Education
About Us
Working with TipRanks
Follow Us
Ribbon Communications Inc (RBBN)
NASDAQ:RBBN
Top Page
Ribbon Communications
(NASDAQ:RBBN)
51Neutral
Positive Factors
Earnings
The company reported strengthening F4Q24 results, with revenue of $251.4M, up 11% year-over-year.
Market Opportunities
The company has a significant market opportunity of over $10 billion and shows strength internationally and in working with U.S. federal customers.
Negative Factors
Geopolitical Factors
Uncertainties remain due to geopolitical factors affecting the IP Optical segment's growth projections.
Ribbon Communications (RBBN) vs. S&P 500 (SPY)
Market Cap
$572.00M
Dividend YieldN/A
Average Volume (3M)517.44K
Price to Earnings (P/E)―
Beta (1Y)1.57
Revenue Growth1.91%
EPS Growth15.71%
CountryUS
Employees3,052
SectorCommunication Services
Sector Strength81
IndustryTelecommunications Services
Share Statistics
EPS (TTM)-0.29
Shares Outstanding176,544,390
10 Day Avg. Volume585,438
30 Day Avg. Volume517,437
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.79
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit2.33
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$5.92Price Target Upside82.72% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
Ribbon Communications Business Overview & Revenue Model
Company DescriptionRibbon Communications Inc. provides communications technology in the United States, Europe, the Middle East, Africa, the Asia Pacific, and internationally. It operates through two segments, Cloud and Edge, and IP Optical Networks. The Cloud and Edge segment provides software and hardware products; and solutions and services for enabling voice over internet protocol communications, voice over long-term evolution, and voice over 5G communications and unified communications and collaboration. It also offers session border controller and network transformation products. This segment serves private, public, or hybrid cloud infrastructures, as well as data centers, enterprise premises, and service provider networks. It also provides multiple solutions for VoIP, VoLTE, VoNR, and UC&C in network, on-premises, or via the telco cloud. The IP Optical Networks segment provides hardware and software solutions for IP networking, switching, routing, and optical transport to support and enable technologies, such as 5G, distributed cloud computing, and corresponding applications. It also offers multiple solutions, including 5G-native solutions for mobile-backhaul, metro and edge aggregation, core networking, data center interconnect, legacy NTR, and transport solutions for wholesale carriers. This segment serves utilities, government, defense, finance, transportation, and education and research industries, as well as service providers and enterprises. It also provides advanced analytics solutions and next generation products that provides cloud-native and streaming analytics platform for networks and subscribers. The company was formerly known as Sonus Networks, Inc. and changed its name to Ribbon Communications Inc. in November 2017. Ribbon Communications Inc. was founded in 1997 and is headquartered in Plano, Texas.
How the Company Makes MoneyRibbon Communications generates revenue through the sale of its communications technology products and services. The company primarily makes money by providing software and hardware solutions such as session border controllers and voice application servers that help organizations manage and secure their communications networks. Additionally, Ribbon earns revenue from maintenance and support contracts, as well as from professional services that assist clients in deploying and optimizing their communication networks. Strategic partnerships with telecom operators and technology vendors also contribute to Ribbon's revenue streams by expanding its market reach and customer base.
Ribbon Communications Financial Statement Overview
Summary
Ribbon Communications shows incremental operational improvements and a stable revenue base, yet struggles with profitability and cash flow generation. The balance sheet is becoming more robust, with improved debt management. However, continued net losses and negative free cash flow pose risks to financial stability and long-term sustainability.Income Statement
The company has shown a steady revenue trend with a slight increase in TTM data. However, persistent net losses and declining gross profit margins indicate challenges in achieving profitability. The EBIT and EBITDA margins have improved in the latest TTM, suggesting operational improvements, but the negative net income continues to be a concern.55
Neutral
Balance Sheet
The balance sheet shows moderate leverage with a declining debt-to-equity ratio, indicating improved capital structure stability. The equity ratio is relatively stable, and the slight improvement in ROE in recent periods suggests better utilization of shareholder funds, though it is still negative due to net losses.60
Neutral
Cash Flow
Cash flow analysis reveals fluctuating free cash flow with a negative trend in the latest TTM period. Operating cash flow has decreased but remains positive, which is positive for liquidity. However, the free cash flow to net income ratio reflects challenges in converting earnings to cash due to ongoing net losses.50
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 833.88M | 826.34M | 819.76M | 844.96M | 843.79M | Gross Profit |
| 439.51M | 379.48M | 400.94M | 444.66M | 493.11M | EBIT |
| 16.87M | -3.60M | -75.70M | -57.03M | 147.76M | EBITDA |
| 52.48M | 43.28M | -50.78M | -140.08M | 194.65M | Net Income Common Stockholders |
| -54.23M | -66.21M | -98.08M | -177.19M | 88.59M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 87.77M | 26.63M | 67.10M | 103.92M | 128.43M | Total Assets |
| 1.16B | 1.14B | 1.26B | 1.35B | 1.55B | Total Debt |
| 383.67M | 287.03M | 387.93M | 442.87M | 474.20M | Net Debt |
| 295.90M | 260.40M | 320.83M | 338.96M | 345.77M | Total Liabilities |
| 757.93M | 691.39M | 737.14M | 820.57M | 860.41M | Stockholders Equity |
| 404.62M | 452.76M | 518.43M | 527.17M | 686.85M |
| Cash Flow | Free Cash Flow | |||
| 27.83M | 7.61M | -39.92M | 2.05M | 74.84M | Operating Cash Flow |
| 50.24M | 17.09M | -26.36M | 19.18M | 101.56M | Investing Cash Flow |
| -22.87M | -9.48M | -12.14M | -14.19M | -330.07M | Financing Cash Flow |
| 37.71M | -47.86M | 931.00K | -33.68M | 319.30M |
Ribbon Communications Technical Analysis
Negative
3.24
Price Trends
3.89
Negative
4.03
Negative
3.72
Negative
Market Momentum
-0.14
Positive
37.24
Neutral
26.67
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RBBN, the sentiment is Negative. The current price of 3.24 is below the 20-day moving average (MA) of 3.48, below the 50-day MA of 3.89, and below the 200-day MA of 3.72, indicating a bearish trend. The MACD of -0.14 indicates Positive momentum. The RSI at 37.24 is Neutral, neither overbought nor oversold. The STOCH value of 26.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RBBN.
Ribbon Communications Risk Analysis
Ribbon Communications disclosed 49 risk factors in its most recent earnings report. Ribbon Communications reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Ribbon Communications Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $191.87M | 27.87 | 7.82% | ― | 18.23% | 81.31% | |
65 Neutral | $330.78M | ― | 0.20% | ― | 9.62% | ― | |
63 Neutral | $140.51M | ― | ― | ― | ― | ||
59 Neutral | $13.76B | 7.65 | -2.18% | 3.85% | 2.32% | -36.56% | |
57 Neutral | $345.89M | ― | -8.45% | ― | 8.50% | -743.51% | |
51 Neutral | $572.00M | ― | -12.42% | ― | 1.91% | 15.71% | |
42 Neutral | $554.63M | ― | -18.92% | ― | 66.77% | -293.79% |
* Communication Services Sector Average
Performance Comparison
RBBN
Ribbon Communications
3.24
0.12
3.85%
RDCM
Radcom
11.97
2.28
23.53%
SIFY
Sify Technologies
4.58
-2.56
-35.85%
ATEX
Anterix
29.84
-1.69
-5.36%
OOMA
Ooma
12.55
5.40
75.52%
SNRE
Sunrise Communications AG Unsponsored ADR Class A
54.09
8.09
17.59%
Ribbon Communications Earnings Call Summary
Earnings Call Date:Apr 29, 2025
(Q1-2025)
| % Change Since: -13.60%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed bag of significant growth in certain segments, especially in Cloud & Edge and specific geographic regions like India and Southeast Asia, but also highlighted challenges such as flat sales year-over-year, lower margins due to product mix, and a decline in the IP Optical segment revenue. The anticipated improvement in gross margins and strong service provider sales are positive signs, but the financial losses and regional challenges pose concerns.Q1-2025 Updates
Positive Updates
Cloud & Edge Business Growth
The Cloud & Edge segment showed strong growth with sales increasing approximately 6% year-over-year, and product and services sales increased by approximately 17% year-over-year. Adjusted EBITDA for the segment increased by 17% year-over-year.
IP Optical Business Excluding Eastern Europe
The IP Optical business excluding Eastern Europe grew by 25% in the first quarter, indicating strong demand and good growth prospects.
Record Sales in India and Southeast Asia
Sales in India increased 80% year-over-year and were up 6% sequentially to the highest level in the last five years. Sales in Southeast Asia increased over 200% year-over-year with multiple new projects.
Strong Service Provider Sales
Business with service providers was robust in the first quarter with sales increasing more than 10% year-over-year and, when adjusted for the suspension of shipments to Eastern Europe, service provider sales increased more than 30% year-over-year.
Improving Gross Margins Anticipated
Consolidated gross margins are expected to improve by more than 400 basis points sequentially in the second quarter due to a better mix of software and regional profiles.
Negative Updates
Sales Flat Year-over-Year
Sales in the first quarter were flat year-over-year and lower than expected, primarily due to the timing of two enterprise projects in the U.S.
Lower Margins Due to Product Mix
Margins in the first quarter were lower than projected due to the mix of shipments and lower sales volume. The mix of Cloud & Edge sales was more concentrated in hardware products and higher professional services revenue.
IP Optical Segment Revenue Decline
Sales in the IP Optical segment were down approximately 6% year-over-year, primarily due to the suspension of shipments to Eastern Europe.
Non-GAAP Net Loss
The quarterly non-GAAP net loss was $5 million, compared to a $1 million loss in the prior year, resulting in a non-GAAP diluted loss per share of $0.03.
Company Guidance
During the Ribbon Communications First Quarter 2025 Financial Results Conference Call, CEO Bruce McClelland provided guidance highlighting a strong outlook for the second quarter and the year. The company projects a 12% year-over-year revenue increase in Q2 2025, reaching between $210 million to $220 million, with adjusted EBITDA expected to rise 38% year-over-year to between $28 million and $32 million. Cloud & Edge segment sales are projected to grow approximately 20% year-over-year, driven by strong momentum with partners like Verizon and federal network modernization opportunities. IP Optical segment sales are expected to grow 5% to 10% sequentially in Q2, despite the previous year's Eastern Europe sales suspension. McClelland also mentioned a significant backlog increase of 35% from the previous year, indicating strong demand, with a book-to-bill ratio of 1.2x in Q1. Adjusted EBITDA was $6 million in Q1, a decrease from the prior year, mainly due to lower-than-expected margins. The company anticipates improved margins in Q2, driven by a better mix of software and regional sales.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.