Ribbon munications (RBBN) - 2025 Q1 - Quarterly Results

Financial Performance and Outlook This section provides an overview of Ribbon Communications' financial results, key business achievements, and future projections First Quarter 2025 Financial Highlights Ribbon Communications reported Q1 2025 revenue of $181 million, a slight increase from $180 million in Q1 2024, experiencing a GAAP Net Loss of ($26) million and Non-GAAP Adjusted EBITDA of $6 million, with performance impacted by deal timing but supported by strong Service Provider sales and backlog growth Q1 2025 Financial Highlights (vs. Q1 2024) | In millions, except per share amounts | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | GAAP Revenue | $181 | $180 | | GAAP Net income (loss) | $(26) | $(30) | | Non-GAAP Net income (loss) | $(5) | $(1) | | Non-GAAP Adjusted EBITDA | $6 | $12 | | GAAP diluted earnings (loss) per share | $(0.15) | $(0.18) | | Non-GAAP diluted earnings (loss) per share | $(0.03) | $(0.01) | - The company projects strong first-half 2025 performance with 5-8% year-over-year revenue growth, driven by a more than 10% increase in sales to Service Providers[2] - Q1 sales were lower than expected due to the delayed timing of two key Federal and Enterprise deals, which are now being fulfilled in Q2[2] - Bookings were solid, and the company's backlog grew by 35% compared to the same period last year, enhancing visibility and confidence for the full year[2] Business Highlights During the quarter, Ribbon secured several key projects and received industry recognition, including a network upgrade for Estonia's EENet, expansion of its high-density router portfolio, and selection by Moratelindo for a 20T capacity link, while also supporting Converge's use of Starlink and showcasing AI-enabled optical innovations - Delivered an open, programmable network upgrade to the Estonian Education and Research Network (EENet)[8] - Expanded its portfolio of innovative, high-density routers[8] - Supported Converge's use of Starlink low latency satellite solutions with Ribbon's AI-enabled data transmission technology[8] - Showcased AI-enabled optical innovation at the OFC conference, with its NPT 2714 Router and Apollo ADM 400/800 receiving recognition[8] - Selected by Moratelindo for a 20T capacity, automated management solution for the Jakarta-Singapore link[8] Business Outlook Ribbon projects second quarter 2025 revenue between $210 million and $220 million, with Non-GAAP gross margin expected to be 53% to 53.5%, and Adjusted EBITDA forecasted to be in the range of $28 million to $32 million, while full-year 2025 projections remain unchanged Q2 2025 Outlook | Metric | Projected Range | | :--- | :--- | | Revenue | $210M - $220M | | Non-GAAP Gross Margin | 53% - 53.5% | | Adjusted EBITDA | $28M - $32M | - Full Year 2025 projections remain unchanged[5] Financial Statements This section presents the company's consolidated statements of operations, balance sheets, and cash flows, detailing its financial position and performance Consolidated Statements of Operations For the three months ended March 31, 2025, total revenue was $181.3 million, slightly up from $179.7 million in the prior-year quarter, with gross margin decreasing to 45.4% from 51.2% YoY, resulting in a loss from operations of ($19.6) million and a net loss of ($26.2) million Key Operational Data (in thousands) | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Total Revenue | $181,279 | $251,359 | $179,664 | | Gross Profit | $82,370 | $140,073 | $91,955 | | Gross Margin | 45.4% | 55.7% | 51.2% | | Income (loss) from operations | $(19,610) | $33,220 | $(13,486) | | Net income (loss) | $(26,227) | $6,364 | $(30,361) | | Diluted EPS | $(0.15) | $0.04 | $(0.18) | Consolidated Balance Sheets As of March 31, 2025, Ribbon had total assets of $1.137 billion, a slight decrease from $1.163 billion at the end of 2024, with cash and cash equivalents at $71.2 million, total liabilities of $755.7 million, and total stockholders' equity of $381.8 million Key Balance Sheet Data (in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $71,243 | $87,770 | | Total current assets | $425,063 | $463,662 | | Total assets | $1,137,477 | $1,162,554 | | Total current liabilities | $305,180 | $328,873 | | Total liabilities | $755,662 | $757,933 | | Total stockholders' equity | $381,815 | $404,621 | Consolidated Statements of Cash Flows For the first quarter of 2025, the company experienced a net cash outflow from operating activities of ($3.5) million, a significant shift from a $13.1 million inflow in Q1 2024, with increased net cash used in investing activities and financing activities, resulting in a total decrease in cash of ($16.7) million Cash Flow Summary (in thousands) | Metric | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(3,535) | $13,100 | | Net cash used in investing activities | $(12,149) | $(2,663) | | Net cash used in financing activities | $(1,812) | $(5,843) | | Net (decrease) increase in cash | $(16,665) | $4,301 | Non-GAAP Measures and Reconciliations This section explains the company's use of non-GAAP financial measures and provides detailed reconciliations to their GAAP equivalents Discussion of Non-GAAP Financial Measures The company utilizes non-GAAP financial measures to assess its core operational performance, plan future periods, and for compensation programs, believing these measures provide better insight by excluding certain recurring and non-recurring items, serving as supplemental rather than substitute figures for GAAP measures - Management uses non-GAAP measures to analyze core business performance, make operating decisions, and plan for the future, as the company's annual financial plan is prepared on a non-GAAP basis[14] - Key adjustments to GAAP figures include excluding expenses for: - Stock-based compensation[16] - Amortization of acquired technology and intangible assets[17] - Certain litigation costs[18] - Restructuring and related expenses[18] - Adjusted EBITDA is a key non-GAAP metric calculated by excluding depreciation, stock-based compensation, amortization of acquired intangible assets, certain litigation costs, and restructuring expenses from income (loss) from operations[24] Reconciliation of GAAP to Non-GAAP Measures In Q1 2025, Ribbon's Non-GAAP Gross Margin was 48.6% compared to a GAAP Gross Margin of 45.4%, with the GAAP Net Loss of ($26.2) million adjusted to a Non-GAAP Net Loss of ($4.6) million, and the GAAP Operating Loss of ($19.6) million reconciled to a Non-GAAP Adjusted EBITDA of $5.8 million Q1 2025 Reconciliation of GAAP Net Loss to Non-GAAP Net Loss (in thousands) | Description | Amount | | :--- | :--- | | GAAP Net income (loss) | $(26,227) | | Stock-based compensation | $4,298 | | Amortization of intangible assets | $11,543 | | Litigation costs | $800 | | Restructuring and related | $5,341 | | Preferred stock and warrant liability mark-to-market adjustment | $(1,735) | | Tax effect of non-GAAP adjustments | $1,401 | | Non-GAAP Net income (loss) | $(4,579) | Q1 2025 Reconciliation of GAAP Operating Loss to Non-GAAP Adjusted EBITDA (in thousands) | Description | Amount | | :--- | :--- | | GAAP Income (loss) from operations | $(19,610) | | Depreciation | $3,469 | | Stock-based compensation | $4,298 | | Amortization of intangible assets | $11,543 | | Litigation costs | $800 | | Restructuring and related | $5,341 | | Non-GAAP Adjusted EBITDA | $5,841 | Reconciliation of Outlook for Q2 2025 (Midpoint, $ millions) | Metric | GAAP Outlook | Adjustments | Non-GAAP Outlook | | :--- | :--- | :--- | :--- | | Gross Margin | 50.65% | +2.60% | 53.25% | | Adjusted EBITDA | $9.3 | +$20.7 | $30.0 |