Ribbon Communications Inc. · NASDAQ:RBBN
Ribbon Communications — Q1 2022 Earnings Presentation
30 slides from Ribbon Communications's earnings presentation, Apr 27, 2022
Slide 1: Ribbon Communications First Quarter 2022 Results
Ribbon Communications First Quarter 2022 Results April 27, 2022 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: First Quarter 2022 Business Overview
First Quarter 2022 Business Overview Bruce McClelland, President & CEO Mick Lopez, Executive Vice President & CFO
Slide 4: First Quarter 2022 New Market Activity
First Quarter 2022 New Market Activity Customers & Partners Awards IP and Optical Cloud & Edge Enterprise Cloud & Edge Telco Cloud Active IP Optical RFPs with 12 major mobile and telecom carriers around the globe 4
Slide 5: First Quarter 2022 Business Highlights
First Quarter 2022 Business Highlights Ribbon now supports Microsoft’s Operator Connect using our Ribbon Connect platform by extending our multi-tenant SaaS Ribbon Connect capability to support service provider deployments of Operator Connect. Our first customer, Switch Connect in Australia, now off
Slide 6: First Quarter 2022 Financial Highlights
First Quarter 2022 Financial Highlights 1Q22 Revenue Balance Sheet Profitability Metrics $173M; down 10% YoY $95M Ending Cash ($9M) Adjusted EBITDA International 56% of Sales Amended credit facility ($0.08) Non-GAAP EPS Enterprise 27% of Sales Average interest rate 3.40% Cloud and Edge IP Optical Ne
Slide 7: First Quarter 2022 GAAP Financial Summary
First Quarter 2022 GAAP Financial Summary 1Q21 4Q21 1Q22 Revenue $193M $231M $173M Gross margin 52% 50% 45% 4Q21 Opex includes $116 million impairment against our IP Optical Networks goodwill OPEX $113M $235M $117M carrying value Loss from operations ($13M) ($120M) ($39M) 1Q22 includes a $27M non-ca
Slide 8: First Quarter 2022 Non-GAAP Financial Summary
First Quarter 2022 Non-GAAP Financial Summary 1Q21 4Q21 1Q22 Revenue $193M $231M $173M Gross margin 57% 54% 50% OPEX $95M $102M $99M Operating margin 8% 9% (7%) Adjusted EBITDA $20M $26M ($9M) Diluted EPS $0.03 $0.01 ($0.08) 8
Slide 9: First Quarter 2022 Non-GAAP Segment Summary
First Quarter 2022 Non-GAAP Segment Summary Cloud and Edge IP Optical Networks Consolidated Revenue $110M $63M $173M Gross margin 62% 29% 50% Adjusted EBITDA $16M ($25M) ($9M) 9
Slide 10: Quarterly Performance: Revenue & Non-GAAP Gross Margins
Quarterly Performance: Revenue & Non-GAAP Gross Margins IP Optical Networks Cloud and Edge $141M $142M $147M $125M $110M $83M $67M $70M $68M $63M 67% 68% 67% 64% 39% 48% 62% 37% 36% 29% 1Q21 2Q21 3Q21 4Q21 1Q22 1Q21 2Q21 3Q21 4Q21 1Q22 10
Slide 11: First Quarter 2022 Key Metrics
First Quarter 2022 Key Metrics Pipeline Revenue Mix Balance Sheet Cash Flow 1Q22 Book to Revenue1 Ratio 26% Software Revenue2 Cash Balance $95M $15M Cash from Operations of 1.20, up 5% YoY 40% Maintenance Revenue3 Debt5 $355M $20M principal debt paydown 80% of 2022 maintenance Top 10 Customers Reven
Slide 12: Key Trends and Outlook
Key Trends and Outlook &) rioddon
Slide 13: New Product Highlights
New Product Highlights Cloud & Edge IP Optical Networks • Ribbon Automation & Management Platform (RAMP) • IP Routing Protocols Suite • Ribbon SBC Software Edition Edge (SWe Edge) • Apollo Gen2 400G ZR+ OpenROADM Transponder • Enterprise Edge 8000 Voice & Data SBC • Neptune 2000 Series IP Routers •
Slide 14: Second Quarter and Full Year 2022 Business Outlook
Second Quarter and Full Year 2022 Business Outlook FY21 2Q22 FY22 (Actual) Revenue $845M $200M to $215M $850M to $880M Non-GAAP Gross Margin 57% 53.5% to 54.5% 55% to 56% Non-GAAP Adjusted EBITDA $120M $17M to $23M $110M to $120M Non-GAAP Diluted EPS $0.32 $0.03 to $0.06 $0.30 to $0.34 Interest & Ot
Slide 15: Appendix
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Slide 16: Ribbon Condensed Statements of Operations
Ribbon Condensed Statements of Operations USD Millions except percentages and EPS 1Q21 2Q21 3Q21 4Q21 FY21 1Q22 GAAP FINANCIAL MEASURES Product Revenue 98 113 112 130 453 82 Service Revenue 95 98 99 100 392 91 Total Revenue 193 211 210 231 845 173 Gross Profit 100 119 111 115 445 78 Gross Margin % 5
Slide 17: Ribbon Condensed Balance Sheets
Ribbon Condensed Balance Sheets USD Millions 1Q21 2Q21 3Q21 4Q21 1Q22 ASSETS Cash and cash equivalents1 109 115 104 106 95 Accounts receivable, net 209 220 236 283 221 Inventory 45 47 45 54 62 Property and equipment, net 49 49 49 48 48 Intangible assets, net and Goodwill 818 801 784 652 636 Investme
Slide 18: Ribbon Condensed Statements of Cash Flows
Ribbon Condensed Statements of Cash Flows USD Millions 1Q21 2Q21 3Q21 4Q21 FY21 1Q22 Cash from Operations (6) 14 - 11 19 15 Purchases of property and equipment (5) (5) (4) (3) (17) (3) Proceeds from sale of business - 3 - - 3 - Borrowings, net (4) (5) (5) (5) (19) (21) Other (12) (1) (2) (1) (15) (2
Slide 19: Ribbon Key Revenue Statistics
Ribbon Key Revenue Statistics USD Millions except for percentages 1Q21 2Q21 3Q21 4Q21 FY21 1Q22 Revenue Product 98 113 112 130 453 82 Service 95 98 99 100 392 91 Total Revenue 193 211 210 231 845 173 % of Total Revenue: Revenue Mix Product 51% 54% 53% 57% 54% 47% Services 49% 46% 47% 43% 46% 53% Rev
Slide 20: Discussion of Non-GAAP Financial Measures
Discussion of Non-GAAP Financial Measures The Company’s management uses several different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall performance of its business, making operating decisions, planning and forecasting future periods, and determining payments unde
Slide 21: Discussion of Non-GAAP Financial Measures (continued)
Discussion of Non-GAAP Financial Measures (continued) 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. The Company believes that presenting non-GAAP op
Slide 22: Discussion of Non-GAAP Financial Measures (continued)
Discussion of Non-GAAP Financial Measures (continued) Acquisition-, Disposal- and Integration-Related The Company considers certain acquisition-, disposal- and integration-related costs to be unrelated to the organic continuing operations of its acquired businesses and the Company. Such costs are ge
Slide 23: Discussion of Non-GAAP Financial Measures (continued)
Discussion of Non-GAAP Financial Measures (continued) Gain on Sale of Business On May 12, 2021, the Company sold its QualiTech business, which it had acquired as part of the ECI Acquisition, to Hermon Laboratories, Ltd. As consideration, the Company received $2.9 million of cash and recorded a gain
Slide 24: Discussion of Non-GAAP Financial Measures (continued)
Discussion of Non-GAAP Financial Measures (continued) Adjusted EBITDA The Company uses Adjusted EBITDA as a supplemental measure to review and assess its performance. The Company calculates Adjusted EBITDA by excluding from Income (loss) from operations: depreciation; amortization of acquired intang
Slide 25: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation $000's 1Q21 2Q21 3Q21 4Q21 FY21 Cloud and IP Optical Consolidated Cloud and IP Optical Consolidated Cloud and IP Optical Consolidated Cloud and IP Optical Consolidated Cloud and IP Optical Consolidated Edge Networks Edge Networks Edge Networks Edge Networks Edge Netwo
Slide 26: GAAP to Non-GAAP Reconciliation (Continued)
GAAP to Non-GAAP Reconciliation (Continued) $000's 1Q22 Cloud and IP Optical Consolidated Edge Networks Revenue $ 109,806 $ 63,392 $ 173,198 GAAP Gross profit $ 62,732 $ 15,323 $ 78,055 GAAP Gross margin (Gross profit/Revenue) 57.1% 24.2% 45.1% Stock-based compensation 0.4% 0.0% 0.3% Amortization of
Slide 27: GAAP to Non-GAAP Reconciliation (Continued)
GAAP to Non-GAAP Reconciliation (Continued) $000s 1Q21 2Q21 3Q21 4Q21 FY21 1Q22 GAAP Operating expenses $ 113,090 $ 105,775 $ 108,662 $ 234,929 $ 562,456 $ 117,109 Stock-based compensation (4,798) (4,228) (3,973) (4,422) (17,421) (3,675) Amortization of acquired intangible assets (5,762) (7,481) (7,
Slide 28: GAAP to Non-GAAP Reconciliation (Continued)
GAAP to Non-GAAP Reconciliation (Continued) 1Q21 2Q21 3Q21 4Q21 FY21 1Q22 GAAP Diluted (loss) earnings per share $ (0.31) $ 0.15 $ (0.40) $ (0.65) $ (1.20) $ (0.47) Stock-based compensation 0.03 0.03 0.03 0.03 0.14 0.03 Amortization of acquired intangible assets 0.11 0.11 0.12 0.12 0.44 0.11 Impairm
Slide 29: GAAP to Non-GAAP Reconciliation (Continued)
GAAP to Non-GAAP Reconciliation (Continued) Three months ending Year ending June 30, 2022 December 31, 2022 Outlook Range Range Revenue ($ millions) $ 200 $ 215 $ 850 $ 880 Gross margin: GAAP outlook 49.2% 50.5% 51.1% 52.2% Stock-based compensation 0.3% 0.3% 0.3% 0.3% Amortization of acquired techno
Slide 30: Thank You
Thank You &) rioddon
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