Slide 1: Ribbon Communications Second Quarter 2024 Results
Ribbon Communications Second Quarter 2024 Results July 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: Second Quarter 2024 Business Overview
Second Quarter 2024 Business Overview Bruce McClelland, President & CEO Mick Lopez, Executive Vice President & CFO
Slide 4: Excellent Progress against Strategic Goals
Excellent Progress against Strategic Goals • Ribbon 3.0 Business re-alignment • Verizon Network Modernization $300M+ contract • 5%+ reduction in operating expenses • 12-month trailing Adj. EBITDA >$100M • Growth in US Rural Broadband • Successful Credit Structure re-financing • India market share ex
Slide 5: Second Quarter and Year to Date 2024 Highlights | Consolidated
Second Quarter and Year to Date 2024 Highlights | Consolidated IP Optical Networks Growth Customer Highlights +$8M YoY Adj. EBITDA1 Improvement First Shipments of Verizon +800 bps Gross Margin1 Growth Modernization Project +21% Gross Profit Growth U.S. Federal Defense Voice Modernization Wins +30% G
Slide 6: Second Quarter 2024 Business Highlights | Consolidated
Second Quarter 2024 Business Highlights | Consolidated Continued Gross Margin Expansion and Operational Efficiencies $385M Senior Secured Credit Facility $22M Q2 Adjusted EBITDA1 Maturity: 5 years Trailing Twelve Month Adjusted EBITDA $104M $13M Improvement Year to Date vs 2023 $ Term Loan Amount: $
Slide 7: Key Financial Trends
Key Financial Trends1 Cloud and Edge Revenue IP Optical Networks Revenue Adjusted EBITDA1 ($ millions) $226M $211M $43 $203M $193M $28 $186M $180M $23 $22 $12 $104 $85 ($2) $87 $72 $82 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 $78 Gross Margin1 % $122 $111 $114 $125 $116 $102 Significant YoY Gross Margin1 Impro
Slide 8: Non-GAAP Segment Financial Highlights | IP Optical Networks
Non-GAAP1 Segment Financial Highlights | IP Optical Networks $8M Improvement in Adj. EBITDA1 vs Q2 23 Adjusted EBITDA1 +$6M Gross Profit Growth / Expanded Margins ($ millions) +$2M Operating Expense Reductions Trailing Twelve Months Adjusted EBITDA @ ($5M) $8 ($4) ($6) ($12) ($4) +30% YoY Growth in
Slide 9: Non-GAAP Segment Financial Highlights | Cloud & Edge
Non-GAAP1 Segment Financial Highlights | Cloud & Edge Strong Gross Margin1 66% Adjusted EBITDA1 69% Services Gross Margin ($ millions) Software Sales 64% of Total Product Revenue Continued Strength in re-occurring Maintenance Revenue Annual Maintenance Backlog >90% $35 $34 $32 $21 $17 $26 1Q23 2Q23
Slide 10: Second Quarter 2024 Key Metrics | Consolidated
Second Quarter 2024 Key Metrics | Consolidated Revenue Mix Profitability Balance Sheet Cash Flow Enterprise 38%2 54% Gross Margin1 Senior Term Loan Debt4 $350M Solid Cash Position @ $67M Service Provider 62%2 Operating Expenses1 4% Lower Outstanding Revolver Loan4 $0M ($10M) Cash from Operations 35%
Slide 11: Second Quarter 2024 Non-GAAP Financial Summary
Second Quarter 2024 Non-GAAP1 Financial Summary 2Q23 1Q24 2Q24 Revenue $211M $180M $193M Non-GAAP Gross Margin1 52% 55% 54% Non-GAAP Opex1 $90M $91M $86M Non-GAAP Operating 9% 5% 9% Margin1 Non-GAAP Adjusted $23M $12M $22M EBITDA1 Non-GAAP Diluted EPS1 $0.04 ($0.01) $0.05 1. Please see the discussio
Slide 12: Quarterly Non-GAAP Operating Expense Trends
Quarterly Non-GAAP Operating Expense Trends 2Q24 of $86M lowest quarter OPEX since the merger with ECI Telecom Group in March 2020 Cloud and Edge IP Optical Networks $ in millions $111 $98 $98 $100 $95 $102 $99 $96 $94 $97 $95 $93 $90 $91 39 $90 $90 $87 $86 34 35 38 36 42 44 43 44 35 39 42 43 39 38
Slide 13: $385M First Lien Senior Secured Credit Facility
First $385M Quarter andSenior First Lien Full Year 2024 Credit Secured GAAPFacility Financial Summary Term Loan Amount: $350M Interest Rate Levels: Revolver Amount: $ 35M • Level 1 until March 2025 • Maturity: 5 Years (6/21/29) • After March 2025, dependent on net leverage ratio • Original Issue Dis
Slide 14: Key Trends & Outlook
Key Trends & Outlook &} rioddon
Slide 15: Key Growth Drivers in 2H 2024
Key Growth Drivers in 2H 2024 Verizon Advanced Voice Network Platform deployment Expansion of Voice Network Modernization projects with additional carriers Enterprise and U.S. Federal growth U.S. Regional and Rural Broadband deployments Expanding fiber deployments and network upgrades in India Compe
Slide 16: Industry Announcements Create Disruption & Opportunity
Industry Announcements Create Disruption & Opportunity Competitive Changes Disruption Ribbon Opportunities + * Support Concerns + Product Uncertainty + Broken Leading Voice Telecom Specialist X Sales Dual Vendor Optical Alternative Investing in Telecom IP Networking * Previously the primary direct c
Slide 17: Third Quarter and Full Year 2024 Business Outlook
Third Quarter and Full Year 2024 Business Outlook 3Q23 FY23 3Q24 FY24 (Actual) (Actual) (Outlook) (Outlook) Revenue $203M $826M $205M to $220M $830M to $850M Non-GAAP Gross Margin1 55% 53% 53.0% to 53.5% 54.0% to 54.5% Non-GAAP Adjusted EBITDA1 $28M $91M $25M to $30M $105M to $115M 1. Please see the
Slide 18: Appendix
Appendix &} rioddon
Slide 19: Ribbon Key Revenue Statistics
Ribbon Key Revenue Statistics USD Millions except for percentages 1Q23 2Q23 3Q23 4Q23 FY23 1Q24 2Q24 Revenue Product 93 117 109 126 445 88 99 Service 93 93 95 100 381 92 93 Total Revenue 186 211 203 226 826 180 193 % of Total Revenue: Revenue Mix Product 50% 56% 53% 56% 54% 49% 51% Services 50% 44%
Slide 20: 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 Revenue $114M $125M $116M $122M $478M $102M $111M vs Prior Year +4% (9%) (7%) (11%) (6%) (11%) (12%) Non-GAAP Gross 61% 67% 68% 68% 66% 66% 66% Margin1 Non-GAAP Adjusted $21M $35M $32M $34M $121M $17M $2
Slide 21: 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 Revenue $72M $85M $87M $104M $349M $78M $82M vs Prior Year +13% +24% +6% +7% +12% +9% (4%) Non-GAAP Gross 27% 31% 38% 44% 36% 41% 39% Margin1 Non-GAAP Adjusted ($23M) ($12M) ($4M) $8M ($31M
Slide 22: Second Quarter 2024 GAAP Financial Summary
First SecondQuarter and2024 Quarter Full Year GAAP2024 GAAP Financial Financial Summary Summary 2Q23 1Q24 2Q24 Revenue $211M $180M $193M Gross Margin 48% 51% 51% OpEx $108M $105M $100M Income (loss) from ($7M) ($13M) ($2M) operations Other (expense) income, ($9M) ($14M) ($13M) net Net income (loss)
Slide 23: 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 23