Ribbon Communications (RBBN) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue was $163 million, down 10% year-over-year, with both Cloud & Edge and IP Optical Networks segments declining due to lower demand and delayed purchases.

• Gross margin and earnings were below expectations, with GAAP gross margin at 42.9% and non-GAAP at 45.8%, impacted by lower professional services revenue, unfavorable mix, and higher service costs.

• Adjusted EBITDA was a loss of $8 million, down from $6 million in Q1 2025, and net loss widened to $34.5 million.

• Stronger demand in India and EMEA offset weaker U.S. tier one provider sales, with new wins in Data Center Interconnect and secure private optical networks.

• Leadership transition: Rick Marmurek promoted to CFO as John Townsend departs.

Financial highlights

• Non-GAAP gross margin was 45.8%, down 280 basis points year-over-year; GAAP gross margin was 42.9%.

• Adjusted EBITDA was a loss of $8 million, $14 million lower than prior year; non-GAAP net loss was $8 million, or $0.05 per diluted share.

• Cash flow from operations was negative $22 million; closing cash was $70 million; net debt leverage ratio at 2.9x.

• CapEx spend was $3 million, in line with normal run rate; outstanding term debt was $339.9 million at 9.9% average interest.

• Maintenance revenue comprised 39% of total revenue; top 10 customers accounted for 49%.

Outlook and guidance

• Q2 2026 revenue expected between $185 million and $195 million; adjusted EBITDA between $9 million and $14 million.

• Full-year 2026 revenue guidance is $840 million to $875 million; non-GAAP gross margin expected at 53%.

• Management expects margin expansion and revenue growth in the second half of 2026, with higher deployment levels at major customers and continued strength in India.

• R&D and G&A expenses are expected to increase modestly in 2026; additional restructuring expenses of approximately $4 million anticipated.