Ribbon Communications Inc. Reports Fourth Quarter and Full Year 2025 Financial Results

Strong Cash Flow and Bookings from Expanding Voice Modernization Customer Base

U.S. Tier 1 Service Provider Sales up over 25% in 2025

Delays in Customer Projects and Budget Timing Impacted 4Q Results

Targeting Expansion in High Growth AI and Defense Markets

New Tax Benefit Expected to Result in Improved Cash Conversion

PLANO, Texas, Feb. 5, 2026 /PRNewswire/ -- Ribbon Communications Inc. (Nasdaq: RBBN), a global leader in real-time communications technology and IP optical networking solutions, today announced its financial results for the fourth quarter and the full year of 2025. Ribbon Communications is dedicated to assisting the world's largest service providers, enterprises, and critical infrastructure operators in modernizing and safeguarding their networks and services.

Fourth Quarter and Full Year 2025 Highlights

Fourth Quarter 2025 Financial Results¹:

• Revenue was $227 million, compared to $251 million for the fourth quarter of 2024
• GAAP Operating Income was $9 million, compared to $33 million for the fourth quarter of 2024
• Non-GAAP Adjusted EBITDA was $40 million, compared to $55 million for the fourth quarter of 2024
• GAAP Gross Margin was 53.3%, compared to 55.7% for the fourth quarter of 2024
• Non-GAAP Gross Margin was 55.4%, compared to 58.1% for the fourth quarter of 2024

Full Year 2025 Financial Results¹:

• Full-Year Revenue was $845 million, compared to $834 million for 2024
• GAAP Operating Income was a loss of ($3) million, compared to $17 million for 2024
• Non-GAAP Adjusted EBITDA was $107 million, compared to $119 million for 2024
• GAAP Gross Margin was 49.8%, compared to 52.7% for 2024
• Non-GAAP Gross Margin was 52.3%, compared to 55.9% for 2024

"Although our fourth quarter results were impacted by several customer and project delays, we generated a new record level of Product and Services bookings in the quarter including over $50 million associated with new voice modernization programs for a growing number of customers across multiple regions. The delayed projects are not lost business and included deliverables already in backlog but with delayed deployment schedules. We also had several orders impacted by budget availability," stated Bruce McClelland, President and Chief Executive Officer of Ribbon Communications. "As we look into 2026, we are accounting for these dynamic market conditions with a more conservative growth rate projection, particularly in the first half of the year where we expect continued lower U.S. Federal agency spending and recent industry M&A to cause timing uncertainty."

Mr. McClelland continued, "In the mid-term, we expect to have multiple growth vectors fueled by accelerating adoption of AI across the Enterprise and the industry's shift towards achieving the goal of fully autonomous networking – an area where our new Acumen AIOps platform is purpose built to lead. We also expect increased global government and defense spending where we can leverage the strong foundation we have established in the U.S. and Europe to expand into other similar agencies. In parallel, we are considering select investments in rapidly growing private technology companies to further differentiate our portfolio and expand into high growth adjacent markets."

John Townsend, Chief Financial Officer of Ribbon Communications, remarked, "In support of these goals, we expect to continue to improve our cost efficiency and working capital levels to drive better cash conversion. These efforts will receive a major boost from the tax benefit we recognized in the fourth quarter, which we expect will reduce our future cash tax payments by approximately $15-$20 million over the next several years, starting in 2026."

Business Highlights:

• Intech Deploys Ribbon's NPT 2100 IP Router to Address India's Evolving Connectivity Landscape
• Seren Juno and Ribbon Achieve 20Tbps Transmission on 10,000 km JUNO Trans-Pacific Cable
• One NZ and Ribbon Partner to Deliver Cloud Native Voice Network
• Aircall Leverages Ribbon and AWS to Power Global Communications Connectivity
• Nasstar Taps Ribbon to Power UK Voice Network Transformation for Cloud Era

Business Outlook²  
For the full year 2026, the Company projects revenue of $840 million to $875 million. Non-GAAP gross margin is projected in a range of 52.5% to 53.5%. Adjusted EBITDA is projected in a range of $105 million to $120 million.

For the first quarter of 2026, the Company projects revenue of $160 million to $170 million. Non-GAAP gross margin is projected in a range of 48% to 49%. Adjusted EBITDA is projected in a range of ($3) million to $1 million.

The Company's outlook is based on current indications for its business, which are subject to change.

Upcoming Conference Schedule

• March 2-5, 2026: Mobile World Congress | Barcelona
• March 17-19, 2026: Optical Fiber Communication Conference and Exhibition | Los Angeles
• March 23-24, 2026: 38^th Annual ROTH Conference

Conference Call and Webcast Information
Ribbon Communications will host a conference call to discuss the Company's financial results at 4:30 p.m. ET on Thursday, February 5, 2026.

Dial-in Information:
     US/Canada: 877-407-2991
     International: 201-389-0925
     Instant Telephone Access: Call me™

A live (listen-only) webcast and replay will be available on the Company's Investor Relations website at investors.ribboncommunications.com.

Investor Contact
+1 (978) 614-8050
[email protected]

Media Contact
Catherine Berthier
+1 (646) 741-1974
[email protected]

About Ribbon 
Ribbon Communications (Nasdaq: RBBN) delivers communications software, IP and optical networking solutions to service providers, enterprises and critical infrastructure sectors globally. We engage deeply with our customers, helping them modernize their networks for improved competitive positioning and business outcomes in today's smart, always-on and data-hungry world. Our innovative, end-to-end solutions portfolio delivers unparalleled scale, performance, and agility, including core to edge software-centric solutions, cloud-native offers, leading-edge security and analytics tools, along with IP and optical networking solutions for 5G and broadband internet. We maintain a keen focus on our commitments to Environmental, Social and Governance (ESG) matters, offering an annual Sustainability Report to our stakeholders. To learn more about Ribbon visit rbbn.com.

Important Information Regarding Forward-Looking Statements 
This release contains "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, which are subject to a number of risks and uncertainties. All statements other than statements of historical facts contained in this release, including without limitation, statements regarding the Company's projected financial results for the first quarter of 2026 and beyond, expected customer spend and timing, beliefs about the Company's business strategy, including new product introductions such as the Acumen AIOps platform, beliefs about the accelerating adoption of AI and the shift towards autonomous networking, the impact of the new tax benefit recognized in the fourth quarter of 2025 and market share growth, are forward-looking statements. Without limiting the foregoing, the words "anticipates", "believes", "could", "estimates", "expects", "expectations", "intends", "may", "plans", "projects" and other similar language, whether in the negative or affirmative, are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

Forward-looking statements are based on the Company's current expectations and assumptions regarding its business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are unknown and/or difficult to predict and that may cause the Company's actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. Such risks and uncertainties include, but are not limited to, unpredictable fluctuations in quarterly revenue and operating results; the impact of restructuring and cost-containment activities; slowdowns in customer capital spending related to their internal cost cutting initiatives; increases in tariffs, trade restrictions or taxes on the Company's products; customer acceptance of and demand for the Company's new product and solution introductions; material cybersecurity and data intrusion incidents, including any security breaches resulting in the theft, transfer, or unauthorized disclosure of customer, employee, or Company information; the impact of the government funding on the Company's operating results including delayed purchases resulting from government shutdowns or changes in federal subsidies; supply chain disruptions resulting from component availability and/or geopolitical instabilities and disputes (including those related to the military conflict in Israel and the war in Ukraine); the impact of military call-ups of employees in Israel; material litigation; the impact of fluctuations in interest rates; the Company's ability to comply with applicable domestic and foreign information security and privacy laws, regulations and technology platform rules or other obligations related to data privacy and security; failure to compete successfully against telecommunications equipment and networking companies; failure to grow the Company's customer base or generate recurring business from existing customers; credit risks; the timing of customer purchasing decisions and the Company's recognition of revenues; macroeconomic conditions, including inflation; the Company's ability to adapt to rapid technological and market changes; the Company's ability to generate positive returns on its research and development; the Company's ability to protect its intellectual property rights and obtain necessary licenses; the Company's ability to maintain partner, reseller, distribution and vendor support and supply relationships; the potential for defects in the Company's products; risks related to the terms of the Company's credit agreement; higher risks in international operations and markets; currency fluctuations; unanticipated adverse changes in legal, regulatory or tax laws; future accounting pronouncements or changes in the Company's accounting policies and/or failure or circumvention of the Company's controls and procedures. We therefore caution you against relying on any of these forward-looking statements.

These factors are not intended to be an all-encompassing list of risks and uncertainties that may affect the Company's business and results from operations. Additional information regarding these and other factors can be found in the Company's reports filed with the Securities and Exchange Commission, including, without limitation, its Form 10-K for the year ended December 31, 2024. Any forward-looking statement made by the Company in this release speaks only as of the date on which this release was first issued. The Company undertakes no obligation to update any forward-looking statement publicly or otherwise, whether as a result of new information, future developments or otherwise, except as required by law.

Discussion of Non-GAAP Financial Measures
The Company's management uses several different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall performance of its business, making operating decisions, planning and forecasting future periods, and determining payments under compensation programs. The Company considers the use of non-GAAP financial measures helpful in assessing the core performance of its continuing operations and when planning and forecasting future periods. The Company's annual financial plan is prepared on a non-GAAP basis and is approved by its board of directors. In addition, budgeting and forecasting for revenue and expenses are conducted on a non-GAAP basis, and actual results on a non-GAAP basis are assessed against the annual financial plan. The Company defines continuing operations as the ongoing results of its business adjusted for certain expenses and credits, as described below. The Company believes that providing non-GAAP information to investors allows them to view the Company's financial results in the way its management views them and helps investors to better understand the Company's core financial and operating performance and evaluate the efficacy of the methodology and information used by its management to evaluate and measure such performance.

While the Company's management uses non-GAAP financial measures as tools to enhance its understanding of certain aspects of the Company's financial performance, management does not consider these measures to be a substitute for, or superior to, GAAP measures. In addition, the Company's presentations of these measures may not be comparable to similarly titled measures used by other companies. These non-GAAP financial measures should not be considered alternatives for, or in isolation from, the financial information prepared and presented in accordance with GAAP. Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures. In particular, many of the adjustments to the Company's financial measures reflect the exclusion of items that are recurring and will be reflected in its financial results for the foreseeable future.

Stock-Based Compensation
The expense related to stock-based awards is generally not controllable in the short-term and can vary significantly based on the timing, size and nature of awards granted. The Company believes that presenting non-GAAP operating results that exclude stock-based compensation provides investors with visibility and insight into its management's method of analysis and its core operating performance.

Amortization of Acquired Technology (including software licenses); Amortization of Acquired Intangible Assets
Amortization amounts are inconsistent in frequency and amount and are significantly impacted by the timing and size of acquisitions. Amortization of acquired technology is reported separately within Cost of revenue and Amortization of acquired intangible assets is reported separately within Operating expenses. These items are reported collectively as Amortization of acquired intangible assets in the accompanying reconciliations of non-GAAP and GAAP financial measures. The Company believes that excluding non-cash amortization of these intangible assets facilitates the comparison of its financial results to its historical operating results and to other companies in its industry as if the acquired intangible assets had been developed internally rather than acquired.

Litigation Costs
In connection with certain ongoing litigation where Ribbon is the defendant (as described in the Company's Commitments and Contingencies footnotes in its Form 10-Qs and Form 10-Ks filed with the SEC, the Company has incurred litigation costs beginning in 2023.  These costs are included as a component of general and administrative expense. The Company believes that such costs are not part of its core business or ongoing operations, are unplanned, and generally are not within its control. Accordingly, the Company believes that excluding litigation costs related to these specific legal matters facilitates the comparison of the Company's financial results to its historical operating results and to other companies in its industry.

Cybersecurity Incident
The Company has recorded expenses associated with responding to and remediating a cybersecurity incident, including costs for external legal services, cybersecurity experts, and IT restoration activities. The Company believes that excluding these expenses facilitates the comparison of its financial results to its historical operating performance and to other companies in its industry, as these costs are non‑recurring in nature and are not associated with future revenue streams or ongoing operational benefits.

Acquisition-, Disposal- and Integration-Related
The Company considers certain acquisition-, disposal- and integration-related costs to be unrelated to the organic continuing operations of the Company and its acquired businesses.  Such costs are generally not relevant to assessing or estimating the long-term performance of the acquired assets. In 2025, the Company recorded expense for legal and professional fees associated with contemplated corporate development activities. The Company excludes such acquisition-, disposal- and integration-related costs to allow more accurate comparisons of its financial results to its historical operations and the financial results of less acquisitive peer companies and allows management and investors to consider the ongoing operations of the business both with and without such expenses.

Restructuring and Related 
The Company has recorded restructuring and related expense to streamline operations and reduce operating costs by closing and consolidating certain facilities and reducing its worldwide workforce. The Company believes that excluding restructuring and related expense facilitates the comparison of its financial results to its historical operating results and to other companies in its industry, as there are no future revenue streams or other benefits associated with these costs.

Preferred Stock and Warrant Liability Mark-to-Market Adjustment
The Company recorded adjustments to the fair value of its Series A Preferred Stock and Warrants to purchase shares of the Company's common stock in Other (expense) income, net. Both of these instruments were issued in March 2023 in connection with the Company's private placement and have been classified as liabilities and marked to market each reporting period until the Series A Preferred Stock was fully redeemed on June 25, 2024. The Warrant liability remains outstanding and will continue to be marked to market each reporting period. The Company excluded these gains and losses from the change in the fair value of these liabilities because it believes that such gains or losses were not part of its core business or ongoing operations.

Tax Indemnification Write-Off
In connection with the Company's acquisition of ECI Telecom Group Ltd. in 2020, a portion of the shares of our common stock that were issued as consideration were held in escrow for potential future tax liabilities. This $6 million tax indemnity asset, consisting of 2 million shares of common stock held in escrow, was written off upon its expiration on December 31, 2024. The Company believes that excluding this tax indemnification write-off facilitates the comparison of the Company's financial results to its historical operating results and to other companies in its industry.

Tax Effect of Non-GAAP Adjustments
The Non-GAAP income tax provision is presented based on an estimated tax rate applied against forecasted annual non-GAAP income. The Company computes its non-GAAP estimated tax rate using its estimated GAAP annual effective tax rate for the period and adjusting for the tax effect of pre-tax non-GAAP adjustments.  The Company computes a single annual non-GAAP rate for the Company and applying that rate (rather than multiple rates by jurisdiction) to its consolidated quarterly results. The Company expects that this methodology will provide a consistent rate throughout the year and allow investors to better understand the impact of income taxes on its results. Due to the methodology applied to its estimated annual tax rate, the Company's estimated tax rate on non-GAAP income will differ from its GAAP tax rate and from its actual tax liabilities.

Adjusted EBITDA
The Company uses Adjusted EBITDA as a supplemental measure to review and assess its performance. The Company calculates Adjusted EBITDA by excluding from income (loss) from operations: depreciation; stock-based compensation; amortization of acquired intangible assets; certain litigation costs; expenses related to cybersecurity incidents; acquisition-, disposal- and integration-related expense; and restructuring and related expense. In general, the Company excludes the expenses that it considers to be non-cash and/or not a part of its ongoing operations. The Company may exclude other items in the future that have those characteristics. Adjusted EBITDA is a non-GAAP financial measure that is used by the investing community for comparative and valuation purposes. The Company discloses this metric to support and facilitate dialogue with research analysts and investors. Other companies may calculate Adjusted EBITDA differently than the Company does, limiting its usefulness as a comparative measure.

SOURCE Ribbon Communications Inc.