Shares of Ribbon Communications Inc. (RBBN) surged 5.92% in after-hours trading on Wednesday following the company's first-quarter 2025 earnings call, which highlighted strong growth prospects and optimistic guidance for the second quarter.
During the call, Ribbon's management provided a robust outlook for Q2, projecting revenue in the range of $110 million to $220 million, representing a year-over-year increase of approximately 12% at the midpoint. The company also expects adjusted EBITDA to grow by 38% year-over-year at the midpoint of its guidance range.
Key drivers of the positive sentiment include: 1. Strong momentum in the Cloud and Edge segment, which is projected to grow approximately 20% year-over-year in Q2. 2. Continued progress on Verizon's voice network modernization project, with expectations to return to Q4 2024 revenue levels. 3. New wins in the enterprise and government sectors, including a Fortune 500 customer leveraging AI for contact center effectiveness. 4. Positive outlook for the full year 2025, maintaining previous guidance despite Q1 challenges. Investors appear encouraged by Ribbon's ability to navigate through recent headwinds and its positioning for growth in key markets, driving the after-hours stock price increase.
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