Ribbon Communications Inc. · NASDAQ:RBBN
Ribbon Communications — Investor Presentation (March 2023)
39 slides from Ribbon Communications's investor presentation, Mar 27, 2023
Slide 1: Ribbon Investor Presentation March 2023
Ribbon Investor Presentation March 2023
Slide 2: Confidential Information / Forward-Looking Statements
Ribbon Confidential Information This presentation contains “forward - looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 19 95, which are subject to a number of risks and uncertainties. All statements other than statements of historical facts contained in
Slide 3: Today's Presenters
Ribbon Confidential Information Today’s Presenters Bruce McClelland President, CEO & Director • Former CEO of ARRIS, COO of CommScope and held several leadership roles at Nortel • 35 years of industry experience Mick Lopez EVP & CFO • Former CFO of Vista Outdoor, CFO of Veritas Technologies and CFO
Slide 4: Investment Highlights
Ribbon Confidential Information Investment Highlights Comprehensive portfolio of best - in - class secure communications and IP optical networking solutions – Differentiates with first mover’s approach to produce innovative, open - sourced products that service customer demands Robust market positio
Slide 5: Strong Financial and Business Momentum / Ribbon at a Glance
Ribbon Confidential Information Strong Financial and Business Momentum 1,000+ Customers $64M 22A EBITDA $840 – 870M ’23 Est. Revenue $95 – 110M ’23 Est. EBITDA 945 Patents 1.10x 4Q22A Book - to - Bill 35% 19% 34% 12% ’22 Revenue Breakdown 51% 31% 18% By Region 28% 72% By Customer Type By Service / P
Slide 6: New Management Team Joins
Ribbon Confidential Information New Management Team Joins Several meaningful transactions have strengthened our market position, expanded our market scope and will provide a major new growth vector in the company’s transformation v Network Modernization Consolidate and modernize legacy fixed voice c
Slide 7: Ribbon 3.0 – The Next Phase of Growth and Profitability
Ribbon Confidential Information Addressable Markets Core Strengths Merger Sonus & GENBAND 2017 Ribbon / ECI merge Mar - 2020 Ribbon acquires Anova Data Mar - 2019 Ribbon acquires Edgewater Aug - 2018 Ribbon 3.0 – The Next Phase of Growth and Profitability Service Provider + Enterprise + Carrier Voic
Slide 8: Continued Momentum for Expected Profitable Growth in 2023
Ribbon Confidential Information Continued Momentum for Expected Profitable Growth in 2023 2022 Accomplishments • 36%+ IP Optical sales growth in 2H22 vs. 1H22 • Major new growth vector on strength of expanded IP Networking portfolio • Noteworthy IP Optical wins: • Telco Cloud momentum and Enterprise
Slide 9: Capital Raise Comes at Significant EBITDA Inflection Point
Ribbon Confidential Information Capital Raise Comes at Significant EBITDA Inflection Point $25 – $30M Gross / $20M Net Expenditure Reduction 2022: Year of R&D Investment EBITDA ($ in millions) ______________________ Note: 2023 EBITDA Mid - Point bridge represents management’s expectations and estima
Slide 10: …And Facilitates Credit Agreement Amendment
Ribbon Confidential Information …And Facilitates Credit Agreement Amendment ______________________ 1. Each leverage covenant in effect will remain net of up to $25 million of cash (unchanged). Fiscal Quarter Ending Net Leverage Covenant Ratio (1) Fixed Charge Coverage Ratio Existing New Existing New
Slide 11: Data Explosion Drives Continuous Network Transformation
Ribbon Confidential Information Network Transformation Everything over IP Cloud Networking Edge Computing Automation & Orchestration Applications for Everything Personalized & Customized Connected Devices Everything as a Service Explosion of Data Market Drivers Technology Evolution Broadband explosi
Slide 12: Industry Drivers and Market Opportunities
Ribbon Confidential Information ______________________ 1. Source: Ericsson Mobility Report, November 2020 • 4.5X expected growth in global mobile traffic from 2020 - 2026 1 driving fiber and IP Networking closer to the edge • Network complexity demanding better management and automation – across Opt
Slide 13: Solutions Meet Demanding Network Requirements
Ribbon Confidential Information Ribbon Solutions Meet Demanding Network Requirements ______________________ 1. Reflects Kandy revenue of $8mm and $11mm in 2019 and 2020, respectively. 2. Reflects pro forma full year results for periods before the close of the ECI acquisition. Core business supports
Slide 14: Cloud & Edge Business Segment
Ribbon Confidential Information Cloud & Edge Business Segment Industry - leading Telco and Enterprise Communications Portfolio Fraud & Analytics Session Border Control • Cloud Native SBC architecture • Highly efficient infrastructure needs • Automation for lifecycle management • Full VoLTE IMS funct
Slide 15: IP Optical Networks Business Segment
Ribbon Confidential Information IP Optical Networks Business Segment Continuous Innovation to Meet Customer Needs Continuous Innovation for Next Generation Optimized, Automated Open IP Optical IP Routing with Neptune • Proven state of the art IP stack with common NOS • Right fit with range of form f
Slide 16: 2023 Customer Investment Profiles
Ribbon Confidential Information 2023 Customer Investment Profiles Mobile Remains a Top Priority Surge in Investment Broadband Access (Fiber, HFC, Fixed Wireless) Relentless Pursuit to Lower Total Cost of Ownership Digital Transformation Ribbon solutions directly address these key investment prioriti
Slide 17: 2023 Targeted Growth Areas
Ribbon Confidential Information Enterprise • Target F1000 Customers in key verticals • Expand adoption of Cloud Services - Ribbon Connect, Identity Management, Analytics • Convert US Federal Opportunities Telco Cloud Transformation Projects • US Tier 1, NA Tier 2, Europe, APAC, CALA SBC Share • Mark
Slide 18: Large and Diverse Service Provider and Enterprise Customer Base
Ribbon Confidential Information Large and Diverse Service Provider and Enterprise Customer Base Telco and Mobile Multi - System Operators Regulated Verticals Utilities Transportation Finance Healthcare Education Government Ribbon is a global company with 57% of 2022 revenues from international custo
Slide 19: Investment Highlights
Ribbon Confidential Information Investment Highlights Comprehensive portfolio of best - in - class secure communications and IP optical networking solutions – Differentiates with first mover’s approach to produce innovative, open - sourced products that service customer demands Robust market positio
Slide 20: Appendix
Appendix g) riddon
Slide 21: Apollo: Programmable Optical Networks
Ribbon Confidential Information IP Optical Networks Business Segment Apollo: Programmable Optical Networks Access - to - Core OTN Switching • Optimize wavelength fill • Point - and - click service provisioning • Dynamic ASON restoration C+L Band Pay as you grow for extra capacity Where you need it –
Slide 22: Neptune IP Routing: WAN Access, Metro & Edge Router
Ribbon Confidential Information IP Optical Networks Business Segment Neptune IP Routing: WAN Access, Metro & Edge Router Applications Disaggregated Routing Super - converged Multi - Access Edge High Performance Routing – XDR Family New IP Routing Portfolio 2100 2200 2300 2400 2700 800G 1RU Fixed 2.4
Slide 23: Muse: Cloud Native SDN Workflow Automation
Ribbon Confidential Information IP Optical Networks Business Segment Muse: Cloud Native SDN Workflow Automation Cloud Native Closed Loop Provisioning Intuitive Web UI Insights & Analytics Network Health • Speed time to revenues • Sell performance assured services • Reduce OPEX • Minimize human mista
Slide 24: 2023 Organization and Leadership
Ribbon Confidential Information 2023 Organization and Leadership Mick Lopez EVP & CFO • Financial accounting reporting, controls, & planning • AP & AR • Treasury & Tax • Investor Relations • Information Technologies Sam Bucci EVP & COO • Business strategy • Innovation & Product Development • Portfol
Slide 25: Fourth Quarter and Full Year 2022 GAAP Financial Summary
Ribbon Confidential Information Fourth Quarter and Full Year 2022 GAAP Financial Summary 4Q21 3Q22 4Q22 2021 2022 Revenue $231M $207M $234M $845M $820M Gross Margin 50% 50% 49% 53% 49% Opex 1 $235M $108M $113M $562M $449M Income (loss) from operations ($120M) ($3M) $1M ($118M) ($48M) Other (expense)
Slide 26: Fourth Quarter and Full Year 2022 Financial Summary
Ribbon Confidential Information Fourth Quarter and Full Year 2022 Non - GAAP Financial Summary 4Q21 3Q22 4Q22 FY21 FY22 Revenue $231M $207M $234M $845M $820M Non - GAAP Gross Margin 54% 54% 52% 57% 53% Non - GAAP Opex $102M $94M $97M $381M $386M Non - GAAP Operating Margin 9% 9% 11% 12% 6% Non - GAA
Slide 27: Fourth Quarter and Full Year 2022 Segment Summary
Ribbon Confidential Information Fourth Quarter and Full Year 2022 Non - GAAP Segment Summary 4Q22 Cloud and Edge 4Q22 IP Optical Networks 4Q22 Consolidated FY22 Cloud and Edge FY22 IP Optical Networks FY22 Consolidated Revenue vs Prior Year $137M (7%) $97M +17% $234M +1% $508M (9%) $312M +8% $820M (
Slide 28: First Quarter and Full Year 2023 Business Outlook
Ribbon Confidential Information First Quarter and Full Year 2023 Business Outlook FY22 (Actual) 1Q23 (Estimated) FY22 (Estimated) Revenue $820M $180M to $190M $840M to $870M Non - GAAP Gross Margin 53% 46% to 48% 53% to 54% Non - GAAP Adjusted EBITDA $64M ($6M) to $1M $95M to $110M Interest and Othe
Slide 29: Discussion of Financial Measures
Ribbon Confidential Information 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 peri
Slide 30: Discussion of Financial Measures (continued)
Ribbon Confidential Information 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 be
Slide 31: Discussion of Financial Measures (continued)
Ribbon Confidential Information 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
Slide 32: Discussion of Financial Measures (continued)
Ribbon Confidential Information 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 its acquisition of ECI Telecom Group Ltd., to Hermon Laboratories, Ltd. As consideration, the Co
Slide 33: Discussion of Financial Measures (continued)
Ribbon Confidential Information 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: depreciatio
Slide 34: GAAP to Reconciliation
Ribbon Confidential Information 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
Slide 35: GAAP to Reconciliation (Continued)
Ribbon Confidential Information GAAP to Non - GAAP Reconciliation (Continued) $000's 1Q22 2Q22 3Q22 4Q22 FY22 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 N
Slide 36: GAAP to Reconciliation (Continued)
Ribbon Confidential Information GAAP to Non - GAAP Reconciliation (Continued) $000s 1Q21 2Q21 3Q21 4Q21 FY21 1Q22 2Q22 3Q22 4Q22 FY22 GAAP Operating expenses 113,090$ 105,775$ 108,662$ 234,929$ 562,456$ 117,109$ 111,789$ 107,614$ 112,748$ 449,260$ Stock-based compensation (4,798) (4,228) (3,973) (4,
Slide 37: GAAP to Reconciliation (Continued)
Ribbon Confidential Information GAAP to Non - GAAP Reconciliation (Continued) 1Q21 2Q21 3Q21 4Q21 FY21 1Q22 2Q22 3Q22 4Q22 FY22 GAAP Diluted (loss) earnings per share (0.31)$ 0.15$ (0.40)$ (0.65)$ (1.20)$ (0.47)$ (0.20)$ (0.12)$ 0.12$ (0.63)$ Stock-based compensation 0.03 0.03 0.03 0.03 0.14 0.03 0.
Slide 38: GAAP to Reconciliation (Continued)
Ribbon Confidential Information GAAP to Non - GAAP Reconciliation (Continued) Three months ending Year ending March 31, 2023 December 31, 2023 Range Range Revenue ($ millions) 180$ 190$ 840$ 870$ Gross margin: GAAP outlook 42.5% 43.7% 49.3% 50.4% Stock-based compensation 0.4% 0.4% 0.3% 0.3% Amortiza
Slide 39: Thank You
Thank You g) riddon
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