Ribbon Communications Inc. · NASDAQ:RBBN
Ribbon Communications — Investor Presentation (August 2018)
44 slides from Ribbon Communications's investor presentation, Aug 23, 2018
Slide 1: Ribbon Communications Overview
Ribbon Communications Overview
Slide 2: About Ribbon Communications
About Ribbon Communications Ribbon is a global leader in secure real-time communications, providing software, cloud and network infrastructure solutions to communications service providers and enterprises Transforming Communications Networks Enabling Cloud Communications Securing Communications Orch
Slide 3: Ribbon Announced Completion of Edgewater Networks Acquisition
Ribbon Announced Completion of Edgewater Networks Acquisition Leader1 in Network Edge Orchestration, providing service assurance, security and analytics for Unified Communications and SD-WAN through a hybrid cloud/edge model Communications Service Providers, Managed Service Providers and Enterprises
Slide 4: Ribbon Communications - Scope and Scale
Ribbon Communications - Scope and Scale Four Decades of Combined Leadership Experience in Real-Time Communications ~ 2,300 Employees Serving Customers in over 100 Countries 1,000+ Service Provider and Enterprise Customers Globally #2 in VoIP Switching, #1 E-SBC, #2 SP-SBC, #2 in Media Gateways 800+
Slide 5: Executive Team
Executive Team John McCready EVP, Chief Strategy Officer Tony Scarfo EVP, Products and R&D Kevin Riley CTO & EVP, Advanced R&D Steven Bruny EVP, Global Operations Daryl Raiford EVP, Chief Financial Officer Mike Swade EVP, Global Sales David Walsh Founder, Kandy Patrick Joggerst CMO & EVP, Business D
Slide 6: Investment Highlights
Investment Highlights Market leader with financial scale to benefit from further consolidation potential Technology embedded in largest service providers worldwide positions us well to capture share in network modernization Investment in innovations ahead of the market is a key competitive advantage
Slide 7: Strategy
Into New Adjacent Markets and Applications Expand Solution Offers to Global Installed Base Broaden With Acquisitions and Alliances Scale In Core Products with Balanced Investments Invest Strategy
Slide 8: What We Do For Our Customers
What We Do For Our Customers Service Providers Enterprises Upgrade Communications Networks to IP and Cloud Enable Software-Defined and Virtualized Networks Secure IP Communications Networks Enable Edge Orchestration, Intelligent Edge and SD-WAN Enable Cloud Unified Communications - UCaaS Enable Embe
Slide 9: Competitive and Technology Differentiation
Competitive and Technology Differentiation Large Installed Base End-to-End Breadth of Products and Solutions Leader in Network Edge Orchestration Leader in Media Processing Technology – CPU, GPU Cloud, Security and Virtualization Innovation and Expertise Solution Reliability, Performance, Functional
Slide 10: End-to-End Solutions is Key Differentiator
End-to-End Solutions is Key Differentiator Brand/Product Session Border Controllers Intelligent Edge, Orchestration and SD-WAN Application Server & WebRTC Call Controllers Media Gateways Network Functions Virtualization Signaling, Policy & Routing Security Solution Service Provider Market Enterprise
Slide 11: Ribbon's Leadership Position and Market Opportunity
Ribbon’s Leadership Position and Market Opportunity Network Transformation 2022 TAM: $3.2B ’18 -’22 CAGR: 4% Leadership Ranking Source: IHS Research 1Q-2018 Market share data (last 12 months)1 (source reference defined in the Appendix section) #2 #2 #3 #2 IP Software Services Cloud Software Services
Slide 12: Addressable Markets
Addressable Markets Core Business ($B) Expected 2022 TAM: $3.2B / 2018 – 2022 CAGR +4% Estimated UCaaS/CPaaS ($B) CAGR: 21% Security & Analytics Estimated Security & Analytics ($B) CAGR: 44% SaaS Business ($B) Expected 2022 TAM: $13.6B / 2018 – 2022 CAGR +23% Anticipate 2022 Total Addressable Market
Slide 13: Cloud Software Services
Cloud Software Services Cloud Communications Communications Security Communications software platform and applications offered “as a Service” that enable service providers and enterprises to deploy embedded1 and unified2 communications Communications security, fraud management and network intelligen
Slide 14: Cloud Software Services
Cloud Software Services communications environments Cloud Communications Communications Security ( Communications software | Communications security, fraud platform and applications offered | management and network “as a Service” that enable | _ intelligence solution that helps service providers and
Slide 15: US Department of Defense
US Department of Defense Largest Voice over IP deployment in the Department of Defense’s history More than 60,000 users migrated to Ribbon’s Joint Interoperability Test Command (JITC)-certified Application Server technology
Slide 16: Verizon Enterprise Solutions offers SBC as a Service
Verizon Enterprise Solutions offers SBC as a Service with Ribbon Network Edge Services – Second customer being deployed
Slide 17: Softbank Accelerates IP Migration and Deploys Ribbon Protect
Softbank Accelerates IP Migration and Deploys Ribbon Protect Softbank selected Ribbon's advanced security and network analytics solution called Ribbon Protect for its ability to provide real-time communications network traffic monitoring and analytics Accelerated migration to IP and replacement of t
Slide 18: City of Los Angeles Kandy Cloud Communications as a Service
City of Los Angeles (50,000+ Employees) Kandy Cloud Communications as a Service Migrating communications at airport, car sales sites and neighborhood locations to the cloud. 145 sites already migrated to Kandy and 50 more planned in the near term. Upgrading UC capabilities and voicemail system, repl
Slide 19: Kandy Cloud Communications as a Service
Kandy Cloud Communications as a Service < KANDY. City of Los Angeles (50,000+ Employees) Large Car Rental Company (10,000+ users) Upgrading UC capabilities and voicemail system, replacing Migrating communications at airport, car sales sites and legacy on-premise PBX and key systems to cloud-based ne
Slide 20: Ribbon Non-GAAP Statements of Operations
Ribbon Non-GAAP1 Statements of Operations2 Confidential and Proprietary Please see non-GAAP reconciliations in presentation appendix. Results for the period January 1, 2016 through September 30, 2017 are those of Sonus. Results in the quarter ended December 31, 2017 represent three months of Sonus a
Slide 21: Ribbon Condensed Balance Sheets
Ribbon Condensed Balance Sheets Confidential and Proprietary Includes cash, cash equivalents and short- and long-term investments. Note: Totals may not sum due to rounding. USD Millions Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 ASSETS Cash and Investments 1 142 143 121 126 129 126 132 83 85
Slide 22: Ribbon Condensed Statements of Cash Flows
Ribbon Condensed Statements of Cash Flows Includes cash, cash equivalents and short- and long-term investments. Note: Totals may not sum due to rounding. USD Millions Q116 Q216 Q316 Q416 FY16 Q117 Q217 Q317 Q417 FY17 Q118 Q218 Cash from Operations 3 6 1 9 19 4 (1) 6 (1) 8 3 (26) Purchases of PP&E (1
Slide 23: Ribbon GAAP Revenue Key Stats
Ribbon GAAP Revenue Key Stats1 Results for the period January 1, 2016 through September 30, 2017 are those of Sonus. Results in the quarter ended December 31, 2017 represent three months of Sonus and include the results of GENBAND for the period October 27, 2017 through December 31, 2017. Note: Tota
Slide 24: 2018 Full Year Outlook
2018 Full Year Outlook FY18 Non GAAP Revenue4 of at least $580 million3 FY17 pro forma1 non-GAAP revenue was $643 million FY18 Adjusted EBITDA2 of $75 million3 FY17 pro forma1 Adjusted EBITDA2 was $45 million Acquisition expected to be immediately accretive to Adjusted EBITDA Impact to Ribbon full y
Slide 25: 2018 Full Year Outlook
2018 Full Year Outlook FY18 Non GAAP Revenue’ of at least $580 million? - _ FY17 pro forma’ non-GAAP revenue was $643 millon riddon FY18 Adjusted EBITDA? of $75 million? —_FY17 pro forma’ Adjusted EBITDA? was $45 million + Acquisition expected to be immediately accretive to Adjusted EBITDA TF edgewa
Slide 26: TAM and Market Share References
TAM and Market Share References TAM & Market Share (SS, MGW, VAS, SP-SBC ): IHS Markit, Service Provider VoIP and IMS Equipment and Subscribers, Published May 23, 2018, Edition: Q1 2018 (for the quarter ended 31 March 2018) (Quarterly) TAM & Market Share (E-SBC): IHS Markit, Enterprise SBCs and VoIP
Slide 27: Product Definitions
Product Definitions Call Controllers Call Controllers are communications network elements that connect voice calls between subscribers within a network and route voice calls between networks. Call controllers are essential elements in service provider networks utilized to provide regulated and un-re
Slide 28: Product Definitions
Product Definitions Application Servers Application servers are the elements in internet protocol (IP) communication networks that enable a variety of unified business communications capabilities like voice calling, messaging and collaboration across different devices. Application servers are essent
Slide 29: Non-GAAP Financial Measures Overview
Ribbon management uses several different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall performance of the business, making operating decisions, planning and forecasting future periods, and determining payments under compensation programs. Our annual financial pla
Slide 30: Acquisition-Related Revenue and Cost of Revenue; Impact of New Revenue Standard
Acquisition-Related Revenue and Cost of Revenue; Impact of New Revenue Standard We provide the supplementary non-GAAP financial measures of non-GAAP Product revenue, non-GAAP Service revenue and non-GAAP Total revenue, which include revenue related to the acquisition of GENBAND that we would have re
Slide 31: Stock-Based Compensation
Stock-Based Compensation Stock-based compensation expense is different from other forms of compensation, as it is a non-cash expense. For example, a cash salary generally has a fixed and unvarying cash cost. In contrast, the expense associated with an equity-based award is generally unrelated to the
Slide 32: Amortization of Intangible Assets
Amortization of Intangible Assets We exclude the amortization of acquired intangible assets from non-GAAP expense and income measures. These amortization amounts are inconsistent in frequency and amount and are significantly impacted by the timing and size of acquisitions. Although we exclude amorti
Slide 33: Discussion of Non-GAAP Financial Measures (continued)
Discussion of Non-GAAP Financial Measures (continued) Settlement Expense In March 2018, we recorded $1.7 million of expense related to settlements, comprised of $1.4 million for the settlement of litigation in connection with our acquisition of Taqua LLC and $0.3 million of patent litigation settlem
Slide 34: Acquisition-Related Facilities Adjustments
Acquisition-Related Facilities Adjustments GAAP accounting requires that the deferred rent liability of an acquired company be written off as part of purchase accounting and that the combined company’s rent expense on a straight-line basis begin as of the acquisition date. As a result, we recorded m
Slide 35: Acquisition- and Integration-Related Costs
Discussion of Non-GAAP Financial Measures (continued) Acquisition- and Integration-Related Costs We consider certain acquisition- and integration-related costs to be unrelated to the organic continuing operations of our acquired businesses and the Company and they are generally not relevant to asses
Slide 36: Gain on Sales of Intangible Assets
Discussion of Non-GAAP Financial Measures (continued) Gain on Sales of Intangible Assets In 2017 and 2016, we sold intangible assets that we had acquired in connection with two previous acquisitions. These amounts, aggregating $0.6 million in 2017 and $1.3 million in 2016, are included as components
Slide 37: Adjusted EBITDA
Discussion of Non-GAAP Financial Measures (continued) Adjusted EBITDA We use Adjusted EBITDA as a supplemental measure to review and assess our performance. We calculate Adjusted EBITDA by excluding from net income (loss): interest income (expense), net; income tax benefit (provision); depreciation;
Slide 38: Annual and Quarterly GAAP to Non-GAAP Reconciliation
Annual and Quarterly GAAP to Non-GAAP Reconciliation $000's Q116 Q216 Q316 Q416 FY16 Q117 Q217 Q317 Q417 FY17 Q118 Q218 GAAP Product revenue 34,769 $ 35,349 $ 38,601 $ 37,662 $ 146,381 $ 25,395 $ 28,790 $ 44,120 $ 82,814 $ 181,119 $ 51,531 $ 63,123 $ Acquisition-related revenue adjustment - - - - -
Slide 39: Annual and Quarterly GAAP to Non-GAAP Reconciliation (continued)
Annual and Quarterly GAAP to Non-GAAP Reconciliation (continued) $000s Q116 Q216 Q316 Q416 FY16 Q117 Q217 Q317 Q417 FY17 Q118 Q218 GAAP Operating expenses 42,284 $ 42,936 $ 47,902 $ 48,098 $ 181,220 $ 44,530 $ 49,105 $ 50,628 $ 112,462 $ 256,725 $ 97,956 $ 91,747 $ Stock-based compensation (4,012) (
Slide 40: Annual and Quarterly GAAP to Non-GAAP Reconciliation (continued)
Annual and Quarterly GAAP to Non-GAAP Reconciliation (continued) $000s, except per share amounts Q116 Q216 Q316 Q416 FY16 Q117 Q217 Q317 Q417 FY17 Q118 Q218 GAAP Net income (loss) (4,654) $ (2,916) $ (3,731) $ (2,631) $ (13,932) $ (10,646) $ (12,345) $ 3,453 $ (15,714) $ (35,252) $ (44,904) $ (19,92
Slide 41: Annual and Quarterly GAAP to Non-GAAP Reconciliation (continued)
Annual and Quarterly GAAP to Non-GAAP Reconciliation (continued) $000's Q116 Q216 Q316 Q416 FY16 Q117 Q217 Q317 Q417 FY17 Q118 Q218 Adjusted EBITDA GAAP Net income (loss) (4,654) $ (2,916) $ (3,731) $ (2,631) $ (13,932) $ (10,646) $ (12,345) $ 3,453 $ (15,714) $ (35,252) $ (44,904) $ (19,922) $ Inte
Slide 42: Revenue Outlook GAAP to Non-GAAP Reconciliation
Revenue Outlook GAAP to Non-GAAP Reconciliation *Guidance is as of July 31, 2018 Y e a r e n d i n g D e c e m b e r 3 1 , 2 0 1 8 N o n - G A A P R e v e n u e * 5 8 0 $ L e s s a c q u i s i t i o n - r e l a t e d a d j u s t m e n t s a n d i m p a c t o f n e w r e v e n u e s t a n d a r d ( 3
Slide 43: Revenue Outlook GAAP to Non-GAAP Reconciliation
Revenue Outlook GAAP to Non-GAAP Reconciliation Year ending December 31, 2018 Non-GAAP Revenue s 580 Less acquisition related adjustments and impact of new revenue standard 32 GAAP Revenue ‘Adjusted EBITDA: Ribbon has not provided a reconciliation of Adjusted EBITDA for the year ending December 31,
Slide 44: Thank You
Thank You 3 riodon communications
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