Key Highlights

  • Ribbon Communications reported third quarter revenue of USD 219 million, up 14% sequentially from the second quarter.
  • Adjusted EBITDA was USD 27 million, more than double the USD 12 million reported in the second quarter.
  • IP Optical Networks revenue increased 17% sequentially, led by new wins in North America.
  • Cloud and Edge revenue increased 11% sequentially, led by U.S. Tier 1 network modernization activity.

Sequential Revenue and Profitability Gains

Ribbon Communications (NASDAQ:RBBN) reported third quarter revenue of USD 219 million, up 14% sequentially and compared with USD 215 million in the third quarter of 2025. Adjusted EBITDA, a non-GAAP measure, was USD 27 million, more than doubling from USD 12 million in the second quarter, though below the USD 29 million reported in the third quarter of 2025. GAAP net loss was USD 9 million, while non-GAAP net income was USD 12 million.

The company said both of its operating segments delivered meaningful sequential increases in revenue and profitability, consistent with commentary provided alongside its second quarter results.

Segment Momentum Across IP Optical and Cloud

IP Optical Networks revenue increased 17% sequentially, growing 5% year over year to a record third quarter level, including two new U.S. Tier 2 internet service provider customers added during the quarter. The segment's bookings trend in the first half of the year translated into this quarter's record sales performance.

Cloud and Edge revenue increased 11% sequentially, with service provider revenue within that segment growing 15% sequentially, supported by a 50% increase in sales to the company's largest customer. The company also cited further growth in its Enterprise and Government market segments as contributing to the quarter's results.

Cost Discipline and Forward Outlook

Non-GAAP operating expenses remained steady at USD 88 million during the quarter, reflecting the company's continued focus on expanding margins while maintaining cost discipline. Management said it expects further significant gains in profitability during the fourth quarter, building on the positive trends seen in both operating segments this quarter.

Looking toward 2027, the company pointed to growth drivers including the adoption of voice-enabled enterprise AI applications and a growing pipeline of data center and AI-related opportunities as factors that could support continued revenue and profitability gains beyond the current fiscal year.

Segment and Margin Metrics to Track

IP Optical Networks revenue growth relative to the 17% sequential increase reported this quarter, continued Cloud and Edge segment momentum relative to the 11% sequential gain, and adjusted EBITDA trends relative to the more than doubling reported this period are among the items the company has flagged for investors heading into the fourth quarter. Non-GAAP operating expenses held flat at USD 88 million this quarter, so any further revenue growth without a corresponding increase in that expense base would translate more directly into profitability gains. The gap between this quarter's adjusted EBITDA and the prior year period, USD 27 million versus USD 29 million, is also worth watching to see whether the sequential recovery trend fully closes that year over year gap in the fourth quarter.