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Ribbon Communications Inc. Reports Second Quarter 2022 Financial Results – PR Newswire

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Jul 27, 2022, 16:03 ET
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Revenue grew 19% sequentially to $206 million for the second quarter of 2022
Profitability improves as gross margin increases 600bps to 51%
PLANO, Texas, July 27, 2022 /PRNewswire/ — 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 second quarter of 2022.
Revenue for the second quarter of 2022 was $206 million, compared to $211 million for the second quarter of 2021 and $173 million for the first quarter of 2022. GAAP gross margin for the second quarter of 2022 was 51%, compared to 56% for the second quarter of 2021 and 45% for the first quarter of 2022. Adjusted gross margin for the second quarter of 2022 was 55%.
"Our results for the second quarter reflect the strong foundation provided by our Cloud & Edge business and the presence we have with major carriers around the world" noted Bruce McClelland, President and Chief Executive Officer of Ribbon Communications. "As we enter the second half of 2022, we expect to see the benefits of the significant investment we are making in new product development as several new products arrive on the market. Our pipeline of opportunities continued to grow in the second quarter and provide the roadmap to further growth in 2023." 
Financial Highlights1
In millions, except per share amounts
Three months ended
Six months ended
June 30,
June 30,
2022
2021
2022
2021
GAAP Revenue
$      206
$     211
$     379
$     404
GAAP Net income (loss)
$       (30)
$       23
$    (100)
$      (21)
Non-GAAP Net income (loss)
$        10
$       27
$        (2)
$       32
Non-GAAP Adjusted EBITDA
$        21
$       43
$       12
$       63
GAAP diluted earnings (loss) per share
$    (0.20)
$    0.15
$   (0.67)
$   (0.15)
Non-GAAP diluted earnings (loss) per share
$     0.06
$    0.17
$   (0.01)
$    0.21
Weighted average shares outstanding basic
150
147
150
147
Weighted average shares outstanding
diluted

154
154
154
155
1 Please see the reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures and additional
information about non-GAAP measures in the section entitled "Discussion of Non-GAAP Financial Measures" in the attached schedules.

Cash, cash equivalents and restricted cash totaled $38 million at June 30, 2022. A total of $25 million in voluntary debt payments were made in the first half of 2022. The GAAP net loss of $30 million in the second quarter of 2022 includes a $12 million non-cash loss associated with the quarterly mark-to-market of our investment in AVCT from the sale of our Kandy Communications business (the "Kandy Sale").
"We were pleased with the financial metrics for the quarter, led by Adjusted EBITDA and Earnings per share at the upper ends of our guidance targets. Operating expenses trended lower for the second straight quarter. Additionally, we continued to strategically pay down debt, making an additional voluntary term loan payment of $10 million, improving our capital structure while also investing for future growth" said Mick Lopez, Chief Financial Officer of Ribbon Communications.
Business Outlook1
The Company’s outlook is based on current indications for its business, which are subject to change. For the third quarter of 2022, the Company projects revenue of $210 million to $225 million, non-GAAP gross margin of 55% to 56%, non-GAAP diluted earnings per share of $0.05 to $0.08, and Adjusted EBITDA of $26 million to $34 million
The Company has also adjusted full year targets based on results year to date, the outlook for the second half, as well as continued elevated supply chain costs and inflationary effects. For the full year 2022, the Company now expects revenue of $840 million to $870 million, non-GAAP gross margin of 54.0% to 54.5%, non-GAAP diluted earnings per share of $0.18 to $0.22, and Adjusted EBITDA of $90 million to $100 million.
1 Please see the reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures and additional information about the non-GAAP measures in the section entitled "Discussion of Non-GAAP Financial Measures" in the attached schedules.
Upcoming Investor Conference Schedule
About Ribbon 
Ribbon Communications (Nasdaq: RBBN) delivers communications software, IP and optical networking solutions to service providers, enterprises and critical infrastructure sectors globally. We engage deeply with our customers, helping them modernize their networks for improved competitive positioning and business outcomes in today’s smart, always-on and data-hungry world. Our innovative, end-to-end solutions portfolio delivers unparalleled scale, performance, and agility, including core to edge software-centric solutions, cloud-native offers, leading-edge security and analytics tools, along with IP and optical networking solutions for 5G. We maintain a keen focus on our commitments to Environmental, Social and Governance (ESG) matters, offering an annual Sustainability Report to our stakeholders. To learn more about Ribbon visit rbbn.com.
Important Information Regarding Forward-Looking Statements 
The information in this release 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 statements of historical facts contained in this release, including without limitation statements regarding the Company’s projected financial results for the third quarter and full year 2022 and beyond; customer engagement and momentum; plans and objectives for future operations; plans for future product development and manufacturing and the expected benefits therefrom, are forward-looking statements. Without limiting the foregoing, the words "believes", "estimates", "expects", "expectations", "intends", "may", "plans", "projects" and other similar language, are intended to identify forward-looking statements.
Forward-looking statements are based on the Company’s current expectations and assumptions regarding its business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict.  Actual results may differ materially from those contemplated in these forward-looking statements due to various risks, uncertainties and other important factors, including, among others, risks related to supply chain disruptions. Including as a result of component availability; the effects of geopolitical instabilities and disputes, including between Russia and Ukraine and the impact of sanctions imposed as a result thereof; risks related to the continuing COVID-19 pandemic, including delays in customer deployments as a result of rises in cases; risks that the Company will not realize the anticipated benefits from the acquisition of ECI Telecom Group Ltd.; risks that the Company will not realize the estimated cost savings and/or anticipated benefits from its strategic restructuring; the impact of restructuring and cost-containment activities; declines in the value of the Company’s ongoing investment in AVCT, the purchaser of the Company’s Kandy Communications business; unpredictable fluctuations in quarterly revenue and operating results; risks related to the terms of the Company’s credit agreement including compliance with the financial covenants; risks related to cybersecurity and data intrusion; failure to compete successfully against telecommunications equipment and networking companies; failure to grow the Company’s customer base or generate recurring business from existing customers; credit risks; the timing of customer purchasing decisions and the Company’s recognition of revenues; macroeconomic conditions, including inflation; litigation; market acceptance of the Company’s products and services; rapid technological and market change; the ability to protect Company intellectual property rights and obtain necessary licenses; the ability to maintain partner, reseller, distribution and vendor support and supply relationships; the potential for defects in the Company’s products; increases in tariffs, trade restrictions or taxes on the Company’s products; and currency fluctuations.
These factors are not intended to be an all-encompassing list of risks and uncertainties that may affect the Company’s business and results from operations. Additional information regarding these and other factors can be found in the Company’s reports filed with the Securities and Exchange Commission, including, without limitation, its Form 10-K for the year ended December 31, 2021. In providing forward-looking statements, the Company expressly disclaims any obligation to update these statements publicly or otherwise, whether as a result of new information, future events or otherwise, except as required by law.
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 periods, and determining payments under compensation programs. The Company considers the use of non-GAAP financial measures helpful in assessing the core performance of its continuing operations and when planning and forecasting future periods. The Company’s annual financial plan is prepared on a non-GAAP basis and is approved by its board of directors. In addition, budgeting and forecasting for revenue and expenses are conducted on a non-GAAP basis, and actual results on a non-GAAP basis are assessed against the annual financial plan. The Company defines continuing operations as the ongoing results of its business adjusted for certain expenses and credits, as described below. The Company believes that providing non-GAAP information to investors will allow investors to view the financial results in the way its management views them and helps investors to better understand the Company’s core financial and operating performance and evaluate the efficacy of the methodology and information used by its management to evaluate and measure such performance.
While the Company’s management uses non-GAAP financial measures as tools to enhance its understanding of certain aspects of the Company’s financial performance, its management does not consider these measures to be a substitute for, or superior to, GAAP measures. In addition, the Company’s presentations of these measures may not be comparable to similarly titled measures used by other companies. These non-GAAP financial measures should not be considered alternatives for, or in isolation from, the financial information prepared and presented in accordance with GAAP. Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures. In particular, many of the adjustments to the Company’s financial measures reflect the exclusion of items that are recurring and will be reflected in its financial results for the foreseeable future.
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 believes that presenting non-GAAP operating results that exclude stock-based compensation provides investors with visibility and insight into its management’s method of analysis and its core operating performance.
Amortization of Acquired Technology; Amortization of Acquired Intangible Assets
Amortization amounts are inconsistent in frequency and amount and are significantly impacted by the timing and size of acquisitions. Amortization of acquired technology is reported separately within Cost of revenue and Amortization of acquired intangible assets is reported separately within Operating expenses. These items are reported collectively as Amortization of acquired intangible assets in the accompanying reconciliations of non-GAAP and GAAP financial measures. The Company believes that excluding non-cash amortization of these intangible assets facilitates the comparison of its financial results to its historical operating results and to other companies in its industry as if the acquired intangible assets had been developed internally rather than acquired.
Impairment of Goodwill
The Company performs its annual testing for impairment of goodwill in the fourth quarter each year. For the purpose of testing goodwill for impairment, all goodwill has been assigned to one of the Company’s two operating segments. The Company performs a fair value analysis using both an income and market approach, which encompasses a discounted cash flow analysis and a guideline public company analysis using selected multiples. Based on the results of its recently completed impairment test, the Company determined that the carrying value of its IP Optical Networks segment exceeded its fair value, and accordingly, recorded a non-cash impairment charge of $116 million in the fourth quarter of 2021. There was no impairment of the Company’s Cloud and Edge segment. The Company believes that such non-cash costs are not part of its core business or ongoing operations. Accordingly, the Company believes that excluding the goodwill impairment charge facilitates the comparison of the Company’s financial results to its historical operating results and to other companies in its industry.
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 and the Company. Such costs are generally not relevant to assessing or estimating the long-term performance of the acquired assets. The Company excludes such acquisition-, disposal- and integration-related costs to allow more accurate comparisons of its financial results to its historical operations and the financial results of less acquisitive peer companies and allows management and investors to consider the ongoing operations of the business both with and without such expenses.
Restructuring and Related
The Company has recorded restructuring and related expense to streamline operations and reduce operating costs by closing and consolidating certain facilities and reducing its worldwide workforce. The Company believes that excluding restructuring and related expense facilitates the comparison of its financial results to its historical operating results and to other companies in its industry, as there are no future revenue streams or other benefits associated with these costs.
Interest Income on Debentures
The Company recorded paid-in-kind interest income on the AVCT Series A-1 convertible debentures (the "Debentures") it received as consideration in connection with the Kandy Sale through September 8, 2021, when the Debentures were converted to shares of AVCT common stock (the "Debenture Shares"), which increased their fair value. The Company excludes this interest income because it believes that such a gain is not part of its core business or ongoing operations.
Gain on Sale of Business
On May 12, 2021, the Company sold its QualiTech business, which it had acquired as part of the ECI Acquisition, to Hermon Laboratories, Ltd.  As consideration, the Company received $2.9 million of cash and recorded a gain on the sale of $2.8 million. The Company excludes this gain because it believes that such gain is not part of its core business or ongoing operations.
Decrease in Fair Value of Investments
The Company calculates the fair values of the Debentures and the warrants to purchase shares of AVCT common stock (the "Warrants") it received as consideration in connection with the Kandy Sale (prior to September 8, 2021) and the Debenture Shares and Warrants (effective September 8, 2021) at each quarter-end and records any adjustments to their fair values in Other (expense) income, net. The Company excludes these and any subsequent gains and losses from the change in fair value of this investment because it believes that such gains or losses are not part of its core business or ongoing operations.
Tax Effect of Non-GAAP Adjustments
The Non-GAAP income tax benefit (provision) is presented based on an estimated tax rate applied against forecasted annual non-GAAP income. The Non-GAAP income tax benefit (provision) assumes no available net operating losses or valuation allowances for the U.S. because of reporting significant cumulative non-GAAP income over the past several years. The Company is reporting its non-GAAP quarterly income taxes by computing an annual rate for the Company and applying that single rate (rather than multiple rates by jurisdiction) to its consolidated quarterly results. The Company expects that this methodology will provide a consistent rate throughout the year and allow investors to better understand the impact of income taxes on its results. Due to the methodology applied to its estimated annual tax rate, the Company’s estimated tax rate on non-GAAP income will differ from its GAAP tax rate and from its actual tax liabilities.
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: depreciation; amortization of acquired intangible assets; stock-based compensation; impairment of goodwill; acquisition-, disposal- and integration-related; and restructuring and related. In general, the Company excludes the expenses that it considers to be non-cash and/or not part of its ongoing operations. The Company may exclude other items in the future that have those characteristics. Adjusted EBITDA is a non-GAAP financial measure that is used by the investing community for comparative and valuation purposes. The Company discloses this metric to support and facilitate dialogue with research analysts and investors. Other companies may calculate Adjusted EBITDA differently than the Company does, limiting its usefulness as a comparative measure.
Conference Call Details
Conference call to discuss the Company’s financial results for the second quarter ended June 30, 2022 on July 27, 2022, via the investor section of its website at investors.ribboncommunications.com, where a replay will also be available shortly following the conference call.
Conference Call Details: 
Date: July 27, 2022
Time: 4:30 p.m. (ET)
Dial-in number (USA): 877-407-2991
Dial-in number (Intl): 201-389-0925
Instant Telephone Access:  Call me™ 
Replay information:
A telephone playback of the call will be available following the conference call until August 11, 2022 and can be accessed by calling 877-660-6853 or 201-612-7415 for international callers. The reservation number for the replay is 13731397.
Investor Relations
+1 (978) 614-8050
[email protected] 
Media Contact
Catherine Berthier
+1 (646) 741-1974
[email protected] 
RIBBON COMMUNICATIONS INC.
Condensed Consolidated Statements of Operations
(in thousands, except percentages and per share amounts)
(unaudited)
Three months ended
June 30,
March 31,
June 30,
2022
2022
2021
Revenue:
Product
$          112,667
$            81,990
$          113,129
Service
93,129
91,208
98,081
Total revenue
205,796
173,198
211,210
Cost of revenue:
Product
58,151
51,209
46,641
Service
35,207
35,667
36,142
Amortization of acquired technology
7,888
8,267
9,700
Total cost of revenue
101,246
95,143
92,483
Gross profit
104,550
78,055
118,727
Gross margin
50.8 %
45.1 %
56.2 %
Operating expenses:
Research and development
51,103
52,690
46,797
Sales and marketing
35,843
37,619
34,881
General and administrative
12,901
12,862
12,734
Amortization of acquired intangible assets
7,513
7,275
7,481
Acquisition-, disposal- and integration-related
1,535
1,849
1,052
Restructuring and related
2,894
4,814
2,830
Total operating expenses
111,789
117,109
105,775
(Loss) income from operations
(7,239)
(39,054)
12,952
Interest expense, net
(4,602)
(4,001)
(3,048)
Other (expense) income, net
(10,228)
(28,800)
17,180
(Loss) income before income taxes
(22,069)
(71,855)
27,084
Income tax (provision) benefit
(8,111)
1,880
(3,843)
Net (loss) income
$           (30,180)
$           (69,975)
$            23,241
(Loss) earnings per share:
Basic
$               (0.20)
$               (0.47)
$                0.16
Diluted
$               (0.20)
$               (0.47)
$                0.15
Weighted average shares used to compute (loss) earnings per share:
Basic
150,190
149,167
147,467
Diluted
150,190
149,167
154,160
RIBBON COMMUNICATIONS INC.
Condensed Consolidated Statements of Operations
(in thousands, except percentages and per share amounts)
(unaudited)
Six months ended
June 30,
June 30,
2022
2021
Revenue:
Product
$             194,657
$            211,018
Service
184,337
192,964
Total revenue
378,994
403,982
Cost of revenue:
Product
109,360
91,086
Service
70,874
73,922
Amortization of acquired technology
16,155
19,761
Total cost of revenue
196,389
184,769
Gross profit
182,605
219,213
Gross margin
48.2 %
54.3 %
Operating expenses:
Research and development
103,793
94,207
Sales and marketing
73,462
72,099
General and administrative
25,763
28,287
Amortization of acquired intangible assets
14,788
13,243
Acquisition-, disposal- and integration-related
3,384
2,249
Restructuring and related
7,708
8,780
Total operating expenses
228,898
218,865
(Loss) income from operations
(46,293)
348
Interest expense, net
(8,603)
(8,867)
Other expense, net
(39,028)
(8,268)
Loss before income taxes
(93,924)
(16,787)
Income tax provision
(6,231)
(4,659)
Net loss
$           (100,155)
$             (21,446)
Loss per share
Basic
$                 (0.67)
$                 (0.15)
Diluted
$                 (0.67)
$                 (0.15)
Weighted average shares used to compute loss per share:
Basic
149,681
146,706
Diluted
149,681
146,706
RIBBON COMMUNICATIONS INC.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
June 30,
December 31,
2022
2021
Assets
Current assets:
Cash and cash equivalents
$                  36,227
$               103,915
Restricted cash
2,037
2,570
Accounts receivable, net
258,116
282,917
Inventory
64,648
54,043
Other current assets
54,395
37,545
Total current assets
415,423
480,990
Property and equipment, net
48,504
47,685
Intangible assets, net
319,787
350,730
Goodwill
300,892
300,892
Investments
4,520
43,931
Deferred income taxes
56,961
47,287
Operating lease right-of-use assets
46,951
53,147
Other assets
37,636
23,075
$             1,230,674
$            1,347,737
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion of term debt
$                  20,058
$                 20,058
Accounts payable
102,518
97,121
Accrued expenses and other
99,951
100,752
Operating lease liabilities
16,078
17,403
Deferred revenue
106,463
109,119
Total current liabilities
345,068
344,453
Long-term debt, net of current
315,264
350,217
Operating lease liabilities, net of current
48,052
55,196
Deferred revenue, net of current
19,584
20,619
Deferred income taxes
8,117
8,116
Other long-term liabilities
43,245
41,970
Total liabilities
779,330
820,571
Commitments and contingencies
Stockholders’ equity:
Common stock
15
15
Additional paid-in capital
1,881,942
1,875,234
Accumulated deficit
(1,455,816)
(1,355,661)
Accumulated other comprehensive income
25,203
7,578
Total stockholders’ equity
451,344
527,166
$             1,230,674
$            1,347,737
RIBBON COMMUNICATIONS INC.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Six months ended
 June 30, 
 June 30, 
2022
2021
Cash flows from operating activities:
Net loss
$           (100,155)
$             (21,446)
Adjustments to reconcile net loss to cash flows (used in) provided by operating activities:
Depreciation and amortization of property and equipment
7,773
8,475
Amortization of intangible assets
30,943
33,004
Amortization of debt issuance costs
1,078
3,684
Stock-based compensation
8,654
9,850
Deferred income taxes
(9,900)
918
Gain on sale of business

(2,772)
Decrease in fair value of investments
39,411
9,171
Foreign currency exchange losses
(1,048)
2,013
Changes in operating assets and liabilities:
Accounts receivable
24,017
17,360
Inventory
(17,043)
(1,527)
Other operating assets
(319)
9,874
Accounts payable
4,090
(3,508)
Accrued expenses and other long-term liabilities
(8,196)
(57,739)
Deferred revenue
(3,692)
673
Net cash (used in) provided by operating activities
(24,387)
8,030
Cash flows from investing activities:
Purchases of property and equipment
(6,515)
(10,570)
Proceeds from sale of business

2,944
Net cash used in investing activities
(6,515)
(7,626)
Cash flows from financing activities:
Borrowings under revolving line of credit
20,000

Principal payments on revolving line of credit
(20,000)

Proceeds from issuance of term debt

74,625
Principal payments of term debt
(35,029)
(82,147)
Principal payments of finance leases
(341)
(507)
Payment of debt issuance costs
(1,046)
(789)
Proceeds from the exercise of stock options

24
Payment of tax withholding obligations related to net share settlements of restricted stock awards
(1,946)
(12,064)
Net cash used in by financing activities
(38,362)
(20,858)
Effect of exchange rate changes on cash, cash equivalents and restricted cash
1,043
(442)
Net decrease in cash, cash equivalents and restricted cash
(68,221)
(20,896)
Cash, cash equivalents and restricted cash, beginning of year
106,485
135,697
Cash, cash equivalents and restricted cash, end of period
$               38,264
$             114,801
RIBBON COMMUNICATIONS INC.
Supplemental Information
(in thousands)
(unaudited)
The following tables provide the details of stock-based compensation included as components of other line items in the Company’s
Condensed Consolidated Statements of Operations and the line items in which these amounts are reported.  

 Three months ended 
 Six months ended 
June 30,
March 31,
June 30,
June 30,
June 30,
2022
2022
2021
2022
2021
Stock-based compensation
Cost of revenue – product
$               107
$                 99
$                 93
$               206
$               120
Cost of revenue – service
494
481
469
975
704
Cost of revenue
601
580
562
1,181
824
Research and development
1,240
1,206
1,160
2,446
1,787
Sales and marketing
1,480
1,371
1,752
2,851
3,626
General and administrative
1,078
1,098
1,316
2,176
3,613
Operating expense
3,798
3,675
4,228
7,473
9,026
Total stock-based compensation
$            4,399
$            4,255
$            4,790
$            8,654
$            9,850
RIBBON COMMUNICATIONS INC.
Reconciliation of Non-GAAP and GAAP Financial Measures
(in thousands, except per share amounts)
(unaudited)
Three months ended
June 30,
March 31,
June 30,
2022
2022
2021
GAAP Gross margin
50.8 %
45.1 %
56.2 %
Stock-based compensation
0.3 %
0.3 %
0.3 %
Amortization of acquired technology
3.8 %
4.8 %
4.6 %
Non-GAAP Gross margin
54.9 %
50.2 %
61.1 %
GAAP Net (loss) incoome
$           (30,180)
$           (69,975)
$            23,241
Stock-based compensation
4,399
4,255
4,790
Amortization of acquired intangible assets
15,401
15,542
17,181
Acquisition-, disposal- and integration-related
1,535
1,849
1,052
Restructuring and related
2,894
4,814
2,830
Gain on sale of business


(2,772)
Interest income on debentures


(1,196)
Decrease in fair value of investments
12,384
27,027
(12,074)
Tax effect of non-GAAP adjustments
3,425
4,531
(6,205)
Non-GAAP Net (loss) income
$              9,858
$           (11,957)
$            26,847
GAAP Diluted (loss) income per share
$               (0.20)
$               (0.47)
$                0.15
Stock-based compensation
0.03
0.03
0.03
Amortization of acquired intangible assets
0.10
0.11
0.11
Acquisition-, disposal- and integration-related
0.01
0.01
0.01
Restructuring and related
0.02
0.03
0.02
Gain on sale of business


(0.02)
Interest income on debentures


(0.01)
Decrease in fair value of investments
0.08
0.18
(0.08)
Tax effect of non-GAAP adjustments
0.02
0.03
(0.04)
Non-GAAP Diluted (loss) earnings per share
$                0.06
$               (0.08)
$                0.17
Weighted average shares used to compute diluted (loss) earnings per share
 Shares used to compute GAAP diluted loss per share
150,190
149,167
154,160
 Shares used to compute Non-GAAP diluted (loss) earnings per share
154,035
149,167
154,160
GAAP Income (loss) from operations
$             (7,239)
$           (39,054)
$            12,952
Depreciation
3,888
3,885
4,249
Amortization of acquired intangible assets
15,401
15,542
17,181
Stock-based compensation
4,399
4,255
4,790
Acquisition-, disposal- and integration-related
1,535
1,849
1,052
Restructuring and related
2,894
4,814
2,830
Non-GAAP Adjusted EBITDA
$            20,878
$             (8,709)
$            43,054
RIBBON COMMUNICATIONS INC.
Reconciliation of Non-GAAP and GAAP Financial Measures
(in thousands, except per share amounts)
(unaudited)
Six months ended
June 30,
June 30,
2022
2021
GAAP Gross Margin
48.2 %
54.3 %
Stock-based compensation
0.3 %
0.2 %
Amortization of acquired technology
4.3 %
4.9 %
Non-GAAP Gross Margin
52.8 %
59.4 %
GAAP Net loss
$         (100,155)
$           (21,446)
Stock-based compensation
8,654
9,850
Amortization of acquired intangible assets
30,943
33,004
Acquisition-, disposal- and integration-related
3,384
2,249
Restructuring and related
7,708
8,780
Gain on sale of business

(2,772)
Interest income on debentures

(2,655)
Decrease in fair value of investments
39,411
11,826
Tax effect of non-GAAP adjustments
7,956
(7,085)
Non-GAAP Net (loss) income
$             (2,099)
$            31,751
GAAP Diluted loss per share
$               (0.67)
$               (0.15)
Stock-based compensation
0.06
0.06
Amortization of acquired intangible assets
0.21
0.22
Acquisition-, disposal- and integration-related
0.02
0.01
Restructuring and related
0.05
0.07
Gain on sale of business

(0.02)
Interest income on debentures

(0.02)
Decrease in fair value of investments
0.26
0.09
Tax effect of non-GAAP adjustments
0.06
(0.05)
Non-GAAP Diluted (loss) earnings per share
$               (0.01)
$                0.21
Weighted average shares used to compute diluted (loss) earnings per share
 Shares used to compute GAAP diluted loss per share
149,681
146,706
  Shares used to compute Non-GAAP diluted (loss) earnings per share
149,681
154,651
GAAP Income (loss) from operations
$           (46,293)
$                 348
Depreciation
7,773
8,475
Amortization of acquired intangible assets
30,943
33,004
Stock-based compensation
8,654
9,850
Acquisition-, disposal- and integration-related
3,384
2,249
Restructuring and related
7,708
8,780
Non-GAAP Adjusted EBITDA
$            12,169
$            62,706
RIBBON COMMUNICATIONS INC.
Reconciliation of Non-GAAP and GAAP Financial Measures – Outlook
(unaudited)
 Three months ending 
 Year ending 
September 30, 2022
December 31, 2022
 Range 
 Range 
Revenue ($ millions)
$                 210
$                 225
$                 840
$                 870
Gross margin:
GAAP outlook
51.0 %
52.3 %
50.1 %
50.7 %
Stock-based compensation
0.4 %
0.3 %
0.3 %
0.3 %
Amortization of acquired technology
3.6 %
3.4 %
3.6 %
3.5 %
Non-GAAP outlook
55.0 %
56.0 %
54.0 %
54.5 %
Earnings (loss) per share:
GAAP outlook
$               (0.09)
$               (0.04)
$               (0.73)
$               (0.66)
Stock-based compensation
0.04
0.04
0.13
0.13
Amortization of acquired intangible assets
0.10
0.10
0.39
0.39
Acquisition-, disposal- and integration-related
0.01
0.01
0.03
0.03
Restructuring and related
0.01
0.01
0.11
0.11
Decrease in fair value of investments


0.25
0.25
Tax effect of non-GAAP adjustments
(0.02)
(0.04)

(0.03)
Non-GAAP outlook
$                0.05
$                0.08
$                0.18
$                0.22
Weighted average shares used to compute GAAP diluted loss per
share (in thousands)

150,000
150,000
150,000
150,000
Weighted average shares used to compute Non-GAAP diluted
earnings per share (in thousands)

156,000
156,000
156,000
156,000
Adjusted EBITDA ($ millions):
GAAP income from operations
$                 (1.6)
$                  6.4
$               (28.1)
$               (18.1)
Depreciation
4.1
4.1
16.2
16.2
Amortization of acquired intangible assets
15.2
15.2
60.4
60.4
Stock-based compensation
5.5
5.5
19.7
19.7
Acquisition-, disposal- and integration-related
0.8
0.8
4.4
4.4
Restructuring and related
2.0
2.0
17.4
17.4
Non-GAAP outlook
$                26.0
$                34.0
$                90.0
$              100.0
SOURCE Ribbon Communications Inc.
Cision Distribution 888-776-0942
from 8 AM – 9 PM ET

source

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