RBBN - Earnings call transcript Q3 2019 | Ribbon Communications Inc.

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Operator

Greetings. Welcome to Ribbon Communications Third Quarter 2019 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded.

to Investor conference Relations. like host, to now Savarese, Lindsay would turn over the your I Thank you.

begin. may You

Lindsay Savarese

Good and afternoon Relations and results welcome President me to Ribbon's third Hobbs, Fritz I on call Ribbon’s Lindsay today the are where And are conference CEO; call of our section available. Today's CFO. live both quarter Raiford, relations am Savarese, Ribbon. press being webcast Investor data and for and at investor ribboncommunications.com, our will Daryl is and be currently the our with call. release archived XXXX financial supplemental on website

global materially to results, restructuring and that statements statements risks and from may are and like anticipated growth, regarding forecasts conditions in marketplace this actual Such make our activities, on call, cause assumptions from current expectations, differ benefits I'd could we containment cost remind results you that economic based and the our to statements. the uncertainties financial include certain opportunities business, forward-looking other our during today. acquisitions, discussed that Ribbon's

contained are company's statements statements by other cautionary and annual Ribbon's filings. Form most their recent SEC entirety forward-looking qualified report the in on Any in XX-K/A

to we While be to update forward-looking may some law. revise point, by required elect we so, except at specifically statements obligation any may disclaim or do as

about and a basis, to on non-GAAP metrics EBITDA non-GAAP basis. of supplemental website. utilize Relations within of data metrics. refer the various a We GAAP in on adjusted release Statements metrics Investor have And are press indicated section non-GAAP are to of reconciliation and our otherwise are to of GAAP the our unless on results these our discussed our profitability assess Not all provided performance business. the where a metrics we

And now, Fritz. turn over I call like to to the would

Fritz Hobbs

our third then financial I everyone trends call of to performance and turn afternoon with along to Daryl good results noteworthy the some for more accomplishments. begin will detailed of I and will outlook. the our on and Lindsay of you, key for a quarter with review call. our Thank business the review

results expectations. of third Adjusted lower EBITDA our with gross financial sequentially the operating strength was margins revenue quarter $XXX Our and expenses. were and was line adjusted $XX on million. higher EBITDA million in rose GAAP

business view state pillars set track being fully on the I increasingly last of center underpinning our our products, achieve software virtualized our as on year strategy. the business to to out We core our analytics faster which cloud-based market. edge in application our software. growing and as presence software enterprise and to our we our the regard service than market, sought the of security expand provider further We through segment

EBITDA grew compared revenue. lower Adjusted of quarter quarter to second third on XXXX the

year-to-date lower network of due mix the nine XXXX XX% the transformation software software deployment first and product our in pure revenue revenue to Our rose sales. with projects compared increased of months timing XXXX. our Nevertheless, was of

In revenue in revenue. product marking our half accounted quarter, for sales majority product fact, software accounted the revenue of time the for software first than our the that of more third

margins. As higher shift drives encouraging gross was it to noted revenue we as the higher quarter, software last

to sales. compared line attached revenue of we uplift results, have top appliance dampens it because However, less

addition during stream. sales progress good and business diversifying we In to growing our in our higher the third software quarter, enterprise made revenue

with of quarter over our as towards XX% from and third on XX% moves the our software I'm up I pleased rose enterprise the initiatives. Our in as space edge strategic enterprise to revenue XX% second XXXX. Ribbon, quarter our revenue, progress both well the quarter product accounted of and view as for second

I'd the to quickly Now review during of some third quarter. our like key accomplishments

its on SBC to virtual continue We Verizon work with migration.

Teams enterprise services service with customers Ribbon secure for routing, by SBC to Verizon's direct Microsoft completed we offering, which quarter, virtual Verizon's the Microsoft Teams' powered testing network connectivity. is allowing a as to During migrate

to at we and Ribbon's to combat our with was multi-year help its network selected network effort to Verizon Verizon, software transformation legacy solutions, a Further help continue large-scale modernize robocalling.

topic to deploy combination providers session, to STIR/SHAKEN the our in with with the On of address their our robocalling, providers software multiple MSO challenge service we're security, cloud solutions cable a customers. for help working large service robocalling and

cloud two in are X services. IP helping We our Tier with network and session, to providers with PSTN service interconnects Japan migration and security, software

their media also TELUS at locations. services network transformation network products with help solutions, We them Canada providing services gateway our multiple fixed transform are fixed to and in voice

With UC services engaged cable provide work with their multiple they service to for and as our enterprise deploy are to we their offerings offerings, assurance provider and edge MSOs a customers. large business

enterprise our solutions. expanding also are We edge

For customers worldwide provider wholesale customers. its for SaaS deploy services to Network, and leading offering telecom a of has telecommunication for enterprise business CloudXEdge example, Peerless up our signed --

During our providing we by solutions space and the third also continued quarter, cloud make progress customers. certain to solutions in security of our provider applications service to

Africa operating and solutions. East launched CloudTalk XX customers Asia, to across enterprise provider UAE application the SMB in large example, our the For using service offering a countries Etisalat, officially and both in its large Middle

reliable CloudTalk with of phone system traditional features hosted and cloud enables services. a unified collaboration plus a and the deliver carrier-grade PBX all Etisalat to communications service business communication

to monitor networks. addition, their In the customers security purchased solution quarter and enterprise multiple Ribbon's during help third secure

evaluating. security providers XX are now enterprise and We other service nearly customers customers offering and our using many have

API continue offerings to grow support business digital marketplace of new expanding its We AT&T customers cloud-based our services. to with

to and outlook. now our our you provide to Daryl color more I'll the full call on through turn results take over

Daryl Raiford

Thank you, Fritz.

I to applying a purchase no detailing change accounting. increase where for As our non-GAAP our format we about our everyone revenue loss like available financial quarter's performance second slides longer on Relations revenue Investor historical reminder, remind the website. of are section would

presentation basis. conformed prior to this have periods We

$XXX $XX our third EBITDA share XX%; million. adjusted total expenses earnings non-GAAP summary, non-GAAP follows: In diluted as were XXXX financial per was non-GAAP quarter $X.XX; margin $XX gross operating was were results million; revenue million; was and was

for represented and transformation and applications of accounted software were revenue. solutions First security product solutions revenue X%. quarter, network third Session the XX% let XX% me solutions in address while our

Within quarter third of XX% these sales quarter total software of in categories our up third in product XXXX. comprised the XX% our revenue from

came growth of Most in from virtualized contributed more months of modest session example software for our nine application solutions with analytics security, the products. from sales first growth this and increasing

in provider In segments conditions continued market States. terms our to segment particularly market market United service largest the of be our challenging in

example Tier a both quarter For providers service the third are in in which customers. two the resulted a business of from pause our combination during X undertaking CapEx U.S.

our enterprise revenue We in edge including in recently accounting with expanded now partners new quarter. our of our in terms in our sales enterprise contribution XX% product of Asia-Pacific Westcon. distribution enterprise third the our product EdgeMarc mix Latin customers America last and But from investment market, higher has yielded of year Europe, solutions line for

the believe and growth a for edge enterprise development to We broad Ribbon investing are represents existing opportunity expand portfolio. market further our

in a with Teams, used software develop to enterprises worldwide. of than functionality support announced collaboration unified recently Inc. a communications product critical Bandwidth also We Microsoft by more XXX,XXX

towards Turning were longer-term with EBITDA our margin. adjusted for progress to we goals our profitability, pleased

our of us of quarter fourth achieve result level quarter our high our third with margin EBITDA with margin of XX% on The ahead last in structure launch saw of cost adjusted us improved coupled year. a deliver seasonally expectations and Ribbon an par to enabled gross since This XXXX. record the

the September and credit at revolving million. our to XX. line term Borrowings were of were under sheet. Turning balance million $XX Cash loan investments $XX and

full to turn to year like I'd Now outlook. our

As we mentioned the remains in service near earlier and persist the I my in market soft, these conditions United provider term. to remarks particularly States the expect for

our the further exists the believe to software our potential we software increase line top revenue pure virtualized higher-margin of to will our for addition, dampen mix pace products. which customers as their adoption In of shifts solutions

high-margin increasing our the Bandwidth approximately earlier. sales such expand adjusted to Due collaboration where expectations investments R&D we year these expect see million. And we opportunities our that I are as $XX EBITDA versus of million to be to $XX our previous factors we full now software our noted

I on and percentage XXXX. from want million is plans, result year of account taking EBITDA current higher view that market increase guidance full in conditions nearly five a XX%, track a to margin to emphasize $XX our adjusted full sizable our year above points last our into year's be and projected represents this adjusted investment $XX million than to EBITDA of

formal the question. operator to all Ribbon. for time, you of continued Operator, this support That call your questions. the I concludes At of are thank over remarks. our turn for want now first to I'd our for we like to ready

Operator

line you. Thank a comes [Operator this with be Cowen. Silverstein question-and-answer your conducting Paul Instructions] At of first question. time, session. Please with Our the proceed from we question will

Paul Silverstein

macro thoughts thoughts backdrop apologies some beyond for out I appreciate EBITDA prepared coming will challenging here it other there you to My and year calendar And recognize be? where But next guys I will where But any XXXX, the now out and for taking EBITDA of if question. issues. in any look as your Hi, remarks. missed are year? is the be

Daryl Raiford

Hi, evening is Paul, on guide right prepared this We're Daryl. to now. to not call this XXXX good

Fritz Hobbs

my for know you We're this. attitude to Paul, shareholders. here make the on money

Paul Silverstein

visibility I a right visibility -- little remarks your now. consistently trust challenge appreciate a that. of I is bit

Operator

[Operator Instructions]

Fritz Hobbs

you everyone soon. to you We your look Ribbon. with support Okay. speaking We the forward of Well, appreciate Thank again then. thank you. joining and call

Operator

concludes today's This teleconference.

this You day. for have disconnect and Thank at may time. your participation you wonderful a now lines your

Ribbon Communications (RBBN) 30 Oct 192019 Q3 Earnings call transcript