Ribbon Communications Inc. Reports Third Quarter 2023 Financial Results

PLANO, Texas -- Ribbon Communications Inc. (Nasdaq: RBBN), a global provider of real time communications technology and IP optical networking solutions to many of the world's largest service providers, enterprises, and critical infrastructure operators to modernize and protect their networks, today announced its financial results for the third quarter of 2023.

Revenue for the third quarter of 2023 was $203 million, compared to $207 million for the third quarter of 2022 and $211 million for the second quarter of 2023.

"Ribbon delivered solid earnings in the third quarter as GAAP Income from Operations improved by $4 million and Non-GAAP Adjusted EBITDA increased 21% year over year. IP Optical Networks sales have increased 14% year-to-date and were up 6% in the third quarter with approximately 50% sales growth in India, the U.S., and Japan. However, IP Optical Networks sales in the EMEA region were approximately 20% lower in the quarter. Strategically, we went into live commercial service with our Neptune IP Router at a U.S. Tier One Service Provider this quarter. Cloud & Edge sales were lower primarily due to reduced spending from U.S. Tier One Service Providers, offset by additional voice modernization sales to U.S. Federal agencies," stated Bruce McClelland, President and Chief Executive Officer of Ribbon Communications.

"For the fourth quarter, we anticipate a strong finish to the year led by sequential growth in both the IP Optical Networks and Cloud & Edge segments. We expect to achieve our goal of positive Non-GAAP Adjusted EBITDA for the IP Optical Networks segment in the fourth quarter," continued Mr. McClelland.

"Our strong Adjusted EBITDA of $28 million for the third quarter 2023, or 14% of revenue, was driven by improved margins and continued spending controls. Gross margins increased for both segments due to positive mix and lower product royalties and costs," said Mick Lopez, Chief Financial Officer of Ribbon Communications. "We believe the continued sales growth and improving margins in IP Optical Networks, combined with continued solid performance from the Cloud & Edge segment, will result in an approximately 40% overall improvement in consolidated profitability for the full year."

Business Outlook¹  
For the fourth quarter of 2023, the Company projects revenue of $230 million to $240 million, Non-GAAP gross margin is projected in a range of 54.5% to 55.5%, and Adjusted EBITDA is projected in a range of $40 million to $46 million.  The current outlook assumes no worsening of geopolitical conditions and related sanctions activities in regions that the Company operates in, including the ongoing wars in Israel and Ukraine. The Company does not anticipate a significant impact to ongoing operations in Israel as a result of the war.