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Ribbon Communications Inc. Reports Second Quarter 2024 Financial Results

Published

6 months ago

on

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,

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

$      0.04

$       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

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,

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

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

5,616

Other long-term liabilities

30,601

30,658

Total liabilities

700,430

691,390

Commitments and contingencies

Stockholders’ equity:

Common stock

17

17

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, 

 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

17

2

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,

June 30,

June 30,

2024

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

2024

2023

GAAP Gross margin

50.8 %

51.2 %

48.2 %

Stock-based compensation

0.2 %

0.3 %

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

0.03

Amortization of acquired intangible assets

0.08

0.07

0.09

Litigation costs

0.01

0.01

 * 

Acquisition-, disposal- and integration-related

–

–

0.01

Restructuring and related

0.01

0.02

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,

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

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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SOURCE Ribbon Communications Inc.

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Technology

Huawei and IUCN Launch Tech4Nature Project to Protect Kenya’s Coral Reefs

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January 10, 2025

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NAIROBI, Kenya, Jan. 10, 2025 /PRNewswire/ — Huawei, International Union for Conservation of Nature (IUCN), and local partner Kenya Wildlife Service (KWS) have launched a Tech4Nature project to monitor and protect coral reef and biodiversity in Kenya’s Kisite-Mpunguti Marine Park and Reserve.

Aligned with Huawei’s TECH4ALL initiative and the IUCN Green List, the objective of the three-year project is to strengthen monitoring and management efficacy of the protected area. Located on the southern coast of Kenya, Kisite-Mpunguti Marine Park and Reserve faces a number of nature conservation challenges. These include:

Illegal fishing and insufficient human resources to effectively patrol the area.A lack of remote monitoring of the reserve’s three coral islands coupled with pressures created by tourism, as the fringing reefs are popular diving sites.Limited community awareness of the importance of reef and biodiversity protection.Insufficient communications network infrastructure for underpinning tech-driven monitoring.

“Tech4Nature is an expansive project that falls under Huawei’s digital inclusion initiative TECH4ALL, where we look at ways to implement technology and innovation in various sectors of our day today life and improving global standards and ensure that we have a sustainable way of life in the world,” said Khadija Mohamed, Director of Media and Government Relations for Huawei Kenya.

Underwater cameras, photogrammetry, and audio monitoring technologies will be deployed to monitor marine life, including the biomass and population of parrot fish. In many coral reef ecosystems, parrot fish are a keystone species that, due to their diet, help prevent coral from being smothered by seaweed and algae. The solution will also monitor substrate cover in the reef ecosystems, seagrass cover, and the occurrence of green turtles and bottlenose dolphins, which are classified on the IUCN Red List as endangered and vulnerable, respectively.

“The technology we are introducing is a groundbreaking development for marine conservation in Kenya. It will serve as the first monitoring tool for data collection, analysis, and management in a marine protected area. Additionally, this innovation presents an opportunity to assist the park in attaining IUCN Green List certification, aligning with the sustainability goals valued by tourists and ensuring that future generations can continue to benefit from our marine parks,” said Innocent Kabenga, Country Representative for the IUCN Kenya Country Office.

AI trained to recognize specific target species by sight or sound will provide real-time data-driven insights into the behaviors, populations, and distribution of biodiversity in the reserve and reef ecosystem. The system will also be able to identify boats used for illegal fishing, and send alerts for rangers to intervene in near real time.

A digital power solution and improved network connectivity covering the park and watch tower will enable the rapid transmission of collected data to a cloud server for analysis by AI.

The project will be implemented in partnership with Kenya Wildlife Service (KWS) and Wildlife Research and Training Institute (WRTI). Based on the project’s data-driven insights, the Tech4Nature partners will be able to develop targeted conservation measures for the reserve.

“For us to deliver our mandate of protecting and conserving our wildlife in both terrestrial and marine ecosystems, you have to understand your resources very well. We are partnering with Huawei and IUCN to deploy underwater cameras to acquire some data on marine mammal, corals, and fisheries to make informed decisions. The advantage of this technology it can be deployed in wider area that we couldn’t patrol every single day to get data for day and night for us to make good, informed decisions,” said Adan Kala, Senior Assistant Director, Coast Conservation Area, Kenya Wildlife Service.

In addition, the project will include community outreach to raise awareness about biodiversity changes over time and the presence of different species, including those that are threatened, vulnerable, or endangered.

The site will be assessed against the IUCN Green List Standard, with the goal being that the reserve obtains Green List certification.

About Tech4Nature

Huawei and IUCN launched the Tech4Nature global partnership in 2020 to scale up success in nature conservation through technological innovation. Aligned with Huawei’s TECH4ALL initiative and the IUCN Green List, Tech4Nature has supported 11 flagship projects in 8 countries with tailored solutions to conservation challenges.

Visit the Tech4Nature website: https://tech4nature.iucngreenlist.org/what-is-tech4nature/ 

About TECH4ALL

TECH4ALL is Huawei’s long-term digital inclusion initiative and action plan. Enabled by innovative technologies and partnerships, TECH4ALL is designed to enable inclusion and sustainability in the digital world.

Visit the Huawei TECH4ALL website at https://www.huawei.com/en/tech4all

Follow us on X at https://x.com/HUAWEI_TECH4ALL 

 

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SOURCE Huawei

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Technology

CES 2025 | AAC Technologies Unveils Comprehensive Automotive Solutions, Paving the Way for Cabin Experience Evolution

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January 10, 2025

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LAS VEGAS, Jan. 10, 2025 /PRNewswire/ — At the Consumer Electronics Show (CES) 2025, AAC Technologies, a pioneer in sensory experience, showcased its industry leadership by introducing a full spectrum of automotive solutions that span “acoustics, haptics, sensing, and image recognition.” Drawing on over three decades of expertise in the development and manufacturing of cutting-edge consumer electronics micro-components, AAC is now poised to offer a comprehensive, precise, real-time, and immersive sensory experience to the automotive sector, reinforcing its position as a trusted partner ready to meet the industry’s evolving technological and product demands.

Catering to the surging market demand, AAC presents a ready-to-deploy portfolio of automotive product solutions that address the critical aspects of intelligent driving and cabin experiences. The company is committed to expanding its innovative product offerings to lead the industry. AAC has been steadily expanding in the automotive industry since 2019, largely driven by the growing adoption of its automotive solutions. These solutions are playing an important role in advancing the capabilities of intelligent cockpits.

AAC’s Automotive Acoustic Solutions for Digital Cockpits

AAC Technologies has unveiled its cutting-edge digital cockpit solutions, showcasing a fusion of innovation in acoustics. AAC offers a holistic approach to audio system design, encompassing hardware, algorithms, and fine-tuning, all aimed at delivering a supremely immersive audio experience across various scenarios.

At CES, AAC set up a state-of-the-art 7.1.4 listening room, showcasing its self-developed advanced automotive audio algorithms such as Independent Sound Zones, NLC PRO (distortion suppression), Audio Track Separation, Virtual Surround (Plus), Virtual Venue, and 3D Chime. In collaboration with Premium Sound Solutions (PSS), a world-leading provider in acoustic components and sound systems, AAC has presented an array of top-tier offerings, including automotive speaker products and solutions, which garnered significant attention.

AAC also introduced the “Smart Audio Box,” a joint creation with Smart that marks the industry’s first all-scenario portable Hi-Fi speaker system designed for vehicles. Debuted on the Smart #5 model, this speaker system offers a unique audio experience, blending the boundaries between driving and the wild world of sound.

AAC’s Automotive Haptic Seat Solutions

The automotive industry is now redefining the car as more than just a way to get around—it’s becoming an extension of our living spaces. With this shift, expectations for the in-car experience are soaring, particularly when it comes to the haptic feedback and auditory elements of smart cockpits. At CES, AAC unveiled its groundbreaking haptic seat solution for vehicles, which fuses advanced haptic and acoustic technologies to create a more tranquil driving safety alert system , amp up entertainment with immersive sound, and even simulate engine sounds for an authentic driving feel, all while providing a space for relaxation and meditation. This innovation, a joint effort with Porsche China’s Innovation Office as part of the Rhythm Space project, is set to redefine comfort and pleasure in the driving experience for all on board.

AAC’s Automotive Sensing Solutions

AAC is leading the way in providing advanced sensing solutions and sensor technologies tailored for the automotive industry. AAC’s automotive-grade MEMS microphones boast a compact design, exceptional signal clarity(SNR), minimal distortion(THD), and a consistent frequency response. They also excel in maintaining uniform sensitivity and phase alignment, which translates to enhanced voice services and reliability in both the cabin and exterior environments. This innovation significantly boosts the user experience in voice interactions across a range of applications.

In addition, AAC has unveiled a line of vehicular inertial products, highlighted by our trio of high-performing MEMS IMUs. These units are engineered for accuracy and stability, designed to meet the diverse demands of various applications. They play a pivotal role in ensuring precise vehicle positioning and safety during the critical phases of advanced driver assistance and autonomous driving, reinforcing our dedication to advancing automotive safety and interaction.

AAC’s Automotive Image Recognition Solutions

In the ongoing quest for enhanced intelligent driving, ensuring safety and comfort has become a primary focus in the automotive industry. At this year’s CES, AAC showcased its complete lineup of lenses and camera modules. This includes those for intelligent driving applications like ADAS and surround view, as well as those for intelligent cockpit features such as DMS and OMS. Furthermore, AAC presented an integrated cockpit monitoring system. Collectively, these innovations provide accurate data for machine vision, thereby enhancing safety and intelligent driving capabilities. AAC’s solutions are designed to meet rigorous industry standards, including the EU’s DDAW (Driver Drowsiness and Attention Warning), E-NCAP (European New Car Assessment Programme), and China’s GB/T 41797-2022 “Performance Requirements and Test Methods for Driver Attention Monitoring Systems”.

AAC has also expanded its product line with a variety of automotive motor solutions. For example, AAC’s brushless motors, known for their quiet performance and adaptability, ensure a smooth and quiet experience for seat adjustments. AAC also offers linear control brake motors (EMB motors), linear control steering motors (RWA and HWA motors), and general EPS motors for advanced chassis applications, all of which have been tested and validated in multiple vehicle models. As the automotive industry advances towards higher levels of driving assistance, the adoption of linear control systems for chassis is becoming crucial. These motors use sensors to detect environmental information, replacing mechanical connections with electrical signals. This technology offers high precision, fast response times, compact designs, and lightweight construction, making it suitable for mass production. In scenarios such as highway driving, navigating narrow roads, and parking, these systems greatly enhance user comfort and meet the increasing demands for improved vehicle maneuverability and active safety.

Moving forward, AAC Technologies will continue to collaborate closely with automotive industry partners. By staying attuned to user preferences and driving technological advancements, AAC aims to lead the industry trend. The company’s focus is on delivering an outstanding intelligent cockpit experience, making every drive a source of joy and immersive sensory pleasure.

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SOURCE AAC Technologies

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Smart Food Packaging Market worth $35.69 billion by 2029 – Exclusive Report by MarketsandMarkets™

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January 10, 2025

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DELRAY BEACH, Fla., Jan. 10, 2025 /PRNewswire/ — The smart food packaging market is estimated at USD 26.42 billion in 2024 and is projected to reach USD 35.69 billion by 2029, at a CAGR of 6.2% from 2024 to 2029, according to a report published by MarketsandMarkets™.

The study ‘Active Packaging in the Food Industry’, published in October 2024, explores the growing significance of active packaging in response to changing consumer demands and market trends. Unlike traditional packaging, which is designed to be inert, active packaging interacts with the product and its environment to extend shelf life and maintain food quality. This can involve incorporating additives into packaging systems, such as oxygen and ethylene scavengers, antimicrobial agents, antioxidants, and flavor-absorbing or releasing compounds. Intelligent packaging systems, like time-temperature indicators and gas detectors, are also discussed, emphasizing the importance of consumer acceptance for the commercial success of these technologies. The study reviews key mechanisms used in active packaging, including oxygen scavengers, which reduce the presence of oxygen in food packaging by using iron-based or ascorbic acid-based systems. These methods help maintain product freshness by limiting oxidative damage. Carbon dioxide-generating systems are also used to suppress microbial growth, particularly in meat, poultry, fish, and cheese packaging. Furthermore, ethylene scavengers are vital for extending the shelf life of fruits and vegetables by controlling ripening processes.

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Other applications discussed include the use of flavor and odor absorbers/releasers, which enhance the sensory properties of packaged food, and antimicrobial packaging that inhibits microbial growth to ensure food safety. The potential of nanotechnology to develop new and more effective active and intelligent packaging solutions is highlighted, paving the way for further innovations in the food packaging industry. This study underscores the need for advanced packaging technologies to meet consumer demand for fresh, safe, and high-quality food products and their critical role in prolonging shelf life and improving food safety.

The Meat, Poultry & Seafood is the having a largest share within the application sector of the smart food packaging market.

Due to growing global demand, meat, poultry, and seafood accounts for the highest market share of application in the smart food packaging market. Its needs lie in extending shelf life, safety, and traceability. As per data provided by the USDA from October 2024, Brazil dominates global chicken meat exports during 2025 as the production will be 11.8 million tons. Australia’s poultry production will increase by 2 percent to 2.6 million tons, as high global demand is expected. Beef exports from Australia will also reach a record 1.9 million tons in the year, as its demand increases in the US. These trends point towards the increasing international meat trade and export opportunities.

Increased production and exports require more advanced smart packaging technologies, such as modified atmosphere packaging and active packaging, for freshness, less food waste, and greater safety. This will fuel innovation and adoption of smart packaging solutions, especially in global markets like East Asia and North America.

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The active packaging segment holds significant market share in the smart food packaging market during the forecasted period 2024-2029.

Active food packaging accounts for a major market share in the smart food packaging industry, which is mainly attributed to the quality improvement, safety, and shelf life that active packaging can offer. Technologies, including oxygen scavengers, moisture absorbers, and antimicrobial agents, respond to some of the most important consumer needs related to freshness and reduction of food waste.

It is primarily gaining adoption across key industries, including meat, poultry, seafood, and dairy, where growing concerns about global food safety and sustainability are driving growth. Additionally, increasing export of perishable food products, particularly in North America, Europe, and Asia-Pacific, further supports the increasing demand for active packaging. As manufacturers look for more innovative ways to meet their regulatory requirements and consumer demands, active packaging will maintain its position in the market.

Based on region, Europe has a significant share in the smart food packaging market.

The growth of the food and beverage industry in Europe is a major driving force for the smart food packaging market, which is motivated by the increasing demand for advanced packaging solutions that would ensure food safety, traceability, and extended shelf life. According to European Commission data (March 2024), the food and drinks industry generates ~USD 245 billion (€227 billion) in added value and employs 4.6 million people, making it the EU’s largest manufacturing sector in terms of jobs and value. SMEs are over 99% of businesses in this ecosystem. The sector has also recorded a food trade surplus, with exports doubled over the last decade to exceed ~USD 196 billion (€182 billion), contributing a positive balance of nearly ~USD 32 billion (€30 billion). These strong figures, combined with growing trade opportunities and EU Single Market benefits, are driving demand for smart food packaging technologies to support efficient, sustainable, and competitive food supply chains.

The report profiles key players such as Amcor plc (Switzerland), Mondi (UK), Sealed Air (US), Berry Global Inc. (US), Toyo Seikan Group Holdings, Ltd. (Japan), THE TETRA LAVAL GROUP (Switzerland), Crown (US), 3M (US), MITSUBISHI GAS CHEMICAL COMPANY, INC. (Japan), Multisorb (US), Huhtamäki Oyj (Finland), Timestrip UK LTD (UK), Stepac (Israel), Checkpoint Systems, Inc. (US), and Novipax Buyer, LLC (US).

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Browse Adjacent Reports @ Food and Beverage Market Research Reports & Consulting

Related Reports:

Food Traceability Market Size, Share, Industry Growth, Trends Report (Technology & Software) by Technology Type (RFID, Barcodes, Infrared, Biometrics, GPS), Software Type (ERP, LIMS, Warehouse), Software End User, Technology Application and Region – Global Forecast to 2025

Food Safety Testing Market by Technology (Traditional and Rapid), Target Tested, Food Tested (Meat, Poultry, Seafood, Dairy, Processed Foods, Fruits & Vegetables, and Cereals & grains) and Region – Global Forecast to 2027

About MarketsandMarkets™

MarketsandMarkets™ has been recognized as one of America’s best management consulting firms by Forbes, as per their recent report.

MarketsandMarkets™ is a blue ocean alternative in growth consulting and program management, leveraging a man-machine offering to drive supernormal growth for progressive organizations in the B2B space. We have the widest lens on emerging technologies, making us proficient in co-creating supernormal growth for clients.

Earlier this year, we made a formal transformation into one of America’s best management consulting firms as per a survey conducted by Forbes.

The B2B economy is witnessing the emergence of $25 trillion of new revenue streams that are substituting existing revenue streams in this decade alone. We work with clients on growth programs, helping them monetize this $25 trillion opportunity through our service lines – TAM Expansion, Go-to-Market (GTM) Strategy to Execution, Market Share Gain, Account Enablement, and Thought Leadership Marketing.

Built on the ‘GIVE Growth’ principle, we work with several Forbes Global 2000 B2B companies – helping them stay relevant in a disruptive ecosystem. Our insights and strategies are molded by our industry experts, cutting-edge AI-powered Market Intelligence Cloud, and years of research. The KnowledgeStore™ (our Market Intelligence Cloud) integrates our research, facilitates an analysis of interconnections through a set of applications, helping clients look at the entire ecosystem and understand the revenue shifts happening in their industry.

To find out more, visit www.MarketsandMarkets™.com or follow us on Twitter, LinkedIn and Facebook.

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