RBBN - Earnings call transcript Q3 2017 | Ribbon Communications Inc.

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Sonus Networks Third Quarter 2017 Conference Call.

During the presentation, all participants will be in a listen-only mode. Afterwards, we'll conduct a question-and-answer session.

As a reminder, this conference is being recorded Monday, October 30, 2017.

Now, I would like to turn the conference over to Sara Leggat, Head of Investor Relations. ma'am. ahead, go Please

Sara Leggat

very welcome introduce quarter you call. results I'm Communications XXXX to and conference to to pleased morning. you to Ribbon financial Good our third

website CEO; me now and of Sonus. Ribbon; former Ray On Today's of Villare, CFO today Susan CFO call and release shortly previous CFO with Dolan, on A recording sonus.net. IR website and at available the call. supplementary our Interim Daryl data the be and this press Raiford, after have the call been our will posted GENBAND IR to are our of transcript of

prepared be moment with to our IR to a supporting documents these a on our During presentation remarks, we'll locate website. take information. Please referring

on XXXX in all are website. Sonus and merger our affect future be, efforts. opportunities by completed, our latest Networks be including, these strategy, As proxy available is difficulties filed such release, cost to XX-Q of Actual limitation, statements regarding differ customer subject shown timing quarterly and and from on our and factors Sonus leveraging and of XX, conditions, in market two, future events purchasing the of in our note market may case materially annual, ability X-K, slide and without company's report economic SEC forward-looking we'll forward-looking that decisions are that may on results of the the integrate the revenue various on these containment XX-K, and as as or products services, making items joint earnings please Sonus financial business GENBAND each that of impact and call, successfully Networks' market which acceptance recognition, IR and may opportunities and Form our the A contained statements results other outlook. discussion current financial the and today's to risks with statement this now uncertainties of during is September

actual from and to Additionally, many statements. differ cause uncertainties materially could risks results these forward-looking

update specifically to revise statements to While we we forward-looking any some obligation elect point, at may or do so. disclaim

GAAP GAAP our During be reconciliation comparable over in President is our call non-GAAP included financial to of me to release financial on A let Executive Ray Officer, measures non-GAAP our it historic and our website our measures turn issued in referring With measures. press presentation earnings today. to and Chief and that, Dolan. we'll certain

Raymond P. Dolan

of XXth Communications. welcome in the our as this today. is issued call and and was one Thanks, to marks my morning, Sonus the as press to a first call the release. earnings This our Sara, CEO the everyone combined of subsequent earnings formed newly GENBAND which was announced company, and CEO and combination on from Ribbon Communications release your Ribbon

for to using symbol, announce provide secure, continue upon trade fourth will We transition expect SONS, will logic ticker will in symbol, our new new name which short enterprises flexible on the date anticipate Ribbon simple, period. end-to-end and to current The cloud We near a to is solutions In quarter our providers, behind the players. the of take to service this NASDAQ our to we place Communications transition RBBN. we XXXX. future,

very will software-centric name positive. day Since to offer company. scale broader more solution. complete customers, has the a to been Our nimble this our announced feedback merger, received the reflects from agile, new a numerous provide set products and we a Communications of With and customers more I've greater Ribbon

details for easier the a standalone. combined second for to will GENBAND found I'll shift we everyone. Now QX Sonus shown The the the results two are in this math for will let will do be also for show me the and results parts: to first be the deck our and your for convenience, the on in on slide make website, IR basis standalone;

details Daryl stated, then Sara To I'll avoid questions me forward, call defer the CFO Daryl I'll going any on going today. appropriate to of the assume be Communications and both back entire with To CFO. Treasurer. be Susan and Raiford cover role Ribbon are financial Susan today of the of the on Villare and script As and clear, the FP&A Vice and President will forth, will

historical basis loss gross reminder, have reconciled historical periods income operating performance IR share and at website website. the prior on is operating a you regarding framework release. have We a materials today's As consistent all reporting end our periods. we've The the details with per net these our you what been expense, in encourage financial for non-GAAP income, to discussed slides and are IR of and press from our margin, get our on for presented

three, to was that Sonus. quarter for Turning slide solid I'm operating to pleased report very QX another

increase already we was importantly, Most Oracle for than revenue in going convert underway been that QX total and XXXX. that to forward. conversion relationship This or QX year. Wireless, compared which more Our we that's orders XX% XX% increase revenue XXXX. $XX.X a We've received to be couldn't from strategic, was for expect scored continue with year of million, expansion I a sequential will QX engagement, and more to better anticipate from Sonus to last project Verizon which a the

gross streamlining processes. than and our progress to of greater margin year record projected are XX%, software in margin XX%. with through XX.X% be tremendous margins, to of slightly QX, equates was standalone high Sonus' In QX We've total which improvements. on Our margins in to made approximately non-GAAP continuing gross being Sonus revenue R&D a drive principally investment internal driven full the our

Communications. shows of this intensely as trend were another after on results able basis shows quarterly operating solid tightly we were forward DSOs focus end Ribbon statement to deliver a bookings shows $XX quarter this as With operations consolidated five QX, a Slide positive of move operating of Sonus' four and over two six cash and to shows which continue positioning key reflecting days non-GAAP EPS in against XX% standalone QX us X We cash past will basis. were sheet. Slide cash expenses, million of balance $X QX, XX XX% Sonus' we Sonus' customers debt. Sonus' ended – controlled future full QX. $XXX year on from guidance Slide than of We of non-GAAP quarter, linearity. our who had were million. of well We AT&T, our Slide $X.XX stats. at the Verizon for historical QX in no EPS flows, $X.XX. with more customers also million

our up also nicely both accounted past and quarter, for was software-related and more XK/XK two-thirds these product year-over-year. with combined the which this Our the revenue for revenue for couldn't merger solid of be while planning quarter-over-quarter GENBAND. team I delivering results, Sonus of about proud

form slide as to now see to we shown cover the combine are of so we've can merger none X. slide Communications. on GENBAND's you end closed quarterly history, their this included QX, Turning results. XX.X%. EBITDA compared was that gross QX by and our the million highlights GENBAND's higher QX our offset subsequent $XX.X linearity financial I'll $X.X quarter Since, in adjusted prior We've Operating EBITDA. results. were included Ribbon solid to resulting led year margin million. of partially Revenue to financial some to consolidated was margins, Gross an revenues were of of a expenses million. in as $XX.X software

Some major with of the integration for phone important Verizon were our including upgrade a as completed, the strategic partner. system projects Pentagon

further in as QX know formally couldn't a on pause QX forecast regarding I'll pause activity, competitive in to the XXXX. much and SBC some related the reduction that the in likely discuss that me revenue go created for especially we provide It's until today add on enough some products, Let GENBAND well given closed. color don't color to next issues anticipated more activity that as the I that revenue. on than GENBAND our we of call the merger. February the planned were

explain Turning efficiencies each We Ribbon. X, and that at other the of And changes Fiscal and Then be separately provide full we'll data implying net EBITDA the rapidly will or we any which Sonus not of report net the flat, accounting income To standalone share I'll I'll unchanged if adjusted we'll see of savings combined revenue begin two basis to our application the complications slide thus you discussion that and and practical. things results forecast for would will way, estimates same guidance, the we actual during as Sonus calls the XXXX. to QX simple, plan XXXX consolidated is scramble mathematical and Also QX on expect once reporting report in business count and to it XXXX, mid-quarter realize and happen, how to financial occurred results for excluding The actual adjustments and GENBAND, provide for start or year thing keep companies a year per million, EPS purchase combined. to as didn't to completed, share properly be XX%, QX, February show margins standalone accounting that, million and of income $XX equates without we in the approximately numbers our variances. with merger perform gross that integrate required GENBAND. estimates. million. These EBITDA. egg with $X.X non-GAAP $X.XX in adjusted by prior for and full and $XX formally $X million approximately non-GAAP just $XX approximately of be we'll remains can are our guidance. made for million those XXXX roughly our of QX let's when This guidance guidance of are in then QX

consolidation in a While expansion we've and impacted example the are sufficient areas customers, CenturyLink, pick-up flat quarter for offset large our seen order good of other the of guidance to on setback how year. X other outlook. the that projects Level in two fourth we of the Wireless full is project maintain filling The Verizon are now and by

have we turning slide outlook XX, Now for GENBAND the to standalone.

QX, to $XX to improve $XXX QX $XXX million adjusted For within expected a to is to to Gross $XX million. XX%. results XX% This to are of range expected continue range the in margins be million. of EBITDA million revenue to

as company happen, this of the meaning businesses, million nine the tracking remain XX. the XXXX now shown didn't slide slide To adjusted merger I exiting Now which pro run-rate a of EBITDA our plus is for on clear, of outlook $XX the With two basis. slide for are forma if roughly combined adjusted million comfortable the roughly reflects above XX. XXXX, with combined and on parts million projected a be $XX in EBITDA synergies, sum $XXX

the XXXX outlook strategic Finally, before shows shifting discussion, full to slide a for to please XX, Communications. turn more year which Ribbon

numerous the are estimates for the this and There months GENBAND's current gave lot of case, slide which intended of is we'll slide you should accounted realize helpful to footnotes period approach, sum math. parts a report that hope your our slide bottom at stub this you in for help XXXX. believe our of you XX actually so shown share the the we've XX new which components the of Now as quarter you move is we model. I to from fourth adjusted is two you what to approximately the I in of review This information, in we count. understand you rebuild

leadership is be about Friday. I'd around we this a discussion Communications. having organized and shift so impacted only start, and past might solid you who new excited Ribbon Ribbon company to to strategic We've prospects organizational the most a to for notified our the already why on share more changes. Friday, like by Now closed I'm structure, with off

taken would of million approximately months $X million. just QX savings to Additionally, of company-wide the in two which reduction approximately equate actions achieve expected are have cost to savings annualized we of alone, that last $XX

at end-year underpinning EBITDA exceed the basis. initial achieve expect of year approximately exiting to our We million, on XXXX, XXXX $XXX savings least our that estimate million $XX a run-rate will in

we from So positive. point view, a combination extremely financial this believe of is

they Sonus' many of the many numbers, customers the combination. acknowledged and benefits Beyond of customer spoken with I've very largest feedback our the supportive. been has

Kandy firsthand into is could in technology company and are that a scale network received appealed achieve strategic with to that sustained achieve large targeted evidence offering critical of will areas of and to these they a a as will provider endorsing packaged half see XXX one concepts. Fortune unified should will marketplace. Kandy Most bring important some our of Tier first cPaaS that with SBC is far solution workflow. increased I with at to and solid financial feedback the soon proofs service their that as at global investments their in to to radically expect the to greater one has date interest cloud enterprise and continue investment we'll that success. alone, of scale either the also scale assets X players. next number emerging products the our happen. the and We as I required to combination and than allow well this concrete couple simplify enterprises. providers more and platform year service the least that strength and least opportunity Ribbon continue and transform has This we make unique I've that tightly with a progress begin of to customers expect partner

you Skype Business. strategic many for relationship a know, had into enterprise we've years, offerings for Microsoft As their SBCs with providing for

to to We bring real-time explore communications continue to to work Azure. with ways them

this All Alexa their their to open provide opportunities offerings. elastic recently, add technology calling forward. one the your cloud, and Microsoft, trends the I'm current to now likely team of represent Google the team Ribbon provided take we've traditional likely architecture. very you've Amazon great announce this please know solutions the converts Beyond and to that the information and telco I to massive commitment for happy we as resilient architecture service saw Operator, lines. during together rapidly and strength you cloud these large invest a excited agile combined financial that evolving to we're leadership, our in-home for questions. deal have and seen a With assets, to lead talent call,

Operator

from first Dmitry Certainly. Thank William with question line the get we'll to Please our Netis Blair. you. on ahead. go And

Dmitry G. Netis

Okay. you. Congratulations, merger. for guys, closing Thank this

Raymond P. Dolan

Thanks, Dmitry.

Dmitry G. Netis

of a Okay. questions. I couple have

a quantify on $X you may particular thing. like of going upgrades lumpy opportunity offer the maybe as a one-time with not the project for how order, or one-time forward? far a consistent that's customer next get sort with expansion First, million quarter? that that just this a there one-time expansion you and as going is be Can this It on order sounds (XX:XX) continuum did is you orders. expansion Is

Raymond P. Dolan

Dmitry. Thanks. Yes,

the that I that. expansion Oracle So continue of continue network initial to of order opportunity a expect that order, quarters, that order often Ribbon network. more to few maybe half there's convert every and beyond than presence to that There's evolve to about is expansion plenty continue orders to and where

Dmitry G. Netis

Or a came something And of result in side, at Okay. of I noticed Great. GENBAND, we should gross that And is that gross or basis, the XX%. gross there which would GENBAND's on? else obviously? level expect then Is margin be on nicely a an margins maybe margin going cost combined out on rationalization? of to continue upside

Raymond P. Dolan

Yeah.

we're (XX:XX) So, gross XX% (XX:XX) journey my guided course, really that go prepared been XX%, here they're that to initial they've we've as progress software. continue The into a and through remarks there's the if done on, been is model the extensions improvements capacity get forward. and the from think our continues. of can in process hardware-based integration and we – discussions is saw some and margin same capacity you cost I R&D and sales (XX:XX) sometimes in then migrate job there's control details but that to been margins, to actually GENBAND you'd then able like, more and in solution they'll going we good Daryl on which a some have light

drive XXs XXs. focuses we're from It's consolidated the biggest is be the through margin of have low One going the going Ribbon. to XXs, into to to the gross the

Dmitry G. Netis

moment you very business, your the there (XX:XX). all next at kind explain the of reduction this initial Okay. say about that related maybe And in came go or guide, exact didn't the then filed was if kind will would and you thought you you this Would that the of say kind on think preannouncement I still when caught exactly And million prepared of puts down back Very helpful the and something and in of ready and sort which S-X. see from that GENBAND's what you to I be could you that initially any early the or to happened detail takes of happened? $XX you're that weren't maybe to good. outlook what I reduction do quarter, or (XX:XX)

Raymond P. Dolan

Sure, Dmitry.

come of side if at least most been at So we've the SBC going just say of more, they GENBAND to wait business. for with far, companies displace to on takedown, in would comprehensive where because winning least year paused opportunities I'd number to remarks, anticipated in orders the which some looked some forward, range half, so a will quarter have has you Sonus seen what I the prepared about not in full SBC I deceleration that where us us they're the a – back say for another more anticipate million. of SBC did like $XX of is and review my

would in confirm teams as suggest more though. has Both has to until to EBITDA are can just looking EBITDA. that so, at We've start margin the $XXX soon been GENBAND forward as synergies, million been come review this the glad line we to flat back because if comprehensive February to call companies critical to fully improvement about But not the a declining. more today, me is on and I you feel been XXXX. you I'm has about Here's And you never comfortable, But – exit revenue to huge integrated. what just run declining. top, this I can't with This we'll get rate right? but always of as bottom to stabilizing, a revenue get there's – been flat trajectory.

Dmitry G. Netis

as of to getting a maybe the going also quarter products give we on are sense forward, and kind put which should are your shelves which us next next And what ones expect for of be the your to be product as products to going – far discuss you, portfolio, something that that quarter? are you will is rationalization is go-to of prepared ones

Raymond P. Dolan

Yes. CPaaS working we'll teams the on server out with high-level as a There'll powerful (XX:XX) We'll the integrate in be disruption call, be earnings Sonus real tremendous and discussion comfortable virtualized, be detailed road Dmitry, map, but very the There's there the much that been too discussions then fundamental the and our opportunity to have customers. as a I be platform. about will platform, will some much February. think don't technology more talk lot feel I Kandy application the see SBC play in you'll GENBAND and hard in talent unified a into more that platform offer. of and it's

Dmitry G. Netis

Okay. My may. last if I question

out some On projects? the your were the network transformation that? about deals, there I evidence know those, Ray, ability When we that into deployment, TDM (XX:XX) evidence large we when you these some transformation switches You some have of to kind us start see initial may examples will transform type of IP already think XX,XXX of how can we to should indicated there. those or switches an but of will give see you

Raymond P. Dolan

you there how give and we'll XXXX. sense We'll some we as our out we'll that then fourth should and out use to that look have of looks in quarter to in forward some Dmitry, give as evidence some you examples, examples. Yeah. and results, pick Coming be able

Dmitry G. Netis

(XX:XX). so much. Okay. Thank the I'll jump off you line

Raymond P. Dolan

Thank you.

Operator

go we'll Paul Cowen. on to question. ahead Silverstein your next And the the our get Please from with line lines question with of

Paul J. Silverstein

you've $XX which before. it, side? Go question be questions, I don't And us? revenue and a is Or you're OpEx. if and whatever synergies go through one, for of much of the on review that my heard in I two OpEx? that all before, Thanks. actually expecting, what of basic and of for you I've million is assume GENBAND I can you is is think media COGS much then selling? Kandy apologize how hearing question this products other SBC may How terms it simple is don't I've that ahead. the the it's else If recall I reviewed complexion gateways, by Ray, but

Raymond P. Dolan

OpEx, all won't COGS. services Paul, some be be into because Well, will the rolled components of It

would synergies XX% the be sales that a R&D. pretty and will say piece will which in good marketing, of OpEx COGS, about that drive there's and probably margins. drive that's between G&A will rest spread I So and

Paul's first of the as revenue? here, the SBC really want you can to we So pieces (XX:XX). Daryl, – the application haven't you out makeup just and question GENBAND versus but general you're broken speak on server, to – the if piece, of to

Daryl E. Raiford

which is to application Sure, telecom revenue with Paul. solution, of bundled again it's on as the the and phone. on its is to disclosures, important in different architecture It's gateway with carrier. NTr nice speak bulk Paul, any that you softswitch, a itself product emphasize the our sold and media portfolio in GENBAND's previous includes needs servers ways of telephony particular depending (XX:XX) solution or its

revenue a will our mix principally We customer bit. small media between and don't that. our portfolio gateways disclosed would NTr break our quite That of to really change that. and includes we So do out like product track wins and also because TDM definitive We measure recognition, revenue numbers but we've softswitch the SBC. things and software solution attempt

over TDM disclosed our XXXX then be a as expect fallen. dramatically $XX We've that revenue figure in revenue time services and we well. was our TDM And lower to this disclosed revenue we it year. million Our would has

Paul J. Silverstein

said, what is dollars you and application up a to approximation it in (XX:XX)? an possible with come server percent SBC given Daryl, what as so is your revenue of

Daryl E. Raiford

revenue In softswitch XX% a I product as unified and only roughly that disclosed, terms XX% our product communications be say our of is SBCs application would the of would revenue and Telephony media VoIP remaining. we've VoIP to XX% gateways. – software server,

Paul J. Silverstein

to make right, have sure just and it to XX%, I softswitch gateways balance? media I being Sorry, XX% SBC, the want

Daryl E. Raiford

software-only is (XX:XX). which after then some products minor communications, there be sales, would application the a Along and with be telephony will makeup, those server, unified that

Paul J. Silverstein

you. Thank that. appreciate I

Operator

Please We'll our the Kelleher get Mark on Davidson. line go to next Thank D. from A. with question. ahead you with question very much. your

Mark Kelleher

questions. for Great. the Thanks taking

number year? now, into share that be count using count. share tell what the Can right the on the we fully next just is diluted you First, should us

Raymond P. Dolan

XXX million. Next be year would

Mark Kelleher

environment Cisco competitive that? then And competitive of think talk what bit And think situation could with you acquisition? BroadSoft the What now? you a about the right of their maybe announcing do little you Okay. do

Raymond P. Dolan

Well, on under together the couldn't brought thrilled more situation two now, the we've brand. Ribbon companies competitive the be right I that

and the company's it'll us, focused opportunity opportunity of, I in below. layer create for very, the BroadSoft it we, Acme, suite think best already three think for us (XX:XX) It suite us very we've probably maybe if and but got of will better Cisco all BroadSoft's from did because critical not, very of an Cisco, a what is a open provider for service With and with suite products sell virtualization which product Cisco entire CPaaS. a I mass even integrate is compete most the regard still Kandy. to one networks when, an around think huge to regard orientation an solutions it's product SBCs the is. do opportunity we fact, the decision which probably and way to as and replace in of frankly, to to actually to their broad That's bring I will take hard up Oracle to where of suite like focused those gateways some UC successful and company into had really to

to to financial focused, invest opportunity So for I stay continue and performance think it's ourselves. better great drive us a

Mark Kelleher

Thanks. Okay, great.

Operator

from Mesniaeff Thank ahead. get from on We'll much. line Drexel very Please next go to Hamilton. you our Greg question the

Greg Mesniaeff

give revenue Sonus' revenue color Thank you now it that Thanks. profile, was GENBAND's some you. recognition wondering on their the it if particularly more can more turns-oriented or additional I to in us gotten you've relates detail. revenues? chance vis-à-vis see backlog-oriented Yes. to Is Ray, revenue profile as

Raymond P. Dolan

backlog there component they than Sonus. to is Thanks, the Greg. professional network. their a a is GENBAND of because component on services Yes. greater There is greater There to live edge

Ribbon together, revenue. the So nice. a Their we quarters. as improve in expect over There, even drive improved to the really will even on lower of towards little combined the But profile it believe, continue as into we will more and is is it SBC last initially, companies combine our will deferred come six greater It's see improving. higher sell our the give licenses visibility revenue be thing to coming out software Kandy. quarter I to a happens on the the more calories and GENBAND bit I company great application content you'll the greater become side margin Sonus It as (XX:XX) off and has evolve actually as of than we side. more will us server which of that opportunity same backlog (XX:XX). same

Greg Mesniaeff

you. Got

Okay, that's Thanks. very helpful.

Raymond P. Dolan

you, Greg. Thank Sure.

Operator

you Latimore Northland Thank line right the question on we'll much. Please next get to our Markets. And very Mike with from Capital go ahead.

Michael Latimore

Yeah, (XX:XX). great. Thanks

next On that, guess, general year, that? color kind you about of side flattish Ray, of Any (XX:XX) million Are an $XXX or something the kind kind of on you EBITDA. talked things, revenue of revenues like of thoughts I standpoint? means on of rate revenue exit what any that from assuming a

Raymond P. Dolan

not balance be as it our that. characterized quarter GENBAND that be We'll ourselves any Sonus. arms Hey, on around to probably ballpark. Mike. I'd XXXX just the probably but there color use in haven't providing get of the the yet. We're I fourth companies, for to like both would

Michael Latimore

mix then, the of too stable Right. service on kind revenue more service And Any business with obviously, combined the a that thought in area, or a lot or...? companies. is flattish

Raymond P. Dolan

for around the underneath take Mike, of going this pass I'm want now. all on my that are ahead that, get I to Again, projects arms revenue. just go a and to

the GENBAND brought throughout though, with had we've do up our leading announcement companies opportunities company a it we to under competitive that there away feel don't want shift I good, there all. be that also have that we move got to from what expected I remains think we time. Ribbon. great point this reasons haven't that as to integration our to drastic to for to I process two the if And in do been marker don't completely aligned as able decided expect some We at changes. together. out strategic But we direction I to and combined expansion do some put a global

Michael Latimore

level Great. What the And now then, post cash debt a just and close? is question. housekeeping right

Raymond P. Dolan

have are number a saying you're at don't a close? trough looking post But you level, I (XX:XX)?

Michael Latimore

No. is, I I'm of curious cash (XX:XX). the current and guess debt kind just what level

Raymond P. Dolan

be net cash. about $XX Okay. Yeah, we'll million

Michael Latimore

cash. Net

Okay. Right. And then just on – yeah...

Raymond P. Dolan

Sorry. That's gross cash.

Michael Latimore

Okay, And the gross. then debt.

there? be I XXXX. its sort Okay, for half the then in Can bit the company And and then little own it first that the just to got use you APIs a mentioned of interesting. would operate voice interesting Just last, about on more messaging prospects little be going just internally? a of service color more just to Fortune maybe (XX:XX) the video, you XXX talk color used it. and provider Kandy are applications more a think Kandy, some Is how would going little on

Raymond P. Dolan

go a answer level ahead just I'll you Mike. now. Sure, give high and

tremendous As and their technology system much much the to more a trunks of amount used at architecture and a they from they point can case functional much because enterprise I'll we opportunity And of multi-vendor to about becoming talk of their is of But up workflows in as I team, the in create more do at I view, in – look the provider's where a tremendous and look lot the providing as just for than SIP provider value-added to underneath cross that all to we and a of ask from as the simplified a simplified end revenue power just circuits. together strategically, them just a specific right? what service complete for that architecture workflows, get everything redesign us some workflow, used a There's telecom and start enterprise think provide and there's cases. think more integrator XXXX more service their well, a to I'd David come join a of ease outlook articulate our like IT save setup into that. environment

not principal articulate sponsor that really a as (XX:XX) can and objectives he's So like to BroadCloud, you because a under And you pioneer that eclipse closer sense ask describe get but proofs leader of compete is say, do environment the platform. innovator I'll in with, we and of what example, we'd to BroadWorks for we how and step David are if to to actually concept, probably been Kandy give as and our only that Cisco, and what those will.

Okay?

Michael Latimore

Great. you. Thank

Raymond P. Dolan

you. Thank

Operator

much. to Please ahead. the Steve from Provo Cohen (XX:XX). very question our get on you next Thank go line Partners We'll with

Unknown Speaker

that the congratulations of Ray, questions interrelated. Two closing Hi, are deal. sort on

the slower going what for aiming to how mix and anticipate on EBITDA be think said business, is business, forecast products to And I then margin objective the expense the out that more $XXX there? dependent GENBAND of related are do that, given product of achievement a plus the be long take of would First reductions? in get million you cost be you that to the and of to revenue coming XX% gross (XX:XX), than, GENBAND does that side are, going would mean you combined

Raymond P. Dolan

(XX:XX). Steve for question. Thanks Sure, the

didn't have (XX:XX) have So end-period higher number some opportunity guided a and when now seeing XX%, yes, we'll anticipated and enough (XX:XX) above we XX% Even it we expected in contribution that business. have to million I XX% we're know we'll synergies tracking on $XXX then, an that (XX:XX). yet, from might than

now revenue right some said softness the is margin. gross of Now offset higher having by being that,

just So beyond of reluctant projects, we I lower-margin some come revenue guide much back I'm backed has how of don't And quarter. to the to out. not, pushed that is why probably or it some some which fourth will of the us know softness, and create will off been which

the with parts, look rest then will by So just a if savings. you the and be sum been margin greater some at has softness supplemented offset cost the of slightly improvement

a gross Now the next what to we've Ribbon entire then year at do prior do as been range is together becoming revenue to and a is about margin towards of a gross somewhere points basis about with That of XXX cadence companies Sonus guess XX%. XXs be that in low will come able get the year. I'd hope my to the company margin, would goal margin, stream XX% the

call, couple I'll low a hope talk we'll but margin at make at that, least least the We to note of XXs, haven't bottomed make the that up in start February basis of could that try together. first on we in years the we'd about points if I XXX would yet and of that

Okay?

Unknown Speaker

Thanks.

Raymond P. Dolan

pure-play can have has and margin you can, a standalone enterprise a (XX:XX) We that doing networks journey that march about leadership it had questions, And we confidence lot do XX% for Ribbon, continued together out can of as gross model from get Acme Sonus. edge gross team. And we as stable unified there's Just comp provider, they reminder, margins. that across a were XX%? a that can, in were to can you that into to and a XX%? there really I'm number. the – tremendous to If XX%? with I as the the that you a get selling terminating started service there to commitment where XX% you get really can saying, pleased If

Unknown Speaker

Remember that well.

Raymond P. Dolan

Thank you.

Operator

Thank Paul our Please question and much. ahead. the Silverstein get to in very from next Cowen. our in line go line We'll of question you follow-up it's the

Paul J. Silverstein

your go you outsized I rate? how (XX:XX) there's once customer, you about in delivered, on are you could the million you total? XX% one relative expect – that remind that the want do how read appreciate and going run Verizon revenue $XX you orders forward, you you that that so project you talk this – us XX% you we you with the was of think heard original response but much and that with only to should into When any Ray, given just can to much couple view impact I the expect of and you quarter, almost quarters. the Verizon extension Can –

Raymond P. Dolan

Thanks, Paul. Yeah.

to So prior just order close call. half. enough the is We've was a that initial half in below extension project The that, million disclosed call $XX the range. on it

them. would it's know see we out continue the how our hope I at if GENBAND with done former work pattern as all well it's GENBAND's to has way, that's into done my with with I way that of So it expansion on with far. yet be GENBAND. both don't coming Kandy. tremendous as would job The do very the job to created customers, can stable other but played a continue is continue extensive them in our tremendous done we projects strategically additional with project NTr current as to innovate. we'll and them a the way getting look engage so a to what They GENBAND's we beginning FiOs. was integrated strategic by are,

tremendous the energy CenturyLink best a these suite believe AT&T, as to amount together but talented there's together product we not so number is only around world other bring for of the of I the Verizon a to and workforce Xs And Tier best help migrate Ribbon with to networks globally what the bring to them cloud.

Paul J. Silverstein

quarter? million of extension, you $X recognize to all the The in expect of that fourth

Raymond P. Dolan

Yes.

Paul J. Silverstein

XX% a to And Verizon stand-alone? is GENBAND customer

Raymond P. Dolan

Yes.

Paul J. Silverstein

any have other GENBAND Does customers? XX%

Raymond P. Dolan

Daryl?

Daryl E. Raiford

AT&T.

Raymond P. Dolan

AT&T.

Paul J. Silverstein

what AT&T Verizon individually and or collectively? And was

Daryl E. Raiford

– in that's so that's specifically the you merger in and MD&A, point there. Paul, S-X, our in I'll the

Raymond P. Dolan

Yeah.

Paul J. Silverstein

All right.

Raymond P. Dolan

backs And if we dig out Paul, can the (XX:XX), call that (XX:XX).

Paul J. Silverstein

That's fine.

Daryl E. Raiford

give there (XX:XX) to you want a definition MD&A. right on don't wrong specific that, but I in the it's

Paul J. Silverstein

Thank you.

Raymond P. Dolan

Thank any questions, you. others? further If operator, no are there's there

Operator

Cohen (XX:XX). We do line from question have Please the a follow-up go ahead. from of Steve Provo Partners

Unknown Speaker

in I Yeah. a maybe give that? Tier us thing. was non-U.S. quarter, believe, a, update quarter's can you call, last talked about the an further on Ray, On one you X had fourth

Raymond P. Dolan

to of our looks became Wireless good (XX:XX), America the X. did for Oracle as Tier Verizon off really Latin X QX and replacement which in A core we say quarter non-U.S. a an actually Well, in was well. that that referenceable Sonus Tier this win, it

Unknown Speaker

Okay. was That the one. Thanks.

Raymond P. Dolan

continue just to Charter MSOs, and types wins Comcast, year. throughout and continue amount with expect next this to year I of highlight the the We score also into and we to a I'll substantial industry names the cable those referred that

Ribbon So and penetrate for with together a pretty global to good there cable common industry opportunity on to portfolio a suite continue us come the product basis.

Raymond P. Dolan

for and results both we morning. great day. for forward week. and you to Sonus a have good Have Thanks look our your Communications. Thanks GENBAND, as to everyone Ribbon attendance sharing Hope a this covering Happy Halloween.

Operator

Thank today. you gentlemen, you, lines. for a day, disconnect participation call very you for to and everyone. this thank Ladies your does you the and much. thank good conference Have your conclude And everyone. We ask

Ribbon Communications (RBBN) 30 Oct 172017 Q3 Earnings call transcript