Ribbon Communications Inc.

Greetings and welcome to Ribbon Communications' second quarter 2021 financial results conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference call is being recorded. I will now turn the conference over to Tom Barry, Investor Relations for Ribbon Communications. Thank you. You may begin.

Good afternoon, and welcome to Ribbon's second quarter 2021 financial results conference call. I'm Tom Berry, investor relations of Ribbon Communications. Also on the call today will be Bruce McClelland, Ribbon's chief executive officer, and Mick Lopez, Ribbon's chief financial officer. Today's call is being webcast live and will be archived on the investor relations section of our website at ribboncommunications.com where both our press release and our supplemental slides are currently available. Certain matters we will be discussing today, including the business outlook and financial projections for the third quarter of 2021, full year 2021 and beyond, are forward-looking statements. Such statements are subject to the risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements. These risks and uncertainties are discussed in our documents filed with the SEC, including our most recent Form 10-K and Form 10-Q. I refer you to our safe harbor statement included on slide two of the supplemental slides for this conference call. In addition, we will present non-GAAP financial information on this call. Reconciliations to the applicable GAAP measures are included in the earnings press release we issued this afternoon, as well as in the supplemental slides for this conference call, which again, are both available on the investor relations section of our website. As we previously noted, we completed our acquisition of ECI Telecom on March 3rd, 2020, and completed the sale of Candy Communications on December 1st, 2020. Further, in the fourth quarter of 2020, we began segment reporting for our Cloud and Edge and IP Optical Networks businesses. These items impact comparisons to prior periods. And now, I'd like to turn the call over to Bruce.

Bruce? Great. Thanks, Tom. Good afternoon, everyone, and thank you for joining us today to discuss our second quarter 2021 results and our outlook for the remainder of the year. We had a strong second quarter from a profitability perspective with both adjusted EBITDA and non-GAAP earnings per share well above our guidance ranges, and we had good cash generation. Revenue in the quarter was negatively impacted by the COVID situation in India and to a lesser degree supply chain challenges. That said, for the first six months of the year, we achieved 10% year-over-year revenue growth. Adjusted EBITDA is up 60%. and non-GAAP earnings per share is up 133% as we continue to benefit from stronger product margins and disciplined expense management. In our IP optical segment, sales in the quarter grew 10% year over year. Our strategy to increase our presence in North America is really starting to take shape, with revenue in the first half exceeding all of 2020 for this important region. We had a very exciting announcement earlier this week with Rogers Communications. a leading diversified communications and media service provider in Canada. We were selected by Rogers to upgrade their national optical transport network, leveraging our new DWDM 400-gig ZR Plus platform for both metro and long-haul applications. We were the first to market with this new technology and had initial shipments to a customer in Latin America in the quarter as planned. Rogers will also deploy our Muse SDN orchestrator, to design and analyze their optical network, automate the creation of new services, and ensure the network is running at peak efficiency. We also had significant new customer wins outside of North America with Singtel in Singapore and Optus in Australia. At Singtel, we were awarded a portion of their DWDM backhaul network, supporting growing demand from their mobile fixed and enterprise networks. At Optus, we were awarded a new program focused on increasing access and metro DWDM capacity to support mobile backhaul and the interconnection points with Australia's national broadband network. Optus and Rogers are great examples of our cross-sell strategy, leveraging the strong foundation built by Ribbon to gain access to and grow our share of the large IP optical addressable market. In addition, we added 12 new IP optical customers to our roster in the second quarter, including Telehouse in France for data center interconnect, the Tom Bigby Electric Cooperative in Alabama, which is expected to leverage RDOF funding once it's released, as well as a significant win with a U.S. wireless provider to replace an existing Huawei DWDM system. Our emphasis on open, interoperable networks is really resonating with customers. and new technologies such as 400 gigs ZR plus combined with our cloud native orchestration platform are a winning combination. In our cloud and edge business, sales were very consistent with the second quarter last year after adjusting for the candy sale. Gross margins were strong, and when combined with a 14% reduction in our non-GAAP operating expenses, adjusted EBITDA increased 16% compared to the second quarter of 2020. Demand for our network transformation solutions was particularly strong this quarter across all regions, led by 16% year-over-year growth in our SawSwitch and Media Gateway products. Our new virtualized platforms are really the solution of choice for many operators modernizing their voice networks. Session border controllers sales in the quarter were consistent with the first quarter, but down from the second quarter last year. Our large enterprise customers added significant SBC capacity during the height of COVID in 2020, and we expect further growth later this year. We've begun to see a recovery in enterprise edge demand as businesses begin returning to the office. And we've had several new important wins with our Ribbon Connect SBC as a service platform, including adoption by several of our service provider customers to support Microsoft Teams deployments. Our advanced applications team had a busy first half. By the end of the second quarter, we had implemented robocalling mitigation services at 40 carriers in the U.S., including the deployment of StirShaken at Verizon. The sense of urgency definitely increased as we approached the June FCC deadline for carriers to implement solutions to prevent rampant nuisance calling, and we're starting to see demand for our call trust solutions in other countries. And finally, in our reoccurring revenue maintenance business, we had another strong bookings quarter and continue to maintain a very high renewal rate with bookings for the year now over 90% complete. And I'll turn it over to Mick to provide additional detail on our results for the quarter, and I'll come back on to review our guidance and provide additional details on our plan for the remainder of 2021. Mick.