Ribbon Communications Inc. · NASDAQ:RBBN
Ribbon Communications — Q1 2018 Earnings Presentation
22 slides from Ribbon Communications's earnings presentation, Apr 26, 2018
Slide 1: First Quarter 2018 Financial Results
First Quarter 2018 Financial Results April 26, 2018
Slide 2: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements This presentation 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 f
Slide 3: Strategy
Strategy Invest In Core Products with Balanced Investments Broaden Solution Offers to Global Installed Base Expand Into New Adjacent Markets and Applications Scale With Acquisitions and Alliances 3
Slide 4: Ribbon Non-GAAP Statements of Operations
Ribbon Non-GAAP1 Statements of Operations2 USD Millions except percentages and EPS Q116 Q216 Q316 Q416 FY16 Q117 Q217 Q317 Q417 FY17 Q118 Product Revenue 35 35 39 38 146 25 29 44 86 184 60 Service Revenue 24 26 26 30 106 28 27 31 83 169 76 Total Non-GAAP Revenue 59 61 65 68 253 53 56 75 169 353 135
Slide 5: Ribbon Condensed Balance Sheets
Ribbon Condensed Balance Sheets USD Millions Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 ASSETS 1 Cash and Investments 142 143 121 126 129 126 132 83 85 Accounts Receivable, Net 34 37 44 54 40 43 52 165 126 Inventory, Net 22 21 21 18 18 17 16 21 21 Property Plant Equipment, Net 13 12 13 12 11 11 10
Slide 6: Ribbon Condensed Statements of Cash Flows
Ribbon Condensed Statements of Cash Flows USD Millions Q116 Q216 Q316 Q416 FY16 Q117 Q217 Q317 Q417 FY17 Q118 Cash from Operations 3 6 1 9 19 4 (1) 6 (1) 8 3 Purchases of PP&E (1) (2) (1) (1) (5) (1) (2) (1) (1) (4) (2) Stock Repurchase (1) (4) (2) (2) (10) 0 0 0 0 0 0 Business Acquisitions (1) 0 (2
Slide 7: 2018 Full Year Guidance and Outlook
2018 Full Year Guidance and Outlook Full year adjusted EBITDA guidance remains unchanged • Adjusted EBITDA2 expected to increase to $75 million – FY17 pro forma1 Adjusted EBITDA was $45 million Full year revenue Outlook remains unchanged • 2018 Non GAAP Revenue expected to decline approximately 10%
Slide 8: Appendix
APPENDIX &Y riddon
Slide 9: Ribbon GAAP Revenue Key Stats
Ribbon GAAP Revenue Key Stats Millions except for percentages Q116 Q216 Q316 Q416 FY16 Q117 Q217 Q317 Q417 FY17 Q118 GAAP Revenue Product 35 35 39 38 146 25 29 44 83 181 52 Services 24 26 26 30 106 28 27 31 63 149 70 Total GAAP Revenue 59 61 65 68 253 53 56 75 146 330 121 % of Total GAAP Revenue: GA
Slide 10: Discussion of Non-GAAP Financial Measures
Discussion of Non-GAAP Financial Measures Ribbon management uses several different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall performance of the business, making operating decisions, planning and forecasting future periods, and determining payments under compe
Slide 11: Discussion of Non-GAAP Financial Measures (continued)
Discussion of Non-GAAP Financial Measures (continued) Acquisition-Related Revenue and Cost of Revenue; Impact of New Revenue Standard We provide the supplementary non-GAAP financial measures, non-GAAP Product revenue, non-GAAP Service revenue and non-GAAP Total revenue, which include revenue related
Slide 12: Discussion of Non-GAAP Financial Measures (continued)
Discussion of Non-GAAP Financial Measures (continued) Amortization of Intangible Assets We exclude the amortization of acquired intangible assets from non-GAAP expense and income measures. These amortization amounts are inconsistent in frequency and amount and are significantly impacted by the timin
Slide 13: Discussion of Non-GAAP Financial Measures (continued)
Discussion of Non-GAAP Financial Measures (continued) Settlement Expense In March 2018, we recorded $1.7 million of expense related to settlements, comprised of $1.4 million for the settlement of litigation in connection with our acquisition of Taqua LLC and $0.3 million of patent litigation settlem
Slide 14: Discussion of Non-GAAP Financial Measures (continued)
Discussion of Non-GAAP Financial Measures (continued) Acquisition-Related Facilities Adjustments GAAP accounting requires that the deferred rent liability of an acquired company be written off as part of purchase accounting and that the combined company’s rent expense on a straight-line basis begin
Slide 15: Discussion of Non-GAAP Financial Measures (continued)
Discussion of Non-GAAP Financial Measures (continued) Acquisition- and Integration-Related Costs We consider certain acquisition- and integration-related costs to be unrelated to the organic continuing operations of our acquired businesses and the Company and they are generally not relevant to asses
Slide 16: Discussion of Non-GAAP Financial Measures (continued)
Discussion of Non-GAAP Financial Measures (continued) Gain on Sales of Intangible Assets In 2017 and 2016, we sold intangible assets that we had acquired in connection with two previous acquisitions. These amounts, aggregating $0.6 million in 2017 and $1.3 million in 2016, are included as components
Slide 17: Discussion of Non-GAAP Financial Measures (continued)
Discussion of Non-GAAP Financial Measures (continued) Adjusted EBITDA We use Adjusted EBITDA as a supplemental measure to review and assess our performance. We calculate Adjusted EBITDA by excluding from net income (loss): interest income (expense), net; income tax benefit (provision); depreciation;
Slide 18: Annual and Quarterly GAAP to Non-GAAP Reconciliation
Annual and Quarterly GAAP to Non-GAAP Reconciliation $000's Q116 Q216 Q316 Q416 FY16 Q117 Q217 Q317 Q417 FY17 Q118 GAAP Product revenue $ 34,769 $ 35,349 $ 38,601 $ 37,662 $ 146,381 $ 25,395 $ 28,790 $ 44,120 $ 82,814 $ 181,119 $ 51,531 Acquisition-related revenue adjustment - - - - - - - - 3,230 3,
Slide 19: Annual and Quarterly GAAP to Non-GAAP Reconciliation (continued)
Annual and Quarterly GAAP to Non-GAAP Reconciliation (continued) $000s Q116 Q216 Q316 Q416 FY16 Q117 Q217 Q317 Q417 FY17 Q118 GAAP Operating expenses $ 42,284 $ 42,936 $ 47,902 $ 48,098 $ 181,220 $ 44,530 $ 49,105 $ 50,628 $ 112,462 $ 256,725 $ 97,956 Stock-based compensation (4,012) (4,226) (5,982)
Slide 20: Annual and Quarterly GAAP to Non-GAAP Reconciliation (continued)
Annual and Quarterly GAAP to Non-GAAP Reconciliation (continued) $000s, e xce pt pe r share amounts Q116 Q216 Q316 Q416 FY16 Q117 Q217 Q317 Q417 FY17 Q118 GAAP Net income (loss) $ (4,654) $ (2,916) $ (3,731) $ (2,631) $ (13,932) $ (10,646) $ (12,345) $ 3,453 $ (15,714) $ (35,252) $ (44,904) Acquisit
Slide 21: Annual and Quarterly GAAP to Non-GAAP Reconciliation (continued)
Annual and Quarterly GAAP to Non-GAAP Reconciliation (continued) $000's Q116 Q216 Q316 Q416 FY16 Q117 Q217 Q317 Q417 FY17 Q118 Adjusted EBITDA GAAP Net income (loss) $ (4,654) $ (2,916) $ (3,731) $ (2,631) $ (13,932) $ (10,646) $ (12,345) $ 3,453 $ (15,714) $ (35,252) $ (44,904) Interest (income) ex
Slide 22: Outlook GAAP to Non-GAAP Reconciliation
Outlook GAAP to Non-GAAP Reconciliation $ millions Year ending December 31, 2018 Non-GAAP Revenue $ 580.0 Less acquisition-related adjustments and impact of new revenue standard (31.5) GAAP Revenue $ 548.5 Adjusted EBITDA: Ribbon has not provided a reconciliation of Adjusted EBITDA for the year endi
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