Ribbon Communications Inc. · NASDAQ:RBBN
Ribbon Communications — Jefferies Virtual Software Conference 2021
29 slides from Ribbon Communications's conference presentation, Sep 14, 2021
Slide 1: Ribbon Communications
Ribbon Communications Jefferies Virtual Software Conference September 14, 2021 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: Key Technology Trends Are Transforming Our Communications Networks
Key Technology Trends Are Transforming Our Communications Networks Market Connected Applications Software Personalized Explosion Drivers Devices for Everything As a Service & Customized of Data Software Wireless Everything Technology Driven Network Moving to Trends Innovations Utilization the Cloud
Slide 4: Carriers and Enterprises are Facing Evolving Network Challenges
Carriers and Enterprises are Facing Evolving Network Challenges Global Internet Users 5G Mobile Subscriptions Unified Communications 66% ▪ Global Internet Users to surpass 3.5B ▪ 55% CAGR from 2020 to 2026 >1B ▪ Zoom has 497k customers with Global 5.3B by 2023 >10 employees Global 5G ▪ 5G to reach 4
Slide 5: Ribbon at a Glance
Ribbon at a Glance Global provider of software and network solutions to service providers, enterprises, and critical infrastructure sectors enabling communications and high-bandwidth networking and connectivity Headquarters: Plano, Texas • NASDAQ: RBBN 1000+ $844M 3,700 140 1000+ Customers1 2020 Rev
Slide 6: Rich History of Innovation Brought Together as Ribbon
Rich History of Innovation Brought Together as Ribbon Session Border Controllers Secure and interwork VoIP communications networks and enable 2018 2019 2020 cloud communications applications 2017 Founded 1997 2010 Media Gateways Interwork legacy voice communications networks with Voice over Internet
Slide 7: Positioned for Increased Growth and On-Going Success
Positioned for Increased Growth and On-Going Success Favorable Industry Focused on Large Disruptive Trusted Business Trends Market Segments Innovation Partner • 4.5X growth in global mobile • Optical Transport • Software-defined, multilayer • We have the world’s leading traffic from 2020-20261 ➢ Met
Slide 8: IP Optical Networking Portfolio Delivering Multi-layer Optimization
IP Optical Networking Portfolio Delivering Multi-layer Optimization Higher Level Services User Orchestration Interface Controller - Muse MuseTM Domain Orchestration Multi-layer Optimization Increase in automation Network Controller Network Network Improved asset utilization Platform Admin Network Se
Slide 9: Secure VoIP Portfolio Applications Across Networks and the Cloud
Secure VoIP Portfolio Applications Across Networks and the Cloud Enterprise Enterprise Network Secure Unified Communications and Teams and Zoom Calling Secure Contact Center Cloud Cloud Secure VoIP, UC applications and Teams Analytics and Call Trust Secure Contact Center Service Provider VoIP Commun
Slide 10: Significant Revenue from Services and Recurring Maintenance
Significant Revenue from Services and Recurring Maintenance Professional Services Presence and Scale ($101M revenue in 2020) Network analysis & Engineering design Integration & consulting & installation validation Transformation & Managed network migration operation Maintenance Provides Durable Recu
Slide 11: Business Highlights
Business Highlights ▪ Strong 1H21 financial results: o 10% YoY1 revenue growth o 60% YoY1 Adj. EBITDA growth o Strong gross margins in both business units and continued disciplined expense control ▪ Significant new IP Optical wins broadening Ribbon’s global customer base: o Rogers Communications sel
Slide 12: Quarterly Performance
Quarterly Performance Revenue and Adjusted EBITDA1 ($MM) $231 $244 $210 $211 $78 $89 $193 $64 $70 $158 $67 $30 $155 $147 $154 $128 $125 $141 $10 $43 $49 $20 $43 $30 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 1 Cloud and Edge Revenue IP Optical Networks Adjusted EBITDA Note: 1. Please see the basis of presentatio
Slide 13: Building Shareholder Value
Building Shareholder Value Strategy to Address Growing Market Opportunity ✓ Favorable industry trends ✓ Focused on large market segments ✓ Disruptive innovation ✓ Trusted business partner Strong Leadership and Execution ✓ Experienced management team with proven track record incentivized to drive gro
Slide 14: Appendix
Appendix &) rioddon
Slide 15: Ribbon Condensed Statements of Operations
Ribbon Condensed Statements of Operations USD Millions except percentages and EPS 1Q20 2Q20 3Q20 4Q20 FY20 1Q21 2Q21 GAAP FINANCIAL MEASURES Product Revenue 76 121 129 142 468 98 113 Service Revenue 82 90 102 102 376 95 98 Total Revenue 158 210 231 244 844 193 211 Gross Profit 91 123 135 144 493 111
Slide 16: Ribbon Condensed Balance Sheets
Ribbon Condensed Balance Sheets USD Millions 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 ASSETS 1 Cash and cash equivalents 110 94 111 136 109 115 Accounts receivable, net 206 205 208 238 209 220 Inventory 67 58 51 46 45 47 Property and equipment, net 47 48 48 49 49 49 Intangible assets, net and Goodwill 866 866
Slide 17: Ribbon Condensed Statements of Cash Flows
Ribbon Condensed Statements of Cash Flows USD Millions 1Q20 2Q20 3Q20 4Q20 FY20 1Q21 2Q21 Cash from Operations 40 (3) 29 36 102 (6) 14 Purchases of property and equipment (6) (9) (4) (8) (27) (5) (5) Business Acquisitions (347) - - - (347) - - Sale of Fixed Assets 44 - - - 44 - 3 Borrowings, net 336
Slide 18: Ribbon Key Revenue Statistics
Ribbon Key Revenue Statistics USD Millions except for percentages 1Q20 2Q20 3Q20 4Q20 FY20 1Q21 2Q21 Revenue Product 76 121 129 142 468 98 113 Service 82 90 102 102 376 95 98 Total Revenue 158 210 231 244 844 193 211 % of Total Revenue: Revenue Mix Product 48% 57% 56% 58% 55% 51% 54% Services 52% 43
Slide 19: Addressable Market Sizing References
Addressable Market Sizing References 1. Dell’Oro Group, Optical Transport Five Year Forecast Report 2021 – 2025 (Optical), (Yearly) Volume 21, Number 1 O2A, Published January 2021, Covering: WDM, Multiservice Multiplexer, Optical Switch, Optical Packet, and Data Center Interconnect 2. Dell’Oro Group
Slide 20: Basis of Presentation
Basis of Presentation Totals may not sum due to rounding. The terms “Cloud and Edge”, “Ribbon standalone”, “Ribbon’s organic business” and “organic” as used herein refer to the business, continuing operations and/or financial results, as the context dictates, of Ribbon excluding the recently acquire
Slide 21: Discussion of Non-GAAP Financial Measures
Discussion of Non-GAAP Financial Measures Our 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 under compensa
Slide 22: Discussion of Non-GAAP Financial Measures (Continued)
Discussion of Non-GAAP Financial Measures (Continued) Acquisition-Related Inventory Adjustment Acquisition-related inventory adjustment amounts are inconsistent in frequency and amount and are significantly impacted by the then-current market prices of such inventory items. We believe that excluding
Slide 23: Discussion of Non-GAAP Financial Measures (Continued)
Discussion of Non-GAAP Financial Measures (Continued) Restructuring and Related Expense We have recorded restructuring and related expense to streamline operations and reduce operating costs by closing and consolidating certain facilities and reducing our worldwide workforce. We believe that excludi
Slide 24: Discussion of Non-GAAP Financial Measures (Continued)
Discussion of Non-GAAP Financial Measures (Continued) Tax Effect of Non-GAAP Adjustments Non-GAAP income tax expense is presented based on an estimated tax rate applied against forecasted annual non-GAAP income. Non-GAAP income tax expense assumes no available net operating losses or valuation allow
Slide 25: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation $000's 1Q20 2Q20 3Q20 4Q20 FY20 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 1Q21 2Q21 Cloud and IP Optical Consolidated Cloud and IP Optical Consolidated Edge Networks Edge Networks Revenue $ 125,422 $ 67,350 $ 192,772 $ 141,421 $ 69,789 $ 211,210 GAAP Gross profit $ 84,162 $ 26,385 $ 110,547 $ 95,463 $ 32,964 $ 128,427 GAA
Slide 27: GAAP to Non-GAAP Reconciliation (Continued)
GAAP to Non-GAAP Reconciliation (Continued) $000s 1Q20 2Q20 3Q20 4Q20 FY20 1Q21 2Q21 GAAP Operating expenses $ 119,264 $ 121,675 $ 123,037 $ 127,462 $ 491,438 $ 123,151 $ 115,475 Stock-based compensation (2,819) (3,024) (3,708) (3,473) (13,024) (4,798) (4,228) Amortization of acquired intangible ass
Slide 28: GAAP to Non-GAAP Reconciliation (Continued)
GAAP to Non-GAAP Reconciliation (Continued) 1Q20 2Q20 3Q20 4Q20 FY20 1Q21 2Q21 Earnings (loss) per share GAAP (Loss) per share or diluted earnings per share $ (0.27) $ (0.06) $ 0.04 $ 0.81 $ 0.61 $ (0.31) $ 0.15 Acquisition-related inventory adjustment - - 0.01 - 0.01 - - Stock-based compensation 0.
Slide 29: Thank you
Thank you &) rioddon
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