Ribbon Communications (NASDAQ: RBBN) reported a strong second quarter in 2025, with total revenue of $221 million, exceeding estimates by $6 million. The growth was driven by key customer wins, including Verizon and U.S. federal agencies. Despite pressure on gross margins, the Cloud and Edge segment saw record profitability, and the company maintained its full-year outlook.
Rosenblatt analyst Mike Genovese reaffirmed a Buy rating for Ribbon Communications and raised the price forecast to $6.00. Revenue growth was fueled by demand from Verizon, U.S. federal agencies, new wins in critical infrastructure, and international markets. The company also secured new contracts and closed delayed deals, driving domestic revenue up by 40% quarter-over-quarter.
Cloud and Edge gross margins contracted due to a higher mix of professional services and hardware, but the segment posted a record adjusted EBITDA of $37 million. IP Optical revenue rose to $84 million, beating estimates by 6%. Company-wide gross margin expanded quarter-over-quarter but contracted year-over-year, with an operating margin of 12.5% and adjusted EBITDA of $32 million.
Management guided third-quarter revenue slightly below estimates, with expectations of sequential growth in IP Optical revenue and a decline in Cloud and Edge revenue due to project timing with Verizon. The company reiterated its full-year outlook, adjusting slightly due to stronger-than-expected sales and currency impacts. The fourth quarter is expected to be the strongest of the year.
Genovese emphasized Ribbon’s attractive valuation and ability to navigate challenges while meeting guidance consistently. He highlighted growth prospects with Verizon’s infrastructure upgrade and potential deals with other telecom operators. Ribbon’s synergies between business segments, particularly with Verizon, signal strategic alignment and future opportunities. RBBN stock is trading lower by 11.7% at $3.76.
Source: Benzinga.com
Read more at Yahoo Finance: Verizon And Federal Wins Power Ribbon Communications’ Confident Outlook