Ribbon Communications Inc. reports fourth quarter 2021 financial results
Feb 16, 2022
PLANO, Texas -- Ribbon Communications Inc. (Nasdaq: RBBN), a global provider of real-time communications software and IP optical transport solutions to service providers, enterprises, and critical infrastructure sectors, today announced its financial results for the fourth quarter and full year 2021.
Revenue for the fourth quarter of 2021 was $231 million, compared to $244 million for the fourth quarter of 2020. Revenue for 2021 was $845 million, compared to $844 million for 2020.
"While our financial results for 2021 did not meet our expectations, we continue to make progress on our strategy. Our IP Optical Networks sales grew 22% sequentially in the fourth quarter and full year revenue in North America grew 164% year over year. We had several new wins with major carriers that we expect to begin to contribute in the second half of 2022. In our Cloud & Edge business, our increased focus on Enterprise is yielding results with sales nearly doubling in the fourth quarter both sequentially and year over year. Additionally, we had our first significant Telco Cloud win in the quarter," noted Bruce McClelland, President and Chief Executive Officer of Ribbon Communications.
McClelland continued, "As we enter 2022, we project 10%+ full year revenue growth in IP Optical Networks. Given the substantial growth opportunity presented by this business amidst a strong demand backdrop, we remain committed to the higher investment level needed to evolve the portfolio and capture share in future years. Our first quarter guidance accounts for continued supply chain delivery and cost issues affecting many industry participants, and increased uncertainty related to the conflicts in the Ukraine and Russia regions that are important markets for us."
Cash, cash equivalents and restricted cash was $106 million at December 31, 2021, compared with $104 million at September 30, 2021. GAAP Net loss of $96 million in the fourth quarter of 2021 includes a non-cash $116 million goodwill impairment charge related to revised projections for the IP Optical business segment, and a tax valuation allowance release of $28 million associated with the Company's U.S. tax position.
"To support our investment in critical growth areas, we are implementing a strategic restructuring to streamline operations. We expect to reduce our operating costs by approximately $5 million per quarter, incurring restructuring charges of about $6 million in employee separation costs and approximately $14 million in real estate optimization. We expect these savings to allow us to better align with the current demand environment and increase investment in key parts of the portfolio," said Mick Lopez, Chief Financial Officer of Ribbon Communications.
Customer and Company Highlights
IP Optical Networks 4Q21 revenue of $83 million, up 22% from 3Q21 Initiated major project with U.S. Tier 1 service provider to modernize their fixed voice infrastructure over the next several years that will significantly reduce the complexity and operating cost of their network Awarded new business with multi-service communications provider in Japan for TDM to IP migration project to begin in 2H22 Selected as new provider of optical transport solutions by major African carrier Other notable new IP Optical wins: Selected by leading European railway operator for a major national backbone project Telehouse selected Ribbon's high-performance Apollo solution to power its flagship Metro Connect offer NamPower deployed Ribbon's IP Optical portfolio to reliably leverage high-capacity bandwidth IPS selected Ribbon's IP Optical Solutions to expand their long-haul submarine data transmission capacity
Cloud & Edge 4Q21 revenue of $147 million, up 3% from 3Q21 First significant Telco Cloud win with major Japanese mobile carrier, utilizing our cloud-native SBC for deployment in their network Strength in Enterprise with new wins in Financial, IT and Automotive verticals Partnered with Infosys to deploy Microsoft Teams at one of the world's largest automobile brands Enterprise product revenue increased 91% from 4Q20
The Company's outlook is based on current indications for its business, which are subject to change. For the first quarter of 2022, the Company projects revenue of $165 million to $180 million, non-GAAP gross margin of 50% to 51%, non-GAAP diluted loss per share of $0.10 to $0.07, and Adjusted EBITDA of ($11) million to ($5) million. For the full year 2022, the Company projects revenue of $850 million to $880 million, non-GAAP gross margin of 55% to 56%, non-GAAP earnings per share of $0.30 to $0.34, and Adjusted EBITDA of $110 million to $120 million. The current outlook assumes no worsening of conditions related to the COVID-19 pandemic, or supply chain disruptions.
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