Ribbon Communications (NASDAQ:RBBN) Releases Earnings Results, Misses Expectations By $0.02 EPS

Ribbon Communications (NASDAQ:RBBN) issued its earnings results on Tuesday. The communications equipment provider reported ($0.03) EPS for the quarter, missing the consensus estimate of ($0.01) by ($0.02), Briefing.com reports. Ribbon Communications had a return on equity of 19.70% and a net margin of 1.96%.The business had revenue of $192.34 million during the quarter, compared to analyst estimates of $191.52 million. During the same period last year, the business earned $0.05 EPS. The business’s quarterly revenue was down 13.0% on a year-over-year basis.

Here are the key takeaways from Ribbon Communications’ conference call:

• Second-quarter results exceeded expectations: Revenue rose 18% sequentially to $192 million and adjusted EBITDA improved by $20 million to $12 million, with both operating segments contributing to the improvement.
• IP Optical momentum was strong. Product and service bookings reached an all-time high with a 1.6x book-to-bill ratio, while backlog increased more than 60% year to date; data-center interconnect, critical infrastructure, and defense projects were key drivers.
• Ribbon highlighted strategic growth opportunities in enterprise communications and AI, including major Fortune 50 customer wins and a partnership integrating Ribbon’s carrier-grade voice capabilities into Salesforce’s Agentforce Contact Center.
• The company moderated its second-half growth expectations because U.S. Tier 1 voice-modernization deployments, particularly at Verizon, are progressing more slowly than anticipated. Full-year revenue guidance is now $810 million-$840 million, below the initial outlook.
• Higher component and logistics costs are expected to add approximately $2 million per quarter in the second half, while supply constraints may persist; full-year gross-margin guidance was reduced to 51%-52%.

Ribbon Communications Trading Up 6.8%

Shares of NASDAQ:RBBN opened at $2.19 on Thursday. The stock has a market capitalization of $385.75 million, a PE ratio of 27.38 and a beta of 1.34. Ribbon Communications has a 1 year low of $1.80 and a 1 year high of $4.24. The firm has a fifty day moving average price of $2.49 and a 200 day moving average price of $2.45. The company has a current ratio of 1.37, a quick ratio of 1.09 and a debt-to-equity ratio of 0.77.

Hedge Funds Weigh In On Ribbon Communications

Several institutional investors have recently bought and sold shares of the stock. Vanguard Group Inc. boosted its stake in shares of Ribbon Communications by 2.2% during the 3rd quarter. Vanguard Group Inc. now owns 7,691,070 shares of the communications equipment provider’s stock worth $29,226,000 after acquiring an additional 166,683 shares in the last quarter. State Street Corp increased its holdings in shares of Ribbon Communications by 0.3% during the 4th quarter. State Street Corp now owns 2,099,793 shares of the communications equipment provider’s stock valued at $6,047,000 after acquiring an additional 5,280 shares during the last quarter. Arrowstreet Capital Limited Partnership increased its holdings in shares of Ribbon Communications by 99.6% during the 3rd quarter. Arrowstreet Capital Limited Partnership now owns 964,446 shares of the communications equipment provider’s stock valued at $3,665,000 after acquiring an additional 481,276 shares during the last quarter. Jacobs Levy Equity Management Inc. raised its stake in shares of Ribbon Communications by 88.9% in the 4th quarter. Jacobs Levy Equity Management Inc. now owns 890,168 shares of the communications equipment provider’s stock valued at $2,564,000 after acquiring an additional 418,967 shares in the last quarter. Finally, Goldman Sachs Group Inc. raised its stake in shares of Ribbon Communications by 85.7% in the 4th quarter. Goldman Sachs Group Inc. now owns 787,493 shares of the communications equipment provider’s stock valued at $2,268,000 after acquiring an additional 363,334 shares in the last quarter. 70.92% of the stock is currently owned by institutional investors.

Key Stories Impacting Ribbon Communications

Here are the key news stories impacting Ribbon Communications this week:

• Positive Sentiment: B. Riley upgraded Ribbon Communications from “neutral” to “buy” and assigned a $3.30 price target, implying substantial upside from recent levels. Finviz analyst upgrade report
• Positive Sentiment: Rosenblatt Securities maintained a “buy” rating while lowering its price target to $3.50 from $4.00. The revised target still indicates significant potential upside. Benzinga analyst price target report
• Positive Sentiment: Management reported 18% sequential revenue growth in the second quarter and a $20 million improvement in profitability. Record IP Optical bookings, North American growth, critical-infrastructure and data-center wins, and the selection of Ribbon by Salesforce for its Agentforce Contact Center support the company’s longer-term growth narrative. Ribbon Communications second-quarter financial results
• Neutral Sentiment: Ribbon guided for third-quarter revenue of $215 million to $230 million, broadly near analysts’ expectations, while full-year revenue guidance of $810 million to $840 million is slightly below the $838.1 million consensus at the midpoint.
• Negative Sentiment: Second-quarter adjusted EPS was a $0.03 loss, missing the expected $0.01 loss. Revenue of $192.34 million exceeded estimates of $189.99 million, but declined 13% year over year; GAAP operating loss, adjusted EBITDA, and gross margin also worsened from the prior-year quarter. Zacks second-quarter earnings report

Wall Street Analysts Forecast Growth

Several equities research analysts recently issued reports on the company. B. Riley Financial raised Ribbon Communications from a “neutral” rating to a “buy” rating and set a $3.30 price objective for the company in a research note on Wednesday. Rosenblatt Securities lowered their target price on Ribbon Communications from $4.00 to $3.50 and set a “buy” rating on the stock in a research note on Wednesday. CL King set a $3.30 target price on Ribbon Communications in a research note on Wednesday. Weiss Ratings downgraded Ribbon Communications from a “sell (d+)” rating to a “sell (d)” rating in a report on Monday, May 11th. Finally, Wall Street Zen lowered shares of Ribbon Communications from a “buy” rating to a “hold” rating in a research report on Sunday, May 3rd. Five analysts have rated the stock with a Buy rating and one has issued a Sell rating to the stock. According to data from MarketBeat.com, the company presently has a consensus rating of “Moderate Buy” and an average price target of $3.52.

Ribbon Communications Company Profile

Ribbon Communications Inc is a global provider of real-time communications software and network solutions for service providers and enterprises. The company’s offerings address the full life cycle of voice, video and data transmission across fixed, mobile and cloud environments. Ribbon’s technology portfolio is designed to enable secure, intelligent and interoperable communications in applications such as unified communications, contact centers, wholesale VoIP interconnect and next-generation 5G networks.

Ribbon’s product suite includes session border controllers (SBCs), which secure and interwork IP voice and multimedia sessions; Diameter signaling controllers for 4G/5G policy and charging control; network edge virtualization platforms; and analytics engines for service assurance and fraud management.