Ribbon Communications approves $50 million stock buyback

PLANO, Texas - Ribbon Communications Inc. (NASDAQ: RBBN), a global provider of communication technology solutions, has announced a new share repurchase initiative. The company’s Board of Directors has authorized a stock buyback program of up to $50 million, set to begin on June 5, 2025, and extend through December 31, 2027. With a current market capitalization of approximately $618 million, InvestingPro analysis suggests the stock is currently trading below its Fair Value, presenting a potential opportunity for value investors.

This decision follows a period of notable financial performance for Ribbon Communications, including a doubling of business with US Tier One Service Providers in 2024. This growth was partly due to a multi-year contract with Verizon aimed at upgrading their telecom voice infrastructure. The company also saw increased dealings with Enterprise customers and U.S. Federal agencies, contributing to a 30% rise in earnings for the year, which aligned with the higher end of their projected guidance. Recent financial data shows annual revenue of $835.5 million with a healthy gross profit margin of 54.3%, according to InvestingPro data.

Bruce McClelland, President and CEO of Ribbon Communications, stated that the repurchase program demonstrates the Board’s belief in the company’s strategic direction and its ability to deliver shareholder value. He highlighted the improved visibility in their business operations, marked by positive book-to-bill ratios and a growing backlog. This optimism is reflected in analyst forecasts, with InvestingPro reporting that four analysts have revised their earnings estimates upward for the upcoming period, with expectations of profitability in 2025. Get access to 12+ additional exclusive ProTips and comprehensive analysis with an InvestingPro subscription.

The share repurchases may be conducted on the open market, through private transactions, structured through investment banks, or by a mix of these methods. Ribbon Communications might also use Rule 10b5-1 plans to facilitate the buybacks. The timing and volume of the repurchases will depend on various factors, including market conditions and compliance with the company’s credit facilities.

Ribbon Communications specializes in secure cloud communications and IP and optical networking solutions for service providers, enterprises, and critical infrastructure sectors globally. The company emphasizes cloud-native architectures, automation, analytics, and security in its end-to-end portfolio. Ribbon also commits to Environmental, Social, and Governance (ESG) practices, providing an annual Sustainability Report to stakeholders.

The press release included forward-looking statements, cautioning that actual outcomes could materially differ due to various risks and uncertainties. The company does not commit to updating these statements, even if circumstances change in the future.

This stock repurchase program will be financed through available cash or cash generated from operations. The program is subject to change and may be adjusted, paused, or terminated at any time.

The information reported is based on a press release statement from Ribbon Communications Inc.

In other recent news, Ribbon Communications reported its first-quarter 2025 earnings, revealing a miss in both earnings per share (EPS) and revenue against market expectations. The company posted an EPS of -$0.03, which was below the forecasted $0.02, and revenue came in at $181 million, falling short of the anticipated $194.52 million. Despite these setbacks, the company remains optimistic about future growth, projecting a 12% year-over-year revenue increase for the second quarter of 2025. Analysts like Trevor Walsh from Citizens JMP have maintained a Market Outperform rating for Ribbon Communications, with a $6.00 price target, indicating confidence in the company’s long-term potential.

Moreover, Ribbon Communications is focusing on network modernization efforts, which have led to a significant increase in sales to service providers. The company’s Cloud and Edge segment showed a 6% revenue increase, while its IP Optical segment experienced a 6% decline. CEO Bruce McCollin expressed optimism about the company’s future, citing strong demand for modernizing voice and data networks, particularly in the Cloud and Edge segment, which is expected to grow by 20% year-over-year. The company also anticipates improved adjusted EBITDA in the range of $28 million to $32 million for the second quarter. Despite the challenges, Ribbon Communications is committed to meeting its full-year guidance, supported by ongoing projects and a robust backlog.

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