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Ribbon Communications Inc.

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Msg  6621 of 6643  at  7/28/2021 3:43:41 PM  by

dontbetoomuchofa


Earnings out early

Ribbon Communications Inc. Reports Second Quarter 2021 Financial Results
Revenue grew 10% sequentially to $211 million for the second quarter of 2021
Net income increased to $23 million and Adjusted EBITDA grew 119% sequentially to $43 million
July 28, 2021
PLANO, Texas -- Ribbon Communications Inc. (Nasdaq: RBBN), a global provider of real-time communications software and IP optical transport solutions to service providers, enterprises, and critical infrastructure sectors, today announced its financial results for the second quarter of 2021.

Sales for the first half of 2021 were up 10% versus the first half of 2020, while Adjusted EBITDA increased 60% and Non-GAAP diluted earnings per share increased 133% over the same time period. Revenue for the second quarter of 2021 was $211 million, compared to $210 million for the second quarter of 2020.

"In the first half of the year, we made significant strides on the execution of our strategy, with new major IP Optical wins with Rogers, Optus, Singtel and several others," noted Bruce McClelland, President and Chief Executive Officer of Ribbon Communications. "These customer wins will significantly broaden our presence in this large addressable market and strengthen our foundation, establishing a clear path to growth in 2022 and beyond."

Mr. McClelland added, "Sales in India in the quarter were impacted by the surge in Covid infections and country-wide restrictions. Deployments have partially recovered in recent weeks, but timing of a full recovery in network investment is difficult to predict, so it is important for us to be prudent with our expectations for the remainder of the year."

Financial Highlights1, 2
The following table summarizes the consolidated financial highlights for the three months ended June 30, 2021 and 2020 (in millions, except per share amounts).


Three months ended


June 30,


2021

2020

GAAP Revenue

$ 211

$ 210

GAAP Net income (loss)

$ 23

$ ( 8)

Non-GAAP Net income

$ 27

$ 11

GAAP Diluted earnings (loss) per share

$ 0.15

$ (0.06)

Weighted average shares outstanding for GAAP diluted earnings (loss) per share

154

144

Non-GAAP diluted earnings per share

$ 0.17

$ 0.08

Weighted average shares outstanding for Non-GAAP diluted earnings per share

154

151

Non-GAAP Adjusted EBITDA

$ 43

$ 30



Cash, cash equivalents and restricted cash was $115 million at June 30, 2021, compared with $109 million at March 31, 2021 and $94 million at June 30, 2020. GAAP Net income of $23 million in the second quarter of 2021 includes a $12 million non-cash gain associated with the quarterly mark-to-market of the Company's investment in American Virtual Cloud Technologies, Inc. ("AVCT") from the sale of the Company's Kandy Communications business and a $2.8 million gain on the sale of our QualiTech business, which closed during the second quarter.

_____________

1 GAAP Net income and GAAP Diluted earnings per share for the three months ended June 30, 2021 include a $2.8 million gain on the sale of the QualiTech business. They also include $1.2 million of paid-in-kind interest income earned on the convertible debt and $12.1 million of income associated with the remeasurement of the convertible debt and warrants associated with the consideration received from the sale of the Company's Kandy Communications business to AVCT. The interest income is included in Interest expense, net, and the remeasurement expense is included in Other income (expense), net. The remeasurement income was calculated using valuation methods in accordance with accounting guidance. Fluctuations in AVCT's stock price will impact the future amounts that are recorded in Other income (expense), net, and could materially impact the Company's quarterly results.

2 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.

"We were very pleased with the earnings and cash generation in the quarter with both Adjusted EBITDA and Earnings per share well above our targets for the quarter. Sales were slightly less than expected primarily due to the Covid situation in India, while gross margins were stronger due to favorable product mix. Operating expenses trended lower with continued spending discipline and the benefit from several one-time items," said Mick Lopez, Chief Financial Officer of Ribbon Communications.

Customer and Company Highlights

Strong 1H21 financial results:
10% YoY revenue growth
60% YoY Adj. EBITDA growth
Strong gross margins in both business units and continued disciplined expense control
Significant new IP Optical wins broadening Ribbon's global customer base:
Rogers Communications selected Ribbon's industry-leading 400G ZR+ optical networking and SDN solutions to upgrade its transport network
Optus and Singtel Telecommunications multi-service transport network DWDM tender award
Strong growth in North American markets with 1H21 sales exceeding sales in all of 2020, including Huawei replacement win with US wireless provider
Continuing portfolio innovation:
Successful introduction and initial shipments of industry's first 400G ZR+ DWDM metro and long-haul transport solution
Integral contributor enabling industry to meet US robocalling June 30th deadline with complete portfolio including CallTrust and STIR/SHAKEN solutions
Business Outlook1
The Company's outlook is based on current indications for its business, which are subject to change. For the third quarter of 2021, the Company projects revenue of $215 million to $225 million, non-GAAP gross margin of 57% to 58%, non-GAAP diluted earnings per share of $0.11 to $0.13, and Adjusted EBITDA of $32 million to $36 million. For the full year 2021, earnings guidance remains unchanged with non-GAAP diluted earnings per share of $0.49 to $0.54, and Adjusted EBITDA of $145 million to $155 million. Revenue is now projected to be approximately $900 million with increased non-GAAP gross margin of 58% to 59%. The current outlook assumes no worsening of conditions related to the COVID-19 pandemic, or supply chain disruptions.

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

Upcoming Investor Conference Schedule

August 10-11, 2021 Oppenheimer Technology, Internet & Communications Conference (virtual presentation and one-on-one institutional investor meetings).
August 31-September 1, 2021 Jefferies Virtual Semiconductor, IT Hardware & Communications Infrastructure Summit (virtual one-on-one institutional investor meetings).
September 14-15, 2021 Jefferies Virtual Software Conference (virtual presentation and one-on-one institutional investor meetings).
November 15-18, 2021 Needham Virtual Security, Networking & Communications Conference (virtual presentation and one-on-one institutional investor meetings).


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