Ribbon Communications Inc. (NASDAQ:RBBN) Q4 2022 Earnings Call Transcript

Bruce McClelland: Yes. Good question, Greg. In the carrier space it can be a lumpy business. Many times we’re selling it’s a capital — a CapEx purchase either hardware and software together or a software license purchase and a perpetual license. And so we’ll sell capacity to one of our carrier customers in a quarter and maybe it will be two quarters or three quarters before they need more capacity again. And so we do see that, kind of, move around in one quarter it could be up another quarter it could be down. In some cases we’re selling SBCs alongside our voice infrastructure our NTR business. And in other cases we’re selling SBCs and not voice. So it can vary customer to customer. I think we’re holding our own very well from a market share perspective.

I feel like our portfolio is really well-positioned with the carriers and when we get an opportunity we do pretty well. As you know enterprise has been a strategic area for us to focus on and grow and gain share. It’s a part of the market where we have not had as much market share traditionally and it’s been a real focus for the last 18 months to evolve the portfolio as well as the go-to-market and the sales motion to gain more share. In some cases now we’re providing annual enterprise-wide licenses that basically authenticate the amount of software and capacity that our customers can use. In some cases we’re still selling appliances and in fact our enterprise edge portfolio of session border controllers that really addresses small medium-sized business has been very robust selling through our carrier partners.

But long answer to your question the enterprise piece has got a real focus. So I’m really pleased to see the growth happen in the fourth quarter here.

Greg Mesniaeff: Thanks, Bruce. I will pass it on.

Bruce McClelland: Thank you very much, Greg.

Operator: Thank you. Our next question is from Dave Kang with B. Riley. Please proceed with your question.

Dave Kang: Thank you. Nice quarter. Perhaps you talked about bookings and book-to-bill. Just wondering if you can provide some color on backlog? I don’t think you really talked about backlog. Any color on backlog whether it was up down? And how should we think about — what should our expectation be going forward?

Bruce McClelland: Yes. Thanks, Dave. So from a — as you said we don’t disclose absolute numbers around backlog. But with the book-to-bill or the book to revenue above one in the quarter it directly implies that we were building some additional backlog. I did comment that we would have shipped more in the quarter if we could. We were supply limited particularly around our access routers and upwards of $10 million or so would have shipped in addition in the quarter if we could have built it. And that’s really carried forward into the first quarter. And in fact a lot of that backlog has really moved out into the second quarter as we continue to be short on a specific component around that part of the portfolio. So as I mentioned in the comments we — because of all that I think we feel like we have better visibility and kind of better line of sight around the momentum in the business given the booking momentum in really both Cloud and Edge and in the IP Optical business.

Dave Kang: And so you gave the annual outlook of $840 million to $870 million. Just wondering if you can go over your assumptions, as far as bookings you expected and where the backlog will be any kind of comments?