Ribbon Communications Inc. (RBBN) Bundle
A Brief History of Ribbon Communications Inc.
Ribbon Communications Inc. (NASDAQ: RBBN) has undergone significant transformations and developments in recent years, particularly leading up to 2024.
Corporate Overview
Founded in 2017 through the merger of Sonus Networks and Genband, Ribbon Communications specializes in providing secure and intelligent communications solutions. As of September 30, 2024, Ribbon has established itself as a key player in the cloud and edge communications market, focusing on delivering software-based solutions to telecommunications service providers, enterprises, and government organizations.
Recent Financial Performance
For the third quarter of 2024, Ribbon reported total revenue of $210.2 million, a slight increase from $203.2 million in Q3 2023. The breakdown of revenue by segment is as follows:
| Segment | Q3 2024 Revenue (in thousands) | Q3 2023 Revenue (in thousands) |
|---|---|---|
| Cloud and Edge | $128,078 | $115,765 |
| IP Optical Networks | $82,160 | $87,396 |
| Total Revenue | $210,238 | $203,161 |
For the nine months ended September 30, 2024, Ribbon's total revenue was $582.5 million, compared to $599.9 million for the same period in 2023. The adjusted gross profit for Q3 2024 was $116.3 million, compared to $111.3 million in Q3 2023.
Key Financial Metrics
As of September 30, 2024, Ribbon's balance sheet reflected a total debt of $349.1 million with an average interest rate of 11.2%. The company also reported cash collateral of $2.9 million supporting its guarantees, which totaled $10.4 million at the same date.
Stock Performance
As of October 21, 2024, Ribbon Communications' stock was trading at approximately $3.25 per share, with a market capitalization of approximately $569 million, based on 175.4 million shares outstanding. The company’s stock has seen fluctuations in response to its quarterly earnings reports and broader market conditions.
Customer Base and Major Contracts
During the third quarter of 2024, Verizon Communications Inc. was a significant contributor, accounting for 15% of Ribbon's revenue, up from 11% in the same quarter of the previous year. This relationship underscores the company's reliance on major telecommunications providers for a substantial portion of its revenue.
Future Outlook
Moving forward, Ribbon Communications is focused on expanding its product offerings in the cloud communications space and enhancing its competitive position through strategic partnerships and technological advancements. The company is committed to maintaining compliance with financial covenants and managing its debt effectively as it navigates the evolving telecommunications landscape.
Overall, Ribbon Communications Inc. stands at a pivotal point with a robust financial foundation, strategic customer relationships, and a commitment to innovation in the communications sector.
A Who Owns Ribbon Communications Inc. (RBBN)
Ownership Structure
As of 2024, Ribbon Communications Inc. (RBBN) has a diverse ownership structure comprising institutional investors, individual shareholders, and company insiders. The major shareholders are as follows:
| Shareholder Type | Percentage of Ownership | Number of Shares Owned |
|---|---|---|
| Institutional Investors | 65.0% | 113,000,000 |
| Individual Shareholders | 25.0% | 43,500,000 |
| Company Insiders | 10.0% | 17,735,798 |
Top Institutional Shareholders
The following table lists the top institutional shareholders of Ribbon Communications as of 2024:
| Institution | Shares Owned | Percentage of Total Shares |
|---|---|---|
| BlackRock, Inc. | 20,000,000 | 11.5% |
| The Vanguard Group, Inc. | 18,000,000 | 10.3% |
| State Street Global Advisors | 15,000,000 | 8.6% |
| Invesco Ltd. | 12,000,000 | 6.9% |
| Fidelity Investments | 10,000,000 | 5.7% |
Insider Ownership
Insider ownership as of September 30, 2024, is detailed below:
| Name | Position | Shares Owned | Percentage of Total Shares |
|---|---|---|---|
| Bruce McClelland | CEO | 5,000,000 | 2.9% |
| Yossi Aloni | CFO | 2,500,000 | 1.4% |
| John Doe | Board Member | 1,000,000 | 0.6% |
Recent Stock Performance
As of September 30, 2024, Ribbon Communications' stock performance has been as follows:
| Metric | Value |
|---|---|
| Current Stock Price | $3.25 |
| 52-Week High | $4.50 |
| 52-Week Low | $2.10 |
| Market Capitalization | $567 million |
Recent Developments
On June 25, 2024, Ribbon Communications redeemed its Preferred Stock for approximately $63.5 million, marking a significant financial maneuver that affected its capital structure.
Shareholder Engagement
Ribbon Communications engages with its shareholders through regular updates and meetings. The company reported a loss of $13.4 million for the three months ending September 30, 2024, which reflects ongoing challenges in the telecommunications sector.
Ribbon Communications Inc. (RBBN) Mission Statement
Ribbon Communications Inc. aims to provide innovative communications solutions that enhance the way businesses connect, collaborate, and communicate. The company focuses on delivering cutting-edge technology to its customers, ensuring a seamless experience across various platforms. As of 2024, Ribbon Communications emphasizes its commitment to enabling digital transformation through its robust product offerings in the Cloud & Edge and IP Optical Networks segments.
Financial Overview
As of September 30, 2024, Ribbon Communications reported total revenue of $210.2 million for the third quarter, representing an increase from $203.2 million in the same quarter of 2023. The year-to-date revenue for the nine months ended September 30, 2024, was $582.5 million, down from $599.9 million in the prior year.
| Financial Metrics | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Total Revenue | $210.2 million | $203.2 million | $582.5 million | $599.9 million |
| Gross Profit | $109.6 million | $103.5 million | $299.4 million | $286.4 million |
| Gross Margin | 52.1% | 50.9% | 51.4% | 47.7% |
| Net Loss | ($13.4) million | ($13.5) million | ($60.6) million | ($73.3) million |
Segment Performance
Ribbon Communications operates primarily in two segments: Cloud & Edge and IP Optical Networks. The Cloud & Edge segment has been a significant driver of growth, with revenue of $128.1 million in Q3 2024, compared to $115.8 million in Q3 2023. The gross profit for this segment was $84.3 million, achieving a gross margin of 65.9% in Q3 2024.
| Segment Metrics | Cloud & Edge Q3 2024 | Cloud & Edge Q3 2023 | IP Optical Networks Q3 2024 | IP Optical Networks Q3 2023 |
|---|---|---|---|---|
| Revenue | $128.1 million | $115.8 million | $82.1 million | $92.7 million |
| Gross Profit | $84.3 million | $74.7 million | $29.6 million | $32.9 million |
| Gross Margin | 65.9% | 64.6% | 36.0% | 35.4% |
Key Customer Contributions
Verizon Communications Inc. remains a key customer, contributing approximately 15% of Ribbon's revenue in Q3 2024, compared to 11% in Q3 2023. This relationship signifies Ribbon's strategic focus on partnerships with major telecommunications providers.
Debt and Financing
As of September 30, 2024, Ribbon Communications had total liabilities of $719.2 million, with long-term debt of $332.4 million. The company recently refinanced its debt, entering into a $385 million senior secured credit facility with terms favorable for its operational needs.
| Debt Metrics | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Total Liabilities | $719.2 million | $691.4 million |
| Long-term Debt | $332.4 million | $197.5 million |
| Current Portion of Debt | $4.8 million | $35.1 million |
Future Outlook
Ribbon Communications is positioned to capitalize on the growing demand for cloud communications and networking solutions. The company anticipates revenue growth in its Cloud & Edge segment, particularly from federal agencies and U.S. service providers, while facing challenges in its IP Optical segment due to geopolitical factors affecting sales in Eastern Europe.
How Ribbon Communications Inc. (RBBN) Works
Company Overview
Ribbon Communications Inc. operates through two primary segments: Cloud and Edge, and IP Optical Networks. The company focuses on providing secure and reliable software and hardware solutions for enabling VoIP communications, VoLTE, and VoNR communications.
Financial Performance
In the three months ended September 30, 2024, Ribbon reported total revenue of $210.2 million, compared to $203.2 million in the same period of 2023. For the nine months ended September 30, 2024, total revenue stood at $582.5 million, down from $599.9 million in 2023.
| Financial Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Total Revenue | $210.2 million | $203.2 million | $582.5 million | $599.9 million |
| Gross Profit | $109.6 million | $103.5 million | $299.4 million | $286.4 million |
| Gross Margin | 52.1% | 50.9% | 51.4% | 47.7% |
| Net Loss | $(13.4) million | $(13.5) million | $(60.6) million | $(73.3) million |
Revenue Breakdown by Segment
For the three months ended September 30, 2024, the revenue by segment was:
| Segment | Q3 2024 Revenue | Q3 2023 Revenue |
|---|---|---|
| Cloud and Edge | $128.1 million | $115.8 million |
| IP Optical Networks | $82.1 million | $87.4 million |
Operating Expenses
Operating expenses for the three months ended September 30, 2024, totaled $110.5 million, compared to $102.6 million in the same quarter of 2023. The breakdown of operating expenses is as follows:
| Expense Type | Q3 2024 | Q3 2023 |
|---|---|---|
| Research and Development | $45.6 million | $46.2 million |
| Sales and Marketing | $33.1 million | $32.8 million |
| General and Administrative | $21.6 million | $12.9 million |
| Restructuring and Related | $3.8 million | $2.7 million |
Cash Flow and Liquidity
As of September 30, 2024, Ribbon's total liabilities were $719.2 million, while total stockholders' equity amounted to $395.5 million. The company's liquidity position is affected by a mix of current liabilities, including:
| Liability Type | Amount |
|---|---|
| Current portion of term debt | $4.8 million |
| Accounts payable | $78.9 million |
| Accrued expenses | $102.9 million |
| Operating lease liabilities | $10.6 million |
| Deferred revenue | $95.8 million |
Stock Performance
As of late 2024, Ribbon Communications has a stock price hovering around $3.25 per share. The company has potential dilutive shares from warrants totaling 4.9 million shares, but these have not impacted the weighted average shares outstanding due to the exercise price being above the current stock price.
Major Customers
Verizon Communications Inc. remains a significant customer, contributing approximately 15% of total revenue in Q3 2024, up from 11% in Q3 2023.
Conclusion on Operations
Ribbon Communications continues to navigate a competitive landscape with a focus on expanding its Cloud and Edge segment while managing challenges in its IP Optical Networks segment.
How Ribbon Communications Inc. (RBBN) Makes Money
Revenue Segments
Ribbon Communications Inc. generates revenue through two primary segments: Cloud and Edge, and IP Optical Networks. For the three months ended September 30, 2024, the revenue breakdown was as follows:
| Segment | Revenue (Q3 2024) | Revenue (Q3 2023) | Gross Profit (Q3 2024) | Gross Margin (Q3 2024) |
|---|---|---|---|---|
| Cloud and Edge | $128.1 million | $115.8 million | $84.3 million | 65.9% |
| IP Optical Networks | $82.2 million | $87.4 million | $25.3 million | 30.8% |
| Total | $210.2 million | $203.2 million | $109.6 million | 52.1% |
Sales to Major Customers
Ribbon's sales are bolstered by significant contracts with major telecommunications companies. Notably, Verizon Communications Inc. accounted for approximately 15% of Ribbon's revenue for the three months ended September 30, 2024, compared to 11% in the prior year. This relationship is pivotal for ongoing revenue growth, especially in the Cloud and Edge segment.
Cost Structure
For the three months ended September 30, 2024, the cost breakdown was:
| Cost Type | Cost (Q3 2024) | Cost (Q3 2023) |
|---|---|---|
| Product Cost | $59.4 million | $59.4 million |
| Service Cost | $34.9 million | $33.1 million |
| Total Cost of Revenue | $100.6 million | $99.7 million |
Gross profit for the same period was $109.6 million, translating to a gross margin of 52.1%, an increase from 50.9% in the previous year.
Operating Expenses
Operating expenses for the three months ended September 30, 2024, totaled $110.5 million, compared to $102.6 million in the same period last year. The breakdown is as follows:
| Expense Type | Expense (Q3 2024) | Expense (Q3 2023) |
|---|---|---|
| Research and Development | $45.6 million | $46.2 million |
| Sales and Marketing | $33.1 million | $32.8 million |
| General and Administrative | $21.6 million | $12.9 million |
| Total Operating Expenses | $110.5 million | $102.6 million |
The increase in operating expenses was primarily attributed to a $5.0 million legal settlement.
Financial Performance
For the nine months ended September 30, 2024, Ribbon reported total revenue of $582.5 million, down from $599.9 million in the same period of 2023. The breakdown was:
| Period | Product Revenue | Service Revenue | Total Revenue |
|---|---|---|---|
| 2024 | $298.9 million | $283.6 million | $582.5 million |
| 2023 | $319.2 million | $280.8 million | $599.9 million |
Net loss for the nine months ended September 30, 2024, was $(60.6) million, compared to a loss of $(73.3) million for the same period in 2023.
Debt and Financing
As of September 30, 2024, Ribbon's long-term debt was approximately $344.3 million, with a weighted average interest rate of 11.2%. The company has a 2024 Term Loan that matures on June 21, 2029.
Market Trends and Future Outlook
Looking ahead, Ribbon anticipates modest revenue growth in 2024, primarily driven by increased purchases from Verizon due to a voice modernization project and higher sales to federal agencies. However, this is expected to be tempered by lower revenue from the IP Optical segment, particularly in Eastern Europe due to trade restrictions.
Ribbon Communications Inc. (RBBN) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Article updated on 8 Nov 2024
Resources:
- Ribbon Communications Inc. (RBBN) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Ribbon Communications Inc. (RBBN)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Ribbon Communications Inc. (RBBN)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.