Ribbon Communications (RBBN) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was $181.3 million, up 0.9% year-over-year, driven by strong cloud and edge demand and robust service provider sales, while IP Optical Networks declined.

• Backlog increased 35% year-over-year, providing improved visibility and confidence for the remainder of 2025.

• Adjusted EBITDA was $6 million, with a margin of 3%, down from $12 million year-over-year.

• Net loss for Q1 2025 was $26 million, or $(0.15) per share, an improvement from a $30.4 million net loss in Q1 2024.

• Book-to-bill ratio was 1.2, indicating strong order intake.

Financial highlights

• Non-GAAP gross margin was 48.6%, down from 55.1% year-over-year; GAAP gross margin declined to 45.4% from 51.2%.

• Operating expenses decreased year-over-year, with Q1 2025 at $102 million, reflecting lower R&D and sales and marketing costs.

• Product revenue was $82 million, down 6.4% year-over-year; service revenue rose 7.9% to $99 million, driven by U.S. service providers.

• Cash from operations was negative $3.5 million to $4 million; closing cash balance was $74 million at quarter end.

• Net debt leverage was 2.4x at quarter end; term loan balance was $347 million at 10.6% interest.

Outlook and guidance

• Q2 2025 revenue projected at $210–$220 million; full-year 2025 revenue guidance unchanged at $870–$890 million.

• Q2 2025 non-GAAP gross margin expected at 53–53.5%; full-year at 54–55%.

• Q2 2025 adjusted EBITDA forecasted at $28–$32 million; full-year at $130–$140 million.

• Margins expected to rebound by over 400 basis points sequentially in Q2 as product and regional mix improves.

• R&D expenses projected to increase modestly in 2025, while general and administrative expenses are expected to decrease.