Ribbon Communications Inc. · NASDAQ:RBBN
Ribbon Communications — Q3 2024 Earnings Presentation
19 slides from Ribbon Communications's earnings presentation, Oct 23, 2024
Slide 1: Ribbon Communications Third Quarter 2024 Results
Ribbon Communications Third Quarter 2024 Results October 23, 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 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 state
Slide 3: Third Quarter 2024 Business Overview
Third Quarter 2024 Business Overview Bruce McClelland, President & CEO John Townsend, Executive Vice President & CFO
Slide 4: Third Quarter and Year to Date 2024 Highlights | Consolidated
Third Quarter and Year to Date 2024 Highlights | Consolidated Cloud & Edge Strength Customer Highlights +11% YoY Growth in Revenue Verizon Modernization Project +20% YoY Growth in Adj. EBITDA1 Network Modernization Momentum Gross Margin at 68% Growth in Federal and Defense U.S. Service Provider Reco
Slide 5: Third Quarter 2024 Business Highlights | Consolidated
Third Quarter 2024 Business Highlights | Consolidated Continued Gross Margin Expansion and Operational Efficiencies Increase in Q3 Revenue YoY Cash Flow +3% $ Cloud & Edge Growth Cash from Operations ($15M) U.S. Federal Program Real Estate Capital Investment ($7M) Total Excluding Eastern Europe +8%
Slide 6: Key Financial Trends
Key Financial Trends1 Cloud & Edge Revenue IP Optical Networks Revenue Adjusted EBITDA1 ($ millions) $226M $211M $210M $43 $203M $193M $23 $28 $22 $30 $186M $180M $12 $104 $85 $82 ($2) $87 $72 $82 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 $78 $128 Gross Margin1 $125 $122 $111 $116 $102 $114 52 bps YoY Cons
Slide 7: Non-GAAP Segment Financial Highlights | Cloud & Edge
Non-GAAP1 Segment Financial Highlights | Cloud & Edge YoY Revenue Change Adjusted EBITDA1 +11% Major DISA Department of Defense Project ($ millions) Verizon sales up >40% YoY Product & Services Book to Revenue 1.4x $35 $32 $34 $38 $26 $21 $17 68% Strong Gross Margin1 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q
Slide 8: Non-GAAP Segment Financial Highlights | IP Optical Networks
Non-GAAP1 Segment Financial Highlights | IP Optical Networks Adjusted EBITDA1 $21M Improvement in YTD Adj. EBITDA vs 2023 1 +$15M Gross Profit Growth / Expanded Margins ($ millions) +$6M Operating Expense Reductions Trailing Twelve Months Adjusted EBITDA @ ($9M) $8 ($4) ($6) ($4) ($12) ($8) ($23) 12
Slide 9: Third Quarter 2024 Key Metrics | Consolidated
Third Quarter 2024 Key Metrics | Consolidated Revenue Mix Profitability Balance Sheet Cash Flow Enterprise 36%2 55% Gross Margin1 Senior Term Loan Debt4 $349M Cash Position @ $40M Service Provider 64%2 Operating Expenses1 2% Lower Outstanding Revolver Loan4 $0M ($15M) Cash from Operations 33% Mainte
Slide 10: Third Quarter 2024 Non-GAAP Financial Summary
Third Quarter 2024 Non-GAAP1 Financial Summary 3Q23 2Q24 3Q24 Revenue $203M $193M $210M Non-GAAP Gross Margin1 55% 54% 55% Non-GAAP Opex1 $87M $86M $90M Non-GAAP Operating 12% 9% 13% Margin1 Non-GAAP Adjusted $28M $22M $30M EBITDA1 Non-GAAP Diluted EPS1 $0.05 $0.05 $0.05 1. Please see the discussion
Slide 11: Key Trends & Outlook
Key Trends & Outlook &} riddon
Slide 12: Improving 2025 Operating Environment
Improving 2025 Operating Environment Federal and Shifting Network Rural Broadband Defense Secure Competitive Innovation Modernization Fiber Investment Communications Environment ▪ Legacy TDM Voice ▪ Major voice ▪ Robust public and ▪ Industry consolidation ▪ Cloud Native Switch replacement modernizat
Slide 13: Fourth Quarter and Full Year 2024 Business Outlook
Fourth Quarter and Full Year 2024 Business Outlook 4Q23 FY23 4Q24 FY24 (Actual) (Actual) (Outlook) (Outlook) Revenue $226M $826M $235M to $255M $818M to $838M Non-GAAP Gross Margin1 57% 53% 55.5% to 56.0% 55.1% to 55.3% Non-GAAP Adjusted EBITDA1 $43M $91M $46M to $52M $109M to $115M 1. Please see th
Slide 14: Appendix
Appendix &} riddon
Slide 15: Ribbon Key Revenue Statistics
Ribbon Key Revenue Statistics USD Millions except for percentages 1Q23 2Q23 3Q23 4Q23 FY23 1Q24 2Q24 3Q24 Revenue Product 93 117 109 126 445 88 99 112 Service 93 93 95 100 381 92 93 98 Total Revenue 186 211 203 226 826 180 193 210 % of Total Revenue: Revenue Mix Product 50% 56% 53% 56% 54% 49% 51% 5
Slide 16: Quarterly Non-GAAP Segment Trend | Cloud & Edge
Quarterly Non-GAAP1 Segment Trend | Cloud & Edge CLOUD & EDGE – 2023 2024 1Q 2Q 3Q 4Q FY23 1Q 2Q 3Q Revenue $114M $125M $116M $122M $478M $102M $111M $128M vs Prior Year +4% (9%) (7%) (11%) (6%) (11%) (12%) +11% Non-GAAP Gross 61% 67% 68% 68% 66% 66% 66% 68% Margin1 Non-GAAP Adjusted $21M $35M $32M
Slide 17: 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 2Q 3Q Revenue $72M $85M $87M $104M $349M $78M $82M $82M vs Prior Year +13% +24% +6% +7% +12% +9% (4%) (6%) Non-GAAP Gross 27% 31% 38% 44% 36% 41% 39% 36% Margin1 Non-GAAP Adjusted ($23M) ($12M
Slide 18: Third Quarter 2024 GAAP Financial Summary
First ThirdQuarter Quarterand Full 2024 YearFinancial GAAP 2024 GAAP Financial Summary Summary 3Q23 2Q24 3Q24 Revenue $203M $193M $210M Gross Margin 51% 51% 52% OpEx $103M $100M $111M Income (loss) from $1M ($2M) ($1M) operations Other (expense) income, ($10M) ($13M) ($11M) net Net income (loss) ($1
Slide 19: 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 19
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