Ribbon Communications (RBBN) investor relations material

Executive summary

• Q3 revenue was $218.7M, up 14% QoQ and 1.6% YoY; Adjusted EBITDA was $26.8M, up $15M QoQ, while GAAP net loss narrowed to $9.1M from $26.9M in Q2.

• Demand was supported by U.S. service-provider voice modernization, IP and optical projects, government and defense work, and data center interconnect activity.

Financial highlights

• Non-GAAP gross margin was 50.3%, up 100 bps QoQ and down 230 bps YoY; non-GAAP operating expenses were $88M and non-GAAP operating margin was 10.3%.

• Non-GAAP net income was $12.4M and diluted EPS was $0.07; GAAP operating income was $5.6M and GAAP net loss was $9.1M.

• 9M revenue declined 7.1% YoY to $573.7M; GAAP net loss widened to $70.5M from $49.4M, and Adjusted EBITDA fell to $30.4M from $66.6M.

• Q3 product revenue rose 10.3% YoY to $121.3M, while service revenue declined 7.6% to $97.4M.

Outlook and guidance

• Q4 revenue guidance is $233M–$247M, non-GAAP gross margin 53.5%–54.5%, and Adjusted EBITDA $40M–$47M; FY26 revenue guidance is $807M–$821M.

• Q4 growth is expected from both segments, led primarily by Cloud and Edge; software mix and higher professional-services revenue are expected to support margins.

• Guidance assumes ~$2M quarterly product-cost increases from components and logistics; targeted 2027 price increases could partly offset costs.

• Some Q4 supply constraints may shift $5M–$10M of customer demand into the following quarter.

• 2027 growth drivers include voice-enabled enterprise AI applications, defenses against AI voice phishing, and data-center fiber infrastructure demand.