Yahoo Finance Ribbon Communications Inc (RBBN) Q1 2024 Earnings Call Transcript Highlights: Key Financial ...
Revenue: $180 million, a decrease of 3.5% year-over-year.
Gross Margin: Non-GAAP gross margin was 55.1%, up 700 basis points from the previous year.
Net Income: Non-GAAP net loss was negative $1 million, an improvement of $2 million from the previous year.
Earnings Per Share (EPS): Non-GAAP diluted loss per share of negative $0.01, an increase of $0.01 versus prior year.
Adjusted EBITDA: $12 million, a significant improvement from last year's EBITDA loss of negative $2 million.
Free Cash Flow: Cash from operations was positive $13 million in the quarter.
Release Date: April 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Hey, congratulations on the big Verizon order. I just had a couple of questions about that. One. Would you know what type of gross margin over time. Should we assume that that and some will be done that? And then as far as the CAD300 million from three year timeframe, is that back-end loaded or does that I know it's good start in the second half, but does it step up big in 25? Any color there would be great. A: Yes, hey, good morning, Christian. Thank you on. So on the gross margin question, we have a mix of product and services that we're supplying to the program. So it may vary a little bit just depending on the activity and uptick quarter on a blended, it's probably a little below the current gross margin level for cloud and edge, which is, as you know, high 60s. So it's a little below that just because of the higher content in hardware and services, but still pretty solid obviously. And on the on on the question on kind of the speed and the ramp up. We definitely get started in earnest in the second half of this year and kind of achieve full velocity as we get into 2025 and stay at that level for a couple of years effectively. So this is a pretty extensive program. You can imagine that the effort that's required to go into these switching centers and switch out equipment seamlessly and everything. So there's quite a it's a it's a pretty long process, which is great. It's going to be a great program.
Q: Great. And then I just have one quick follow-up just on the rural broadband stuff. I know other people inside the space are kind of suggesting that that really doesn't kick off until Q1 of 25, but it sounds like maybe some of the things that you're working on may start a little bit sooner than that. Just did I hear that incorrectly or how should we be thinking about that? A: Yes, it's a good question. So the middle, the bead program, the $42 billion B. program. So it doesn't really start until next year timeframe. In fact, I think for us. It's kind of second half of next year. About half of the rural broadband programs we have in process today are assisted in one form or fashion from other federal funding programs like aren't often those sorts of programs. So well, we've got a nice base, a nice funnel of activity there, even prior to the larger funding program coming in fantastic no other questions.
Q: Thank you. Good morning and my first question is is the follow on on that Verizon when Verizon was a major customer. So I was just wondering what's the delta between the old program versus the new one? A: Yes, hey, good morning, Dave. Tom. So this is obviously a major step up from the current run rate we're at today on I think I mentioned in the remarks that we'd exit the year at a greater than $100 million per annum run rate with them, which is maybe where we were a few years ago back when other programs we're very active. So we get back to that level or better in the next few years here as this program really starts to gain energy.
Q: So like, you know, back to where Verizon was several years ago, but what was the run rate in recent years, like in the last year or two where they had like $50 million going to $100 million or in particular there? A: Yes, sorry, Dave? Yes. So the I'm given there were a 10% plus customer. We actually break them out in our Q and our K I can't remember the exact number for 23, but I think it was in the mix. You remember what the number was 10 or 11%. Yes. So in call it organic by 18? Yes, yes. Okay.
Q: Great. Thanks, Tim, and thanks for taking my questions. Um, Bruce, you mentioned on last quarter about the larger federal deal that had slipped into 1Q on just more for confirmation on that. Did the bulk of the revenue expected from that deal then kind of fall in the quarter? Or might there be more kind of miss that further ramps up kind of next quarter throughout the year? And then I've got a follow-up. Just kind of a broader kind of federal spending Hemisphere. A: Hey, yes, good morning, Trevor? Yes, good question. So it turned out that deal that has been awarded the revenues actually still coming. So we expect actually more of it here this quarter and throughout the year in the in the first quarter, we actually closed another deal, another extension deal with another agency. So you can get the idea. There's a lot of these kind of going in parallel. And as I've mentioned a few times trying to predict the timing on them tends to be a little bit of a challenge, but it's great to see that Tom we've got, I'll say, multiple irons in the fire, right? All these agencies need to do a modernization program, not unlike the program we talked about with Verizon, where we're replacing legacy TDM infrastructure with modern cloud based on technology. And so in the first quarter, we had another couple of release done substantial deals close and go to revenue. And the one I talked about last quarter is still coming forward, which is great.
Q: Great. Terrific. And maybe just one last one for me and then I'll get back in the queue. On the you had mentioned in your prepared remarks around just some of the differentiating factors around the security and cyber aspects of of the products. I'm just wondering, is that a function of kind of competitive products not really having anything to kind of help customers on that front? A: Yes. So I think it comes from kind of the close engagement with a number of these agencies where we're dialoguing with them on what are their requirements, what are their future needs and then building some of that into the products. So it starts out with somewhat of a custom capability and then we make it more general that we can bring it to market to other similar agencies and it actually helps out the rest of our Critical Infrastructure business. If we're selling to us an energy company or an energy distribution company like like American Electric Power, AEP, we talked about last quarter capabilities that we built in for defense application end up differentiating us in that space as well. So it's a little bit of a long sales cycle, but once you're in dialoging, understanding the future requirements, it really makes the whole the whole portfolio better.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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