Technology

Ribbon Communications Inc. Reports Second Quarter 2024 Financial Results

Published

2 years ago

July 24, 2024

Net income increased 21% and Adjusted EBITDA up 65% in 1H 2024 YoY

Continued improvement in gross margin and lower operating expenses

Expect strong second half based on growth from U.S. Tier 1, Rural Broadband, Enterprise, and India

PLANO, Texas, July 24, 2024 /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 2024.

Revenue for the second quarter of 2024 was $193 million, compared to $211 for the second quarter of 2023 and $180 million for the first quarter of 2024. First half 2024 GAAP Loss from Operations improved $26 million year over year to ($15 million), and Non-GAAP Adjusted EBITDA improved $13 million, or 65%, to $33 million. GAAP and Non-GAAP Gross Margin for the second quarter improved 260 and 240 basis points year over year, respectively.

“Earnings increased significantly in the first half of 2024 with Adjusted EBITDA increasing 65% year over year despite lower sales. The improvement in profitability was driven by higher gross margins and lower operating expenses year over year. Revenue in the second quarter was impacted by a large U.S. Federal deal that was delayed to the third quarter. Sales were also lower as we suspended product shipments into Eastern Europe due to the extended war in Ukraine and increased complexities of operating in the region,” stated Bruce McClelland, President and Chief Executive Officer of Ribbon Communications.

Mr. McClelland added, “We continue to project a strong second half of 2024 as we ramp the recently announced Verizon Voice Network modernization program and anticipate strong growth in several other areas such as Enterprise, U.S. Rural Broadband, Europe, and India. Recent changes in the competitive landscape also present an opportunity for further share expansion. However, we have adjusted our full year 2024 guidance slightly to reflect a more conservative outlook for the Eastern European region for the rest of the year.”

Financial Highlights1

Three months ended

Six months ended

June 30,

In millions, except per share amounts

2024

2023

2024

2023

GAAP Revenue

$ 193

$ 211

$ 372

$ 397

GAAP Net income (loss)

$ (17)

$ (21)

$ (47)

$ (60)

Non-GAAP Net income (loss)

$ 9

$ 8

$ 7

$ 5

Non-GAAP Adjusted EBITDA

$ 22

$ 23

$ 33

$ 20

GAAP diluted earnings (loss) per share

$ (0.10)

$ (0.13)

$ (0.27)

$ (0.35)

Non-GAAP diluted earnings (loss) per share

$ 0.05

$ 0.04

$ 0.03

Weighted average shares outstanding basic

174

170

173

169

Weighted average shares outstanding diluted

176

175

176

175

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.

“During the second quarter of 2024, we completed the refinancing of our capital structure with a $385 million five-year senior secured credit facility that provides us greater liquidity with less restrictions. Our new strategic banking group relationship with HPS Investment Partners, LLC and WhiteHorse Capital Management, LLC will also give us opportunities to support our future growth needs,” said Mick Lopez, Chief Financial Officer of Ribbon Communications. “Additionally, we continue to improve our operations, driving a 240 basis point improvement year over year in gross margins and a $4 million reduction in expenses, resulting in the lowest level of operating expenses since the ECI acquisition in 2020.”

Business Outlook1
For the third quarter of 2024, the Company expects continued sequential growth in both of our businesses with revenue in a range of $205 million to $220 million. Non-GAAP gross margin is projected in a range of 53% to 53.5%. Adjusted EBITDA is projected in a range of $25 million to $30 million.

The Company has also adjusted full-year 2024 targets and now expects revenue in a range of $830 million to $850 million, non-GAAP gross margin in a range of 54% to 54.5%, and Adjusted EBITDA in a range of $105 million to $115 million.

The Company’s outlook is based on current indications for its business, which are subject to change.

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 Conference Schedule

August 27, 2024: Evercore ISI 2024 Semiconductor, IT Hardware & Networking ConferenceAugust 28, 2024: Jefferies Semiconductor, IT Hardware & Communication Technology Summit

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 and broadband internet. 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 of 2024 and beyond; plans and objectives for future operations, including cost reductions; the impact of the wars in Israel and Ukraine; customer spending and engagement and momentum; and 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, the effects of geopolitical instabilities and wars, including in Israel and Ukraine (and the impact of sanctions and trade restrictions imposed as a result thereof); unpredictable fluctuations in quarterly revenue and operating results; increases in tariffs, trade restrictions or taxes on the Company’s products; the impact of restructuring and cost-containment activities; operational disruptions at facilities located in Israel including as a result of military call-ups of the Company’s employees in Israel, closure of the offices there or the temporary or long-term closure of contract manufacturing in the region; the potential impact of litigation; risks related to supply chain disruptions, including as a result of component availability; risks resulting from higher interests rates and continued inflationary pressures; 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; 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; 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, 2023 and its Form 10-Q for the quarter ended March 31, 2024. 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 allows them to view the Company’s 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, 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 (including software licenses); 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.

Litigation Costs
In connection with certain ongoing contract litigation where Ribbon is the defendant (as described in Note 26 to the Company’s Consolidated Financial Statements included in its Annual Report on Form 10-K for the year ended December 31, 2023), the Company has incurred litigation costs beginning in 2023. These costs are included as a component of general and administrative expense. The Company believes that such costs are not part of its core business or ongoing operations, are unplanned and generally not within its control. Accordingly, the Company believes that excluding the litigation costs related to these specific legal matters 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 the Company and its acquired businesses. 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.

Preferred Stock and Warrant Liability Mark-to-Market Adjustment
The Company recorded adjustments to the fair value of its Series A Preferred Stock and Warrants to purchase shares of the Company’s common stock in Other (expense) income, net. Both of these instruments were issued in March 2023 in connection with the Company’s private placement and have been classified as liabilities and marked to market each reporting period until the Series A Preferred Stock was fully redeemed on June 25, 2024. The Warrant liability remains outstanding and will continue to be marked to market each reporting period. The Company excluded these gains and losses from the change in the fair value of these liabilities because it believes that such gains or losses were not part of its core business or ongoing operations.

Tax Effect of Non-GAAP Adjustments
The Non-GAAP income tax provision is presented based on an estimated tax rate applied against forecasted annual non-GAAP income. The Non-GAAP income tax 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; stock-based compensation; amortization of acquired intangible assets; certain litigation costs; acquisition-, disposal- and integration-related expense; and restructuring and related expense. In general, the Company excludes the expenses that it considers to be non-cash and/or not a 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, 2024.

Date: Wednesday, July 24, 2024
Time: 4:30 p.m. (ET)

Dial-In Information:
US/Canada: 877-407-2991
International: 201-389-0925
Instant Telephone Access: Call me™

A telephone playback of the call will be available following the conference call until August 7, 2024 and can be accessed by calling 877-660-6853 or 201-612-7415 for international callers. The reservation number for the replay is 13747581.

Live (Listen-Only) Webcast:
Available via the Investor Relations website, where a replay will also be available shortly following the conference call.

For more details on financial results, please visit investors.ribboncommunications.com.

Investor Relations
+1 (978) 614-8050
ir@rbbn.com

Media Contact
Catherine Berthier
+1 (646) 741-1974
cberthier@rbbn.com

RIBBON COMMUNICATIONS INC.

Consolidated Statements of Operations

(in thousands, except percentages and per share amounts)

(unaudited)

Three months ended

June 30,

March 31,

June 30,

2024

2023

Revenue:

Product

$ 99,133

$ 87,610

$ 117,347

Service

93,487

92,054

93,271

Total revenue

192,620

179,664

210,618

Cost of revenue:

Product

54,845

45,794

67,927

Service

33,376

35,364

33,782

Amortization of acquired technology

6,532

6,551

7,439

Total cost of revenue

94,753

87,709

109,148

Gross profit

97,867

91,955

101,470

Gross margin

50.8 %

51.2 %

48.2 %

Operating expenses:

Research and development

43,489

45,763

47,776

Sales and marketing

32,984

34,716

33,905

General and administrative

14,901

15,191

14,346

Amortization of acquired intangible assets

6,508

6,706

7,260

Acquisition-, disposal- and integration-related

–

498

Restructuring and related

1,920

3,065

4,307

Total operating expenses

99,802

105,441

108,092

Income (loss) from operations

(1,935)

(13,486)

(6,622)

Interest expense, net

(3,879)

(5,987)

(6,766)

Other (expense) income, net

(9,503)

(7,513)

(2,688)

Income (loss) before income taxes

(15,317)

(26,986)

(16,076)

Income tax benefit (provision)

(1,499)

(3,375)

(5,403)

Net income (loss)

$(16,816)

$(30,361)

$ (21,479)

Income (loss) per share:

Basic

$ (0.10)

$ (0.18)

$ (0.13)

Diluted

$ (0.10)

$ (0.18)

$ (0.13)

Weighted average shares used to compute income (loss) per share:

Basic

173,793

172,428

170,103

Diluted

173,793

172,428

170,103

RIBBON COMMUNICATIONS INC.

Consolidated Statements of Operations

(in thousands, except percentages and per share amounts)

(unaudited)

Six months ended

June 30,

2024

2023

Revenue:

Product

$ 186,743

$ 210,665

Service

185,541

186,112

Total revenue

372,284

396,777

Cost of revenue:

Product

100,639

129,990

Service

68,740

69,087

Amortization of acquired technology

13,083

14,828

Total cost of revenue

182,462

213,905

Gross profit

189,822

182,872

Gross margin

51.0 %

46.1 %

Operating expenses:

Research and development

89,252

99,080

Sales and marketing

67,700

69,304

General and administrative

30,092

28,391

Amortization of acquired intangible assets

13,214

14,524

Acquisition-, disposal- and integration-related

–

2,140

Restructuring and related

4,985

11,244

Total operating expenses

205,243

224,683

Income (loss) from operations

(15,421)

(41,811)

Interest expense, net

(9,866)

(13,188)

Other (expense) income, net

(17,016)

2,084

Income (loss) before income taxes

(42,303)

(52,915)

Income tax benefit (provision)

(4,874)

(6,869)

Net income (loss)

$ (47,177)

$ (59,784)

Income (loss) per share:

Basic

$ (0.27)

$ (0.35)

Diluted

$ (0.27)

$ (0.35)

Weighted average shares used to compute income (loss) per share:

Basic

173,110

169,326

Diluted

173,110

169,326

RIBBON COMMUNICATIONS INC.

Consolidated Balance Sheets

(in thousands)

(unaudited)

June 30,

December 31,

2024

2023

Assets

Current assets:

Cash and cash equivalents

$ 64,558

$ 26,494

Restricted cash

2,850

136

Accounts receivable, net

210,954

268,421

Inventory

79,216

77,521

Other current assets

46,576

46,146

Total current assets

404,154

418,718

Property and equipment, net

40,824

41,820

Intangible assets, net

212,052

238,087

Goodwill

300,892

Deferred income taxes

78,067

69,761

Operating lease right-of-use assets

33,901

39,783

Other assets

35,562

35,092

$ 1,105,452

$ 1,144,153

Liabilities and Stockholders’ Equity

Current liabilities:

Current portion of term debt

$ 3,500

$ 35,102

Accounts payable

64,333

85,164

Accrued expenses and other

92,847

91,687

Operating lease liabilities

12,347

15,739

Deferred revenue

99,547

113,381

Total current liabilities

272,574

341,073

Long-term debt, net of current

333,979

197,482

Warrant liability

6,170

5,295

Preferred stock liability

–

53,337

Operating lease liabilities, net of current

34,858

38,711

Deferred revenue, net of current

16,632

19,218

Deferred income taxes

5,616

Other long-term liabilities

30,601

30,658

Total liabilities

700,430

691,390

Commitments and contingencies

Stockholders’ equity:

Common stock

Additional paid-in capital

1,964,304

1,958,909

Accumulated deficit

(1,567,127)

(1,519,950)

Accumulated other comprehensive income

7,828

13,787

Total stockholders’ equity

405,022

452,763

$ 1,105,452

$ 1,144,153

RIBBON COMMUNICATIONS INC.

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

Six months ended

June 30,

2024

2023

Cash flows from operating activities:

Net loss

$ (47,177)

$ (59,784)

Adjustments to reconcile net income (loss) to cash flows provided by (used in) operating activities:

Depreciation and amortization of property and equipment

6,770

7,059

Amortization of intangible assets

26,297

29,352

Amortization of debt issuance costs and original issue discount

3,445

1,793

Amortization of accumulated other comprehensive gain related to interest rate swap

(8,196)

(2,062)

Stock-based compensation

8,016

11,964

Deferred income taxes

(8,104)

(6,946)

Gain on sale of swap

–

(7,301)

Change in fair value of warrant liability

875

(1,318)

Change in fair value of preferred stock liability

8,091

1,456

Dividends accrued on preferred stock liability

2,743

1,272

Payment of dividends accrued on preferred stock liability

(6,686)

–

Foreign currency exchange (gains) losses

2,023

(1,080)

Changes in operating assets and liabilities:

Accounts receivable

56,146

21,534

Inventory

(4,405)

(2,221)

Other operating assets

8,854

13,486

Accounts payable

(20,541)

(1,740)

Accrued expenses and other long-term liabilities

(8,407)

2,343

Deferred revenue

(16,422)

767

Net cash provided by (used in) operating activities

3,322

8,574

Cash flows from investing activities:

Purchases of property and equipment

(5,613)

(4,091)

Purchases of software licenses

(263)

–

Net cash provided by (used in) investing activities

(5,876)

(4,091)

Cash flows from financing activities:

Borrowings under revolving line of credit

44,106

30,000

Principal payments on revolving line of credit

(44,106)

(30,000)

Proceeds from issuance of term debt

342,300

–

Principal payments of term debt

(235,395)

(85,029)

Payment of debt issuance costs

(3,978)

(1,572)

Proceeds from issuance of preferred stock and warrant liabilities

–

53,350

Payment of preferred stock liability

(56,850)

–

Proceeds from the exercise of stock options

Payment of tax obligations related to vested stock awards and units

(2,638)

(3,456)

Net cash provided by (used in) financing activities

43,456

(36,705)

Effect of exchange rate changes on cash and cash equivalents

(124)

(394)

Net increase (decrease) in cash and cash equivalents

40,778

(32,616)

Cash and cash equivalents, beginning of year

26,630

67,262

Cash and cash equivalents, end of period

$ 67,408

$ 34,646

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
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,

2024

2023

2024

2023

Stock-based compensation

Cost of revenue – product

$ 64

$ 106

$ 115

$ 170

$ 264

Cost of revenue – service

274

472

526

746

1,061

Cost of revenue

338

578

641

916

1,325

Research and development

616

1,068

1,300

1,684

2,562

Sales and marketing

954

1,157

2,142

2,111

4,271

General and administrative

1,586

1,719

2,033

3,305

3,806

Operating expense

3,156

3,944

5,475

7,100

10,639

Total stock-based compensation

$ 3,494

$ 4,522

$ 6,116

$ 8,016

$ 11,964

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,

2024

2023

GAAP Gross margin

50.8 %

51.2 %

48.2 %

Stock-based compensation

0.2 %

0.3 %

Amortization of acquired technology

3.4 %

3.6 %

3.5 %

Non-GAAP Gross margin

54.4 %

55.1 %

52.0 %

GAAP Net income (loss)

$(16,816)

$(30,361)

$(21,479)

Stock-based compensation

3,494

4,522

6,116

Amortization of acquired intangible assets

13,040

13,257

14,699

Litigation costs

1,768

951

114

Acquisition-, disposal- and integration-related

–

498

Restructuring and related

1,920

3,065

4,307

Preferred stock and warrant liability mark-to-market adjustment

8,210

3,499

1,410

Tax effect of non-GAAP adjustments

(3,095)

3,971

2,083

Non-GAAP Net income (loss)

$ 8,521

$ (1,096)

$ 7,748

GAAP Diluted earnings (loss) per share

$ (0.10)

$ (0.18)

$ (0.13)

Stock-based compensation

0.02

0.03

Amortization of acquired intangible assets

0.08

0.07

0.09

Litigation costs

0.01

Acquisition-, disposal- and integration-related

–

0.01

Restructuring and related

0.01

0.02

Preferred stock and warrant liability mark-to-market adjustment

0.05

0.02

0.01

Tax effect of non-GAAP adjustments

(0.02)

0.02

0.01

Non-GAAP Diluted earnings (loss) per share

$ 0.05

$ (0.01)

$ 0.04

Weighted average shares used to compute diluted earnings (loss) per share

Shares used to compute GAAP diluted earnings (loss) per share

173,793

172,428

170,103

Shares used to compute Non-GAAP diluted earnings (loss) per share

176,246

172,428

175,220

GAAP Income (loss) from operations

$ (1,935)

$(13,486)

$ (6,622)

Depreciation

3,376

3,394

3,549

Stock-based compensation

3,494

4,522

6,116

Amortization of acquired intangible assets

13,040

13,257

14,699

Litigation costs

1,768

951

114

Acquisition-, disposal- and integration-related

–

498

Restructuring and related

1,920

3,065

4,307

Non-GAAP Adjusted EBITDA

$ 21,663

$ 11,703

$ 22,661

* Less than $0.01 impact on earnings (loss) per share.

RIBBON COMMUNICATIONS INC.

Reconciliation of Non-GAAP and GAAP Financial Measures

(in thousands, except per share amounts)

(unaudited)

Six months ended

June 30,

2024

2023

GAAP Gross Margin

51.0 %

46.1 %

Stock-based compensation

0.2 %

0.3 %

Amortization of acquired technology

3.5 %

3.8 %

Non-GAAP Gross Margin

54.7 %

50.2 %

GAAP Net income (loss)

$(47,177)

$(59,784)

Stock-based compensation

8,016

11,964

Amortization of acquired intangible assets

26,297

29,352

Litigation costs

2,719

291

Acquisition-, disposal- and integration-related

–

2,140

Restructuring and related

4,985

11,244

Preferred stock and warrant liability mark-to-market adjustment

11,709

1,410

Preferred stock and warrant liability issuance costs

–

3,545

Tax effect of non-GAAP adjustments

876

4,759

Non-GAAP Net income (loss)

$ 7,425

$ 4,921

GAAP Diluted earnings (loss) per share

$ (0.27)

$ (0.35)

Stock-based compensation

0.05

0.07

Amortization of acquired intangible assets

0.14

0.18

Litigation costs

0.02

Acquisition-, disposal- and integration-related

–

0.01

Restructuring and related

0.03

0.06

Preferred stock and warrant liability mark-to-market adjustment

0.07

0.01

Preferred stock and warrant liability issuance costs

–

0.02

Tax effect of non-GAAP adjustments

0.03

Non-GAAP Diluted earnings (loss) per share

$ 0.04

$ 0.03

Weighted average shares used to compute diluted earnings per share

Shares used to compute GAAP diluted loss per share

173,110

169,326

Shares used to compute Non-GAAP diluted earnings per share

175,784

175,359

GAAP Income (loss) from operations

$(15,421)

$(41,811)

Depreciation

6,770

7,059

Stock-based compensation

8,016

11,964

Amortization of acquired intangible assets

26,297

29,352

Litigation costs

2,719

291

Acquisition-, disposal- and integration-related

–

2,140

Restructuring and related

4,985

11,244

Non-GAAP Adjusted EBITDA

$ 33,366

$ 20,239

* Less than $0.01 impact on earnings (loss) per share.

RIBBON COMMUNICATIONS INC.

Reconciliation of Non-GAAP and GAAP Financial Measures

(in thousands)

(unaudited)

Trailing Twelve Months

June 30,

March 31,

June 30,

2024

2023

GAAP Income (loss) from operations

$ 2,105

$ (2,582)

$(43,842)

Depreciation

13,816

13,989

14,581

Stock-based compensation

17,858

20,480

22,017

Amortization of acquired intangible assets

53,836

55,495

59,597

Litigation costs

3,735

2,081

291

Acquisition-, disposal- and integration-related

2,336

2,834

5,042

Restructuring and related

9,950

12,337

14,369

Non-GAAP Adjusted EBITDA

$ 103,636

$ 104,634

$ 72,055

RIBBON COMMUNICATIONS INC.

Reconciliation of Non-GAAP and GAAP Financial Measures – Outlook

(unaudited)

Three months ending

Year ending

September 30, 2024

December 31, 2024

Midpoint (1)

Range

Midpoint (1)

Range

Revenue ($ millions)

$ 212.5

+/- $7.5M

$ 840

+/- $10M

Gross margin:

GAAP outlook

50.09 %

51.07 %

Stock-based compensation

0.26 %

0.24 %

Amortization of acquired technology

2.90 %

2.94 %

Non-GAAP outlook

53.25 %

+/- 0.25%

54.25 %

+/- 0.25%

Adjusted EBITDA ($ millions):

GAAP income (loss) from operations

$ 3.0

$ 5.9

Depreciation

3.8

14.4

Stock-based compensation

4.7

17.2

Amortization of acquired intangible assets

12.8

50.9

Litigation costs

0.9

4.6

Restructuring and related

2.3

17.0

Non-GAAP outlook

$ 27.5

+/- $2.5M

$ 110.0

+/- $5M

(1) Q3 2024 and FY 2024 outlook represents the midpoint of the expected ranges

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Technology

Autonomous Defense Technologies Set to Ignite a Nearly $200 Billion Global Market

Published

46 minutes ago

July 23, 2026

AI-Powered Military Drones, Autonomous Platforms, and Next-Generation Defense Systems Are Fueling One of the Fastest-Growing Opportunities in Aerospace and Defense

NEW YORK, July 23, 2026 /PRNewswire/ — Market News Updates News Commentary – Around the globe, the defense industry is quickly adopting autonomous technologies, with governments investing significantly in artificial intelligence, unmanned systems, advanced sensors, and self-directed decision-making capabilities. Military forces are on the lookout for technologies that can swiftly gather intelligence, function in dangerous settings without risking personnel, and respond promptly to threats. Unmanned aerial vehicles (UAVs) utilizing autonomous AI are increasingly crucial in modern military operations, proficient in various tasks such as reconnaissance, surveillance, target identification, electronic warfare, logistics support, and precision strike missions with minimal human intervention. As artificial intelligence advances, these sophisticated systems are expected to improve their efficiency in managing drone swarms, sharing battlefield information, and swiftly adjusting to changing combat situations. Companies leading the Autonomous and AI technology Defense Operations boom include: VisionWave Holdings Inc. (NASDAQ: VWAV), Kratos Defense & Security Solutions, Inc. (NASDAQ: KTOS), AeroVironment, Inc. (NASDAQ: AVAV), AEVEX Corp. (NYSE: AVEX), Sidus Space, Inc. (NASDAQ: SIDU).

There is also a rapid expansion in financial opportunities. Fortune Business Insights forecasts substantial growth in the global Autonomous Defense Platforms Market, with a projected increase from approximately US$69.77 billion in 2026 to US$198.87 billion by 2034, indicating a robust compound annual growth rate of 14.0%. Additionally, the firm anticipates a surge in the global Military Drone Market from US$22.49 billion in 2026 to US$52.31 billion by 2034, showing an 11.1% compound annual growth rate. With rising defense budgets and a focus on AI-enhanced military capabilities, companies specializing in autonomous aircraft, AI software, advanced sensors, cybersecurity platforms, navigation systems, and cutting-edge battlefield technologies are well positioned to capitalize on these expanding markets.

The widespread integration of autonomous AI UAVs is revolutionizing military strategies and operations. Instead of relying on individual aircraft, armed forces are increasingly deploying coordinated fleets of intelligent drones capable of monitoring vast areas, identifying targets, transmitting secure communications, and offering real-time situational awareness to ground troops. Advancements in machine learning, computer vision, edge computing, and secure battlefield networking are empowering these systems to autonomously process large amounts of data, thereby reducing the workload on operators and increasing mission success. As global tensions rise and defense modernization remains a top priority worldwide, autonomous defense technologies are expected to be one of the fastest-growing sectors in the military industry in the coming decade.

VisionWave (NASDAQ: VWAV) and Meteor Aerospace Leadership Advance Integration Planning for AI-Enabled Multi-Domain Defense Technologies Following Previously Announced Acquisition Agreement — VisionWave Holdings Inc. (“VisionWave” or the “Company”) a defense technology company developing advanced artificial intelligence, autonomous systems and next-generation security technologies, today announced that its executive leadership team has completed a strategic technology and integration working session with the leadership of Meteor Aerospace Ltd. in Israel following the Company’s previously announced acquisition agreement to acquire a controlling interest in Meteor Aerospace. Completion of the transaction remains subject to the closing conditions described below.

The executive meetings represent an important milestone in the transaction process as both companies continue advancing technical, operational and commercial integration planning while progressing toward satisfaction of the closing conditions described below.

During the visit, VisionWave executives conducted comprehensive reviews of Meteor Aerospace’s expanding portfolio of advanced defense technologies, including tactical and strategic unmanned aerial vehicles (UAVs), unmanned ground vehicles (UGVs), unmanned surface vessels (USVs), electronic warfare (EW) and SIGINT technologies, precision strike systems, C4ISR platforms and integrated sovereign defense architectures.

The working sessions included executive strategy meetings, engineering reviews, technology demonstrations, manufacturing assessments and product roadmap discussions focused on identifying opportunities to accelerate innovation, expand international commercialization and strengthen VisionWave’s multi-domain defense technology platform.

Meteor Aerospace presented video documentation of field tests and demonstrations of its products, including flights of the Impact-700 UAV at the Bar Yehuda airfield near the Dead Sea in Israel, that were done with the regulatory monitoring and approval of the Israeli Aviation Authority.

For operational security reasons, the meetings were conducted at a confidential location, and additional details regarding attendees and facilities are not being disclosed.

Douglas Davis, Executive Chairman and Chief Executive Officer of VisionWave Holdings, stated: “Visiting Meteor Aerospace and working directly alongside its leadership and engineering teams reinforced what we recognized when we entered into the acquisition agreement. Meteor has developed a highly differentiated portfolio of autonomous systems, electronic warfare technologies, and integrated battlefield capabilities supported by a team with decades of aerospace engineering experience. Seeing these technologies firsthand further strengthened our confidence in the strategic opportunity this transaction represents.”

Mr. Davis continued: “Our integration planning, in preparation for a potential closing, is well underway. By bringing together VisionWave’s expertise in artificial intelligence, advanced sensing and computational technologies with Meteor’s capabilities across autonomous platforms, C4ISR, precision defense technologies and sovereign defense architectures, we believe we are building a next-generation defense technology platform positioned to address rapidly growing global demand for integrated battlefield solutions, autonomous systems and national security modernization.”

Throughout the visit, executives from both organizations evaluated opportunities to align technology development, manufacturing capabilities, international business development initiatives and long-term product strategies as part of VisionWave’s integration planning process.

The meetings also provided both leadership teams with the opportunity to establish integration priorities across engineering, operations, commercialization and future product development while preparing for the successful completion of the proposed transaction.

As previously announced, completion of the acquisition remains subject to a number of conditions for VisionWave’s satisfactory completion of legal, financial, operational, technical, aerospace, cybersecurity, export control, intellectual property and commercial due diligence, receipt of any applicable regulatory approvals and satisfaction of other customary closing conditions. There can be no assurance that the closing conditions will be satisfied, or that the transaction will be completed on the anticipated timeline or at all. Continued… Read this full release and additional news for VWAV by visiting: https://www.vwav.inc/newsroom/

Why Investors Are Watching the UAV / Autonomous / AI Military Operations Industries:

Autonomous AI-powered UAVs becoming standard assets for ISR and combat support missionsRising global defense spending focused on artificial intelligence and autonomous warfareGrowing adoption of autonomous drone swarms and collaborative mission capabilitiesIncreased demand for real-time intelligence, surveillance, and reconnaissance (ISR)Continued advances in machine learning, computer vision, edge computing, and autonomous navigationExpansion of electronic warfare, cybersecurity, and secure battlefield communicationsDefense modernization programs accelerating across North America, Europe, and the Indo-PacificGrowing opportunities for companies developing next-generation autonomous defense platforms

Other recent developments in the autonomous, defense/military/UAV/drone industries of note include:

Kratos Defense & Security Solutions, Inc. (NASDAQ: KTOS), a technology company in the defense, national security and global markets, recently announced it has been awarded a sole-source, single award Indefinite Delivery/Indefinite Quantity (IDIQ) contract for approximately $156 million, by the U.S. Department of Energy’s National Nuclear Security Administration (NNSA) Office of Secure Transportation (OST), in support of Project Solar Shield.

Under this new contract award, Kratos will provide mobile Counter-Unmanned Aircraft System (C-UAS) platforms designed to support OST’s critical National Security mission. The Office of Secure Transportation is responsible for the safe and secure ground and air transportation of nuclear weapons, weapon components, and special nuclear materials, as well as other missions supporting U.S. national security.

AeroVironment, Inc. (“AV”) (NASDAQ: AVAV), a global leader in intelligent, multi-domain autonomous systems, recently announced it has been awarded a $117.3 million contract by the U.S. Army for its P550™ electric vertical take-off and landing (eVTOL) unmanned aerial system in support of the Army’s Long Range Reconnaissance program, advancing the Army’s push to field scalable, adaptable capabilities for modern warfare.

The award was issued under a Basic Ordering Agreement (BOA) through a competitive Call for Solutions (C4S) under the U.S. Army’s Unmanned Aircraft Systems (UAS) Marketplace initiative, a centralized digital platform designed to accelerate the procurement of vetted drone technologies.

AEVEX Corp. (NYSE: AVEX) recently announced it has been awarded a $17.5 million follow-on contract under its Global Solutions portfolio to continue delivering critical services in support of U.S. national security objectives.

The contract reinforces the company’s role in providing mission focused, data-driven services and solutions that help decision makers act with speed and confidence. AEVEX’s Global Solutions capabilities integrate technology and multi-domain expertise to transform complex data into actionable insight for time sensitive missions.

“Our teams are trusted to support some of the nation’s most important missions,” said Roger Wells, Chief Executive Officer at AEVEX. “This award reflects continued confidence in AEVEX to deliver the specialized expertise required to advance essential national security interests.”

Sidus Space, Inc. (NASDAQ: SIDU) (“Sidus” or the “Company”), an innovative space and defense technology company, recently announced that its next LizzieSat® has successfully completed vibration testing, a key environmental qualification milestone for SpaceX’s Transporter-18 rideshare mission from Vandenberg Space Force Base in California, currently scheduled for launch no earlier than October 2026.

Vibration testing simulates the intense mechanical loads a spacecraft experiences during launch and ascent. The testing was conducted at Element U.S. Space & Defense’s facility in Orlando, Florida, an accredited independent provider of product qualification and environmental testing services. Completing this testing is designed to confirm that the satellite’s structure, components, and integrated payloads can withstand the stresses of liftoff and remain fully operational on orbit, a critical step in clearing the spacecraft for final integration and shipment to the launch site.

DISCLAIMER: MarketNewsUpdates.com (MNU) is a third party publisher and news dissemination service provider, which disseminates electronic information through multiple online media channels. MNU is NOT affiliated in any manner with any company mentioned herein. MNU and its affiliated companies are a news dissemination solutions provider and are NOT a registered broker/dealer/analyst/adviser, holds no investment licenses and may NOT sell, offer to sell or offer to buy any security. MNU’S market updates, news alerts and corporate profiles are NOT a solicitation or recommendation to buy, sell or hold securities. The material in this release is intended to be strictly informational and is NEVER to be construed or interpreted as research material. All readers are strongly urged to perform research and due diligence on their own and consult a licensed financial professional before considering any level of investing in stocks. All material included herein is republished content and details which were previously disseminated by the companies mentioned in this release. MNU is not liable for any investment decisions by its readers or subscribers. Investors are cautioned that they may lose all or a portion of their investment when investing in stocks. This press release was distributed on behalf of VisionWave Holdings, Inc. For current services performed MNU was compensated forty nine hundred dollars for news coverage of the current press releases issued by VisionWave Holdings, Inc. by the Company. MNU HOLDS NO SHARES OF ANY COMPANY NAMED IN THIS RELEASE.

This release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. “Forward-looking statements” describe future expectations, plans, results, or strategies and are generally preceded by words such as “may”, “future”, “plan” or “planned”, “will” or “should”, “expected,” “anticipates”, “draft”, “eventually” or “projected”. You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in a company’s annual report on Form 10-K or 10-KSB and other filings made by such company with the Securities and Exchange Commission. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements. The forward-looking statements in this release are made as of the date hereof and MNU undertakes no obligation to update such statements.

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Technology

atQor Earns Microsoft Frontier Partner Status for AI Delivery

Published

46 minutes ago

July 23, 2026

The recognition validates atQor’s ability to unite Cloud & AI Platforms, AI Business Solutions and Security for customers in financial services, manufacturing, retail, healthcare and public sector.

AHMEDABAD, India, MISSISSAUGA, ON and SANTA FE SPRINGS, Calif., July 23, 2026 /PRNewswire/ — atQor, a Microsoft-focused AI and data platform company, today announced it has achieved Microsoft Frontier Partner status, with its nomination led by Microsoft India and recognition extending across Canada, the United States and India.

atQor holds all six Microsoft Solutions Partner designations, the Support Services designation, Azure Expert MSP status, Microsoft Fabric Featured Partner recognition and ten Advanced Specializations.

“Our engineers do not wait for a mandate to use AI, they build with it every day, and that is what Microsoft recognized,” said Pushkaraj Kale, CEO of atQor India. “Earlier this year, our teams built and deployed more than two hundred production AI agents in a single seventy-two-hour engineering event, and twenty-five of those are now live on Microsoft Marketplace. This nomination was led by Microsoft India, and it reflects the discipline our customers see across every industry we serve.”

“The Frontier Partner designation recognizes organizations that are helping customers move beyond AI experimentation and into business transformation. atQor has consistently invested across Microsoft’s AI, data, cloud, and security stack while building the Go-To-Market and delivery capabilities required to create measurable customer outcomes. We are pleased to see atQor join this distinguished group of partners and look forward to their continued contribution to AI adoption across industries,” said Om Batra, Channel Partner Sales Leader, India and South Asia, Microsoft.

“The most successful AI partners are those that can bridge innovation with operational excellence. atQor has built competencies spanning Microsoft Fabric, Azure AI, Security, and Copilot while maintaining a strong focus on delivery quality and governance. Their Frontier Partner recognition reflects the technical maturity and execution capability needed to help customers scale AI with confidence,” said Sanjeev Sharma, Director Tech Sales and Partner CTO, India and South Asia, Microsoft.

For customers, the recognition means fewer handoffs: one firm carrying the work from the first Microsoft Fabric workshop through the AI agent in production, instead of a customer coordinating several vendors to get there. atQor applies this across financial services, manufacturing, retail, healthcare and public sector organizations in Canada, the United States and India, continuing the relationship through managed Azure operations once systems are live.

Pushkaraj and the India team led this global recognition, according to Kartik Shah, Founder of atQor, who said Canada and U.S. teams, led by Co-Founder and Global COO Greg Kachhadiya, already hold themselves to that same standard.

About atQor: atQor is a Microsoft-focused AI and data platform company that helps enterprises move AI from pilot to production. Founded in 2002, the company operates across Canada, the United States and India, and holds CSP Direct authorization including Azure Gov Cloud in US. atQor maintains ISO 9001, ISO 20000, ISO 27001 and ISO 22301 certifications. Learn more at atQor.com.

Media Contact: Ramanuj Zawar, 419311@email4pr.com. United States: +1-844-294-5383. Canada: +1-289-290-4490. India: +91-706-904-3269.

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Technology

Carrier Accelerates Intelligent Building Strategy with Acquisition of 75F

Published

46 minutes ago

July 23, 2026

Cloud-native building automation strengthens Carrier’s digital ecosystem to enable increasingly intelligent and autonomous buildings

PALM BEACH GARDENS, Fla., July 23, 2026 /PRNewswire/ — Carrier Global Corporation (NYSE: CARR), global leader in intelligent climate and energy solutions, today announced it has acquired 75F, a leading innovator in cloud-native, wireless, AI-enabled building automation systems. The acquisition strengthens Carrier’s intelligent building capabilities across applications — from complex applied systems and high-growth data centers to light commercial and retrofits.

“Buildings are becoming intelligent and autonomous systems that continuously learn, adapt and optimize performance,” said David Gitlin, Chairman & CEO, Carrier. “Through Carrier ClimaVision™, we have already seen firsthand the power of 75F’s cloud-native, AI-enabled platform. This acquisition accelerates our strategy to create increasingly autonomous and self-optimizing buildings by bringing together connected equipment, intelligent controls and digital solutions in a unified platform that simplifies deployment, connects building data and enables agentic AI.”

The combination of Carrier’s WebCTRL® building controls install base, Abound™ predictive analytics capability and the Nlyte® operational intelligence platform with 75F’s unified data layer and AI capabilities will create a differentiated end-to-end offering spanning equipment, controls, analytics and outcomes for buildings globally. Together, these integrated capabilities enable building operators to transition from traditional building management to fully autonomous operations that proactively identify maintenance opportunities, optimize energy consumption, intelligently manage assets and improve occupant comfort.

“75F was founded to fundamentally rethink building automation using cloud-native software, AI and wireless technologies,” said Deepinder Singh, founder and CEO, 75F. “Joining Carrier enables us to accelerate that vision on a global scale. Together, we can help make intelligent buildings simpler to deploy, easier to operate and more accessible to customers everywhere.”

75F’s platform combines wireless sensors, intuitive controls, cloud software and AI-enabled automation designed to reduce installation time and simplify commissioning while optimizing energy efficiency and indoor air quality. Carrier plans to integrate 75F’s generative and agentic AI as well as auto-commissioning capabilities into its large commercial platforms, including its Carrier QuantumLeap™ thermal management suite, improving deployment and real-time thermal performance for the rapidly growing data center market.

Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as external legal counsel to Carrier in connection with the transaction. Avisen Legal, PA acted as external legal counsel to 75F in connection with the transaction.

About Carrier
Carrier Global Corporation, global leader in intelligent climate and energy solutions, is committed to creating innovations that bring comfort, safety and sustainability to life. Through cutting-edge advancements in climate solutions such as temperature control, air quality and transportation, we improve lives, empower critical industries and ensure the safe transport of food, life-saving medicines and more. Since inventing modern air conditioning in 1902, we lead with purpose: enhancing the lives we live and the world we share. We continue to lead because of our world-class, inclusive workforce that puts the customer at the center of everything we do. For more information, visit carrier.com or follow Carrier on social media at @Carrier.

Carrier. For the World We Share.

Cautionary Statement
This communication contains statements which, to the extent they are not statements of historical or present fact, constitute “forward-looking statements” under the securities laws. These forward-looking statements are intended to provide management’s current expectations or plans for Carrier’s future operating and financial performance, based on assumptions currently believed to be valid. Forward-looking statements can be identified by the use of words such as “believe,” “expect,” “expectations,” “plans,” “strategy,” “prospects,” “estimate,” “project,” “target,” “anticipate,” “will,” “should,” “see,” “guidance,” “outlook,” “confident,” “scenario” and other words of similar meaning in connection with a discussion of future operating or financial performance. Forward-looking statements may include, among other things, statements relating to the acquisition of the 75F business, the integration of such business into Carrier’s existing operations, strategies or transactions of Carrier, Carrier’s plans with respect to its indebtedness and other statements that are not historical facts. All forward-looking statements involve risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied in the forward-looking statements. For additional information on identifying factors that may cause actual results to vary materially from those stated in forward-looking statements, see Carrier’s reports on Forms 10-K, 10-Q and 8-K filed with or furnished to the U.S. Securities and Exchange Commission from time to time. Any forward-looking statement speaks only as of the date on which it is made, and Carrier assumes no obligation to update or revise such statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

CARR-IR

Contact:

Media Inquiries

Rob Six

561-281-2362

Robert.Six@Carrier.com

Investor Relations

Michael Rednor

561-365-2020

InvestorRelations@Carrier.com

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