RBBN - Earnings call transcript Q4 2024 | Ribbon Communications Inc.

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Operator

Greetings, and welcome to the Ribbon Communications Fourth Quarter and Full Year 2024 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Joni Roberts, Chief Marketing Officer. Thank you.

You may begin.

Joni Roberts

to Quarter welcome Conference Financial and Call. afternoon, Ribbon's XXXX Fourth Results Good Chief Ribbon Officer Joni Marketing I'm Roberts, at Communications. Chief Also on Officer; Officer. Ribbon's Executive Ribbon's McClelland, Financial the call and today, John Bruce Chief Townsend, quarter webcast call section business be press XXXX discussing matters Relations website of release live Today's supplemental our for and being and be financial are the of both archived where rbbn.com, are the we'll slides beyond today, outlook forward-looking will projections at and including Investor on our first and available. Certain is currently statements. the are subject those and statements statements. cause Such could these actual in to to from risks materially uncertainties differ that forward-looking results contained These included our website. SEC, you financial XX-Q. I and filed refer on are most in documents information our posted and our with including harbor safe the Form risks to the supplemental statement discussed recent uncertainties in our Form XX-K

release measure as applicable In in the non-GAAP to Bruce? addition, we'll for present our press this the issued information on can found it again be on Reconciliations supplemental conference to are financial included website. And as call. to the we this This I'd call. available earlier turn GAAP financial earnings well over Bruce. prepared of like Relations both now section Investor we our information today

Bruce McClelland

federal also presence of Joni. levels and markets behind service in enterprise the successfully was strategy excellent discuss such capital agencies, performance global afternoon, and across highest performance key in earnings joining the our driver Great. portfolio. of the by invested all while U.S. our increased This across all segments, quarter and in primary clear of but very the Cloud of for provider doubled sales Thanks, in areas XX%. X to where to Good sales defense, positioning federal our U.S. and to revenue company. & service strong sales practically report is everyone, is being than to the Tier enterprises, expand was and year-over-year regions history validation metrics, company as fourth provider today I'm us Cloud Edge the customers. Business the our thanks and pleased including quarter robust results. Edge financial increased & including our more

expectations in continued a in in quarter Europe, Optical Higher Networks mix segment Edge management also gross in strong sales We the our good our IP well. above and margins Asia-Pacific. The segment had this IP XX%. routers solid growth for software with quarter mix at margins India of resulted resulted as Cloud of in & and well

profitability In the at original end increased the overall a high we million XX% beginning year. at $XXX very the of of quarter result, fourth by year, the year-over-year. range we achieved the in EBITDA As the adjusted full of established

cycle. $XX also investment cash investment very segments. creates in Our an network at cash was year-end networks very with above as the a generation X.Xx and for at improving modernization good in foundation bookings were focus on XXXX profitable for the growth sales both This continued fiber in strong and and good the drives quarter million, X.Xx

customers result big to you excellent our a and partners. Ribbon an team, Just thank and the

few and service performing Edge XX% the more grew the & EBITDA a diversified business Cloud with was year-over-year and our quarter aspects sales federal Now in for providers quarter operating defense XX% and sales to grew solidly approximately Sales segments. two-thirds with our of enterprise customers. one-thirds and of year-over-year. of obviously to an is each adjusted operation This The excellent highlights all on business our well.

Network our provider in expect we year we both saw second developing grew Voice growth the in Modernization the overall the the fourth significant incremental initial a accounted part revenue quarter this in and in of year. half migrating as year solid will full ramp, and of The and company number customers is phase projects with we the year, one customer to currently service the a revenue grew a have XX% U.S. switch of Verizon trajectory the the in Europe scale For to half. just And solid program in sales of progresses. second Project year. U.S. for week maintain XXXX. that EBITDA grew The into growth approximately of The and major and expect momentum this by we're great key and to X% XX%, continues a voice recovery. Sales every the earlier further recovery translated XX%

sales a other new quarter with up XX% were network area we Core of Enterprise Tier an significant such segment, us. companies services And IMS new provider operational leadership cloud-native exciting Chase, were providers led Bank others. financial software a a project as strong have European service large Verizon, a of X well, and awarded with highlights is to our growing and growth cloud in the win, Mobile the migration to U.S. addition included for by as service quarter modernization In America, quarter-over-quarter. This model. technology leveraging that in We had outstanding we Citibank which JPMorgan an delivery

better to to framework enterprise products revenue license predictability. agreement customers continue software our a that technical services and they consume support flexible and We simplifies transition how provides

recognize renew strongest to of enterprise a year license agreements We the these amount continue be fourth in and expect the we as revenue. significant quarter will the term

agency very a had we strong quarter anticipated, with several new As awards. U.S. Defense

addition to with a project, platform a deployed communication large network control in on network-in-a-box a orders we can significant be command modernization In expansion that win quickly forward voice had portable environment. new a and

XXX% federal agencies business our year, year-over-year. full the U.S. almost increased For with

we're replacement service a smaller not included XXX decision although as surge that sales Europe. sell the lifeline additional a voice regulated of spending the of is in in Metaswitch comparison to year-over-year tough, as on-premise opportunities in pipeline wins strong Finally, Israeli the secure, small and of potential business that over at quarter, fourth platform well from really the spot. their beginning the several given segment, a had solid Defense provider XXXX platform comfort into this to our quarter. Microsoft's we providers of does sweet focused is much future and cloud Eastern intensely on the war our the Optical the IP In is Force a that give region had finish

year-over-year network XX% with other by in business two grew regions, highlight regions. sales was markets and and improvement increasing Idea. those Vodafone of sales with across of X% the and India, continued strength The Excluding the the XX% quarter renewed investment quarter-over-quarter continued year-over-year Bharti on the

year. first sales to in in the more of the XX% second to as increased Our our contributing India by compared in growth later the the half year, than half strong

had region sales with quarter-over-quarter XX% in and Asia-Pacific quarter XX% year-over-year. We the growing a strong also

IP wavelengths. In book-to-bill In up addition, continued and specialize critical relationships approximately our U.S., continued increasing efforts The region that second above fiber-to-the-home with quarter. the end that gigabit additional expand organization leverages in the It's momentum Chinese in firms well. X.X the increased right year-over-year both large new that of X.Xx Western several had we support sales in to our bookings per adding year hard-fought drive to our X-nanometer to broadband rural transponders focus against in this wins overall with the space. We're These helped project the the from optical suppliers. were Optical resources at we've and establish to sales specialists. here the X% investment strong area, also this and presales engineering as this and area,

in our to XX cases of XX%, more currently to-date in additional here benefiting of quarter IP in number over the little different have better our product perspective, platform, the from Neptune for XX quarter of segment Management XX% which strongest first a small in customers $X for year-over-year this than the loss in at us. Overall, a line. opportunities we margins Overall this use a expand major our We of a projects product sizable adjusted stages continue sales of strategic we Optical million a and routing growing Muse software, active deployment than had expected mix in differentiator EBITDA. is the as at of quarter. From with came we sale resulted IP

profitability over additional XXX full points by year on EBITDA discuss full progressing to For first Eastern and margin back the goal segment, John? improved shipments quarter. of fourth results and Optical then on the of the by basis IP towards despite and our million $X in gross come year, for Europe. With details turn financial improved quarter that, to it our provide I'll to John the outlook to for XXXX suspension

John Townsend

million. afternoon, towards the but good everyone. XXXX in of were and guidance. end Bruce, only was financial Adjusted high Thanks, guidance, not cash continued the revenue new our performance EBITDA for pleased quarter with a fourth very also high revenue performance above strong with robust balance We flow of of exceptionally cash driven $XX helped a business, healthy by to closing the the and product with margins. This record produce

was the beginning of year, high full in For million at of the the EBITDA adjusted XXXX. the $XXX our provided original consolidated guidance end

a our the As please financial website Investor reminder, refer Relations page to for supplemental information. Ribbon on

consolidated financial quarter. the year of Let's revenues the begin results with from Ribbon $XXX million, level. of an In increase quarter of XXXX, the at generated prior fourth XX%

$XXX increase points was non-GAAP XXX million gross year-to-year. quarter full XX.X%, the For X% margin up Fourth million, year, from revenues quarter. prior basis an year the were of $X or

mix. non-GAAP full from by basis both business margin driven XXX prior up was year, improvements in For gross segment the and the year, XX.X%, points segments

additional employee increase were fourth the million partially due expenses, improved expenses and to $XX For an of quarter, sales non-GAAP earnings $X to million, the related year-over-year performance. operating

non-GAAP was $X million non-GAAP operating earnings prior up reduction XXXX from $X.XX, For million, an $X year. was prior income $X a earnings $X.XX, Quarterly generated $XX the share the of XX% non-GAAP million diluted million was XXXX a per for $X.XX the from Diluted net from the was were million, of year. year-over-year. share improvement year million, income or This net increase $X.XX per of year, year. XXXX. which up Full versus expenses net $XXX $XX prior

tax was Our non-GAAP rate quarter for XX%. the normalized

resulting from year, benefited net and in of reassessment XX% year-end, full rates a and quarter at tax the XX% tax of we one-time respectively. for However, reserves

was The million was end for improvement XX% above the $XX $XX million expense of $XX upper EBITDA the record-breaking million, quarter year. fourth is the our and interest an $XX guidance. of adjusted year-over-year. for Our This quarter million full or

XX%. million, million over increase EBITDA is improvement the For EBITDA a $XXX an adjusted $XX with over was year year. prior was straight the second the which full This year,

share was for count diluted XXX shares shares XXX and fully the share quarter. our million was basic count Our million

business Now let's of results at our the look two segments.

an produced as & from million, Edge XXXX. business year driven exceptional transformation engagements results with well were increase $XXX year-over-year, quarter revenues of which a defense $XX as customers. Full fourth million the Our with and enterprise $XXX increase million, of revenues reflect Verizon XX% X% Cloud network or by

basis XX.X% at and and Fourth Support the up gross quarter $XXX Services XX.X%, increased million EBITDA gross continued & to full remained XX% business contribution with the year, high an prior Our the and of profit for quarter. revenues. was X% in of XXX Cloud cash or XX% points of non-GAAP $XX fourth strong margin revenues or from year. Edge its margins adjusted strong all-time million

year, year, prior XX% million revenues. For the increased EBITDA ending versus adjusted at the $XXX full XX% or of

Now Revenues were for the results; volumes. XX% $XX recorded on primarily shipments impact IP X% IP a Optical to points at XXX due Optical revenue due the down range, from to target was business decrease year, full we gross of of quarter quarter lower year million, which for the prior of high Fourth year. the suspending million, down Networks versus $XXX Europe. XX%, end from to basis our XXXX to the fourth margin was Eastern but our non-GAAP prior was

the actions previous the profitability. reflecting have points was the taken we improve margin XX%, XXX from basis full gross year, year, For up to

to million adjusted year-over-year. loss or that continue we can million, XXXX, high Optical $XX the $X XXs EBITDA believe for quarter year margins of IP was full target Networks For the we in gross better. a less

cash leverage we year, adjusted the company; was ratio million million balance of cash improved year $X the $XX and flows in $XX quarter full the loss on $XX and a fourth in X.Xx. for EBITDA a closing to $XX Free by for strong a the net drove For performance million. the collections loss million. Touching free the full flow of and of debt million cash flow cash resulted of business

embraced especially seat, CFO the for extremely transformation services. the our carrier, and to and encouraging be on at by execute strategy has alike, Ribbon see customers network federal So my enterprise quarter been first our full in team it

post we Our clearly in off day-to-day today. that is execution focus results paying the

Now to I'll Bruce. back turn the call

Bruce McClelland

John. Thanks, Great.

As is the been we enter position we've last strongest X over the in in New Year, years. the Ribbon

Our customer and diversified. base has expanded

ahead. we've We our have the current visibility with year on customers, deepened relationship and improved

across momentum this expect all business, our have with XXXX continue almost into finished we We sheet strengthened XXXX. balance and strong parts and of our to

our several broad our strategy to leverage important that and portfolio We presence. elements global have

solutions the focused so and many relevance presence cross-selling remain we is better our our and increasing our very the we areas customers. future important with the on First, with who largest extra control have most leveraging customers. level This CapEx. This intensity Tier of with our includes are of business our service to that to aligning majority providers the an grow industry X

remain we growing our improving IP and transport Second, in optical committed routing to America. and North business

have a have routing and very We providers. Voice our service great number that's a Infrastructure with networks IP business growing deployments to TDM support and of solution in complementary eliminating copper of

U.S. broadband and In addition, our a expand to the is business. part perfect our industry-wide portfolio across growing rural of the a for investment fit being made

particular, to are increase in in requires go-to-market center edge X scalability mainstream to investment network, mentioned paying such fixed AI become a new remain to to efficiency including in presence will earlier. in differentiated on. Fourth, market. strategy. and connectivity networks to customers data we continue government Fifth, new technologies, part and our AI we networkloads, and our capacity as Third, ensure constantly fiber are that In expertise. will areas invest we decision applications win and exactly industry we advance, portfolio services. And enterprise telecom we're to This to the with massive in to element driving focused transport continue a and and continued a European followers. of strong the believe the and cloud ago very leaders, investments voice Advancements for off Tier solution as more mobile exponential to Kubernetes in not the data win grow continue their key closer clearly is are technologies we already growth traffic to and add and move in of the of Containers key a area have the these years providers several begin I was share expected recent mission-critical

by All company. operation of and focused these order the are simplify to to of the supported integrate initiatives the strategic effort in areas key streamline

Of have in road continue map network and advances robust differentiate, crucial XXXX, course, and to we security we cloud routing, automation. innovate a for automation, IP it's and that information including

talent demand data where generations of that and differentiator we invest also have has and in capabilities across high our very will a We unique more employee an in knowledge professional that's services multiple for practices, important and networking pool voice us.

this that XXXX, our solid and several expect modernize Focusing profitable longer-term very that communication been specifically we on outlook Increasingly, areas being fixed extensive cloud for deployment that governments area we're growth contact clearly significant services from provide over three the there are to several business drive solutions, use successful years providers, by advantage. This services and to enterprises contract service infrastructure. We've next of line selling complete applications. their and extensions. a is and set center of but contracts from key competitive a products, foundation covers further cases The including made broad of investment to provide probability desktop two traditional largest not visibility voice to a through year. opportunity will unified communications improved with planning securing in enterprise high of just the differentiation

the U.S., secure opportunity billion there's the Cloud and addressable sector, Middle and portfolio countries room these segment Secure market least Voice Communications next entire opportunities. Overall, data government at for be that the leveraging we address the expand products & We're customers we years. significant estimate into to four over communication other to built $X.X of mission-critical to Edge East, of and in base voice the a our Europe strong Within but regions. the

important The second of investment business area is year to capture our networks. fiber larger this share most for the in

From larger investment growth We're at to addition is years, analytics we're opportunity dollars our billions weaknesses related tail a automation take also continues stronger network to as supporting well of and area. AI market that Chinese going service to normalize consolidation in Internet cycle go-to-market advantage be supply various the over drive opportunity fit traditional as customer chain traffic optical broadband in base, network interconnect, I time. There's expansion, more increasing enhanced of telecom significantly our applying to challenges as costs for of optimism solution activities. portfolio perspective, business. data In reverses of in inflation the we're and is rates promise and the a our this improved over here. our and and a long next of to of mobile competitive be we new fiber for providers continue aspects we're Ukraine great and macro across as provide portfolio, data distracted expected our Israel also of would our XX%-plus AI conflicts to a such reduce to also there's planner suppliers a implementation tailwind a that five our slowly significant of trouble targeting interest pursue. and for customers. who look think be competitors assurance our resolution There for such as a resolution. From inventory presence the CAGR, to and are growing perspective, And by to the will times center replacement abate, and industry global regions

we're that stronger look to options a at through as a company value seriously in accelerate shareholder with to Finally, I'll note more ability substantially position the M&A.

pretty to and certainly that add what criterion possible we'll scale tight portfolio and would strengthen on While more it's find business. sense, have differentiation the options a make we our

consolidated to million the $XXX midpoint approximately but to higher a for maintenance growth excluding year, million. of projecting growth low guidance, full This we're revenue for significantly actually regional XXXX; of adjustments. on and the after of at other guidance a is implies rate $XXX range year-over-year Now X% in revenue

For essentially Cloud Edge and year-over-year. projecting segment, services product revenue & professional XX% revenue approximately of maintenance the we're growth flat with

IP segment, X%, growth Eastern XXX be full to Optical of IP rate net margin suspension Eastern growth services. professional Europe We're a 'XX, the gross for is rate partway the through year-over-year We're XXXX. basis the due than approximately impacted comparison year-over-year increased primarily to XX% lower by points a the greater Europe. implies the For currently approximately for year this for projecting Optical to from than after but adjusting revenue year projecting shipments of of

lower While loyalty to and services pull-through. and and projecting brand continue absorb year-over-year increases. real are carefully strong as software, high-margin essentially product we margin We're inflationary than a advantage creates strategic our OpEx manage flat normal expenses

As a a result, which million, than year XXXX XX% $XXX to range adjusted EBITDA is would approximately of the in million for midpoint. be the projected $XXX higher at

the For in of year-over-year revenue approximately to affected comparison a we're year-over-year in of Europe by shipments $XXX the million, the million X% first quarter the $XXX to XXXX. is the projecting at Once first substantial quarter, increase we of had again, Eastern midpoint. range a

growth Excluding projected of increase is million, start those range sales, strong a $XX the year. EBITDA the XX% XX%, pretty than implied $XX the in to approximately for year-over-year is rate greater a midpoint. million of a year-over-year at

margin and questions. and gaining ahead. prepared we volume really momentum. Operator, an as we working, We lower concludes In is year a our but have can optical IP QX And now expect to & strategy lower and take mix we're that Cloud in the Edge due margin few our exciting with quarter. with shows, recent our trends, performance remarks, consistent gross conclusion,

Operator

comes Michael first Genovese Securities. Rosenblatt from Our Instructions] question with [Operator

Michael Genovese

Improving general. outlook the for company in

quarter? is gets move normal expect reading guide about about else the Like just the just the the seasonality Is European nice seasonal being year heard Eastern away anything we start too to throughout you it? in guide. quarterly that the is guess take comparison first first that it the harder should and much we that's that to better I as I on or I said in more then the than from what So there you quarter. see. year into want

Bruce McClelland

delta up we're I think biggest said, that I the digits And piece. is the of kind Eastern no, Mike, backing double European as out.

and the compare trough. that kind I we're a compare ahead of be the general, It's in toughest tough of So the of year. just in will think QX,

as So go it easier here. get will quarters the forward

Michael Genovese

possibility? that about? quickly then breakthrough there Eastern to that were your if Are Okay, be on to great. you would do place better. Ukraine something be not that And I to hostilities thinking in there you're able a assets start Could be Is business should back get Europe, or in we that to be and up? mean, that thinking particularly about

Bruce McClelland

it's definitely Yeah, possibility. a

happens hardware support get restrictions we Of into how know new from don't with the fast continue us them. prevent how now but the resolution a course, shipping right region, we lifted. restrictions and the But fast to work customers and

start So that position if that. in up allowed business a we're again we're to we're to prepared do where

So -- and fairly that could happen quickly.

the goes as year possibility a definitely it's here. So

Michael Genovese

winning you new is the all just -- similarly, something like great. IP like else? from here here Starting And for driver it with Optical Is Edge make just both business year? a the if what on. momentum? it or for for sorry, then this And I important business. finish pass Okay, of should comment IP, then be I'll we the most next looking & contracts most on with is with on forward the the Edge. guess I'll with -- segments Cloud important could Starting thing going Edge, Cloud &

Bruce McClelland

Yeah. Thanks Appreciate Mike. the question.

place have So new that obviously, the in put us position. contracts business, a in & different the in Cloud Edge we

have backlog year. this stronger a the visibility lot We entering year, better

a So the resources. of there's more the taking of a with lot of of of actual programs work. kind focus lot are execution. more large on These We're good services, deployment

year and us federal that a in quarter-to-quarter, stronger And don't and there's top in kind IP obviously North as of we've U.S. the One year. execution in or and threads are focus two service is here. there good America. to Optical real the A on lot our good diversified And I pretty here good of business Not business, enterprise we customers. three priority. investment this think just into a for portfolio got platform now strong broadband, we're on Clearly, we in much but We've still need well really and business a rural the here really growing backlog year. In made half providers XXXX. it it the fits going position of second progress as of broadband. with so expanding as do kind business. into that really the of just a well both gives going And around our win the

So that's a big of focus. probably area

We obviously, have region India, has the continued second, in improve where throughout a important business XXXX. to

another We region to in again we're pretty expanding our Idea, where year aggressively. Vodafone that and customers, expect presence have network is good one in of their larger our investing obviously

So a thirdly, And is customers, good and that's for an strategic. to us. critical providers. presence we really important into a infrastructure region then service want Europe got with in We've larger presence grow very

So those portfolio. kind are the I around themes big think that three of

I So questions. appreciate the Mike,

Operator

Our Markets. Tim next Capital from Northland comes question with Savageaux

Timothy Savageaux

on guide, and my afternoon developments what addition I that see in back we or that that some know quarterly run in see something in was we any you we given front, congrats here term, of that and near $XX really kind Eastern mean, that get deeper could and like a is last test positive to the to? the in about on or great the good Is the business skills Good QX what a math Europe quarter year, million about just it want you a outlook. little perhaps was quarter. looks can a I to said dig rate that should relatively should scenario? things one-timers

Bruce McClelland

always math well, Hey Yeah. good. your Tim, is

more back little know north rate the going that number, a about number it was we've into run It last $XX of a was So I bit overall in the based is actually always in company. but the than on little bit for X% QX, sales that. percentages, more the than a right little talked And the million about probably Eastern of on year. you Europe

on a a and million more. year in a we're quarter, looking million $XX ballpark that to at $XX $XX to maybe so $XX million normalized basis So million

business. I there's the able for So us if to there restore opportunity think we're more

Timothy Savageaux

buttons. Real Okay. with problems these

was to of eliminating comment Cloud their follow in copper I those think the good. on customer, Day any just they're current there. on in have But change their probably their a up, guess? the not did terms you any potential used TDM exact wanted recent Analyst opportunity? of the same made in driving know networks, I if if in opportunities I words given in see you side those And wonder carriers what -- and/or customers there, business. And But Edge be to very you it Okay, I'd other Bruce, I plans potential modernize, kind do networks QX, almost of script that I & that XX%. XX% simplify, AT&T you about a see interested.

Bruce McClelland

Yeah. Tim. Good question,

focus. So of in phone And that. of kind that. In of one their the XX% traditional couple to mentioned general, techniques different there's we of is kind doing fourth the quarter. customer had two primary a completely network. Verizon AT&T And One modernizing seeing mentioned, we're eliminating ways copper. as It's you

a effectively. that's enterprise voice copper that preserve can IP wireless a What over line line You a on typically voice the IP, can line [ can the you for move on the infrastructure voice allows is talked over line interface, on a substitute to for to enterprises. emulation or you circuit ] or they POS broadband being do to the them able do interface and used about phone emulate

infrastructure. their the it traditional copper over you IP. can you So customer all eliminate don't the emulating by operate SONET basically continue churn. or infrastructure to to But They the force

you by getting elimination, of variety that's now fantastic if And will. doing so that, here U.S. platform technique. great got customers a the used across complete that's a for We've circuit a copper for that's emulation and

the popular a the infrastructure that's back we're Verizon really challenging and modernizing power very approach in few conference a the but are amount U.S. their methodology dramatically in regulatory seeing environment a consumption And is switching the the regions that obviously, a place, California, much in most switches from The they the AT&T's expensive more today. reduce really move perspective months architecture about up the talked had more different is keeping power other ago, and software-centric taking particular, copper what they in to taking. In cost is and of approach to

there, So do that. couple techniques different there's a customers a to great of got portfolio and enable we've to

Timothy Savageaux

with more me. just Okay, and interested that center in you're I on for service on more And big great. actions are data providers telecom you the for interconnect. I'd guys. But what or cloud are maybe players going cloud making any focused you I in And working are was that's investments about area? right investing love taking imagine that what one maybe your more comments in specifics

Bruce McClelland

generally than speaking, it's being deployed many product cases, in the working at our the edge. center data is latter. more data the telecom the in center the It's We're Yeah. And -- former customers. through

the of of deals year interconnect end right exactly at terabit capabilities that. very Some mentioned using our X.X in the are new the platform, I Apollo Asia-Pacific,

but today, very that client interfaces, aggregation center but selling to And providers. kind data getting last gig so our and of very yet high at of is the support biggest launched directly the part we're opposed of to that new large telecom revenue speed It's cloud that as not efficient. side XXX very side client extensive products application, year through stream we providers interfaces

application. And around seeing so a we're of that of interest type lot

Operator

Craig-Hallum Our with Capital next Group. Schwab question Christian comes from

Christian Schwab

Great.

of company? quantify rid that. how of which on for to potentially of of of get a technology be questioning. technology big opportunity could use Just you or to attempting regardless your an solutions mix Could is the all end copper the solution of last follow-up AT&T they supporting that line by satisfy XXXX,

Bruce McClelland

specifically messaging point, give of Christian. just Yeah. more hesitate strategy, and to customers AT&T. our any don't at I get want I to this on with ahead their color their

the was -- up in fourth quarter As quarter-over-quarter. the XX% service our segment I of provider mentioned, our over rest

good on the level next Xs I the And detailed customer the we're well point. Tier strategy but that's year operators as across about on the the have can with hopefully, their So as region. base we'll seeing get this specificity traction at with goes of as across as here, as more

Christian Schwab

you shipping an idea the give of this program? their for modernization Great. to us Could year you revenue of range anticipate Verizon

Bruce McClelland

we're and of on run year the execution here referencing a Obviously, I the strong the last very resources as to good ramp our had greater it's continue at year So per quarter, annum of $XXX with call, the with is progressing. than Verizon. to kind know million the back in had fourth end we rate program earnings and a I comments

of level from fairly is we're expect for the projecting related directly sizable to a that So the we year amount grow growth to and that program.

that at gives you we're hopefully, the So directionally year least thinking there. for what

Christian Schwab

then has question to last Metaswitch. my Great. do with And

north of If replace high million, did and approaching million. be of transaction assume kind rip on $X maybe could a of thousands I little anywhere you of $X the hundreds to dollars that, bit size a from

million, math have that thinking is talking the that that about I $X $XXX XXX number, right that the if Am is customers meaning different you right? and use say just So if to, like we numbers million round that you're opportunity?

Bruce McClelland

just I way think the you mentioned it. range to of the is think exactly

of millions be larger Some that of operators dollars then couple of of a years. breadth hundreds thousands -- different maybe dollars. year, quite them in and in certainly to And are long one would develop a broad might that are are over take there's not operators smaller be smaller. There's that of of

So the estimated, -- not total I maybe total ballpark Christian. necessarily, think the the you but annualized in that is opportunity, opportunity

Operator

with Ryan from Koontz Needham is & question next Company. Our

Ryan Koontz

the then the your there? but face in different It domestic obviously, I'm set of maybe internationally? real modernization? as is Cloud about looked a well. it discussion & QX quarter, like voice the you a in lot competitors going domestic on how international in great opportunity. of for pile think to sounds And international like -- Edge you'd focus on SPs, A domain big on, international on opportunity a here. we Can expand opportunities should And it strong

Bruce McClelland

business and with you we not in Ryan, Yeah, of the America. good mentioned architectures nice to been win we X. Their and heritage question. traditionally, Tier North a our are what the have the networks. as goes for I seeing has network today internationally. thank to our historically traction large tend America, It's European some North the in be different. stronger position evolved have it But see little telecom one the Hey as networks Yeah. in back and how we

wants software power to The up wants save and a take So move and lot use different into eliminate Everybody solutions version hardware our and copper from of that power. to products real those challenges selling architecture. to same of little exist. we're move Everyone a estate bespoke markets. a

type much software seeing or interest move in We center might cloud-centric to little standard actually our implementation, running initiative are a meaning more stronger maybe a or compute be running on private a environment. a to public -- might be data cloud within a

the Africa, to I to products allowed has last MTN customer discuss And a pretty interconnect strategic making we're us that share to been be cloud hub. the and we've in to voice more win a native did new investment large doing modernize been year, really start fairly so where there.

we and that, presence number there's So have regions well around examples good a including a voice products. where Japan like our as like India, of

Ryan Koontz

one Got IP it. Great. on just one And other Optical.

Eastern You've Europe some talked in tough QX. about comps,

business rates Eastern If And exclude Europe have seen 'XX? about would how your Eastern kind of think compare you were what in do in to growth that Europe, we there? we 'XX, excluding

Bruce McClelland

still the have XXXX run it than to was total sizable the was math, revenue which fairly fairly It the year. can but Europe back go significant. Yeah, in first I less in still the But sales, do Eastern was of part X% of and I in offline.

going added back of it year another X% previous So you of sales way kind this the year to been the for one X% would and year. similar growth impact or have rate, have out of you into a run probably last would kind it it a other, or that us continue of as

Operator

question next comes with Securities. Riley Our from Kang B. Dave

Dave Kang

inventories. is question channel First regarding

inventory channel you what see from customers? with situations wondering your Just the

Bruce McClelland

Dave. Hi Yeah.

little enterprise this same see a most around bit stage. that build but part, at of our X sort others XX that's the to didn't challenge the maybe ago seen, platforms, edge months probably we For have inventory

So -- and of a & a at as Edge least the is software. lot what we're on Cloud side of know, selling you of -- course, lot

concept really of not inventory an there's So there. kind

we're So challenges. those with for types the of dealing most not part,

Dave Kang

I on just wanted color are Vodafone more then mean, they have to clarify, the And regarding it. Idea, to Got timing? they or ramp? started Just about ramp to

Bruce McClelland

Yeah.

and see bit refinancing after some started then little a quarter. a we completed they stronger fourth business much So incremental the their quarter, in third right to

whole revenue quarter up, and quarter-over-quarter was in fourth I that. As our was XX% a the of part mentioned, and I XX% think, in think India Vodafone year-over-year certainly I as

mean it great a this So the really I business was see been historically. they've to customer. important part of

them great with reinvest some network providing they the it's platforms again. optical routing a IP as customer. both the transport as in in see position to And So well we're can

Dave Kang

regarding my gross Got is last it. And margin. question

around quarter. for year, XX%, XX.X% then you're XX%, starting the first And XX%. to guiding So you're

second maybe higher let's we're at say. So clearly, even finish in to half, or year talking XX.X%, just XX% the

drive will what that to half? first from expansion be the to So margin catalyst second half the

Bruce McClelland

Yeah.

most particular of part, amazing Cloud Optical. & in How it's high-margin we selling how it's lower-margin the Edge get much And you So are simply IP just big as the of line revenue a model -- mix. first the IP increases. of much quarter in in leverage lower in margin optical. the volume here with lower I the not the on a shift mentioned, than segments There's quarter, versus little the actual a each of other as

services, the software, taking the level seeing my basis professional it we the very margin year, the lower selling thing in same one with of portion for isn't I customers. in Obviously, primarily higher quite remarks that aggregate because at year-over-year about said high which little the that bit margin. and So that's think mix XXX margin larger are we're on very, service of work a is our the guidance of professional points changing I as

So shift on but there's the of probably we've that bit built model, that that's little into going biggest there. thing a the

Operator

McClelland session. the of to question-and-answer end like to now over floor the Bruce for And reached would We've back I our turn closing comments.

Bruce McClelland

call with you everyone look conferences. interest in Thanks at the many Maria. for investor Ribbon. you, Great. to speaking forward of upcoming We on the our and Thank again

We and also up of Congress optical World have San OFC, Francisco. coming the in show year big March show, Barcelona conference our significant Mobile in largest another in

We're a that call. and great 'XX. forward look you. to thank Operator, a you, concludes off So our to and start, good see have let's

Operator

concludes teleconference. today's This

you participation. You your lines may disconnect for this time. your Thank at

Ribbon Communications (RBBN) 12 Feb 252024 Q4 Earnings call transcript