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Ribbon Communications Inc. Reports Fourth Quarter and Full Year 2024 Financial Results

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Record Quarterly Sales and Operating Income

Revenue Grows 11% YoY with Strong Demand from Service Providers, Enterprise Customers, and U.S. Federal Agencies

PLANO, Texas, Feb. 12, 2025 /PRNewswire/ — Ribbon Communications Inc. (Nasdaq: RBBN), a prominent supplier of real-time communications technology and IP optical networking solutions, today announced its financial results for the fourth quarter and the full year of 2024. Ribbon Communications is dedicated to assisting the world’s largest service providers, enterprises, and critical infrastructure operators in modernizing and safeguarding their networks and services.

Revenue for the fourth quarter of 2024 was $251 million, compared to $226 million for the fourth quarter of 2023 and $210 million for the third quarter of 2024. GAAP Operating Income was $33 million, compared to $17 million for the fourth quarter of 2023. Quarterly Non-GAAP Adjusted EBITDA increased by 30% year over year to $55 million, or 22% of sales.

For the full year 2024, Revenue was $834 million, compared to $826 million for the full year 2023. GAAP Operating Income was $17 million, compared to a loss of ($24) million for 2023. Non-GAAP Adjusted EBITDA improved by 31% to $119 million, or 14% of sales. GAAP and Non-GAAP Gross Margins for the full year increased approximately 300 basis points to 53% and 56% respectively, with improvement in both operating segments.

“Our fourth quarter results were very strong across all key financial metrics, achieving record levels of revenue, near the top end of our guidance, and profitability, exceeding our guidance. We believe this is a clear validation of our strategy and a culmination of the effort over the last several years to diversify and drive profitable growth in both Service Provider and Enterprise markets,” stated Bruce McClelland, President and Chief Executive Officer of Ribbon Communications.

“Revenue growth was underpinned by higher sales to U.S. Tier One Service Providers, U.S. Federal Defense agencies, and Enterprise customers. We also had solid contribution from U.S. Rural Broadband, Europe, and India. When combined with robust margins and our continued operational expense control, profitability improved more than 30% compared to 2023,” Mr. McClelland added. “It is especially satisfying to generate Adjusted EBITDA for the full year at the high end of our original guidance range despite the suspension of shipments to Eastern Europe. Our visibility has improved, and we anticipate further momentum in 2025 as the industry-wide focus on network modernization and the investment in fiber networks drives a strong growth cycle.”

Financial Highlights 1

Three months ended

Year ended

December 31,

December 31,

In millions, except per share amounts

2024

2023

2024

2023

GAAP Revenue

$         251

$         226

$         834

$         826

GAAP Net income (loss)

$             6

$             7

$          (54)

$          (66)

Non-GAAP Net income (loss)

$           28

$           22

$           44

$           36

Non-GAAP Adjusted EBITDA

$           55

$           43

$         119

$           91

GAAP diluted earnings (loss) per share 

$        0.04

$        0.04

$       (0.31)

$       (0.39)

Non-GAAP diluted earnings (loss) per share

$        0.16

$        0.12

$        0.25

$        0.21

Weighted average shares outstanding basic

175

172

174

170

Weighted average shares outstanding diluted

179

173

177

173

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.

“The fourth quarter was a very strong finish for Ribbon and capped off a transformative year for the business. Improved earnings generation enabled us to successfully refinance our credit facility earlier in the year, and momentum accelerated with the launch of the voice network modernization program with Verizon. Increased business across both Enterprise and Service Providers resulted in a record level of sales in the fourth quarter along with a book-to-bill of 1.1x times. Cash from operations benefitted from higher collections, resulting in a year-end cash position of $90 million. I’m very excited about our growth prospects for 2025,” said John Townsend, Chief Financial Officer of Ribbon Communications.

Business Outlook2  
For 2025, the Company expects profitable growth in both operating segments, with continued momentum from network modernization across Service Providers, Enterprise, and Federal and Defense customers. We expect a normal seasonal pattern with the business accelerating as the year progresses.

For the full year 2025, the Company projects revenue of $870 million to $890 million. Non-GAAP gross margin is projected in a range of 54% to 55%. Adjusted EBITDA is projected in a range of $130 million to $140 million.

For the first quarter of 2025, the Company projects revenue of $185 million to $195 million. Non-GAAP gross margin is projected in a range of 53% to 53.5%. Adjusted EBITDA is projected in a range of $12 million to $18 million.

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

2 GAAP earnings guidance is not provided. 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

March 3-6, 2025: Mobile World CongressMarch 17-20, 2025: Enterprise ConnectMarch 30-April 3, 2025: Optical Fiber Communication Conference and ExhibitionMay 21-22, 2025: B. Riley Securities 25th Annual Institutional Investor Conference

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
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 first quarter of 2025 and beyond; market share growth; increases in shareholder value; 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 “anticipates”, “believes”, “could”, “estimates”, “expects”, “expectations”, “intends”, “may”, “plans”, “projects” and other similar language, whether in the negative or affirmative, are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

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 unknown and/or difficult to predict and that may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. Such risks and uncertainties include, but are not limited to, unpredictable fluctuations in quarterly revenue and operating results; the impact of restructuring and cost-containment activities; increases in tariffs, trade restrictions or taxes on the Company’s products; supply chain disruptions resulting from component availability and/or geopolitical instabilities and disputes (including those related to the wars in Israel and Ukraine); the closure, on a temporary basis, of the Company’s offices or those of the Company’s contract manufacturer in Israel as a result of the war and the impact of military call-ups of the Company’s employees in Israel; material litigation; the impact of fluctuations in interest rates; material cybersecurity and data intrusion incidents, including any security breaches resulting in the theft, transfer, or unauthorized disclosure of customer, employee, or Company information; the Company’s ability to comply with applicable domestic and foreign information security and privacy laws, regulations and technology platform rules or other obligations related to data private and security; 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; the ability to adapt to rapid technological and market changes; the ability to generate positive returns on the Company’s research and development; 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; risks related to the terms of the Company’s credit agreement; higher risks in international operations and markets; currency fluctuations; unanticipated averse changes in legal, regulatory or tax laws; future accounting pronouncements or changes in the Company’s accounting policies; and/or failure or circumvention of the Company’s controls and procedures. We therefore caution you against relying on any of these forward-looking statements.

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. Any forward-looking statement made by the Company in this release speaks only as of the date on which this release was first issued. The Company undertakes no obligation to update any forward-looking statement publicly or otherwise, whether as a result of new information, future developments 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 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 that began in 2023. Also, on October 14, 2024, a settlement in principle was reached on one of these legal matters and the Company accrued the $5 million settlement in the third quarter of 2024. 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 are not within its control. Accordingly, the Company believes that excluding 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 Indemnification Write-Off
In connection with the Company’s acquisition of ECI Telecom Group Ltd. in 2020, a portion of the shares of our common stock that were issued as consideration were held in escrow for potential future tax liabilities. This $6 million tax indemnity asset, consisting of 2 million shares of common stock held in escrow, was written off upon its expiration on December 31, 2024. The Company believes that excluding this tax indemnification write-off facilitates the comparison of the Company’s financial results to its historical operating results and to other companies in its industry.

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 fourth quarter and year ended December 31, 2024.

Date: Wednesday, February 12, 2025
Time: 4:30 p.m. (ET)

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

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 

December 31,

September 30,

December 31,

2024

2024

2023

Revenue:

Product

$         148,335

$               112,151

$         125,984

Service

103,024

98,087

100,417

Total revenue

251,359

210,238

226,401

Cost of revenue:

Product

68,483

59,405

61,183

Service

37,316

34,893

37,205

Amortization of acquired technology

5,487

6,323

6,305

Total cost of revenue

111,286

100,621

104,693

Gross profit

140,073

109,617

121,708

Gross margin

55.7 %

52.1 %

53.8 %

Operating expenses:

Research and development

45,044

45,645

45,351

Sales and marketing

37,070

33,060

35,361

General and administrative

17,060

21,588

13,686

Amortization of acquired intangible assets

6,298

6,457

6,861

Acquisition-, disposal- and integration-related

–

–

1,494

Restructuring and related

1,381

3,794

2,285

Total operating expenses

106,853

110,544

105,038

Income (loss) from operations

33,220

(927)

16,670

Interest expense, net

(12,003)

(11,952)

(6,989)

Other (expense) income, net

(13,159)

1,056

(3,232)

Income (loss) before income taxes

8,058

(11,823)

6,449

Income tax benefit (provision)

(1,694)

(1,599)

630

Net income (loss)

$             6,364

$               (13,422)

$             7,079

Earnings (loss) per share:

Basic

$               0.04

$                   (0.08)

$               0.04

Diluted

$               0.04

$                   (0.08)

$               0.04

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

Basic

175,321

174,613

171,755

Diluted

178,703

174,613

172,990

 

RIBBON COMMUNICATIONS INC.

Consolidated Statements of Operations

(in thousands, except percentages and per share amounts)

(unaudited)

Year ended

December 31,

December 31,

2024

2023

Revenue:

Product

$         447,229

$         445,150

Service

386,652

381,189

Total revenue

833,881

826,339

Cost of revenue:

Product

228,527

250,609

Service

140,949

139,357

Amortization of acquired technology

24,893

28,290

Total cost of revenue

394,369

418,256

Gross profit

439,512

408,083

Gross margin

52.7 %

49.4 %

Operating expenses:

Research and development

179,941

190,660

Sales and marketing

137,830

137,460

General and administrative

68,740

54,962

Amortization of acquired intangible assets

25,969

28,601

Acquisition-, disposal- and integration-related

–

4,476

Restructuring and related

10,160

16,209

Total operating expenses

422,640

432,368

Income (loss) from operations

16,872

(24,285)

Interest expense, net

(33,821)

(27,320)

Other (expense) income, net

(29,119)

(3,768)

Income (loss) before income taxes

(46,068)

(55,373)

Income tax benefit (provision)

(8,167)

(10,833)

Net income (loss)

$         (54,235)

$         (66,206)

Earnings (loss) per share:

Basic

$             (0.31)

$             (0.39)

Diluted

$             (0.31)

$             (0.39)

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

Basic

174,044

170,408

Diluted

174,044

170,408

 

RIBBON COMMUNICATIONS INC.

Consolidated Balance Sheets

(in thousands)

(unaudited)

December 31,

December 31,

2024

2023

Assets

Current assets:

Cash and cash equivalents

$           87,770

$           26,494

Restricted cash

2,709

136

Accounts receivable, net

254,718

268,421

Inventory

79,179

77,521

Other current assets

39,286

46,146

Total current assets

463,662

418,718

Property and equipment, net

60,364

41,820

Intangible assets, net

187,537

238,087

Goodwill

300,892

300,892

Deferred income taxes

88,982

69,761

Operating lease right-of-use assets

34,544

39,783

Other assets

26,573

35,092

$      1,162,554

$      1,144,153

Liabilities and Stockholders’ Equity

Current liabilities:

Current portion of term debt

$             6,125

$           35,102

Accounts payable

87,759

85,164

Accrued expenses and other

106,251

91,687

Operating lease liabilities

9,443

15,739

Deferred revenue

119,295

113,381

Total current liabilities

328,873

341,073

Long-term debt, net of current

330,726

197,482

Warrant liability

8,064

5,295

Preferred stock liability

–

53,337

Operating lease liabilities, net of current

37,376

38,711

Deferred revenue, net of current

20,991

19,218

Deferred income taxes

5,941

5,616

Other long-term liabilities

25,962

30,658

Total liabilities

757,933

691,390

Commitments and contingencies

Stockholders’ equity:

Common stock

18

17

Additional paid-in capital

1,970,708

1,958,909

Accumulated deficit

(1,574,185)

(1,519,950)

Accumulated other comprehensive income

8,080

13,787

Total stockholders’ equity

404,621

452,763

$      1,162,554

$      1,144,153

 

RIBBON COMMUNICATIONS INC.

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

Year ended

 December 31, 

 December 31, 

2024

2023

Cash flows from operating activities:

Net income (loss)

$           (54,235)

$           (66,206)

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

Depreciation and amortization of property and equipment

13,539

14,105

Amortization of intangible assets

50,862

56,891

Amortization of debt issuance costs and original issue discount

4,847

3,241

Amortization of accumulated other comprehensive gain related to interest rate swap

(8,196)

(5,575)

Stock-based compensation

16,086

21,806

Deferred income taxes

(16,887)

(9,196)

Gain on sale of swap

–

(7,301)

Change in fair value of warrant liability

2,769

(201)

Change in fair value of preferred stock liability

8,091

1,548

Dividends accrued on preferred stock liability

2,743

3,935

Payment of dividends accrued on preferred stock liability

(6,686)

–

Foreign currency exchange (gains) losses

5,741

(44)

Changes in operating assets and liabilities:

Accounts receivable

12,420

5,726

Inventory

(3,616)

(10,701)

Other operating assets

30,459

34,834

Accounts payable

(6,016)

(10,498)

Accrued expenses and other long-term liabilities

(9,367)

(14,684)

Deferred revenue

7,686

(593)

Net cash provided by (used in) operating activities

50,240

17,087

Cash flows from investing activities:

Purchases of property and equipment

(22,406)

(9,381)

Purchases of software licenses

(462)

(100)

Net cash provided by (used in) investing activities

(22,868)

(9,481)

Cash flows from financing activities:

Borrowings under revolving line of credit

44,106

97,000

Principal payments on revolving line of credit

(44,106)

(97,000)

Proceeds from issuance of term debt

342,300

–

Principal payments of term debt

(237,145)

(95,058)

Payment of debt issuance costs

(6,312)

(1,685)

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

21

15

Payment of tax obligations related to vested stock awards and units

(4,308)

(4,481)

Net cash provided by (used in) financing activities

37,706

(47,859)

Effect of exchange rate changes on cash and cash equivalents

(1,229)

(379)

Net increase (decrease) in cash and cash equivalents

63,849

(40,632)

Cash, cash equivalents and restricted cash, beginning of year

26,630

67,262

Cash, cash equivalents and restricted cash, end of period

$             90,479

$             26,630

 

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 

 Year ended 

December 31,

September 30,

December 31,

December 31,

December 31,

2024

2024

2023

2024

2023

Stock-based compensation

Cost of revenue – product

$                66

$                64

$              125

$              300

$              510

Cost of revenue – service

288

291

550

1,325

2,147

Cost of revenue

354

355

675

1,625

2,657

Research and development

737

745

1,112

3,166

4,933

Sales and marketing

1,178

1,108

1,438

4,397

7,111

General and administrative

1,756

1,837

1,667

6,898

7,105

Operating expense

3,671

3,690

4,217

14,461

19,149

Total stock-based compensation

$           4,025

$           4,045

$           4,892

$         16,086

$         21,806

 

RIBBON COMMUNICATIONS INC.

Reconciliation of Non-GAAP and GAAP Financial Measures

(in thousands, except per share amounts)

(unaudited)

 Three months ended 

December 31,

September 30,

December 31,

2024

2024

2023

GAAP Gross margin

55.7 %

52.1 %

53.8 %

Stock-based compensation

0.2 %

0.2 %

0.3 %

Amortization of acquired technology

2.2 %

3.0 %

2.7 %

Non-GAAP Gross margin

58.1 %

55.3 %

56.8 %

GAAP Net income (loss)

$             6,364

$         (13,422)

$             7,079

Stock-based compensation

4,025

4,045

4,892

Amortization of intangible assets

11,785

12,780

13,166

Litigation costs

1,583

6,896

538

Acquisition-, disposal- and integration-related

–

–

1,494

Restructuring and related

1,381

3,794

2,285

Preferred stock and warrant liability mark-to-market adjustment

2,478

(583)

3,724

Tax indemnification write-off

6,313

–

–

Tax effect of non-GAAP adjustments

(5,648)

(5,024)

(11,606)

Non-GAAP Net income (loss)

$           28,281

$             8,486

$           21,572

GAAP Diluted earnings (loss) per share

$               0.04

$             (0.08)

$               0.04

Stock-based compensation

0.02

0.02

0.03

Amortization of intangible assets

0.06

0.08

0.08

Litigation costs

0.01

0.04

 * 

Acquisition-, disposal- and integration-related

–

–

0.01

Restructuring and related

0.01

0.02

0.01

Preferred stock and warrant liability mark-to-market adjustment

0.01

 * 

0.02

Tax indemnification write-off

0.04

–

–

Tax effect of non-GAAP adjustments

(0.03)

(0.03)

(0.07)

Non-GAAP Diluted earnings (loss) per share

$               0.16

$               0.05

$               0.12

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

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

175,321

174,613

171,755

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

178,703

177,028

172,990

GAAP Income (loss) from operations

$           33,220

$              (927)

$           16,670

Depreciation

3,408

3,361

3,502

Stock-based compensation

4,025

4,045

4,892

Amortization of intangible assets

11,785

12,780

13,166

Litigation costs

1,583

6,896

538

Acquisition-, disposal- and integration-related

–

–

1,494

Restructuring and related

1,381

3,794

2,285

Non-GAAP Adjusted EBITDA

$           55,402

$           29,949

$           42,547

* 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)

Year ended

December 31,

December 31,

2024

2023

GAAP Gross Margin

52.7 %

49.4 %

Stock-based compensation

0.2 %

0.3 %

Amortization of acquired technology

3.0 %

3.4 %

Non-GAAP Gross Margin

55.9 %

53.1 %

GAAP Net income (loss)

$         (54,235)

$         (66,206)

Stock-based compensation

16,086

21,806

Amortization of intangible assets

50,862

56,891

Litigation costs

11,198

1,307

Acquisition-, disposal- and integration-related

–

4,476

Restructuring and related

10,160

16,209

Preferred stock and warrant liability mark-to-market adjustment

13,604

5,282

Preferred stock and warrant liability issuance costs

–

3,545

Tax indemnification write-off

6,313

–

Tax effect of non-GAAP adjustments

(9,796)

(7,462)

Non-GAAP Net income (loss)

$           44,192

$           35,848

GAAP Diluted earnings (loss) per share

$             (0.31)

$             (0.39)

Stock-based compensation

0.09

0.13

Amortization of intangible assets

0.29

0.33

Litigation costs

0.06

0.01

Acquisition-, disposal- and integration-related

–

0.03

Restructuring and related

0.06

0.09

Preferred stock and warrant liability mark-to-market adjustment

0.08

0.03

Preferred stock and warrant liability issuance costs

–

0.02

Tax indemnification write-off

0.04

–

Tax effect of non-GAAP adjustments

(0.06)

(0.04)

Non-GAAP Diluted earnings (loss) per share

$               0.25

$               0.21

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

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

174,044

170,408

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

177,306

172,947

GAAP Income (loss) from operations

$           16,872

$         (24,285)

Depreciation

13,539

14,105

Stock-based compensation

16,086

21,806

Amortization of intangible assets

50,862

56,891

Litigation costs

11,198

1,307

Acquisition-, disposal- and integration-related

–

4,476

Restructuring and related

10,160

16,209

Non-GAAP Adjusted EBITDA

$         118,717

$           90,509

* 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

December 31,

September 30,

December 31,

2024

2024

2023

GAAP Income (loss) from operations

$           16,872

$                322

$         (24,285)

Depreciation

13,539

13,633

14,105

Stock-based compensation

16,086

16,953

21,806

Amortization of intangible assets

50,862

52,243

56,891

Litigation costs

11,198

10,153

1,307

Acquisition-, disposal- and integration-related

–

1,494

4,476

Restructuring and related

10,160

11,064

16,209

Non-GAAP Adjusted EBITDA

$         118,717

$         105,862

$           90,509

 

RIBBON COMMUNICATIONS INC.

Reconciliation of Non-GAAP and GAAP Financial Measures – Outlook

(unaudited)

 Three months ending  

 Year ending  

March 31, 2025

December 31, 2025

Midpoint (1)

Range

Midpoint (1)

Range

Revenue ($ millions)

$               190

 +/- $5M

$               880

+/- $10M

Gross margin:

GAAP outlook

50.25 %

52.0 %

Stock-based compensation

0.20 %

0.2 %

Amortization of acquired technology

2.80 %

2.3 %

Non-GAAP outlook

53.25 %

 +/- 0.25%

54.5 %

+/- 0.5%

Adjusted EBITDA ($ millions):

GAAP income (loss) from operations

$              (6.4)

$              49.7

Depreciation

3.6

15.8

Stock-based compensation

4.0

16.2

Amortization of intangible assets

11.5

44.1

Litigation costs

0.3

1.2

Restructuring and related

2.0

8.0

Non-GAAP outlook

$              15.0

 +/- $3M

$            135.0

+/- $5M

(1) Q1 2025 and FY 2025 outlook represents the midpoint of the expected ranges

 

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SOURCE Ribbon Communications Inc.

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Haloid Poll: Majority of Public Safety and Commercial Radio Administrators Would Consider Starlink Integration With LMR Two-Way Radio Networks, but Disruption Unlikely

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STONY BROOK, N.Y., Oct. 25, 2026 /PRNewswire/ — Following Starlink’s announced entry into the mobile communications space, Haloid’s consulting team polled government and business land mobile radio (LMR) administrators on whether Starlink could replace, or complement, their LMR systems. We found that most radio administrators were receptive to the nascent technology but did not see it as a replacement for their LMR networks.

Sixty-seven percent of radio administrators said they would be willing to integrate Starlink technology if it allowed them to expand coverage or lower infrastructure costs. When asked whether Starlink could completely replace their LMR networks, fewer than 15 percent said yes; the vast majority believed Starlink is not as reliable as the custom networks they have built. Among administrators who already use two-way radio over cellular (also known as push-to-talk over cellular, or PoC), however, nearly 80 percent said that Starlink’s satellite coverage, combined with its newly acquired cellular spectrum, would make it more desirable than the industry’s wireless incumbents because it could eliminate dead spots where cellular does not reach.

In the U.S., hundreds of thousands of radio users rely on traditional cellular carriers for push-to-talk communications, and that number grows each year. While the migration to two-way radio over cellular has affected the LMR industry, it has not replaced it. Many public safety agencies never made the switch, citing the risk that cellular networks could go down during weather events, power outages, or cyberattacks and jeopardize emergency communications.

In fact, during recent cellular outages, Starlink was used to provide emergency communications to affected areas, because its satellite connectivity does not depend on cell towers. But Starlink’s integration with the 800 MHz cellular spectrum — “Starlink 2.0,” as some experts are calling it — exposes it to some of the same vulnerabilities as traditional wireless carriers.

While Starlink’s satellite service might still function if local cell towers go down, a critical portion of an agency’s communications might rely on local towers using the 800 MHz spectrum, leaving the agency vulnerable in a storm or outage.

Expect evolution, not disruption

“Just like cellular didn’t replace LMR, we don’t see Starlink as an existential risk,” said Jeremy Alicandri, President of Haloid Solutions. He expects Starlink to accelerate the industry’s evolution toward shared communications infrastructure, also known as hybrid LMR. “We have public safety customers already using Starlink in their vehicles to extend the coverage of their radios. This trend will continue as Starlink devices become more ubiquitous.”

The stock prices of Verizon, T-Mobile, and AT&T were affected by Starlink’s recent announcement. LMR stocks such as L3Harris, JVCKENWOOD, and BK Technologies, maker of the Bendix King brand, have been unaffected, as Wall Street views Starlink as unlikely to replace LMR technology for the same reasons cellular did not. “But it may be too early to predict the industry’s winners and losers,” Alicandri added. “The cellular incumbents have many advantages, including low-cost devices, existing infrastructure, and their own satellite ambitions.”

About Haloid Solutions Research

Haloid’s Starlink poll drew on respondents to its LMR brand loyalty study, which measures radio administrators’ sentiment toward the ownership and after-sales experience. Haloid’s LMR research is sponsored by investors in the mission-critical communications space.

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SOURCE HALOID SOLUTIONS

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Newborn Town and Viggle Launch AI-Powered 3D Interactive Game, Bringing World Models to Social Gaming

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HONG KONG, Oct. 26, 2026 /PRNewswire/ — Recently, Newborn Town’s game-oriented social platform TopTop has launched “Slap Showdown”, an AI-powered 3D interactive mini-game developed in collaboration with Viggle, a company specializing in physics-native world models. The launch brings world model technology into social gaming, offering users a more personalized and engaging interactive experience.

Developed by TopTop and powered by Viggle’s self-developed Joint Space-Time (JST) world model, “Slap Showdown” lets users turn uploaded photos into customized 3D characters and take them straight into the game.

Launched in September, “Slap Showdown” has gained particular traction in Japan, among Spanish-speaking users in North America, and across the Middle East. It is now available in multiple countries and regions worldwide.

From Better Gameplay to a Richer Ecosystem: How World Models Could Redefine Social Gaming on TopTop

In terms of gameplay, “Slap Showdown” combines AI-generated 3D characters with multiplayer interaction. Players can simply upload a photo from their phone and generate a personalized 3D character in around 30 seconds, whether it’s an anime protagonist, a cyberpunk cyborg, or a LEGO minifigure. They can then bring their custom characters into the game and face off against other players in fun, interactive battles.

As players use controls such as press-and-hold, tap, and drag, the 3D characters respond with realistic, physics-based movements. This takes AI-generated characters beyond visual customization, integrating them directly into the gameplay experience.

According to TopTop’s operations team, “Slap Showdown” has attracted a growing base of highly engaged, high-spending-potential players in its first month since launch. The game has recorded a 97% match completion rate, while its game-start rate has also exceeded the platform-wide average.

The depth of user engagement is further illustrated by individual player activity. One player in Japan completed 1,041 matches over 22 days, reaching a daily peak of 151 matches and averaging one match every 9.5 minutes. Another particularly avid player in Eastern Europe completed 735 matches in just 11 days, averaging 66.8 matches per day and peaking at 126 matches in a single day.

For a UGC-driven social gaming platform such as TopTop, mini-games serve as entry points and traffic drivers, while social features underpin retention and monetization. Personalized 3D avatars add another dimension to that experience. Beyond their visual appeal, they give users new ways to express themselves, interact with friends and share memorable moments. In turn, richer gameplay and more meaningful social interactions can help improve retention, attract new users and strengthen engagement across the platform.

“Slap Showdown” marks a successful step in TopTop’s efforts to deepen its application of AI technology, as well as a starting point for using world models to enhance gaming and social experiences. TopTop’s operations team said future game releases could make greater use of AI-powered 3D generation, extending beyond avatars to include customized environments. Existing games could also be revitalized by the introduction of new gameplay features, potentially driving stronger retention and user acquisition.

Beyond enriching gameplay, world model capabilities could also reshape social interaction itself, enabling more immersive, face-to-face experiences in virtual spaces. “We’re constantly exploring how AI can transform gaming and social interaction, while bringing new energy and capabilities to our UGC ecosystem,” TopTop’s operations team said.

Viggle Unveils Physics-Native Model JST-2, Setting Its Sights on Becoming the Infrastructure Layer for Physical AI

The world model technology powering “Slap Showdown” is provided by Viggle.

Founded in 2022, Viggle has focused on developing physics-native world foundation models. Its self-developed JST model can generate 3D characters, motion and environments directly, providing a foundation for gaming and a growing range of AI applications.

Viggle previously attracted widespread attention with Meme Maker, its AI-powered video creation product. The tool enables users to animate static characters and generate videos by applying specified movements, making AI character animation and video creation more accessible. In August 2024, Viggle raised USD 19 million in a Series A funding round led by Silicon Valley venture capital firm Andreessen Horowitz (a16z).

However, video creation was an early application of this technology. Viggle’s longer-term ambition is to make JST a foundational technology for AI-powered experiences across gaming, social platforms and other applications.

Viggle is now further expanding its technological boundaries. On 19 October, Viggle launched JST-2 in full, likening its significance for world models to GPT-2’s role in the evolution of language models.

Unlike many world models that infer physical structure indirectly from pixels, JST-2 is built around a physics-native architecture designed to learn the structure and dynamics of the 3D world directly. Its underlying representation consists of units resembling digital “atoms.” Each has a defined position in three-dimensional space, along with physical properties such as material, color and mass, and information describing how it moves and responds to forces. This allows the model to do more than generate convincing images. It can represent and generate 3D characters, motion and scenes with an underlying understanding of their physical properties.

To support this approach, Viggle has developed an integrated technology stack spanning tokenization, model architecture, data engine, pre-training and post-training. After four years of research and development, JST-2 can generate characters, motion and scenes within a single unified architecture.

Compared with other approaches, JST-2 also demonstrates cost efficiency. JST-2 can generate a 3D scene in seconds, at an inference cost of less than one US cent. Once created, the content can be rendered locally without repeatedly running the foundation model to generate each frame.

It is noteworthy that world model technology remains at an early stage, but Viggle is already working toward more advanced capabilities.

Its next-generation model, JST-3, is intended to become a comprehensive world simulator. Such a system could underpin future game and graphics engines, while also serving as a virtual training environment for robotics and other forms of physical AI.

The longer-term goal is for JST-3 to learn the physical rules governing its simulated world directly from data, rather than relying on rules explicitly written by developers.

For Newborn Town, its investment in and partnership with Viggle represents an important step in exploring how advanced AI can reshape social gaming, promoting a deep integration of AI technology with its business operations.

As a leading global social entertainment company, Newborn Town has continued to deepen the use of AI across key areas in recent years, including product R&D, social recommendation systems, intelligent operations, safety and risk management, and marketing and user acquisition, supporting ongoing business growth.

Meanwhile, the company also continued to invest across the AI ecosystem, backing projects in areas including world models, AI companionship, AI Agents and AI interactive gaming. These investments have further enriched its AI application ecosystem, with Viggle among the AI companies previously backed by Newborn Town.

“Slap Showdown” represents an early step in bringing world models into social gaming. For Newborn Town and Viggle, the next challenge is to turn increasingly sophisticated AI capabilities into experiences that users find genuinely engaging — and compelling enough to keep coming back.

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SOURCE Newborn Town

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HKICEC Launches First-Ever Global Mobile Exchange Pavilion at Mobile Electronics Show

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Charting a New Milestone with Outstanding Achievements

HONG KONG, Oct. 26, 2026 /PRNewswire/ — The Hong Kong International Communications Electronic Chamber (HKICEC) made a landmark debut at the Global Sources Mobile Electronics Show, held from October 18-21, 2026, with the inaugural launch of the HKICEC Global Mobile Exchange Pavilion. Spanning 600 square meters, the pavilion brought together nearly 60 industry leaders from mainland China, Hong Kong, India, Japan, the UAE, the US and the UK. As the largest themed pavilion in the mobile electronics sector and a premier highlight of the exhibition, this event marks a new developmental milestone for HKICEC. The pavilion underscores the chamber’s dedication to bridging global markets and serving the communications and electronics industry, injecting vital new momentum into the synergy between Hong Kong’s technology sector and international trade.

The grand opening ceremony on October 18 marked the official launch of the first B2B pavilion in Hong Kong and Asia dedicated exclusively to mobile communications equipment. The milestone event was officiated by a distinguished lineup of devices global business, including  Dr. the Hon. Starry Lee Wai King, GBS, JP, Member of the Standing Committee of the National People’s Congress and President of the Legislative Council; Mr. Zhu Xiaodong, Director of the Kowloon Affairs Department of the Liaison Office of the Central People’s Government in the HKSAR; Dr. the Hon. Horace Cheung Kwok Kwan SBS JP, Deputy Secretary for Justice, HKSAR; Mr. Liu Maozhou, Level 1 Bureau Rank Official, the Economic and Financial Department II, Liaison Office of the Central People’s Government in the HKSAR; Mr. Ho Lap Ki, Denny, JP, District Officer (Kwun Tong), Home Affairs Department; Mr James Liu, CEO of Global Sources; and Mr. Jacky Tse, Chairman of HKICEC, alongside HKICEC Management team. Together, they witnessed the official launch of the first B2B pavilion in Hong Kong and Asia dedicated to mobile communications equipment. The ceremony drew over a hundred political and business leaders, industry representatives, international exhibitors, and major media outlets, reflecting the event’s importance and the industry’s green trading development. Following the inauguration, officials toured the pavilion for high-level discussions with global exhibitors, signaling robust institutional backing for the industry and HKICEC’s strategic expansion.

During the four-day exhibition, the pavilion experienced a continuous flow of visitors. Communications and electronics suppliers and global buyers from overseas visited specifically for business matchmaking and negotiations, unlocking numerous commercial opportunities. Notably, the pavilion also featured a retrospective exhibit of 16 classic mobile phones, tracing the industry’s evolution from early ‘brick’ devices to Mainland China’s first official Apple release, the iPhone 3GS. The historical display proved to be a standout attraction, gathering large crowds throughout the event.

Beyond the exhibition floor, the chamber partnered with Global Sources to co-host an international forum on October 19. Under the theme ” From New Devices to New Life: Building a Global Mobile Device Lifecycle Ecosystem”, the event gathered experts from ecoATM, PCS Wireless, Cenwood, Our Hong Kong Foundation, and the Global Mobile Association. They engaged in profound discussions on cutting-edge topics including the global economic landscape, inventory management, ESG development, the circular ecology of new and used devices, and AI technology.  Attended by over 200 international representatives, the forum successfully catalyzed cross-border collaboration and established a new standard for sustainability discourse in the global mobile industry.

As a capstone to the comprehensive four-day events, HKICEC convened over 500 industry leaders, VIPs, and exhibitors for a high-profile networking banquet designed to accelerate cross-border business alliances. The gathering provided a premier platform for delegates to solidify collaborative ties and exchange strategic insights initiated from the pavilion. Ahead of the exhibition’s conclusion, a special ” Pearl Of The Orient • Victoria Harbour Cruise Party” was organized to showcase Hong Kong’s unique charm as a cosmopolitan city to global guests, providing a memorable networking experience against Hong Kong’s iconic skyline to formally cap off the week’s successes.

High-resolution images: https://bit.ly/3WqHMxu

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SOURCE The Hong Kong International Communications Electronic Chamber (HKICEC)

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