GICS Sector : Communication Services
Ribbon Communications Inc.provides communications technology in the United States, Europe, the Middle East, Africa, the Asia Pacific, and internationally.It operates through two segments, Cloud and Edge, and IP Optical Networks.
Ribbon Communications reported revenue of $215 million in Q3 2025, a 2% increase year-over-year, with non-GAAP gross margin coming in at 52.6%, lower than expected due to reduced software sales to U.S. government customers. EPS was $0.04, missing estimates of $0.06. Despite the miss, the company saw a 6% increase in year-to-date revenue and a 5% increase in EBITDA.
Publication Date: Oct -28
The company's Cloud & Edge portfolio is becoming increasingly strategic, with significant awards from leading technology providers, including a major SaaS company and IBM. However, sales to enterprise customers were down 3% year-over-year, impacted by lower sales to U.S. government agencies. IP Optical Networks business continued to grow, increasing 11% year-over-year, driven by higher sales and favorable regional and customer mix.
Ribbon Communications expects Q4 to be its strongest quarter, with revenue projected in the range of $230 million to $250 million and non-GAAP adjusted EBITDA between $42 million to $48 million. The company is well-positioned to benefit from growing investment in data centers, critical infrastructure, and fiber networks, with the voice communications business expected to continue growing. The impact of the U.S. government shutdown is estimated to be around $10-15 million per quarter.
With a P/E Ratio of -14.13 and an EV/EBITDA of 11.27, the market appears to be pricing in some level of risk. The P/S Ratio of 0.7 suggests that the stock may be undervalued relative to its revenue growth prospects. Analysts estimate next year's revenue growth at 5.7%, which, if achieved, could lead to a re-rating of the stock. The company's ROIC of 2.99% and ROE of -11.36% indicate room for improvement in capital allocation and profitability.
The company's new Acumen platform, an AIOps automation platform, is gaining traction, with Altice-owned Optimum integrating it into their operations. This new product category is expected to drive growth, with Bruce McClelland noting that it's a new category spanning both product categories. The TAM for agentic AI is still developing, but Ribbon Communications is well-positioned with its cloud-native implementations of session border controllers and other network functions.
Aircall Leverages Ribbon and AWS to Power Global Communications Connectivity
Dec -04
Ribbon to Participate in Four Leading Investor Conferences Before Year-End
Nov -17
Seren Juno and Ribbon Achieve 20Tbps Transmission on 10,000 km JUNO Trans-Pacific Cable
Nov -12
Ribbon Communications Announces Inducement Equity Grants to Steve McCaffery and Don Toft Under Nasdaq Listing Rule 5635(c)(4)
Oct -31
Ribbon Communications Inc. (RBBN) Q3 2025 Earnings Call Transcript
Oct -23
Ribbon Communications (RBBN) Q3 Earnings and Revenues Miss Estimates
Oct -22
Ribbon Communications Inc. Reports Third Quarter 2025 Financial Results
Oct -22
Ribbon Communications to Report Third Quarter 2025 Financial Results on October 22, 2025
Oct -13
Ribbon Communications' Cloud and Edge segment growth is driven by increasing demand for secure, real-time communications and digital transformation. Key drivers include adoption of cloud-based unified communications, growth in IoT and 5G networks, and rising need for edge computing and security solutions. Additionally, Ribbon's strong partnerships and innovative product offerings contribute to its 6% growth.
Ribbon Communications Inc.'s Internet Protocol Optical Networks growth is driven by increasing demand for high-speed data transmission, proliferation of 5G networks, and rising need for network infrastructure upgrades. Additionally, growing adoption of cloud computing, IoT, and big data analytics are fueling the demand for high-capacity optical networks, contributing to a growth rate of 4.
A cloud-optimized session border controller (SBC) that provides secure, scalable, and highly available real-time communications services
A software-based SBC that enables secure, scalable, and highly available real-time communications services in cloud and hybrid environments
A scalable and highly available SBC that provides secure real-time communications services for large-scale deployments
A high-performance, scalable, and highly available SBC that provides secure real-time communications services for large-scale deployments
A cloud-based unified communications (UC) solution that provides a suite of collaboration tools, including voice, video, messaging, and conferencing
A family of intelligent edge devices that provide secure, scalable, and highly available real-time communications services at the network edge
A policy and routing engine that provides advanced call control and routing capabilities for real-time communications services
Ribbon Communications Inc. operates in a niche market with limited substitutes, but the threat of substitutes is still present due to the evolving nature of the telecommunications industry.
Ribbon Communications Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products and services are often customized, making it difficult for customers to switch to alternative suppliers.
Ribbon Communications Inc. relies on a few key suppliers for critical components, which gives these suppliers some bargaining power. However, the company's size and scale of operations mitigate this risk to some extent.
The telecommunications industry has high barriers to entry, including significant capital requirements and regulatory hurdles. This makes it difficult for new entrants to challenge established players like Ribbon Communications Inc.
The telecommunications industry is highly competitive, with several established players competing for market share. Ribbon Communications Inc. faces intense competition from rivals, which can lead to pricing pressure and reduced margins.
| Value | |
|---|---|
| Debt Weight | 39.99% |
| Debt Cost | 5.00% |
| Equity Weight | 60.01% |
| Equity Cost | 9.80% |
| WACC | 7.88% |
| Leverage | 66.63% |
Value: 4.9
Growth: 5.9
Quality: 5.2
Yield: 0.0
Momentum: 5.0
Volatility: 6.0
1-Year Total Return ->
Value: 7.0
Growth: 3.9
Quality: 4.5
Yield: 0.0
Momentum: 7.0
Volatility: 3.7
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Value: 3.1
Growth: 7.3
Quality: 3.4
Yield: 0.0
Momentum: 10.0
Volatility: 2.0
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Value: 6.2
Growth: 4.9
Quality: 8.8
Yield: 0.0
Momentum: 1.0
Volatility: 4.7
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Value: 7.2
Growth: 0.7
Quality: 1.1
Yield: 0.0
Momentum: 5.0
Volatility: 5.0
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Value: 2.0
Growth: 3.0
Quality: 4.0
Yield: 0.0
Momentum: 7.0
Volatility: 1.7
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