What changed in this filing

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Item 1. Financial Statements

2025-07-24 compared with 2025-04-30 · 241 added, 150 removed, 673 unchanged (37% of the section changed)

31 unchanged sentences

Common stock, $ 0.0001 par value per share;

240,000,000 shares authorized;

175,967,875 shares issued and outstanding at March 31, 2025;

390,000,000 shares authorized at June 30, 2025;

240,000,000 shares authorized at December 31, 2024;

177,156,341 shares issued and outstanding at June 30, 2025;

175,599,250 shares issued and outstanding at December 31, 2024

10 unchanged sentences

Three months ended

Six months ended

Total revenue

7 unchanged sentences

Amortization of acquired intangible assets

Acquisition-, disposal- and integration-related

Restructuring and related

Total operating expenses

Loss from operations

Income (loss) from operations

Interest expense, net

Other income (expense), net

Other (expense) income, net

Loss before income taxes

Income tax benefit (provision)

Income tax provision

Loss per share:

5 unchanged sentences

Three months ended

Other comprehensive (loss) income, net of tax:

Unrealized (loss) gain on interest rate swap, net of reclassifications and amortization into earnings

Six months ended

Other comprehensive loss, net of tax:

Unrealized loss on interest rate swap, net of reclassifications and amortization into earnings

Foreign currency translation adjustments

Other comprehensive (loss) income, net of tax

Other comprehensive loss, net of tax

Comprehensive loss, net of tax

3 unchanged sentences

(in thousands, except shares)

Three months ended March 31, 2025

Three months ended June 30, 2025

comprehensive

1 unchanged sentence

(loss) income

Balances, April 1, 2025

( 1,600,412 )

Exercise of stock options

Exercise of warrants

Repurchase of common stock

Vesting of restricted stock awards and units

Vesting of performance-based stock units

Shares of restricted stock returned to the Company under net share settlements to satisfy tax withholding obligations

Stock-based compensation expense

Other comprehensive loss

Balances, June 30, 2025

( 1,611,505 )

Six months ended June 30, 2025

comprehensive

stockholders'

(loss) income

Balances, January 1, 2025

2 unchanged sentences

Exercise of warrants

Repurchase of common stock

Vesting of restricted stock awards and units

3 unchanged sentences

Other comprehensive loss

Balances, March 31, 2025

Balances, June 30, 2025

( 1,611,505 )

Three months ended March 31, 2024

RIBBON COMMUNICATIONS INC.

Condensed Consolidated Statements of Stockholders’ Equity

(in thousands, except shares)

Three months ended June 30, 2024

comprehensive

1 unchanged sentence

(loss) income

Balances, April 1, 2024

( 1,550,311 )

Vesting of restricted stock awards and units

Vesting of performance-based stock units

Shares of restricted stock returned to the Company under net share settlements to satisfy tax withholding obligations

Stock-based compensation expense

Other comprehensive loss

Balances, June 30, 2024

( 1,567,127 )

Six months ended June 30, 2024

comprehensive

stockholders'

(loss) income

Balances, January 1, 2024

6 unchanged sentences

Other comprehensive loss

Balances, March 31, 2024

Balances, June 30, 2024

( 1,567,127 )

3 unchanged sentences

(in thousands)

Three months ended

Six months ended

Cash flows from operating activities:

9 unchanged sentences

Dividends accrued on preferred stock liability

Foreign currency exchange (gains) losses

Payment of dividends accrued on preferred stock liability

Foreign currency exchange losses

Changes in operating assets and liabilities:

12 unchanged sentences

Principal payments on revolving line of credit

Proceeds from issuance of term debt

Principal payments of term debt

Payment of debt issuance costs

Payment of preferred stock liability

Proceeds from the exercise of stock options

Payment of tax obligations related to vested stock awards and units

Net cash used in financing activities

Repurchase of common stock

Net cash (used in) provided by financing activities

Effect of exchange rate changes on cash and cash equivalents

2 unchanged sentences

Cash, cash equivalents and restricted cash, end of period

See notes to the unaudited condensed consolidated financial statements.

RIBBON COMMUNICATIONS INC.

1 unchanged sentence

(in thousands)

Three months ended

Six months ended

Supplemental disclosure of cash flow information:

21 unchanged sentences

Interim results are not necessarily indicative of results for a full year or any future interim period.

The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, as amended (the "Annual Report"), which was filed with the SEC on February 27, 2025.

The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, (the "Annual Report"), which was filed with the SEC on February 27, 2025.

Operating Segments

4 unchanged sentences

The Company’s significant accounting policies are disclosed in Note 2 to the Consolidated Financial Statements included in the Annual Report.

There were no material changes to the significant accounting policies during the three months ended March 31, 2025.

There were no material changes to the significant accounting policies during the six months ended June 30, 2025.

Principles of Consolidation

15 unchanged sentences

The Company accounts for the factoring of its financial assets as a sale of the assets and records the factoring fees, when incurred, as a component of interest expense in the condensed consolidated statements of operations, and the proceeds from the sales of receivables are included in cash from operating activities in the condensed consolidated statements of cash flows.

Factoring of accounts receivable and associated fees for the three months ended March 31, 2025 and 2024 were as follows (in thousands):

Factoring of accounts receivable and associated fees for the three and six months ended June 30, 2025 and 2024 were as follows (in thousands):

Three months ended

Six months ended

Accounts receivable sold

9 unchanged sentences

Improvements to Income Tax Disclosures (“ASU 2023-09”), which increases the disclosure requirements around rate reconciliation information and certain types of income taxes companies are required to pay.

ASU 2023-09 will be effective for the Company beginning with its 2025 annual financial statements, with early adoption permitted.

ASU 2023-09 will be effective for the Company beginning with its 2025 annual financial statements.

The Company expects the adoption of the standard will require certain additional income tax disclosure.

6 unchanged sentences

Three months ended

Six months ended

Weighted average shares outstanding—basic

1 unchanged sentence

Weighted average shares outstanding—diluted

Options to purchase the Company’s common stock and unvested restricted and performance-based stock units aggregating 6.8 million and 12.1 million shares were excluded from the computation of diluted loss per share for the three months ended March 31, 2025 and 2024, respectively, because their effect would have been antidilutive.

Options to purchase the Company’s common stock and unvested restricted and performance-based stock units aggregating 13.6 million and 11.9 million shares were excluded from the computation of diluted loss per share for the three and six months ended June 30, 2025 and 2024, respectively, because their effect would have been antidilutive.

On March 28, 2023, the Company issued 55,000 shares of newly designated Series A Preferred Stock (the "Preferred Stock") to investors in a private placement offering at a price of $ 970 per share, along with 4.9 million warrants (the "Warrants") to purchase shares of the Company’s common stock, par value $ 0.0001 per share (the "Private Placement"), at the exercise price of $ 3.77 per share.

1 unchanged sentence

On June 25, 2024, the Company redeemed the Preferred Stock with a portion of the proceeds from its refinancing of the 2020 Credit Facility at a rate of 103 % for a total of approximately $ 63.5 million.

During the three months ended March 31, 2025, 0.2 million Warrants were exercised.

During the six months ended June 30, 2025, 0.2 million Warrants were exercised.

The remaining Warrants outstanding continue without modification.

See Note 9 for a description of the refinancing of the 2020 Credit Facility.

As of March 31, 2025 and 2024, the potential number of dilutive shares from the Warrants outstanding totaled 4.7 million and 4.9 million shares, respectively.

For the three months ended March 31, 2025, 0.5 million Warrants would have been included in the calculation of diluted loss per share, but had no impact due to the Company’s net loss position.

There was no impact on weighted average shares outstanding from these Warrants for the three months ended March 31, 2024 as the average market price of the Company’s common stock was below the exercise price of $ 3.77 per share and their effect would have been antidilutive.

As of June 30, 2025 and 2024, the potential number of dilutive shares from the Warrants outstanding totaled 4.7 million and 4.9 million shares, respectively.

For the six months ended June 30, 2025, 0.2 million Warrants would have been included in the calculation of diluted loss per share, but had no impact due to the Company’s net loss position.

There was no impact on weighted average shares outstanding from these Warrants for three months ended June 30, 2025 or for the three and six months ended June 30, 2024 as the average market price of the Company’s common stock was below the exercise price of $ 3.77 per share and their effect would have been antidilutive.

Dividends accrued on the Preferred Stock were not an adjustment to net income (loss) used for the calculation of diluted earnings (loss) per share as these dividends were included in the fair value adjustment of the Preferred Stock which was reflected in Other income (expense), net until the redemption of the Preferred Stock on June 25, 2024.

2 unchanged sentences

(3) INVENTORY

Inventory at March 31, 2025 and December 31, 2024 consisted of the following (in thousands):

Inventory at June 30, 2025 and December 31, 2024 consisted of the following (in thousands):

On-hand assemblies and finished goods inventories

3 unchanged sentences

(4) INTANGIBLE ASSETS AND GOODWILL

The Company’s intangible assets at March 31, 2025 and December 31, 2024 consisted of the following (in thousands):

March 31, 2025

The Company’s intangible assets at June 30, 2025 and December 31, 2024 consisted of the following (in thousands):

June 30, 2025

Developed technology

5 unchanged sentences

Software licenses

Estimated future amortization expense for the Company’s intangible assets at March 31, 2025 was as follows (in thousands):

Estimated future amortization expense for the Company’s intangible assets at June 30, 2025 was as follows (in thousands):

Years ending December 31,

2 unchanged sentences

Notes to Condensed Consolidated Financial Statements (Continued)

There were no changes to the carrying value of the Company’s goodwill in the three months ended March 31, 2025 and 2024.

The components of goodwill at both March 31, 2025 and 2024 were as follows (in thousands):

There were no changes to the carrying value of the Company’s goodwill in the six months ended June 30, 2025 and 2024.

The components of goodwill at both June 30, 2025 and 2024 were as follows (in thousands):

Accumulated impairment losses

(5) FAIR VALUE HIERARCHY

The carrying amounts of the Company’s cash equivalents, accounts receivable, accounts payable and borrowings under a revolving credit facility in the condensed consolidated balance sheets approximates fair value due to the immediate or short-term nature of these financial instruments.

Ribbon’s term debt balance as of March 31, 2025 and December 31, 2024 of $ 347.4 million and $ 348.3 million, respectively, had a fair value of approximately $ 348.2 million and $ 350.4 million, respectively.

The Company’s Warrant liability had a fair value of $ 6.2 million and $ 8.1 million as of March 31, 2025 and December 31, 2024, respectively.

The carrying amounts of the Company’s cash equivalents, accounts receivable, accounts payable and borrowings under a revolving credit facility in the condensed consolidated balance sheets approximate fair value due to the immediate or short-term nature of these financial instruments.

Ribbon’s term debt balance as of June 30, 2025 and December 31, 2024 of $ 346.5 million and $ 348.3 million, respectively, had a fair value of approximately $ 350.8 million and $ 350.4 million, respectively.

The Company’s Warrant liability had a fair value of $ 6.3 million and $ 8.1 million as of June 30, 2025 and December 31, 2024, respectively.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.

4 unchanged sentences

● Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

The Company had no assets or liabilities fair valued using Level 1 input at March 31, 2025 or December 31, 2024.

The Company had no assets or liabilities fair valued using Level 1 input at June 30, 2025 or December 31, 2024.

● Level 2 applies to assets or liabilities for which there are inputs that are directly or indirectly observable in the marketplace, such as quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets).

At December 31, 2024, the Company determined the fair value of its defined benefit plans’ assets using Level 2 input.

There were no significant changes to the Company’s defined benefit plans’ assets during the three months ended March 31, 2025 that required the calculation of their fair value as of March 31, 2025.

There were no significant changes to the Company’s defined benefit plans’ assets during the six months ended June 30, 2025 that required the calculation of their fair value as of June 30, 2025.

● Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

Level 3 input was used to determine the fair value of the Company’s Warrants at March 31, 2025 and December 31, 2024.

The Company had no transfers between Level 2 and Level 3 fair value measurements during the three months ended March 31, 2025 and 2024.

Level 3 input was used to determine the fair value of the Company’s Warrants at June 30, 2025 and December 31, 2024.

The Company had no transfers between Level 2 and Level 3 fair value measurements during the three and six months ended June 30, 2025 or 2024.

RIBBON COMMUNICATIONS INC.

1 unchanged sentence

(6) ACCRUED EXPENSES AND OTHER

Accrued expenses at March 31, 2025 and December 31, 2024 consisted of the following (in thousands):

Accrued expenses at June 30, 2025 and December 31, 2024 consisted of the following (in thousands):

Employee compensation and related costs

1 unchanged sentence

Taxes payable

The changes in the Company’s warranty accrual balance in the three months ended March 31, 2025 were as follows (in thousands):

The changes in the Company’s warranty accrual balance in the six months ended June 30, 2025 were as follows (in thousands):

Balance at January 1, 2025

Current period provisions

Balance at March 31, 2025

At March 31, 2025, the Company’s accrual for product warranties was reflected in its condensed consolidated balance sheet as a current liability in Accrued expenses and other of $ 5.4 million, and as a long-term liability in Other long-term liabilities of $ 7.2 million.

Balance at June 30, 2025

At June 30, 2025, the Company’s accrual for product warranties was reflected in its condensed consolidated balance sheet as a current liability in Accrued expenses and other of $ 5.5 million, and as a long-term liability in Other long-term liabilities of $ 7.4 million.

(8) RESTRUCTURING AND FACILITIES CONSOLIDATION INITIATIVES

The Company recorded restructuring and related expense aggregating $ 5.3 million and $ 3.1 million in the three months ended March 31, 2025 and 2024, respectively.

The Company recorded restructuring and related expense aggregating $ 1.3 million and $ 1.9 million in the three months ended June 30, 2025 and 2024, respectively and $ 6.7 million and $ 5.0 million in the six months ended June 30, 2025 and 2024, respectively.

Restructuring and related expense includes restructuring expense (primarily severance and related costs), estimated future variable and other lease costs for vacated properties with no intent or ability to sublease, and accelerated rent amortization expense.

4 unchanged sentences

Accelerated amortization of lease assets is recognized from the date that the Company commences the plan to fully or partially vacate a facility, for which there is no intent or ability to enter into a sublease, through the final vacate date.

Amounts of accelerated rent amortization that are included as a component of restructuring and related expense are excluded from the tables below, as the liability for lease payments for each respective facility is included as a component of Operating lease liabilities in the Company’s condensed consolidated balance sheets at March 31, 2025 and

RIBBON COMMUNICATIONS INC.

2 unchanged sentences

The Company may incur additional future expense if it is unable to sublease other locations included in the Facilities Initiative.

The components of restructuring and related expense for the three months ended March 31, 2025 and 2024 were as follows (in thousands):

The components of restructuring and related expense for the three and six months ended June 30, 2025 and 2024 were as follows (in thousands):

Three months ended

Six months ended

Severance and related costs

3 unchanged sentences

Any potential positions eliminated in countries outside the United States are subject to local law and consultation requirements.

In connection with the 2025 Restructuring Plan, the Company recorded restructuring and related expense of $ 2.4 million in the three months ended March 31, 2025, with nominal cash payments to date.

In connection with the 2025 Restructuring Plan, the Company recorded restructuring and related expense of $ 0.2 million and $ 2.6 in three and six months ended June 30, 2025, respectively, with payments of $ 2.1 million in 2025.

2023 Restructuring Plan

2 unchanged sentences

Any potential positions eliminated in countries outside the United States are subject to local law and consultation requirements.

In connection with the 2023 Restructuring Plan, the Company recorded restructuring and related expense of $ 0.1 million and $ 1.6 million in the three months ended March 31, 2025 and 2024, respectively, consisting entirely of severance related costs.

The 2023 Restructuring Plan accrual activity for the three months ended March 31, 2025 was nominal, with a balance remaining at March 31, 2025 of $ 0.1 million.

No expense was recorded in the three or six months ended June 30, 2025 related to the 2023 Restructuring Plan.

However, the Company recorded restructuring and related expense, consisting entirely of severance related costs, of $ 0.4 million and $ 2.0 million in the three and six months ended June 30, 2024, respectively.

Changes to accrued restructuring during the six months ended June 30, 2025 and the ending accrual balance as of June 30, 2025 related to the 2023 Restructuring Plan was nominal.

2022 Restructuring Plan

2 unchanged sentences

Any positions eliminated in countries outside the United States are subject to local law and consultation requirements.

The Company recorded restructuring and related expense of $ 3.1 million and $ 1.4 million in the three months ended March 31, 2025 and 2024, respectively, in connection with the 2022 Restructuring Plan for variable and other facilities-related costs.

A summary of the 2022 Restructuring Plan accrual activity for the three months ended March 31, 2025 is as follows (in thousands):

The Company recorded restructuring and related expense of $ 1.2 million and $ 1.6 million in the three months ended June 30, 2025 and 2024, respectively, and $ 4.3 million and $ 3.0 million in the six months ended June 30, 2025 and 2024, respectively, in connection with the 2022 Restructuring Plan for variable and other facilities-related costs.

RIBBON COMMUNICATIONS INC.

Notes to Condensed Consolidated Financial Statements (Continued)

March 31, 2025

summary of the 2022 Restructuring Plan accrual activity for the six months ended June 30, 2025 is as follows (in thousands):

June 30, 2025

Variable and other facilities-related costs

Balance Sheet Classification

The current portions of accrued restructuring were $ 2.8 million and $ 1.4 million at March 31, 2025 and December 31, 2024, respectively, and are included as components of Accrued expenses in the condensed consolidated balance sheets.

The current portions of accrued restructuring were $ 0.8 million and $ 1.4 million at June 30, 2025 and December 31, 2024, respectively, and are included as components of Accrued expenses in the condensed consolidated balance sheets.

The long-term portions of accrued restructuring are included as components of Other long-term liabilities in the condensed consolidated balance sheets.

The long-term portions of accrued restructuring were $ 0.7 million and $ 0.8 million at March 31, 2025 and December 31, 2024, respectively.

The long-term portions of accrued restructuring were $ 0.6 million and $ 0.8 million at June 30, 2025 and December 31, 2024, respectively.

2024 Credit Facility

12 unchanged sentences

The 2024 Credit Facility requires compliance with a Maximum Consolidated Net Leverage Ratio (the "Financial Covenant"), as defined in the 2024 Credit Facility, which is tested on a quarterly basis.

The Company was in compliance with the Financial Covenant as of March 31, 2025 and December 31, 2024.

The indebtedness and other obligations under the 2024 Credit Facility are irrevocably and unconditionally guaranteed on a joint and several basis by the Company and its subsidiaries (together, the "Guarantors").

The 2024 Credit Facility is secured on a first-priority basis by liens on substantially all assets of the Borrower and the Guarantors.

The Company was in compliance with the Financial Covenant as of June 30, 2025 and December 31, 2024.

RIBBON COMMUNICATIONS INC.

Notes to Condensed Consolidated Financial Statements (Continued)

The 2024 Credit Facility is secured on a first-priority basis by liens on substantially all assets of the Borrower and the Guarantors.

2020 Credit Facility

7 unchanged sentences

Debt issuance costs associated with the Sixth Amendment totaled $ 1.7 million and were being amortized on a straight-line basis over the remaining life of the 2020 Credit Facility and were written off in conjunction with the early extinguishment of the 2020 Credit Facility on June 21, 2024.

The Company had the following outstanding borrowings, unamortized debt issuance costs and original issue discount, letters of credit, interest rates, and remaining borrowing capacity under the 2024 Credit Facility as of March 31, 2025 and December 31, 2024:

RIBBON COMMUNICATIONS INC.

Notes to Condensed Consolidated Financial Statements (Continued)

Current portion of Term Debt

10 unchanged sentences

Average Interest Rates:

RIBBON COMMUNICATIONS INC.

Notes to Condensed Consolidated Financial Statements (Continued)

The Company’s debt maturities as of March 31, 2025 were as follows:

The Company’s debt maturities as of June 30, 2025 were as follows:

Years ending December 31,

2 unchanged sentences

In the course of its business, the Company uses letters of credit, bank guarantees, and surety bonds (collectively, "Guarantees").

The Company had $ 10.9 million of Guarantees under various uncommitted facilities as of both March 31, 2025 and December 31, 2024.

The Company had no letters of credit outstanding under the 2024 Credit Facility as of March 31, 2025 or December 31, 2024.

At March 31, 2025 and December 31, 2024, the Company had cash collateral of $ 2.6 million and $ 2.7 million, respectively, supporting the Guarantees, which are reported as Restricted cash in the Company’s condensed consolidated balance sheets.

The Company had $ 9.9 million and $ 10.9 million of Guarantees under various uncommitted facilities as of June 30, 2025 and December 31, 2024, respectively.

The Company had no letters of credit outstanding under the 2024 Credit Facility as of June 30, 2025 or December 31, 2024.

At June 30, 2025 and December 31, 2024, the Company had cash collateral of $ 1.8 million and $ 2.7 million supporting the Guarantees, respectively, which are reported as Restricted cash in the Company’s condensed consolidated balance sheets.

(10) DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

2 unchanged sentences

To manage the volatility related to the exposure to changes in interest rates, the Company may enter into derivative financial instruments.

Management’s objective has been to reduce, where it is deemed appropriate to do so, fluctuations in earnings and cash flows associated with changes in interest rates.

Management’s objective has been

RIBBON COMMUNICATIONS INC.

Notes to Condensed Consolidated Financial Statements (Continued)

to reduce, where it is deemed appropriate to do so, fluctuations in earnings and cash flows associated with changes in interest rates.

Ribbon’s policies and practices are to use derivative financial instruments only to the extent necessary to manage exposures.

8 unchanged sentences

Cash Flow Hedge of Interest Rate Risk

The 2024 Term Loan Facility had outstanding balances of $ 347.4 million and $ 348.3 million at March 31, 2025 and December 31, 2024, respectively.

The 2024 Revolving Credit Facility was undrawn at March 31, 2025 and December 31, 2024.

The 2024 Term Loan Facility had outstanding balances of $ 346.5 million and $ 348.3 million at June 30, 2025 and December 31, 2024, respectively.

The 2024 Revolving Credit Facility was undrawn at June 30, 2025 and December 31, 2024.

Borrowings under the 2024 Credit Facility and the 2020 Credit Facility have variable interest rates based on SOFR (see Note 9).

RIBBON COMMUNICATIONS INC.

Notes to Condensed Consolidated Financial Statements (Continued)

As a result of exposure to interest rate movements, the Company entered into an interest rate swap arrangement in March 2020 which effectively converted its $ 400 million term loan with its variable interest rate based upon one-month LIBOR to an aggregate fixed rate of 0.904 %, plus a leverage-based margin as defined in the 2020 Credit Facility.

In two separate transactions during 2022, the Company sold a total of $ 60 million of the notional amount of our interest rate swap back to its counterparty for $ 3.1 million, reducing the notional amount of this swap to $ 340 million.

The gain in Accumulated other comprehensive (loss) income related to these sales totaled $ 3.1 million and was being released into earnings on a straight-line basis over the remaining term of the 2020 Credit Facility as a decrease to interest expense, the amortization of which totaled $ 0.2 million in the three months ended March 31, 2024.

In two separate transactions during 2022, the Company sold a total of $ 60 million of the notional amount of its interest rate swap back to its counterparty for $ 3.1 million, reducing the notional amount of this swap to $ 340 million.

The remaining unamortized gain in Accumulated other comprehensive (loss) income of approximately $ 0.5 million was written off to interest expense in conjunction with the refinancing of the 2020 Credit Facility on June 21, 2024.

1 unchanged sentence

The portion of the gain in Accumulated other comprehensive (loss) income related to the term loan debt prepaid on the date of the final sale of the swap totaled $ 7.3 million and was released into earnings immediately as Other expense, net.

The portion of the gain in Accumulated other comprehensive (loss) income related to the remaining term loan debt balance totaled $ 12.0 million and was being released into earnings on a straight-line basis over the remaining term of the 2020 Credit Facility as a decrease to interest expense beginning in the second quarter of 2023, the amortization of which was $ 1.6 million for the three months ended March 31, 2024.

The portion of the gain in Accumulated other comprehensive (loss) income related to the remaining term loan debt balance totaled $ 12.0 million and was being released into earnings on a straight-line basis over the remaining term of the 2020 Credit Facility as a decrease to interest expense beginning in the second quarter of 2023, the amortization of which was $ 1.4 million and $ 3.0 million for three and six months ended June 30, 2024, respectively.

The remaining unamortized gain in Accumulated other comprehensive (loss) income of $ 4.4 million was written off to interest expense in conjunction with the refinancing of the 2020 Credit Facility on June 21, 2024.

RIBBON COMMUNICATIONS INC.

Notes to Condensed Consolidated Financial Statements (Continued)

The Company’s objectives in using interest rate derivatives have been to add stability to interest expense and to manage its exposure to interest rate movements.

5 unchanged sentences

Amounts reported in Accumulated other comprehensive income related to the Company’s derivative are reclassified to interest expense as interest is accrued on the Company’s variable-rate debt.

The impact of the Company’s derivative financial instrument on its condensed consolidated statements of comprehensive (loss) income for the three months ended March 31, 2024 was a reclassification of $ 1.3 million to increase interest expense.

The Company had no derivative assets or liabilities at March 31, 2025 or December 31, 2024.

The impact of the Company’s derivative financial instrument on its condensed consolidated statements of comprehensive (loss) income for three and six months ended June 30, 2024 was a reclassification of $ 4.7 million and $ 6.0 million, respectively, to increase interest expense.

The Company had no derivative assets or liabilities at June 30, 2025 or December 31, 2024.

(11) PREFERRED STOCK AND WARRANTS

1 unchanged sentence

On June 25, 2024, the Company redeemed the Preferred Stock with a portion of the proceeds from the refinancing of the 2020 Credit Facility at a rate of 103 % for a total of approximately $ 63.5 million.

During the three months ended

RIBBON COMMUNICATIONS INC.

Notes to Condensed Consolidated Financial Statements (Continued)

March 31, 2025, 0.2 million Warrants were exercised.

During six months ended June 30, 2025, 0.2 million Warrants were exercised.

The remaining Warrants outstanding continue without modification.

6 unchanged sentences

The Company determined the fair value of the Warrants using Level 3 input.

The key assumptions into the model utilized was as follows as of March 31, 2025 and 2024:

The key assumptions into the model utilized were as follows as of June 30, 2025 and December 31, 2024:

RIBBON COMMUNICATIONS INC.

Notes to Condensed Consolidated Financial Statements (Continued)

Risk-free rate

2 unchanged sentences

Fair value of Warrant per share

The changes in the Company’s Preferred Stock liabilities for the three months ended March 31, 2024 were as follows (in thousands):

The changes in the Company’s Preferred Stock liabilities for the six months ended June 30, 2024 were as follows (in thousands):

Preferred stock

1 unchanged sentence

Payable in-kind dividends

Fair value change

Balance at March 31, 2024

The changes in the Company’s Warrant liabilities for the three months ended March 31, 2025 and 2024 were as follows (in thousands):

Three months ended March 31,

Reversal of fair value adjustments

Call premium ( 3 %)

Redemption (June 25, 2024)

Balance at June 30, 2024

The changes in the Company’s Warrant liabilities for the six months ended June 30, 2025 and 2024 were as follows (in thousands):

Six months ended June 30,

Balance at beginning of year

2 unchanged sentences

Balance at end of period

RIBBON COMMUNICATIONS INC.

Notes to Condensed Consolidated Financial Statements (Continued)

The Preferred Stock, redeemed on June 25, 2024, was subordinate to the Company’s indebtedness and senior to the Company’s common stock or other equity.

10 unchanged sentences

The registration requirement was completed on May 19, 2023.

During the three months ended March 31, 2025, 176,658 of the Warrants were exercised in cashless exercises, resulting in the issuance of 32,573 of the Company’s common stock at a weighted average fair value of $ 4.62 per share.

There were 4,681,432 remaining Warrants outstanding as of March 31, 2025.

RIBBON COMMUNICATIONS INC.

Notes to Condensed Consolidated Financial Statements (Continued)

During the six months ended June 30, 2025, 176,658 of the Warrants were exercised in cashless exercises, resulting in the issuance of 32,573 of the Company’s common stock at a weighted average fair value of $ 4.62 per share.

There were 4,681,432 remaining Warrants outstanding as of June 30, 2025.

(12) REVENUE RECOGNITION

16 unchanged sentences

The Company begins to recognize software revenue related to the renewal of term-based software licenses at the start of the renewal period.

RIBBON COMMUNICATIONS INC.

Notes to Condensed Consolidated Financial Statements (Continued)

Revenue related to sales of SaaS-based software is recognized ratably over the service period as the customer does not take possession of the software or have the ability to take possession of the software.

9 unchanged sentences

The Company’s professional services include consulting, technical support, resident engineer services, design services and installation services.

Because control transfers over time, revenue is recognized based on progress toward completion of the performance obligation.

Because control transfers over time, revenue is recognized based on progress toward

RIBBON COMMUNICATIONS INC.

Notes to Condensed Consolidated Financial Statements (Continued)

completion of the performance obligation.

The method to measure progress toward completion requires judgment and is based on the nature of the products or services to be provided.

13 unchanged sentences

However, if a contract includes a significant financing component, the transaction price is adjusted for the time value of money.

For the three months ended March 31, 2025, the impact of financing components was immaterial.

For the three and six months ended June 30, 2025, the impact of financing components was immaterial.

Amounts billed to customers for sales and other taxes are excluded from the transaction price.

45 unchanged sentences

The Company disaggregates its revenue from contracts with customers based on the nature of the products and services and the geographic regions in which each customer is domiciled.

The Company’s total revenue for the three months ended March 31, 2025 and 2024 was disaggregated geographically as follows:

The Company’s total revenue for three and six months ended June 30, 2025 and 2024 was disaggregated geographically as follows:

Service revenue

1 unchanged sentence

(professional

Three months ended March 31, 2025

Three months ended June 30, 2025

(maintenance)

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(professional

Three months ended March 31, 2024

Three months ended June 30, 2024

(maintenance)

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Europe, Middle East and Africa

The Company’s product revenue from its direct sales program and from indirect sales through its channel partner program for the three months ended March 31, 2025 and 2024 was as follows (in thousands):

Service revenue

(professional

Six months ended June 30, 2025

(maintenance)

Total revenue

United States

Europe, Middle East and Africa

Service revenue

(professional

Six months ended June 30, 2024

(maintenance)

Total revenue

United States

Europe, Middle East and Africa

The Company’s product revenue from its direct sales program and from indirect sales through its channel partner program for the three and six months ended June 30, 2025 and 2024 was as follows (in thousands):

Three months ended

Six months ended

Indirect sales through channel partner program

The Company’s product revenue from sales to enterprise customers and from sales to service provider customers for the three months ended March 31, 2025 and 2024 was as follows (in thousands):

RIBBON COMMUNICATIONS INC.

Notes to Condensed Consolidated Financial Statements (Continued)

The Company’s product revenue from sales to enterprise customers and from sales to service provider customers for the three and six months ended June 30, 2025 and 2024 was as follows (in thousands):

Three months ended

Six months ended

Sales to enterprise customers

Sales to service provider customers

RIBBON COMMUNICATIONS INC.

Notes to Condensed Consolidated Financial Statements (Continued)

The Company’s product revenue and service revenue components by segment for the three months ended March 31, 2025 and 2024 were as follows (in thousands):

The Company’s product revenue and service revenue components by segment for the three and six months ended June 30, 2025 and 2024 were as follows (in thousands):

Three months ended

Six months ended

Product revenue:

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These assets and liabilities are reported in the Company’s condensed consolidated balance sheets on a contract-by-contract basis as of the end of each reporting period.

Changes in the contract asset and liability balances during the three months ended March 31, 2025 were not materially impacted by any factors other than billing and revenue recognition.

Changes in the contract asset and liability balances during the six months ended June 30, 2025 were not materially impacted by any factors other than billing and revenue recognition.

Nearly all of the Company’s deferred revenue balance is related to services revenue, primarily customer support contracts.

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In some arrangements, the Company allows customers to pay for term-based software licenses and products over the term of the software license.

The Company also sells SaaS-based software under subscription arrangements, with payment terms over the term of the SaaS agreement.

Amounts recognized as revenue in excess of amounts billed are recorded as unbilled receivables.

Unbilled receivables that are anticipated to be invoiced in the next twelve months are included in Accounts receivable on the Company’s condensed consolidated balance sheets.

The changes in the Company’s accounts receivable, unbilled receivables and deferred revenue balances for the three months ended March 31, 2025 were as follows (in thousands):

The Company also sells SaaS-based software under subscription arrangements, with

RIBBON COMMUNICATIONS INC.

Notes to Condensed Consolidated Financial Statements (Continued)

payment terms over the term of the SaaS agreement.

Amounts recognized as revenue in excess of amounts billed are recorded as unbilled receivables.

Unbilled receivables that are anticipated to be invoiced in the next twelve months are included in Accounts receivable on the Company’s condensed consolidated balance sheets.

The changes in the Company’s accounts receivable, unbilled receivables and deferred revenue balances for the six months ended June 30, 2025 were as follows (in thousands):

Balance at January 1, 2025

Increase (decrease), net

Balance at March 31, 2025

The Company recognized approximately $ 51 million of revenue in the three months ended March 31, 2025 that was recorded as deferred revenue at December 31, 2024 and approximately $ 51 million of revenue in the three months ended March 31, 2024 that was recorded as deferred revenue at December 31, 2023.

Of the Company’s deferred revenue reported as long-term in its condensed consolidated balance sheet at March 31, 2025, the Company expects that approximately $ 10 million will be recognized as revenue in 2026 , approximately $ 8 million will be recognized as revenue in 2027 and approximately $ 6 million will be recognized as revenue in 2028 and beyond.

Balance at June 30, 2025

The Company recognized approximately $ 75 million of revenue in the six months ended June 30, 2025 that was recorded as deferred revenue at December 31, 2024 and approximately $ 78 million of revenue in the six months ended June 30, 2024 that was recorded as deferred revenue at December 31, 2023.

Of the Company’s deferred revenue reported as long-term in its condensed consolidated balance sheet at June 30, 2025, the Company expects that approximately $ 10 million will be recognized as revenue in 2026 , approximately $ 9 million will be recognized as revenue in 2027 and approximately $ 13 million will be recognized as revenue in 2028 and beyond.

The Company applies the optional exemption of not disclosing the transaction price allocated to the remaining performance obligation for its contracts with an original duration of less than one year.

In 2024, the Company entered into a contract with an existing customer that has revenue allocated to remaining performance obligations, which includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods of approximately $ 275 million and $ 285 million as of March 31, 2025 and December 31, 2024, respectively.

The Company expects to recognize the remaining revenue in 2025, 2026 and 2027.

In 2024, the Company entered into a contract with an existing customer that has revenue allocated to remaining performance obligations, which includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods of approximately $ 235 million and $ 285 million as of June 30, 2025 and December 31, 2024, respectively.

At this time, the Company expects to recognize the majority of the revenue related to this contract in the years 2025 through 2028.

All freight-related customer invoicing is recorded as revenue, while the shipping and handling costs that occur after control of the promised goods or services transfer to the customer are reported as fulfillment costs, a component of Cost of revenue - product in the Company’s condensed consolidated statements of operations.

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These costs have been deferred on our condensed consolidated balance sheet and are being amortized over the expected life of the customer contract, which is generally five years .

At March 31, 2025 and December 31, 2024, the Company had $ 2.5 million and $ 2.8 million of deferred sales commissions capitalized, respectively.

At June 30, 2025 and December 31, 2024, the Company had $ 2.2 million and $ 2.8 million of deferred sales commissions capitalized, respectively.

(13) OPERATING SEGMENT INFORMATION

2 unchanged sentences

The Cloud and Edge segment provides secure and reliable software and hardware products, solutions and services for enabling Voice over Internet Protocol ("VoIP") communications, Voice over Long-Term Evolution ("VoLTE") and Voice Over 5G ("VoNR") communications, and Unified Communications and Collaboration ("UC&C") within service provider and enterprise networks and from the cloud.

The Cloud and Edge products are increasingly software-centric and cloud-native for deployment on private, public or hybrid cloud infrastructures, in data centers, on enterprise premises and within service provider networks.

Ribbon's Cloud and Edge product portfolio consists primarily of its Session Border Controller ("SBC") products and its Network Transformation products.

The IP Optical Networks segment provides high-performance, secure solutions for IP networking and optical

The Cloud and Edge products are increasingly software-centric and cloud-native for deployment on private, public or hybrid cloud infrastructures, in data centers, on enterprise premises

RIBBON COMMUNICATIONS INC.

Notes to Condensed Consolidated Financial Statements (Continued)

transport, supporting wireless networks including 5G, metro and edge aggregation, core networking, data center interconnect, legacy transformation and transport solutions for wholesale carriers.

and within service provider networks.

Ribbon's Cloud and Edge product portfolio consists primarily of its Session Border Controller ("SBC") products and its Network Transformation products.

The IP Optical Networks segment provides high-performance, secure solutions for IP networking and optical transport, supporting wireless networks including 5G, metro and edge aggregation, core networking, data center interconnect, legacy transformation and transport solutions for wholesale carriers.

This portfolio is offered to service provider, enterprise and industry verticals with critical transport network infrastructures including utilities, government, defense, transportation, and education and research.

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See below for a reconciliation of segment adjusted gross profit to gross profit and loss before income taxes.

The tables below present significant segment expenses regularly reviewed by the CODM for the three months ended March 31, 2025 and 2024 (in thousands):

The tables below present significant segment expenses regularly reviewed by the CODM for the three and six months ended June 30, 2025 and 2024 (in thousands):

RIBBON COMMUNICATIONS INC.

Notes to Condensed Consolidated Financial Statements (Continued)

Three months ended

Six months ended

Segment revenue:

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Three months ended

Six months ended

Segment adjusted gross profit:

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Amortization of acquired intangible assets

Acquisition-, disposal- and integration-related expense

Restructuring and related expense

Interest expense, net

Other income (expense), net

Other (expense) income, net

Loss before income taxes

RIBBON COMMUNICATIONS INC.

Notes to Condensed Consolidated Financial Statements (Continued)

Three months ended

Six months ended

Segment depreciation expense:

3 unchanged sentences

(14) MAJOR CUSTOMERS

The following customer contributed 10% or more of the Company’s revenue in the three months ended March 31, 2025 and 2024:

The following customer contributed 10% or more of the Company’s revenue in the three and six months ended June 30, 2025 and 2024:

Three months ended

Six months ended

Verizon Communications Inc.

* Less than 10% of total revenue

At March 31, 2025 and December 31, 2024, no customer accounted for 10% or more of the Company’s accounts receivable balance.

RIBBON COMMUNICATIONS INC.

Notes to Condensed Consolidated Financial Statements (Continued)

At June 30, 2025 and December 31, 2024, no customer accounted for 10% or more of the Company’s accounts receivable balance.

The Company performs ongoing credit evaluations of its customers and generally does not require collateral on accounts receivable.

The Company maintains an allowance for doubtful accounts and such losses have historically been within management’s expectations.

(15) COMMON STOCK REPURCHASES

In the second quarter of 2025, the Company's Board of Directors approved a program to repurchase up to $ 50 million of the Company’s common stock (the “2025 Repurchase Program” or the “Repurchase Program”).

Commencing on June 5, 2025 and continuing through December 31, 2027, the Repurchase Program is being funded with cash on hand or cash generated from operations.

During the quarter ended June 30, 2025, the Company used $ 2.3 million, including transaction fees, to repurchase and retire 0.6 million shares of its common stock under the Repurchase Program, with $ 47.7 million remaining for future repurchases as of June 30, 2025.

(16) STOCK-BASED COMPENSATION PLANS

The Company grants stock-based compensation to employees, officers and non-employee directors, as well as consultants and advisors of the Company and its subsidiaries under its Amended and Restated 2019 Incentive Award Plan which provides for the award of stock options, stock appreciation rights, restricted stock awards ("RSAs"), performance-based stock awards, restricted stock units ("RSUs"), performance-based stock units ("PSUs") and other stock- or cash-based awards.

The Company grants stock-based compensation to employees, officers and non-employee directors, as well as consultants and advisors of the Company and its subsidiaries under its 2025 Incentive Award Plan (the “2025 Plan”) which provides for the award of stock options, stock appreciation rights ("SARs"), restricted stock awards ("RSAs"), performance-based stock awards ("PSAs"), restricted stock units ("RSUs"), performance1based stock units ("PSUs") and other stock- or cash-based awards.

The 2025 Plan, approved by the Company’s stockholders at the annual meeting held on May 28, 2025 (the “2025 Annual Meeting”), permits the Company to grant awards of up to (i) 14 million new shares of its common stock, plus (ii) 2,180,307 shares of its common stock previously reserved for issuance by the Company’s Amended and Restated 2019 Incentive Award Plan plus that number of shares of its common stock subject to awards granted under certain prior plans which become available for grant under the 2025 Plan.

At the 2025 Annual Meeting, the Company's stockholders also approved an amendment to the Company’s Restated Certificate of Incorporation, as amended, to increase the number of authorized shares of its common stock by 150 million shares to a total of 390 million shares.

Executive Equity Arrangements

10 unchanged sentences

Restricted Stock Units

The activity related to the Company’s RSUs for the three months ended March 31, 2025 was as follows:

The activity related to the Company’s RSUs for the six months ended June 30, 2025 was as follows:

Unvested balance at January 1, 2025

Unvested balance at March 31, 2025

The total grant date fair value of shares of restricted stock underlying RSUs that vested during the three months ended March 31, 2025 was $ 0.6 million.

( 2,621,202 )

Unvested balance at June 30, 2025

The total grant date fair value of shares of restricted stock underlying RSUs that vested during the six months ended June 30, 2025 was $ 8.1 million.

Performance-Based Stock Units

The activity related to the Company’s PSUs for the three months ended March 31, 2025 was as follows:

The activity related to the Company’s PSUs for the six months ended June 30, 2025 was as follows:

Unvested balance at January 1, 2025

Unvested balance at March 31, 2025

The total grant date fair value of shares of restricted stock underlying PSUs that vested during the three months ended March 31, 2025 was $ 1.4 million.

Unvested balance at June 30, 2025

The total grant date fair value of shares of restricted stock underlying PSUs that vested during the six months ended June 30, 2025 was $ 1.4 million.

RIBBON COMMUNICATIONS INC.

1 unchanged sentence

Stock-Based Compensation

The condensed consolidated statements of operations include stock-based compensation for the three months ended March 31, 2025 and 2024 as follows (in thousands):

The condensed consolidated statements of operations include stock-based compensation for the three and six months ended June 30, 2025 and 2024 as follows (in thousands):

Three months ended

Six months ended

Product cost of revenue

3 unchanged sentences

General and administrative

At March 31, 2025, there was $ 10.3 million, net of expected forfeitures, of unrecognized stock-based compensation expense related to unvested RSUs and PSUs.

This expense is expected to be recognized over a weighted average period of approximately one year .

At June 30, 2025, there was $ 34.8 million, net of expected forfeitures, of unrecognized stock-based compensation expense related to unvested RSUs and PSUs.

This expense is expected to be recognized over a weighted average period of approximately two years .

The Company has operating leases for corporate offices and research and development facilities.

9 unchanged sentences

The measurement of the right-of-use asset also includes any lease payments made prior to the commencement date (excluding any lease incentives) and initial direct costs incurred.

The Company assessed its right-of-use assets for impairment as of March 31, 2025 and December 31, 2024 and determined no impairment has occurred.

The Company assessed its right-of-use assets for impairment as of June 30, 2025 and December 31, 2024 and determined no impairment has occurred.

Lease terms may include options to extend or terminate the lease and the Company incorporates such options in the lease term when it has the unilateral right to make such an election and it is reasonably certain that the Company will exercise that option.

9 unchanged sentences

Accordingly, the Company may accelerate the amortization of those lease assets through the planned cease-use date of each facility, resulting in additional amortization expense.

No such accelerated amortization was recorded in the three months ended March 31, 2025 or March 31, 2024.

The Company did no t record estimated future variable lease costs in the three months ended March 31, 2025 or 2024 related to the 2022 Restructuring Plan.

No such accelerated amortization was recorded in the three and six months ended June 30, 2025 or 2024.

The Company did no t record estimated future variable lease costs in the three and six months ended June 30, 2025 or 2024 related to the 2022 Restructuring Plan.

All incremental accelerated amortization and accruals for estimated future variable costs are included in Restructuring and related expense in the Company’s condensed consolidated statements of operations.

At March 31, 2025 and December 31, 2024, the Company had accruals of $ 1.0 million and $ 1.1 million, respectively, for all future anticipated variable lease costs related to these facilities.

At June 30, 2025 and December 31, 2024, the Company had accruals of $ 0.9 million and $ 1.1 million, respectively, for all future anticipated variable lease costs related to these facilities.

The Company may incur additional future expense if it is unable to sublease other locations included in the Facilities Initiative.

The Company leases its corporate offices and other facilities under operating leases, which expire at various times through 2036.

The Company’s right-of-use lease assets and lease liabilities at March 31, 2025 and December 31, 2024 were as follows (in thousands):

The Company’s right-of-use lease assets and lease liabilities at June 30, 2025 and December 31, 2024 were as follows (in thousands):

Classification

8 unchanged sentences

Notes to Condensed Consolidated Financial Statements (Continued)

The components of lease expense for the three months ended March 31, 2025 and 2024 were as follows (in thousands):

The components of lease expense for the three and six months ended June 30, 2025 and 2024 were as follows (in thousands):

Three months ended

Six months ended

Operating lease cost*

3 unchanged sentences

Net lease cost

No accelerated amortization was recorded in the three months ended March 31, 2025 or 2024.

No variable lease costs were accrued in the three months ended March 31, 2025 or 2024 for future estimated variable expenses related to certain assets partially or fully vacated with no intent or ability to sublease.

Cash flows related to the Company’s leases included in the measurement of operating lease liabilities were classified as operating cash flows and totaled $ 3.5 million and $ 4.8 million in the three months ended March 31, 2025 and 2024, respectively.

The Company’s non-cash investing and financing activities in the three months ended March 31, 2025 and 2024 related to the addition of operating leases resulted in right-of-use assets (“ROUs”) obtained in exchange for lease obligations of $ 16.6 million and $ 1.3 million, respectively, and operating lease liabilities recorded of $ 27.3 million and $ 1.3 million, respectively.

Other information related to the Company’s leases as of March 31, 2025 and December 31, 2024 was as follows (in thousands):

No accelerated amortization was recorded in the three and six months ended June 30, 2025 or 2024.

No variable lease costs were accrued in the three and six months ended June 30, 2025 or 2024 for future estimated variable expenses related to certain assets partially or fully vacated with no intent or ability to sublease.

Cash flows related to the Company’s leases included in the measurement of operating lease liabilities were classified as operating cash flows and totaled $ 7.7 million and $ 9.4 million in the six months ended June 30, 2025 and 2024, respectively.

The Company’s non-cash investing and financing activities in the six months ended June 30, 2025 and 2024 related to the addition of operating leases resulted in right-of-use assets (“ROUs”) obtained in exchange for lease obligations of $ 17.3 million and $ 1.6 million, respectively, and operating lease liabilities recorded of $ 28.0 million and $ 1.6 million, respectively.

Other information related to the Company’s leases as of June 30, 2025 and December 31, 2024 was as follows (in thousands):

Weighted average remaining lease term (years):

2 unchanged sentences

Operating leases

Future minimum fixed lease payments under noncancelable leases at March 31, 2025 were as follows (in thousands):

Future minimum fixed lease payments under noncancelable leases at June 30, 2025 were as follows (in thousands):

Remainder of 2025

5 unchanged sentences

(18) INCOME TAXES

The Company recorded income tax benefits (provisions) of $ 0.8 million and $( 3.4 ) million in the three months ended March 31, 2025 and 2024, respectively.

The Company recorded income tax provisions of $ 1.4 million and $ 4.9 million in the six months ended June 30, 2025 and 2024, respectively.

These amounts reflect the Company’s estimates of the effective rates expected to be applicable for the respective full years, adjusted for any discrete events, which are recorded in the period in which they occur.

3 unchanged sentences

(19) RELATED PARTIES

The Company recognized revenue from its largest stockholder of $ 1.7 million and $ 1.5 million in the three months ended March 31, 2025 and 2024, respectively.

Also, the Company’s accounts receivable from its largest stockholder totaled $ 4.7 million and $ 5.5 million as of March 31, 2025 and December 31, 2024, respectively.

The Company recognized revenue from its largest stockholder of $ 1.3 million and $ 1.5 million in the three months ended June 30, 2025 and 2024, respectively, and $ 3.0 million in both the six months ended June 30, 2025 and 2024.

Also, the Company’s accounts receivable from its largest stockholder totaled $ 3.8 million and $ 5.5 million as of June 30, 2025 and December 31, 2024, respectively.

In addition, certain related party stockholders participated in the Private Placement described in Note 11.

8 unchanged sentences

For grants approved in 2024 and thereafter, interest is calculated based on SOFR.

At March 31, 2025, the Company had $ 2.1 million of unpaid royalties accrued.

The Company’s maximum possible future royalties commitment at March 31, 2025 of $ 14.1 million, including interest of $ 0.9 million, was based upon estimates of future sales of product and services and the grants received from the IIA not yet repaid.

At June 30, 2025, the Company had $ 1.3 million of unpaid royalties accrued.

The Company’s maximum possible future royalties commitment at June 30, 2025 of $ 12.8 million, including interest of $ 0.8 million, was based upon estimates of future sales of product and services and the grants received from the IIA not yet repaid.

The Company is often a party to disputes and legal proceedings that it considers routine and incidental to its business, including those described below.

5 unchanged sentences

On September 19, 2022, Charter Communications Operating, LLC (“Charter”) filed two complaints against two of our subsidiaries (Sonus Networks, Inc.

and Ribbon Communications Operating Company, Inc.) alleging breach of contract with respect to indemnification obligations purportedly owed to Charter in connection with Charter’s legal dispute with Sprint Communications Company L.P., which was settled by Charter in

and Ribbon Communications Operating Company, Inc.) alleging breach of contract with respect to indemnification obligations purportedly owed to Charter in

RIBBON COMMUNICATIONS INC.

Notes to Condensed Consolidated Financial Statements (Continued)

connection with Charter’s legal dispute with Sprint Communications Company L.P., which was settled by Charter in March 2022.

One complaint was filed in the Supreme Court of the State of New York, in New York County;

2 unchanged sentences

The Company filed its answer to the first complaint file in New York on December 7, 2022 and to the second complaint filed in Delaware on January 9, 2023.

Discovery is on-going and the court in the Delaware complaint has set a trial date of June 2025.

On May 14, 2025, the Delaware court granted our dispositive motion for summary judgement and denied Charter’s motion for partial summary judgement.

The Delaware court’s ruling ended the case in Delaware at the trial level.

Charter has appealed the Delaware court’s ruling and briefing on the appeal is underway.

Discovery remains on-going in the New York case.

No trial date has been set for the case in New York.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements