventory adjustment | - | 2,000 | |
Stock-based compensation | 14,411 | 10,167 | |
Amortization of acquired intangible assets | 50,225 | 45,352 | |
Litigation costs | - | 2,101 | |
Acquisition-, disposal- and integration-related expense | 4,204 | 14,607 | |
Restructuring and related expense | 10,547 | 10,726 | |
Gain on sale of business | (2,772) | - | |
Interest income on debentures | (3,556) | - | |
Decrease in fair value of investments | 68,301 | - | |
Tax effect of non-GAAP adjustments | (12,379) | (15,335) | |
Non-GAAP Net income | $ 48,104 | $ 34,449 | |
(Loss) earnings per share | |||
GAAP Loss per share | $ (0.55) | $ (0.26) | |
Acquisition-related inventory adjustment | - | 0.01 | |
Stock-based compensation | 0.09 | 0.07 | |
Amortization of acquired intangible assets | 0.33 | 0.33 | |
Litigation costs | - | 0.01 | |
Acquisition-, disposal- and integration-related expense | 0.03 | 0.10 | |
Restructuring and related expense | 0.07 | 0.08 | |
Gain on sale of business | (0.02) | - | |
Interest income on debentures | (0.02) | - | |
Decrease in fair value of investments | 0.45 | - | |
Tax effect of non-GAAP adjustments | (0.07) | (0.10) | |
Non-GAAP Diluted earnings per share | $ 0.31 | $ 0.24 | |
Weighted average shares used to compute (loss) diluted earnings per share | |||
Shares used to compute GAAP loss per share | 147,204 | 136,837 | |
Shares used to compute Non-GAAP diluted earnings per share | 154,573 | 141,498 | |
Adjusted EBITDA | |||
GAAP Income (loss) from operations | $ 2,340 | $ (15,231) | |
Depreciation | 12,684 | 12,754 | |
Amortization of acquired intangible assets | 50,225 | 45,352 | |
Acquisition-related inventory adjustment | - | 2,000 | |
Stock-based compensation | 14,411 | 10,167 | |
Litigation costs | - | 2,101 | |
Acquisition-, disposal- and integration-related expense | 4,204 | 14,607 | |
Restructuring and related expense | 10,547 | 10,726 | |
Non-GAAP Adjusted EBITDA | $ 94,411 | $ 82,476 | |
RIBBON COMMUNICATIONS INC. | |||||
Reconciliation of Non-GAAP and GAAP Financial Measures - Outlook | |||||
(unaudited) | |||||
Three months ending | |||||
December 31, 2021 | |||||
Range | |||||
Revenue ($ millions) | $ 240 | $ 260 | |||
Gross margin | |||||
GAAP outlook | |||||
Stock-based compensation | |||||
Non-GAAP outlook | |||||
Earnings per share | |||||
GAAP outlook | $ 0.04 | $ 0.08 | |||
Stock-based compensation | 0.03 | 0.03 | |||
Amortization of acquired intangible assets | 0.11 | 0.11 | |||
Acquisition-, disposal- and integration-related expense | 0.01 | 0.01 | |||
Restructuring and related expense | 0.01 | 0.01 | |||
Tax effect of non-GAAP adjustments | (0.07) | (0.07) | |||
Non-GAAP outlook | $ 0.13 | $ 0.17 | |||
Weighted average shares used to compute diluted earnings per share | 154,000 | 154,000 | |||
Adjusted EBITDA ($ millions) | |||||
GAAP income from operations | $ 16.2 | $ 22.2 | |||
Depreciation | 4.3 | 4.3 | |||
Amortization of acquired intangible assets | 16.3 | 16.3 | |||
Stock-based compensation | 5.0 | 5.0 | |||
Acquisition-, disposal- and integration-related expense | 1.8 | 1.8 | |||
Restructuring and related expense | 1.4 | 1.4 | |||
Non-GAAP outlook | $ 45.0 | $ 51.0 | |||
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SOURCE Ribbon Communications Inc.
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