Ribbon Communications Inc. · NASDAQ:RBBN
Ribbon Communications — Q1 2024 Earnings Presentation
22 slides from Ribbon Communications's earnings presentation, Apr 24, 2024
Slide 1: Ribbon Communications First Quarter 2024 Results
Ribbon Communications First Quarter 2024 Results April 24, 2024 © 2024 Ribbon | Public 1
Slide 2: Note Regarding Forward-Looking Statements and Non-GAAP Financial Measures
Note Regarding Forward-Looking Statements and Non-GAAP Financial Measures The information in 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 statemen
Slide 3: First Quarter 2024 Business Overview
First Quarter 2024 Business Overview Bruce McClelland, President & CEO Mick Lopez, Executive Vice President & CFO
Slide 4: First Quarter 2024 Highlights | Consolidated
First Quarter 2024 Highlights | Consolidated IP Optical Networks Growth Diversification +$17M YoY Adj. EBITDA1 Improvement Multi Year Verizon Win +9% Overall Revenue Growth Enterprise Vertical Growth Gross Margin1 above 40% New Product Launches +46% Growth YoY in EMEA Federal Wins +$14M Year over Ye
Slide 5: First Quarter 2024 Business Highlights | Consolidated
First Quarter 2024 Business Highlights | Consolidated Profitable Growth Driven by Margin Expansion and Operational Efficiencies $12M Q1 Adjusted EBITDA1 $13M Cash from Operations Gross Margin Expansion in both Segments +18% Improvement YoY Trailing Twelve Month Adjusted EBITDA $105M $14M Improvement
Slide 6: Key Financial Trends
Key Financial Trends1 Cloud and Edge Revenue IP Optical Networks Revenue Adjusted EBITDA1 ($ millions) $226M $211M $43 $203M $28 $186M $23 $180M $12M $104 $85 ($2) $87 $72 1Q23 2Q23 3Q23 4Q23 1Q24 $78 Gross Margin1 % $125 $122 $116 $102 $114 Gross Margin1 Improvement 61% 66% YoY in Both Segments 41%
Slide 7: Non-GAAP Segment Financial Highlights | IP Optical Networks
Non-GAAP1 Segment Financial Highlights | IP Optical Networks $17M Improvement in Adj. EBITDA1 vs Q1 23 Adjusted EBITDA1 +$12M Gross Profit Growth ($ millions) +$5M Operating Expense Reductions $8 ($4) ($6M) Growth in YoY Revenue ($23) ($12) +9% Optical Growth: + 9% IP Routing Growth: + 2% Profession
Slide 8: Non-GAAP Segment Financial Highlights | Cloud & Edge
Non-GAAP1 Segment Financial Highlights | Cloud & Edge +500bps Gross Margin1 Improvement YoY Adjusted EBITDA1 Higher Software Mix (41% -> 68% of Total Revenue) ($ millions) Strong re-occurring Maintenance Revenue Enterprise / U.S. Federal Mix $35 $32 $34 $21 $17M 17% Stable Adj. EBITDA1 Margin Cost E
Slide 9: First Quarter 2024 Key Metrics | Consolidated
First Quarter 2024 Key Metrics | Consolidated Revenue Mix Profitability Balance Sheet Cash Flow Enterprise 43%2 55% Gross Margin1 Senior Term Loan Debt4 $230M Cash Balance $31M Service Provider 57%2 Operating Expenses1 5% Lower Outstanding Revolver Loan4 $0M 38% Maintenance Revenue3 than Q1 2023 +$1
Slide 10: First Quarter and Full Year 2024 Non-GAAP Financial Summary
First Quarter and Full Year 2024 Non-GAAP1 Financial Summary 1Q23 4Q23 1Q24 Revenue $186M $226M $180M Non-GAAP Gross Margin1 48% 57% 55% Non-GAAP Opex1 $95M $90M $91M Non-GAAP Operating (3%) 17% 5% Margin1 Non-GAAP Adjusted ($2M) $43M $12M EBITDA1 Non-GAAP Diluted EPS1 ($0.02) $0.12 ($0.01) 1. Pleas
Slide 11: Key Trends & Outlook
Key Trends & Outlook &} rioddon
Slide 12: New Products Drive Addressable Market Expansion
New Products Drive Addressable Market Expansion Existing Markets Apollo 9400 Series Metro-Regional Transport High Density Applications SAM $2.5B Private (CI, Gov’t) SAM $1.2B New Addressable Markets Long Haul Transport 9408 9458 SAM $700M Compact Modular Compact Modular Optical Transport Open Line S
Slide 13: New Services Supported by Expanded Neptune Portfolio
New Services Supported by Expanded Neptune Portfolio Neptune 2300 & 2400 Broadband Backhaul XDR High Performance Routing & Networking Coherent Routing | Service Aware | Automated Access Aggregation Aggregation TDM to IP Migration Hub Regional site /Central site 2100 4G/5G xHaul 2100/2300 100G/400G 2
Slide 14: Ribbon's Government and Defense Solutions
Ribbon’s Government and Defense Solutions Misson Critical Solutions Proven Solutions for Defense • Base and Mission Oriented Solutions • Secure Voice & Data Networking • Ultra-high Availability • Ribbon Network-in-a-Box • JITC Certified Solutions 9% FY20 FY21 FY22 FY23 % of Total Revenue © 2024 Ribb
Slide 15: Practical Applications of AI For IP Optical Networks
Practical Applications of AI For IP Optical Networks Muse - Ribbon’s Network Orchestration • AI/ML Driven Network Telemetry & Management Ribbon’s Network • Gen AI-enabled User Experience Orchestration • Automated Root Cause Analysis • Intelligent Optimization – e.g. Greenest Path IP Routing How many
Slide 16: Second Quarter and Full Year 2024 Business Outlook
Second Quarter and Full Year 2024 Business Outlook 2Q23 FY23 2Q24 FY24 (Actual) (Actual) (Outlook) (Outlook) Revenue $211M $826M $200M to $210M $840M to $870M Non-GAAP Gross Margin1 52% 53% 53.5% to 54.5% 53% to 54% Non-GAAP Adjusted EBITDA1 $23M $91M $20M to $25M $110M to $120M 1. Please see the di
Slide 17: Appendix
Appendix &} rioddon
Slide 18: Ribbon Key Revenue Statistics
Ribbon Key Revenue Statistics USD Millions except for percentages 1Q23 2Q23 3Q23 4Q23 FY23 1Q24 Revenue Product 93 117 109 126 445 88 Service 93 93 95 100 381 92 Total Revenue 186 211 203 226 826 180 % of Total Revenue: Revenue Mix Product 50% 56% 53% 56% 54% 49% Services 50% 44% 47% 44% 46% 51% Rev
Slide 19: Quarterly Non-GAAP Segment Trend | Cloud & Edge
Quarterly Non-GAAP1 Segment Trend | Cloud & Edge CLOUD & EDGE – 2023 2024 1Q 2Q 3Q 4Q FY23 1Q Revenue $114M $125M $116M $122M $478M $102M vs Prior Year +4% (9%) (7%) (11%) (6%) (11%) Non-GAAP Gross 61% 67% 68% 68% 66% 66% Margin1 Non-GAAP Adjusted $21M $35M $32M $34M $121M $17M EBITDA1 Non-GAAP Adju
Slide 20: Quarterly Non-GAAP Segment Trend | IP Optical Networks
Quarterly Non-GAAP1 Segment Trend | IP Optical Networks IP OPTICAL NETWORKS – 2023 2024 1Q 2Q 3Q 4Q FY23 1Q Revenue $72M $85M $87M $104M $349M $78M vs Prior Year +13% +24% +6% +7% +12% +9% Non-GAAP Gross 27% 31% 38% 44% 36% 41% Margin1 Non-GAAP Adjusted ($23M) ($12M) ($4M) $8M ($31M) ($6M) EBITDA1 N
Slide 21: First Quarter and Full Year 2024 GAAP Financial Summary
First First Quarter Quarter and Full Year and Full Year2024 2024GAAP GAAPFinancial Financial Summary Summary 1Q23 4Q23 1Q24 Revenue $186M $226M $180M Gross Margin 44% 54% 51% OpEx $117M $105M $105M Income (loss) from ($35M) $17M ($13M) operations Other (expense) income, ($2M) ($10M) ($14M) net Net i
Slide 22: Thank You
Refer to the supplemental schedules including financial results, key stats, and non-GAAP reconciliations on the investor relations website investors.ribboncommunications.com Thank You © 2024 Ribbon | Public 22
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