Ribbon Communications Inc. 10-K

Item 8. Financial Statements and Supplementary Data ​ ​ Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34 ) 61 ​ ​ Consolidated Balance Sheets as of December 31, 2025 and 2024 64 ​ ​ Consolidated Statements of Operations for the years ended December 31, 2025, 2024 and 2023 65 ​ ​ Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2025, 2024 and 2023 66 ​ ​ Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2025, 2024 and 2023 67 ​ ​ Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024 and 2023 68 ​ ​ Notes to Consolidated Financial Statements 70 ​ ​ ​ ​ 60 ​ REPORT OF INDEPENDENT RE GISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Ribbon Communications Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Ribbon Communications Inc. and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income (loss), stockholders' equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 26, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Revenue Recognition - Refer to Notes 2 and 16 to the Financial Statements Critical Audit Matter Description The Company recognizes revenue from two primary sources: products and services. Generally, contracts with customers contain multiple performance obligations, consisting of products and services. For these contracts, the Company accounts for individual performance obligations separately if they are considered distinct. When an arrangement contains more than one performance obligation, the Company will allocate the transaction price to each performance obligation on a relative standalone selling price basis. The Company utilizes the observable price of goods and services, including when they are sold separately to similar customers, in order to estimate standalone selling price. 61 ​ Management is required to use judgment to develop its estimates of standalone selling price. Auditing the Company’s estimates of standalone selling price required a high degree of auditor judgment and an increased extent of effort, including the need to involve our data analytics specialists to assist in the testing of the standalone selling price analyses given the judgment required by management in this area. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the testing of management’s estimation of standalone selling prices included the following, among others: * We tested the effectiveness of controls over revenue, including those over the determination of estimated standalone selling price. * We evaluated whether management’s significant accounting policies related to the estimation of standalone selling price were appropriate. * With the assistance of our data analytics specialists, we evaluated the estimated standalone selling price analyses prepared by the Company, including testing the underlying detail of customer arrangements and the mathematical accuracy of the calculations. ​ Goodwill - Cloud and Edge Reporting Unit - Refer to Notes 2 and 9 to the Financial Statements Critical Audit Matter Description The Company’s evaluation of goodwill for impairment involves the comparison of the fair value of each reporting unit to its carrying value. The Company used a combination of the income and market approaches to estimate reporting unit fair value. With respect to the income approach, management is required to make significant estimates and assumptions related to discount rates and forecasts of future revenues and profit margins. Changes in these assumptions could have a significant impact on either the fair value, the amount of any goodwill impairment charge, or both. The goodwill balance was $301 million as of December 31, 2025, of which $225 million was allocated to the Cloud and Edge Reporting Unit (“Cloud and Edge”). Given the significant judgments made by management to estimate the fair value of Cloud and Edge, performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to the selection of the discount rate and forecasts of future revenues and profit margins required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the discount rate and forecasts of future revenues and profit margins, used by management to estimate the fair value of Cloud and Edge, included the following, among others: ◦ We tested the effectiveness of controls over management’s goodwill impairment evaluation, including those over the determination of the fair value of Cloud and Edge, such as controls related to management’s selection of the discount rate and forecasts of future revenues and profit margins. ◦ We evaluated management’s ability to accurately forecast future revenues and profit margins by comparing actual results to management’s historical forecasts. ◦ We evaluated the reasonableness of management’s revenue and profit margin forecasts by comparing the forecasts to: ▪ Historical revenues and profit margins. ▪ Internal communications to management and the Board of Directors. ▪ Forecasted information included in the Company press releases as well as in analyst and industry reports for the Company and certain of its peer companies. ◦ With the assistance of our fair value specialists, we evaluated the reasonableness of the discount rate by: 62 ​ ▪ Testing the source information underlying the determination of the discount rate and the mathematical accuracy of the calculation. ▪ Developing a range of independent estimates and compared those to the discount rate selected by management. ​ /s/ Deloitte & Touche LLP Dallas, Texas February 26, 2026 We have served as the Company's auditor since 2005. ​ ​ ​ 63 ​ RIBBON COMMUNICATIONS INC. Consolidated Balance Sheets (in thousands, except share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Assets ​ ​ ​ ​ ​ ​ Current assets: ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 96,405 ​ $ 87,770 Restricted cash ​ ​ 1,726 ​ ​ 2,709 Accounts receivable, net ​ 231,885 ​ 254,718 Inventory ​ 78,806 ​ 79,179 Other current assets ​ 45,663 ​ 39,286 Total current assets ​ 454,485 ​ 463,662 Property and equipment, net ​ 65,559 ​ 60,364 Intangible assets, net ​ 143,344 ​ 187,537 Goodwill ​ 300,892 ​ 300,892 Deferred income taxes ​ 174,318 ​ 88,982 Operating lease right-of-use assets ​ 46,240 ​ 34,544 Other assets ​ 27,417 ​ 26,573 ​ ​ $ 1,212,255 ​ $ 1,162,554 Liabilities and Stockholders’ Equity ​ ​ ​ ​ Current liabilities: ​ ​ ​ ​ Current portion of term debt ​ $ 8,750 ​ $ 6,125 Accounts payable ​ 79,840 ​ 87,759 Accrued expenses and other ​ 90,759 ​ 106,251 Operating lease liabilities ​ 11,699 ​ 9,443 Deferred revenue ​ 124,425 ​ 119,295 Total current liabilities ​ 315,473 ​ 328,873 Long-term debt, net of current ​ 324,525 ​ 330,726 Warrant liability ​ 1,919 ​ 8,064 Operating lease liabilities, net of current ​ 60,159 ​ 37,376 Deferred revenue, net of current ​ 31,654 ​ 20,991 Deferred income taxes ​ 5,728 ​ 5,941 Other long-term liabilities ​ 23,803 ​ 25,962 Total liabilities ​ 763,261 ​ 757,933 Commitments and contingencies (Note 26) ​ ​ ​ ​ Stockholders’ equity: ​ ​ ​ ​ Common stock, $ 0.0001 par value per share; 390,000,000 shares authorized at December 31, 2025; 240,000,000 shares authorized at December 31, 2024; 175,776,074 shares issued and outstanding at December 31, 2025; 175,599,250 shares issued and outstanding at December 31, 2024 ​ 18 ​ 18 Additional paid-in capital ​ 1,976,958 ​ 1,970,708 Accumulated deficit ​ ( 1,534,549 ) ​ ( 1,574,185 ) Accumulated other comprehensive income ​ 6,567 ​ 8,080 Total stockholders’ equity ​ 448,994 ​ 404,621 ​ ​ $ 1,212,255 ​ $ 1,162,554 ​ See notes to the consolidated financial statements. ​ 64 ​ RIBBON COMMUNICATIONS INC. Consolidated Statements of Operations (in thousands, except per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ Product ​ $ 434,587 ​ $ 447,229 ​ $ 445,150 Service ​ 409,969 ​ 386,652 ​ 381,189 Total revenue ​ 844,556 ​ 833,881 ​ 826,339 Cost of revenue: ​ ​ ​ ​ ​ ​ Product ​ 249,247 ​ 228,527 ​ 250,609 Service ​ 154,259 ​ 140,949 ​ 139,357 Amortization of acquired technology ​ 20,344 ​ 24,893 ​ 28,290 Total cost of revenue ​ 423,850 ​ 394,369 ​ 418,256 Gross profit ​ 420,706 ​ 439,512 ​ 408,083 Operating expenses: ​ ​ ​ ​ ​ ​ Research and development ​ 178,872 ​ 179,941 ​ 190,660 Sales and marketing ​ 133,075 ​ 137,830 ​ 137,460 General and administrative ​ 64,239 ​ 68,740 ​ 54,962 Amortization of acquired intangible assets ​ 23,849 ​ 25,969 ​ 28,601 Acquisition-, disposal- and integration-related ​ 4,337 ​ — ​ 4,476 Restructuring and related ​ 19,658 ​ 10,160 ​ 16,209 Total operating expenses ​ 424,030 ​ 422,640 ​ 432,368 (Loss) income from operations ​ ( 3,324 ) ​ 16,872 ​ ( 24,285 ) Interest expense, net ​ ( 44,011 ) ​ ( 33,821 ) ​ ( 27,320 ) Other income (expense), net ​ 2,226 ​ ( 29,119 ) ​ ( 3,768 ) Loss before income taxes ​ ( 45,109 ) ​ ( 46,068 ) ​ ( 55,373 ) Income tax benefit (provision) ​ 84,745 ​ ( 8,167 ) ​ ( 10,833 ) Net income (loss) ​ $ 39,636 ​ $ ( 54,235 ) ​ $ ( 66,206 ) Earnings (loss) per share: ​ ​ ​ ​ ​ ​ Basic ​ $ 0.22 ​ $ ( 0.31 ) ​ $ ( 0.39 ) Diluted ​ $ 0.22 ​ $ ( 0.31 ) ​ $ ( 0.39 ) Weighted average shares used to compute earnings (loss) per share: ​ ​ ​ ​ ​ ​ Basic ​ 176,199 ​ 174,044 ​ 170,408 Diluted ​ 179,822 ​ 174,044 ​ 170,408 ​ See notes to the consolidated financial statements. ​ 65 ​ RIBBON COMMUNICATIONS INC. Consolidated Statements of Comprehensive Income (Loss ) (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Net income (loss) ​ $ 39,636 ​ $ ( 54,235 ) ​ $ ( 66,206 ) Other comprehensive loss, net of tax: ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized loss on interest rate swap, net of reclassifications and amortization into earnings ​ — ​ ( 6,019 ) ​ ( 10,015 ) Reclassification of gain to other expense, net upon sale of interest rate swap ​ — ​ — ​ ( 5,099 ) Foreign currency translation adjustments ​ ( 445 ) ​ 472 ​ ( 506 ) Employee retirement benefits ​ ( 1,068 ) ​ ( 160 ) ​ ( 1,178 ) Other comprehensive loss, net of tax ​ ( 1,513 ) ​ ( 5,707 ) ​ ( 16,798 ) Comprehensive income (loss), net of tax ​ $ 38,123 ​ $ ( 59,942 ) ​ $ ( 83,004 ) ​ See notes to the consolidated financial statements. ​ 66 ​ RIBBON COMMUNICATIONS INC. Consolidated Statements of Stockholders’ Equity (in thousands, except share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ other ​ Total ​ ​ Common stock ​ paid-in ​ Accumulated ​ comprehensive ​ stockholders’ ​ ​ ​ ​ Shares ​ ​ ​ Amount ​ ​ ​ capital ​ ​ ​ deficit ​ ​ ​ income (loss) ​ ​ ​ equity Balances, January 1, 2023 168,324,995 ​ $ 17 ​ $ 1,941,569 ​ $ ( 1,453,744 ) ​ $ 30,585 ​ $ 518,427 Exercise of stock options 7,816 ​ — ​ 15 ​ — ​ — ​ 15 Vesting of restricted stock awards and units 4,840,738 ​ — ​ ​ — ​ ​ — ​ ​ — ​ — Vesting of performance-based stock units 381,071 ​ — ​ ​ — ​ ​ — ​ ​ — ​ — Shares of restricted stock returned to the Company under net share settlements to satisfy tax withholding obligations ( 1,470,953 ) ​ — ​ ( 4,481 ) ​ — ​ — ​ ( 4,481 ) Stock-based compensation expense — ​ — ​ 21,806 ​ — ​ — ​ 21,806 Other comprehensive loss — ​ — ​ — ​ — ​ ( 16,798 ) ​ ( 16,798 ) Net loss — ​ — ​ — ​ ( 66,206 ) ​ — ​ ( 66,206 ) Balances, December 31, 2023 172,083,667 ​ 17 ​ 1,958,909 ​ ( 1,519,950 ) ​ 13,787 ​ 452,763 Exercise of stock options 11,285 ​ — ​ 21 ​ — ​ ​ — ​ 21 Vesting of restricted stock awards and units 4,653,037 ​ 1 ​ — ​ — ​ ​ — ​ 1 Vesting of performance-based stock units 298,586 ​ — ​ — ​ — ​ ​ — ​ — Shares of restricted stock returned to the Company under net share settlements to satisfy tax withholding obligations ( 1,447,325 ) ​ — ​ ( 4,308 ) ​ — ​ — ​ ( 4,308 ) Stock-based compensation expense — ​ — ​ 16,086 ​ — ​ — ​ 16,086 Other comprehensive loss — ​ — ​ — ​ — ​ ( 5,707 ) ​ ( 5,707 ) Net loss — ​ — ​ — ​ ( 54,235 ) ​ — ​ ( 54,235 ) Balances, December 31, 2024 175,599,250 ​ 18 ​ 1,970,708 ​ ( 1,574,185 ) ​ 8,080 ​ 404,621 Exercise of stock options 3,997 ​ ​ — ​ ​ 6 ​ ​ — ​ ​ — ​ 6 Exercise of warrants ​ 32,573 ​ ​ — ​ ​ 150 ​ ​ — ​ ​ — ​ ​ 150 Repurchase of common stock ​ ( 2,456,141 ) ​ ​ — ​ ​ ( 8,955 ) ​ ​ — ​ ​ — ​ ​ ( 8,955 ) Vesting of restricted stock awards and units 3,334,571 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ — Vesting of performance-based stock units 423,677 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ — Shares of restricted stock returned to the Company under net share settlements to satisfy tax withholding obligations ( 1,161,853 ) ​ ​ — ​ ​ ( 4,357 ) ​ ​ — ​ ​ — ​ ( 4,357 ) Stock-based compensation expense — ​ ​ — ​ ​ 19,406 ​ ​ — ​ ​ — ​ 19,406 Other comprehensive loss — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 1,513 ) ​ ( 1,513 ) Net income — ​ ​ — ​ ​ — ​ ​ 39,636 ​ ​ — ​ 39,636 Balances, December 31, 2025 175,776,074 ​ $ 18 ​ $ 1,976,958 ​ $ ( 1,534,549 ) ​ $ 6,567 ​ $ 448,994 ​ See notes to the consolidated financial statements. ​ 67 ​ RIBBON COMMUNICATIONS INC. Consolidated Statements of Cash Flows (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Cash flows from operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) ​ $ 39,636 ​ $ ( 54,235 ) ​ $ ( 66,206 ) Adjustments to reconcile net income (loss) to cash flows provided by operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization of property and equipment ​ 16,728 ​ ​ 13,539 ​ 14,105 Amortization of intangible assets ​ 44,193 ​ ​ 50,862 ​ 56,891 Amortization of debt issuance costs and original issue discount ​ 2,802 ​ ​ 4,847 ​ 3,241 Amortization of accumulated other comprehensive gain related to interest rate swap ​ — ​ ​ ( 8,196 ) ​ ( 5,575 ) Stock-based compensation ​ 19,406 ​ ​ 16,086 ​ 21,806 Deferred income taxes ​ ( 85,603 ) ​ ​ ( 16,887 ) ​ ( 9,196 ) Gain on sale of swap ​ ​ — ​ ​ — ​ ​ ( 7,301 ) Change in fair value of warrant liability ​ ( 5,995 ) ​ ​ 2,769 ​ ( 201 ) Change in fair value of preferred stock liability ​ — ​ ​ 8,091 ​ 1,548 Dividends accrued on preferred stock liability ​ — ​ ​ 2,743 ​ 3,935 Payment of dividends accrued on preferred stock liability ​ ​ — ​ ​ ( 6,686 ) ​ ​ — Foreign currency exchange losses (gains) ​ 3,653 ​ ​ 5,741 ​ ( 44 ) Changes in operating assets and liabilities: ​ ​ ​ ​ ​ ​ ​ Accounts receivable ​ 20,028 ​ ​ 12,420 ​ 5,726 Inventory ​ 234 ​ ​ ( 3,616 ) ​ ( 10,701 ) Other operating assets ​ ( 564 ) ​ ​ 30,459 ​ 34,834 Accounts payable ​ ( 3,257 ) ​ ​ ( 6,016 ) ​ ( 10,498 ) Accrued expenses and other long-term liabilities ​ ( 15,656 ) ​ ​ ( 9,367 ) ​ ( 14,684 ) Deferred revenue ​ 15,793 ​ ​ 7,686 ​ ( 593 ) Net cash provided by operating activities ​ 51,398 ​ ​ 50,240 ​ 17,087 Cash flows from investing activities: ​ ​ ​ ​ ​ ​ ​ Purchases of property and equipment ​ ( 25,342 ) ​ ​ ( 22,406 ) ​ ( 9,381 ) Purchases of software licenses ​ — ​ ​ ( 462 ) ​ ​ ( 100 ) Net cash used in investing activities ​ ( 25,342 ) ​ ​ ( 22,868 ) ​ ​ ( 9,481 ) Cash flows from financing activities: ​ ​ ​ ​ ​ ​ ​ ​ Borrowings under revolving line of credit ​ — ​ ​ 44,106 ​ 97,000 Principal payments on revolving line of credit ​ — ​ ​ ( 44,106 ) ​ ( 97,000 ) Proceeds from issuance of term debt ​ — ​ ​ 342,300 ​ — Principal payments of term debt ​ ( 6,125 ) ​ ​ ( 237,145 ) ​ ( 95,058 ) Payment of debt issuance costs ​ — ​ ​ ( 6,312 ) ​ ( 1,685 ) Proceeds from issuance of preferred stock and warrant liabilities ​ — ​ ​ — ​ 53,350 Payment of preferred stock liability ​ — ​ ​ ( 56,850 ) ​ — Proceeds from the exercise of stock options ​ ​ 6 ​ ​ 21 ​ ​ 15 Payment of tax obligations related to vested stock awards and units ​ ​ ( 4,357 ) ​ ​ ( 4,308 ) ​ ​ ( 4,481 ) Repurchase of common stock ​ ​ ( 8,955 ) ​ ​ — ​ ​ — Net cash (used in) provided by financing activities ​ ​ ( 19,431 ) ​ ​ 37,706 ​ ​ ( 47,859 ) Effect of exchange rate changes on cash and cash equivalents ​ ​ 1,027 ​ ​ ( 1,229 ) ​ ( 379 ) Net increase (decrease) in cash and cash equivalents ​ ​ 7,652 ​ 63,849 ​ ( 40,632 ) Cash, cash equivalents and restricted cash, beginning of year ​ ​ 90,479 ​ 26,630 ​ 67,262 Cash, cash equivalents and restricted cash, end of year ​ $ 98,131 ​ $ 90,479 ​ $ 26,630 ​ ​ ​ ​ 68 ​ RIBBON COMMUNICATIONS INC. Consolidated Statements of Cash Flows (continued) (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Supplemental disclosure of cash flow information: ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest paid ​ $ 37,998 ​ $ 32,969 ​ $ 25,573 Income taxes paid ​ $ 11,950 ​ $ 29,280 ​ $ 18,876 Income tax refunds received ​ $ 1,428 ​ $ 1,545 ​ $ 1,611 Supplemental disclosure of non-cash investing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Capital expenditures incurred, but not yet paid ​ $ 4,511 ​ $ 10,090 ​ $ 2,578 Inventory transfers to property and equipment ​ $ 2,159 ​ $ 2,165 ​ $ 1,693 Supplemental disclosure of non-cash financing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Warrant liability released to additional paid-in-capital ​ $ 150 ​ $ — ​ $ — Fair value of vested restricted and performance-based stock grants ​ $ 14,103 ​ $ 14,822 ​ $ 15,571 ​ See notes to the consolidated financial statements. ​ ​ 69 Table of Contents RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (1) NATURE OF THE BUSINESS Ribbon Communications Inc. (“Ribbon” or the “Company”) is a leading global provider of communications technology to service providers and enterprises. The Company provides a broad range of software and high-performance hardware products, network solutions, and services that enable the secure delivery of data and voice communications, and high-bandwidth networking and connectivity for residential consumers and for small, medium, and large enterprises and industry verticals such as finance, education, government, utilities, and transportation. Ribbon’s mission is to create a recognized global technology leader providing cloud-centric solutions that enable the secure exchange of information, with unparalleled scale, performance, and elasticity. The Company is headquartered in Plano, Texas, and has a global presence with research and development, or sales and support locations in over thirty countries around the world. (2) BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The consolidated financial statements have been prepared in United States dollars, in accordance with accounting principles generally accepted in the United States (“GAAP”). Private Placement Offering 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. The proceeds from the Private Placement were approximately $ 53.4 million, including approximately $ 10 million from existing related party stockholders (See Note 15). Operating Segments The Company’s chief operating decision maker (the “CODM”) is its president and chief executive officer. The CODM assesses the Company’s performance based on the performance of two separate organizations within Ribbon: the Cloud and Edge segment (“Cloud and Edge”) and the IP Optical Networks segment (“IP Optical Networks”). Significant Accounting Policies Principles of Consolidation The accompanying consolidated financial statements include the accounts of Ribbon and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Use of Estimates and Judgments The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Significant estimates and judgments relied upon in preparing these consolidated financial statements include accounting for business combinations, revenue recognition for arrangements that contain multiple performance obligations, inventory valuations, assumptions used to determine the fair value of stock-based compensation and the Preferred Stock and Warrants, intangible asset and goodwill valuations, including impairments, debentures and warrants, warranty accruals, legal contingencies and recoverability of Ribbon’s net deferred tax assets and the related valuation allowances. Ribbon regularly assesses these estimates and records changes in estimates in the period in which they become known. Ribbon bases its estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances. Actual results could differ from those estimates. 70 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ Business Combinations The Company recognizes identifiable assets acquired and liabilities assumed at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed and represents the expected future economic benefits arising from other assets acquired in the business combination that are not individually identified and separately recognized. While the Company uses its best estimates and assumptions as part of the purchase price allocation process to accurately value assets acquired and liabilities assumed at the acquisition date, its estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill to the extent that it identifies adjustments to the preliminary purchase price allocation. Upon the conclusion of the measurement period or final determination of the values of assets acquired and liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the consolidated statements of operations. Revenue Recognition The Company derives revenue from two primary sources: products and services. Product revenue includes: 1) the Company’s proprietary hardware and software that function together to deliver the products’ essential functionality and 2) the Company’s software only solutions that can be used on either the Company’s hardware or third-party hardware. Both proprietary hardware and software only solutions are also sold on a standalone basis. Services include customer support (software updates, upgrades and technical support), consulting, design services, installation services and training. Generally, contracts with customers contain multiple performance obligations, consisting of products and services. For these contracts, the Company accounts for individual performance obligations separately if they are considered distinct. When an arrangement contains more than one performance obligation, the Company will allocate the transaction price to each performance obligation on a relative standalone selling price basis. The Company utilizes the observable price of goods and services, including when they are sold separately to similar customers, in order to estimate standalone selling price (“SSP”). The Company’s software licenses typically provide a perpetual right to use the Company’s software. However, the Company also sells term-based software licenses that expire and Software-as-a-Service (“SaaS”)-based software which are referred to as subscription arrangements. The Company does not customize its software nor are installation services required, as the customer has a right to utilize internal resources or a third-party service company. The software and hardware are delivered before related services are provided and are functional without professional services or customer support. The Company has concluded that its software licenses are functional intellectual property that are distinct, as the user can benefit from the software on its own. Product revenue from sales of the Company’s perpetual and term-based software licenses is typically recognized when the software is made available for download, as this is the point the user of the software can direct the use of and obtain substantially all of the remaining benefits from the functional intellectual property. The Company begins to recognize software revenue related to the renewal of term-based software licenses at the start of the renewal period. 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. The Company offers warranties on its products. Certain of the Company’s warranties are considered to be assurance-type in nature, ensuring the product is functioning as intended. Assurance-type warranties do not represent separate performance obligations. The Company also sells separately-priced maintenance service contracts which qualify as service-type warranties and represent separate performance obligations. The Company does not allow and has no history of accepting product returns. 71 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ Service revenue includes revenue from customer support and other professional services. Customer support includes software updates on a when-and-if-available basis, telephone support, integrated web-based support and bug fixes or patches. The Company sells its customer support contracts at a percentage of list or net product price. Customer support revenue is recognized ratably over the term of the customer support agreement, which is typically one year . 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. The method to measure progress toward completion requires judgment and is based on the nature of the products or services to be provided. The Company generally uses the input method to measure progress for its contracts and to recognize revenue because it believes such method, in general, best depicts the transfer of assets to its customers. The input method measures costs the Company has incurred in the period for its contracts. In some infrequent instances, the Company may engage a third-party to perform services on its behalf and in those cases the output method is used to recognize revenue because it best depicts the transfer of assets to its customers. Under the output method, there is a cost-to-cost measure of progress. The progress toward completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. When the measure of progress is based upon expended labor, progress toward completion is measured as the ratio of labor time expended to date versus the total estimated labor time required to complete the performance obligation. Revenue is recorded proportionally as costs are incurred or as labor is expended. Costs to fulfill these obligations can include internal labor as well as subcontractor costs. ​ Customer training includes courses offered by the Company. The related revenue is typically recognized as the training services are performed, typically over a period of one to five days . Payment terms for the Company’s contracts with its customers typically range from 30 to 60 days from the invoice date. In certain cases, it may offer extended payment terms, which are assessed on a case-by-case basis. ​ The Company does not generally offer significant financing components in its contracts with customers. However, if a contract includes a significant financing component, the transaction price is adjusted for the time value of money. For the year ended December 31, 2025, the impact of financing components was immaterial. ​ Amounts billed to customers for sales and other taxes are excluded from the transaction price. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to government authorities. ​ Preferred Stock and Warrants The Company accounted for the Preferred Stock until it was redeemed on June 25, 2024 and continues to account for the Warrants as liability-classified instruments based on an assessment of their specific terms in accordance with ASC Topic 480, Distinguishing Liabilities from Equity . The fair value option was elected for the Preferred Stock, as the Company considered fair value to best reflect the expected future economic value. These liabilities are remeasured to fair value at each reporting date using the same valuation methodology applied upon issuance using current input assumptions. The Preferred Stock was considered to be debt for our Consolidated Net Leverage Ratio covenant calculation required under our 2020 Credit Facility. The value of the Preferred Stock was calculated using the Black-Derman-Toy (BDT) stochastic yield lattice model to capture the optimal timing of repayment, increasing dividend rate and other features, and the value of the Warrants is calculated using the Black-Scholes Pricing Model. Changes in the fair value of the Preferred Stock and Warrants are reported as Other expense, net in the Company’s consolidated statements of operations. 72 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ Financial Instruments The carrying amounts of the Company’s cash equivalents, accounts receivable, accounts payable and borrowings under a revolving credit facility in the Consolidated Balance Sheets approximates fair value due to the immediate or short-term nature of these financial instruments. The carrying amount of the Company’s term debt is also considered to approximate fair value, based on prevailing market conditions. Our Warrant liability as of December 31, 2025 had a fair value of $ 1.9 million. Financial instruments with remaining maturities or that are due within one year from the balance sheet date are classified as current. Financial instruments with maturities or that are payable more than one year from the balance sheet date are classified as noncurrent. Transfers of Financial Assets The Company’s IP Optical Networks segment maintains customer receivables factoring agreements with a number of financial institutions. Under the terms of these agreements, the Company may transfer receivables to the financial institutions, on a non-recourse basis, provided that the financial institutions approve the receivables in advance. The Company maintains credit insurance policies from major insurance providers or obtains letters of credit from the customers for a majority of its factored trade receivables. 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 consolidated statements of operations, and the proceeds from the sales of receivables are included in cash from operating activities in the consolidated statements of cash flows. Factoring of accounts receivable and associated fees for the years ended December 31, 2025 and 2024 were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ Accounts receivable sold ​ $ 127,618 ​ $ 107,874 ​ Less factoring fees ​ ​ ( 2,343 ) ​ ​ ( 2,228 ) ​ Net cash proceeds ​ $ 125,275 ​ $ 105,646 ​ ​ Foreign Currency Translation For foreign subsidiaries where the functional currency is the local currency, assets and liabilities are translated into U.S. dollars at the current exchange rate on the balance sheet date. Revenue and expenses are translated at average rates of exchange prevailing during each period. Translation adjustments for these subsidiaries are included in Accumulated other comprehensive income. For foreign subsidiaries where the functional currency is the U.S. dollar, monetary assets and liabilities are translated into U.S. dollars at the current exchange rate on the balance sheet date. Nonmonetary assets and liabilities are remeasured into U.S. dollars at historical exchange rates. Revenue and expense items are translated at average rates of exchange prevailing during each period. Translation adjustments for these subsidiaries are included in Other expense, net. Realized and unrealized foreign currency exchange losses and gains arising from transactions denominated in currencies other than the subsidiary’s functional currency are reflected in earnings. The Company records its foreign currency losses (gains) as a component of Other expense, net. The Company recognized net foreign currency losses and (gains) of $ 3.7 million, $ 5.7 million and less than $( 0.1 ) million for the years ended December 31, 2025, 2024 and 2023, respectively. 73 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ Inventory Inventory is recorded at the lower of cost or market value using the first-in, first-out convention. The Company reduces the carrying value of inventory for those items that are potentially excess, obsolete or slow-moving based on changes in customer demand, technology developments or other economic factors. Ribbon writes down evaluation equipment (equipment at customer sites for testing and evaluation) at the time of shipment to its customers, as it is probable that the inventory value will not be realized. Deferred product costs represent deferred cost of revenue for product shipments to customers prior to satisfaction of Ribbon’s revenue recognition criteria. The Company classifies inventory that is not expected to be consumed within one year from the balance sheet date as noncurrent and includes such inventory as a component of Other assets. Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation. Expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets, which range from two to five years . Leasehold improvements are amortized over the lesser of the lease term or ten years . When an asset is sold or retired, the cost and related accumulated depreciation or amortization are eliminated, and the resulting gain or loss, if any, is recognized in (Loss) income from operations in the consolidated statement of operations. The Company reviews property and equipment for impairment in the same manner as intangible assets discussed below. Software development costs associated with internal use software are incurred in three stages of development: the preliminary project stage, the application development stage and the post-implementation stage. Costs incurred during the preliminary project and post-implementation stages are expensed as incurred. Certain qualifying costs incurred during the application development stage are capitalized as property and equipment. Internal use software is amortized on a straight-line basis over its estimated useful life of three years , beginning when the software is ready for its intended use. Intangible Assets and Goodwill The Company’s intangible assets are comprised of in-process research and development, developed technology, customer relationships, trade names, software licenses and internal use software. Intangible assets are reviewed for impairment when events or changes in circumstances indicate that their carrying amounts may not be recoverable based upon the estimated undiscounted cash flows. Recoverability of intangible assets with estimated lives and other long-lived assets is measured by a comparison of the carrying amount of an asset or asset group to future net undiscounted cash flows expected to be generated by the asset or asset group. If these comparisons indicate that an asset is not recoverable, the Company will recognize an impairment loss for the amount by which the carrying value of the asset or asset group exceeds the related estimated fair value. Estimated fair value is based on either discounted future operating cash flows or appraised values, depending on the nature of the asset. The Company amortizes its intangible assets over their respective useful lives, with the exception of in-process research and development, which has an indefinite life until the product is generally available, at which time such asset is typically reclassified to developed technology, and the Company begins to amortize this asset. See Note 9 for additional information regarding the Company’s intangible assets. Goodwill is recorded when the consideration for an acquisition exceeds the fair value of net tangible and identifiable intangible assets acquired. Goodwill is not amortized, but instead is tested for impairment at least annually, or more frequently if indicators of potential impairment exist, by comparing the fair value of the Company’s reporting unit to its carrying value. The Company’s annual test for impairment of goodwill is completed as of October 1. For the purpose of testing goodwill for impairment, all goodwill is assigned to a reporting unit, which may either be an operating segment or a portion of an operating segment. The Company’s reporting units are its two operating segments, Cloud and Edge and IP 74 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ Optical Networks. The Company performs a fair value analysis for each reporting unit using both an income and market approach, which encompasses a discounted cash flow analysis and a guideline public company analysis using selected multiples. The Company assesses each valuation methodology based upon the relevance and availability of the data at the time the valuation is performed and the methodologies are weighted appropriately. Any impairment charges are reported separately in the Company’s consolidated statements of operations. Stock-Based Compensation The Company’s stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period, which generally represents the vesting period, and includes an estimate of the awards that will be forfeited. The Company uses the Black-Scholes valuation model for estimating the fair value of stock options on the grant date. The fair value of stock option awards is affected by the Company’s stock price as well as valuation assumptions, including the volatility of Ribbon’s stock price, expected term of the option, risk-free interest rate and expected dividends. The Company may grant to certain of its executives and certain other employees performance-based stock units (“PSUs”) that include a market condition. The Company uses a Monte Carlo simulation approach to model future stock price movements based upon the risk-free rate of return, the volatility of each entity and the pair-wise covariance between each entity. These results are then used to calculate the grant date fair values of the PSUs. The Company is required to record expense for the PSUs with market conditions through their respective final vesting dates regardless of the number of shares that are ultimately earned. Once the grant date criteria have been met for a fiscal year performance period, the Company records stock-based compensation expense based on its assessment of the probability that the respective performance condition will be achieved and the level, if any, of such achievement. The Compensation Committee determines the number of shares earned, if any, after the Company’s financial results for each fiscal year performance period are finalized. Upon the determination by the Compensation Committee of the number of shares that will be received upon vesting, such number of shares becomes fixed and the unamortized expense is recorded through the remainder of the service period, at which time any Performance PSUs earned will vest pending each employee’s continuing employment with Ribbon through that date. Concentration of Risk Ribbon is subject to counterparty risk as well as financial instrument concentration risk involving cash, cash equivalents and accounts receivable. To mitigate these risks, cash and cash equivalents are diversified and maintained with various financial institutions globally. In certain instances, advance payments, credit insurance, or customer issued letters of credit are required to mitigate potential risk. Certain components and software licenses from third parties used in Ribbon’s products are procured from single sources of supply. The failure of a supplier, including a subcontractor, to deliver on schedule could delay or interrupt Ribbon’s delivery of products and thereby materially adversely affect Ribbon’s revenue and operating results. Advertising Costs Advertising costs are expensed as incurred and included as a component of Sales and marketing expense in the Company’s consolidated statements of operations. Advertising expenses were $ 1.4 million, $ 1.7 million and $ 1.2 million for the years ended December 31, 2025, 2024 and 2023, respectively. Loss Contingencies and Reserves Ribbon is subject to ongoing business risks arising in the ordinary course of business, including legal claims, that affect the estimation process of the carrying value of assets, the recording of liabilities and the possibility of various loss contingencies. An estimated loss contingency is accrued when it is probable that a liability has been incurred or an asset 75 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ has been impaired and the amount of loss can be reasonably estimated. Ribbon regularly evaluates current information available to determine whether such amounts should be adjusted and records changes in estimates in the period they become known. An allowance for doubtful accounts is estimated based on the Company’s assessment of the collectability of specific customer accounts. Ribbon accrues for royalties for technology that it licenses from vendors based on established royalty rates and usage. Ribbon is periodically contacted by third parties who claim that Ribbon’s products infringe on certain intellectual property of a third party. Ribbon evaluates these claims and accrues amounts when it is probable that the obligation has been incurred and the amounts are reasonably estimable. Warranty The Company records warranty liabilities for estimated costs of fulfilling its obligations under standard limited hardware and software warranties at the time of sale. The specific warranty terms and conditions vary depending upon the country in which the Company does business, but generally includes material costs, technical support, labor and associated overhead over a period ranging from one to three years . At December 31, 2025, the Company’s liability for product warranties was $ 12.8 million of which $ 5.4 million was current and included in Accrued expenses and other and $ 7.4 million was long-term and included in Other long-term liabilities in the Company’s consolidated balance sheet. At December 31, 2024, the Company’s liability for product warranties was $ 12.3 million, of which $ 5.2 million was current and included in Accrued expenses and other, and $ 7.1 million was long-term and included in Other long-term liabilities in the Company’s consolidated balance sheet. Research and Development Grants The Company records grants received from the Office of the Innovation Authority of the Israeli Ministry of Economics (the “IIA”) as a reduction to Research and development expense. Royalties payable to the IIA are recognized pursuant to sales of related products and services and are included in Cost of revenue (see Note 26). Accounting for Leases The Company accounts for its leases in accordance with Accounting Standards Codification (“ASC”) 842, Leases (“ASC 842”) (see Note 21). The Company has operating leases for corporate offices, and research and development facilities. Operating leases are reported separately in the Company’s consolidated balance sheets at December 31, 2025 and 2024. The Company has no finance leases as of December 31, 2025 or 2024. The Company determines if an arrangement is a lease at inception. A contract is determined to contain a lease component if the arrangement provides the Company with a right to control the use of an identified asset. Lease agreements may include lease and non-lease components. In such instances for all classes of underlying assets, the Company does not separate lease and non-lease components but rather, accounts for the entire arrangement under leasing guidance. Leases with an initial term of 12 months or less are not recorded on the balance sheet and lease expense for these leases is recognized on a straight-line basis over the lease term. Lease expense for minimum fixed lease payments is recognized on a straight-line basis over the lease term. The expense for finance leases would include both interest and amortization expense components, with the interest component calculated based on the effective interest method and the amortization component calculated based on straight-line amortization of the right-of-use asset over the lease term. Lease contracts may contain variable lease costs, such as common area maintenance, utilities and tax reimbursements that vary over the term of the contract. Variable lease costs are not included in minimum fixed lease payments and as a result, are excluded from the measurement of the right-of-use assets and lease liabilities. The Company expenses all variable lease costs as incurred. ​ 76 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ Accounting for Income Taxes Deferred tax assets and liabilities are recognized for the expected future consequences of events that have been reflected in the consolidated financial statements. Deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax basis of assets and liabilities and operating loss carryforwards, using tax rates expected to be in effect for the years in which the differences are expected to reverse. The Company records valuation allowances to reduce deferred income tax assets to the amount that is more likely than not to be realized. The Company has provided for income taxes on the undistributed earnings of its non-U.S. subsidiaries as of December 31, 2025, excluding Ireland and Israel, which are indefinitely reinvested. Accordingly, the Company is required to recognize and record deferred taxes for 2025 on the entire outside basis differences related to the foreign subsidiaries, the largest of these differences being undistributed earnings. The Company determines whether it is more likely than not that a tax position will be sustained upon examination. If it is not more likely than not that a position will be sustained, no amount of the benefit attributable to the position is recognized. The tax benefit to be recognized of any tax position that meets the more likely than not recognition threshold is calculated as the largest amount that is more than 50 % likely of being realized upon resolution of the contingency. The Company accounts for interest and penalties related to uncertain tax positions as part of its provision for income taxes. Defined Benefit Plans The Company has defined benefit plans for some of its employees at various international locations. The Company recognizes retirement benefit assets or liabilities in the consolidated balance sheets reflecting the funded status of pension and other retirement benefit plans. Retirement benefit assets and liabilities are adjusted for the difference between the benefit obligations and the plan assets at fair value (measured at year-end), with the offset recorded directly to stockholders’ equity through Other comprehensive income (loss), net of tax. The amount recorded in stockholders’ equity represents the after-tax unamortized actuarial gains or losses, unamortized transition obligations and unamortized prior service costs. Recent Accounting Pronouncements In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities (“ASU 2025-10”), to clarify the appropriate accounting, reduce diversity in practice, and increase consistency across business entities. ASU 2025-10 will be effective for us beginning with our 2029 interim and annual financial statements, with early adoption permitted. The Company believes this ASU will have no material impact on its consolidated financial statements. In November 2025, the FASB issued ASU 2025‑09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements (“ASU 2025‑09”), to enhance hedge accounting guidance and better align it with entities’ risk management activities. The amendments expand eligibility for hedge accounting, simplify certain requirements, and address issues related to reference rate reform. Key changes include allowing cash flow hedge accounting for “choose‑your‑rate” debt instruments, introducing a principles‑based “similar risk exposure” criterion for grouping forecasted transactions, permitting component hedging for nonfinancial forecasted transactions, and clarifying the treatment of certain derivative structures. ASU 2025‑09 will be effective for the Company beginning with its 2027 interim and annual financial statements, with early adoption permitted. The Company is currently evaluating the impact of this accounting standard on its consolidated financial statements and related disclosures. In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other- Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”). To clarify how the accounting guidance applies to both linear and nonlinear software development, this standard removes all references to “developments stages” from ASC 350-40. ASU 2025-06 will be effective for the Company beginning with its 2028 interim and annual financial statements, with early adoption permitted as of the beginning of an annual reporting 77 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ period. The Company is currently evaluating the impact of this accounting standard on its consolidated financial statements and related disclosures. In July 2025, the FASB issued ASU 2025-05, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”), which provides a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606. In developing reasonable and supportable forecasts as part of estimating expected credit losses, all entities may elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. ASU 2025-06 will be effective for the Company beginning with its 2026 interim and annual financial statements, with early adoption permitted. The Company believes this ASU will have no material impact on its consolidated financial statements. In November 2024, the FASB issued ASU 2024-03, Income Statement, Reporting Comprehensive Income: Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”), which requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. The objective of this standard is to provide investors with information to better understand a public entity’s performance and prospects for future cash flows, and to compare their performance over time with that of other entities. ASU 2024-03 will be effective for the Company beginning with our 2027 annual financial statements and interim financial statements thereafter, with early adoption permitted. The adoption of ASU 2024-03 will require the Company to provide new footnote disclosure about the types of expenses that are included in certain captions on its Statements of Operations, such as Cost of revenue, Research and development, Sales and marketing, and General and administrative. In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which increases the disclosures requirements around rate reconciliation information and certain types of income taxes companies are required to pay. ASU 2023-09, which the Company applied on a prospective basis, became effective beginning with this Annual Report on Form 10-K and includes the required additional income tax disclosures. (3) BUSINESS ACQUISITIONS On March 3, 2020, Ribbon completed its merger transaction with ECI Telecom Group Ltd (“ECI”) in accordance with the terms of the Agreement and Plan of Merger, dated as of November 14, 2019 (the “ECI Acquisition”). Prior to the ECI Acquisition, ECI was a privately-held global provider of end-to-end packet optical transport and software-defined networking (“SDN”) and network function virtualization solutions for service providers, enterprises and data center operators. The ECI Acquisition was accounted for as a business combination and the financial results of ECI are included in the Company’s consolidated financial statements. Costs related to the integration of the Company and ECI are included in the Acquisition-, disposal- and integration-related expenses in the table below. Acquisition-, Disposal- and Integration-Related Expenses Acquisition-related expenses include those expenses related to acquisitions that would otherwise not have been incurred by the Company, including professional and services fees, such as legal, audit, consulting, paying agent and other fees, and expenses related to cash payments to certain former executives of the acquired businesses in connection with their employment agreements. Disposal-related expenses are professional and services fees related to disposals of subsidiaries or portions of the business. Integration-related expenses represent incremental costs related to combining the Company and its business acquisitions, such as third-party consulting and other third-party services related to merging the previously separate companies’ systems and processes. The acquisition-related expenses in the year ended December 31, 2025 are related to legal and professional fees associated with contemplated corporate development activities. The integration-related expenses in the year ended December 31, 2023 related to the ECI Acquisition. 78 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ The components of Acquisition-, disposal- and integration-related expenses incurred in the years ended December 31, 2025, 2024 and 2023 were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Professional and services fees (acquisition-related) ​ $ 4,337 ​ $ — ​ $ — Integration-related expenses ​ — ​ — ​ 4,476 ​ ​ $ 4,337 ​ $ — ​ $ 4,476 ​ ​ (4) EARNINGS (LOSS) PER SHARE Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares outstanding during the period. For periods in which the Company reports net income, diluted net earnings per share is determined by using the weighted average number of common and dilutive common equivalent shares outstanding during the period, unless the effect is antidilutive. The shares used to compute loss per share were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Weighted average shares outstanding—basic 176,199 174,044 170,408 Potential dilutive common shares 3,623 — — Weighted average shares outstanding—diluted 179,822 174,044 170,408 ​ Options to purchase the Company’s common stock and unvested restricted and performance-based stock units aggregating 0.7 million shares, 7.6 million shares, and 13.5 million shares were excluded from the computation of diluted loss per share for the years ended December 31, 2025, 2024 and 2023, respectively, because their effect would have been antidilutive. As of December 31, 2025, 2024 and 2023, the potential number of dilutive shares from the Warrants totaled 4.7 million, 4.9 million and 4.9 million shares, respectively. However, there was no impact on weighted average shares outstanding from these Warrants for the years ended December 31, 2025, 2024 and 2023 as the average share 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 are included in the fair value adjustment of the Preferred Stock which was reflected in Other expense, net until the redemption of the Preferred Stock on June 25, 2024. (5) FAIR VALUE HIERARCHY 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. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. The three-tier fair value hierarchy is based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is as follows: ● 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 December 31, 2025 or 2024. 79 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ ● 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, 2025 and 2024, the Company determined the fair value of its defined benefit plans’ assets using Level 2 input. ● 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. At December 31, 2025 and 2024, the fair value of the Company’s Warrants was determined using Level 3 input. The Company did not have any transfers between Level 2 and Level 3 fair value measurements during the years ended December 31, 2025 and 2024. (6) ACCOUNTS RECEIVABLE, NET Accounts receivable, net, consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Accounts receivable ​ $ 233,226 ​ $ 256,174 Allowance for doubtful accounts ​ ( 1,341 ) ​ ( 1,456 ) Accounts receivable, net ​ $ 231,885 ​ $ 254,718 ​ The Company’s allowance for doubtful accounts activity was as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Charges ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at ​ ​ ​ Charges ​ ​ ​ (credits) to ​ ​ ​ ​ ​ ​ ​ ​ Balance at ​ ​ beginning ​ (credits) ​ other ​ ​ ​ ​ end of Year ended December 31, ​ of year ​ to expense ​ accounts ​ Write-offs ​ year 2025 ​ $ 1,456 ​ $ ( 97 ) ​ $ — ​ $ ( 18 ) ​ $ 1,341 2024 ​ $ 1,512 ​ $ 152 ​ $ ( 75 ) ​ $ ( 133 ) ​ $ 1,456 2023 ​ $ 1,427 ​ $ 428 ​ $ 143 ​ $ ( 486 ) ​ $ 1,512 ​ ​ ​ (7) INVENTORY ​ Inventory consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 On-hand assemblies and finished goods inventories ​ $ 92,981 ​ $ 95,366 Deferred cost of goods sold ​ 2,421 ​ 2,430 ​ ​ 95,402 ​ 97,796 Less noncurrent portion (included in Other assets) ​ ( 16,596 ) ​ ( 18,617 ) Current portion ​ $ 78,806 ​ $ 79,179 ​ ​ ​ 80 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ (8) PROPERTY AND EQUIPMENT Property and equipment consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ Useful Life ​ ​ ​ 2025 ​ ​ ​ 2024 Equipment 2 - 5 years ​ $ 96,029 ​ $ 84,409 Software 2 - 5 years ​ 38,830 ​ 36,859 Furniture and fixtures 3 - 5 years ​ 5,295 ​ 3,309 Leasehold improvements Shorter of the estimated lease term or 10 years ​ 59,231 ​ 54,849 ​ ​ ​ ​ 199,385 ​ 179,426 Less accumulated depreciation and amortization ​ ​ ( 133,826 ) ​ ( 119,062 ) Property and equipment, net ​ ​ $ 65,559 ​ $ 60,364 ​ As of December 31, 2025 and 2024, property and equipment included $ 3.9 million and $ 23.2 million, respectively, of assets that had not yet commenced depreciation. The 2024 assets primarily consisted of leasehold improvements and equipment, with the most significant portion related to construction at our new main campus in Petah Tikva, Israel that was completed and occupied in the 1 st half of 2025, totaling $ 18.9 million as of December 31, 2024. The Company recorded depreciation and amortization expense related to property and equipment of $ 16.7 million, $ 13.5 million and $ 14.1 million for the years ended December 31, 2025, 2024 and 2023, respectively. During each of these years, the Company disposed of certain property and equipment that was fully depreciated at the time of disposal, which resulted in reductions in both Cost and Accumulated depreciation. The net book values of the Company’s property and equipment by geographic area were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Israel ​ $ 32,198 ​ $ 27,657 United States ​ 18,587 ​ 20,445 Asia/Pacific ​ 10,209 ​ 7,941 Canada ​ 3,206 ​ 3,071 Europe ​ 1,193 ​ 1,034 Other ​ 166 ​ 216 ​ ​ $ 65,559 ​ $ 60,364 ​ ​ (9) INTANGIBLE ASSETS AND GOODWILL ​ The Company’s intangible assets at December 31, 2025 and 2024 consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ ​ ​ average ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ amortization ​ ​ ​ ​ ​ ​ ​ Net ​ ​ period ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ carrying December 31, 2025 ​ ​ ​ (years) ​ Cost ​ ​ ​ amortization ​ ​ ​ value Developed technology ​ 7.84 ​ $ 340,380 ​ $ 281,000 ​ $ 59,380 Customer relationships ​ 11.86 ​ ​ 268,140 ​ ​ 184,462 ​ ​ 83,678 Trade names ​ 3.88 ​ ​ 5,000 ​ ​ 5,000 ​ ​ — Software licenses 3.00 ​ 5,748 ​ 5,462 ​ 286 ​ ​ ​ $ 619,268 ​ $ 475,924 ​ $ 143,344 81 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ ​ ​ average ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ amortization ​ ​ ​ ​ ​ ​ ​ Net ​ ​ period ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ carrying December 31, 2024 ​ ​ ​ (years) ​ Cost ​ ​ ​ amortization ​ ​ ​ value Developed technology ​ 7.84 ​ $ 340,380 ​ $ 262,085 ​ $ 78,295 Customer relationships ​ 11.86 ​ ​ 268,140 ​ ​ 160,635 ​ ​ 107,505 Trade names ​ 3.88 ​ ​ 5,000 ​ ​ 4,978 ​ ​ 22 Software licenses 3.00 ​ 5,748 ​ 4,033 ​ 1,715 ​ ​ ​ $ 619,268 ​ $ 431,731 ​ $ 187,537 ​ Estimated future amortization expense for the Company’s intangible assets at December 31, 2025 was as follows (in thousands): ​ ​ ​ ​ Years ending December 31, ​ ​ ​ ​ ​ 2026 ​ $ 39,143 2027 ​ 33,976 2028 ​ 23,400 2029 ​ 18,380 2030 ​ ​ 7,723 Thereafter ​ ​ 20,722 ​ ​ $ 143,344 ​ Goodwill is recorded when the consideration for an acquisition exceeds the fair value of net tangible and identifiable intangible assets acquired. For the purpose of testing goodwill for impairment, all goodwill is assigned to a reporting unit, which may be either an operating segment or a portion of an operating segment. The Company’s reporting units are its two operating segments, Cloud and Edge and IP Optical Networks. Testing for impairment of goodwill is completed annually as of October 1 st . The Company’s IP Optical Networks operating segment, with $ 76.0 million of associated goodwill, had a negative carrying value and a positive fair value as of October 1 st for both 2025 and 2024. Upon completion of the 2025 and 2024 annual tests for goodwill impairment, the Company determined that there was no impairment of goodwill in either of its reporting units. There was no change in the carrying value of the Company’s goodwill in the years ended December 31, 2025 and 2024. The components of goodwill at December 31, 2025 and 2024 were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cloud and ​ ​ ​ IP Optical ​ ​ ​ ​ ​ ​ ​ Edge ​ Networks ​ Total Goodwill ​ $ 392,302 ​ $ 191,996 ​ $ 584,298 Accumulated impairment losses ​ ( 167,406 ) ​ ( 116,000 ) ​ ( 283,406 ) ​ ​ $ 224,896 ​ $ 75,996 ​ $ 300,892 ​ ​ ​ ​ (10) ACCRUED EXPENSES AND OTHER Accrued expenses and other consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Employee compensation and related costs ​ $ 37,857 ​ $ 44,948 Professional fees ​ 14,400 ​ 16,339 Taxes payable ​ 5,541 ​ 6,364 Other ​ 32,961 ​ 38,600 ​ ​ $ 90,759 ​ $ 106,251 ​ 82 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ ​ ​ (11) WARRANTY The changes in the Company’s warranty accrual balance in the years ended December 31, 2025, 2024 and 2023 were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at ​ ​ ​ ​ ​ ​ ​ Balance at ​ ​ beginning ​ ​ ​ ​ ​ ​ ​ end of Year ended December 31, ​ ​ ​ of year ​ ​ ​ Provision ​ ​ ​ Settlements ​ ​ ​ year 2025 ​ $ 12,300 ​ $ 5,954 ​ $ ( 5,435 ) ​ $ 12,819 2024 ​ $ 12,243 ​ $ 5,423 ​ $ ( 5,366 ) ​ $ 12,300 2023 ​ $ 11,857 ​ $ 5,875 ​ $ ( 5,489 ) ​ $ 12,243 ​ ​ (12) RESTRUCTURING AND FACILITIES CONSOLIDATION INITIATIVES The Company recorded restructuring and related expense aggregating $ 19.7 million, $ 10.2 million and $ 16.2 million in the years ended December 31, 2025, 2024 and 2023, 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 of sublease, and accelerated rent amortization expense. For restructuring events that involve lease assets and liabilities, the Company applies lease reassessment and modification guidance and evaluates the right-of-use assets for potential impairment. If the Company plans to exit all or distinct portions of a facility and does not have the ability or intent to sublease, the Company will accelerate the amortization of each of those lease components through the vacate date. The accelerated amortization is recorded as a component of Restructuring and related expense in the Company’s consolidated statements of operations. Related variable lease expenses will continue to be expensed as incurred through the vacate date, at which time the Company will reassess the liability balance to ensure it appropriately reflects the remaining liability associated with the premises and record a liability for the estimated future variable lease costs. 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 (see Note 21). 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 years ended December 31, 2025, 2024 and 2023 were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Severance and related costs ​ $ 13,666 ​ $ 4,036 ​ $ 9,875 Variable and other facilities-related costs ​ 5,992 ​ 6,124 ​ 5,326 Accelerated amortization of lease assets due to cease-use ​ — ​ — ​ 1,008 ​ ​ $ 19,658 ​ $ 10,160 ​ $ 16,209 ​ ​ 83 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ ​ The following table presents the rollforward of accrued restructuring liabilities for the Company’s restructuring plans for the years ended December 31, 2025, 2024 and 2023 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 and Prior ​ 2023 ​ 2024 ​ 2025 ​ 2026 ​ ​ ​ ​ Restructuring ​ ​ Restructuring ​ ​ Restructuring ​ ​ Restructuring ​ ​ Restructuring ​ ​ ​ ​ Plans ​ Plan ​ Plan ​ Plan ​ Plan ​ Total Balances, December 31, 2022 $ 3,358 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 3,358 Charged to expense 6,334 ​ 9,875 ​ — ​ — ​ — ​ 16,209 Transfer to operating lease assets ( 1,008 ) ​ — ​ — ​ — ​ — ​ ( 1,008 ) Payments ( 7,164 ) ​ ( 9,204 ) ​ — ​ — ​ — ​ ( 16,368 ) Balances, December 31, 2023 1,520 ​ 671 ​ — ​ — ​ — ​ 2,191 Charged to expense 6,123 ​ 2,003 ​ ​ 2,090 ​ — ​ ​ — ​ 10,216 Reversals/adjustments ( 56 ) ​ — ​ ​ — ​ — ​ ​ — ​ ( 56 ) Payments ( 6,472 ) ​ ( 2,589 ) ​ ( 1,091 ) ​ — ​ — ​ ( 10,152 ) Balances, December 31, 2024 ​ 1,115 ​ ​ 85 ​ ​ 999 ​ ​ — ​ ​ — ​ ​ 2,199 Charged to expense 5,992 ​ 70 ​ ​ 99 ​ 5,188 ​ ​ 8,640 ​ 19,989 Reversals/adjustments — ​ 90 ​ ​ ( 319 ) ​ ( 102 ) ​ ​ — ​ ( 331 ) Payments ( 6,301 ) ​ ( 245 ) ​ ( 779 ) ​ ( 4,464 ) ​ ( 179 ) ​ ( 11,968 ) Balances, December 31, 2025 $ 806 ​ $ — ​ $ — ​ $ 622 ​ $ 8,461 ​ $ 9,889 ​ 2026 Restructuring Plan During the fourth quarter of 2025, the Company’s President and CEO approved a strategic restructuring program (the "2026 Restructuring Plan") that consists of workforce reductions in certain of the Company’s operating locations to correspond with current sales levels in those areas. In connection with the 2026 Restructuring Plan, the Company recorded restructuring and related expense of $ 8.6 million, with cash payments of $ 0.2 million in the year ended December 31, 2025. The Company estimates that it will expense approximately $ 5 million in 2026 under the 2026 Restructuring Plan. 2025 Restructuring Plan During the first quarter of 2025, the Company’s President and CEO approved a strategic restructuring program (as subsequently amended, the "2025 Restructuring Plan") that consists of workforce reductions in certain of the Company’s operating locations to correspond with current sales levels in those areas. The 2025 Restructuring Plan was amended in the third quarter of 2025 to reflect an increase in the scope of the proposed reductions. 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 $ 5.0 million, with cash payments of $ 4.5 million in the year ended December 31, 2025. 2024 Restructuring Plan The Company’s President and CEO approved workforce reductions in 2024 for certain of the Company’s operating locations to correspond with the current sales levels in those areas. The Company recorded a nominal amount in the year ended December 31, 2025 and $ 2.1 million in the year ended December 31, 2024 related to these actions. 2023 Restructuring Plan On February 22, 2023, the Company’s Board of Directors approved a strategic restructuring program (the “2023 Restructuring Plan”) to streamline the Company’s operations in order to support the Company’s investment in critical growth areas. The 2023 Restructuring Plan includes, among other things, charges related to a workforce reduction. Any positions eliminated in countries outside the United States were subject to local law and consultation requirements. 84 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ In connection with the 2023 Restructuring Plan, the Company recorded restructuring and related expense of $ 0.2 million and $ 2.0 million in the years ended December 31, 2025 and 2024, respectively, consisting entirely for severance related costs. 2022 and Prior Restructuring Plans Prior to December 31, 2022, the Company engaged in various restructuring activities that included consolidation of facilities and workforce reductions. Substantially all the ongoing costs incurred under such plans in the years presented relates to variable and other facilities-related costs. The Company estimates that it will expense approximately $ 3 million in 2026 under these restructuring plans. ​ Balance Sheet Classification The current portions of accrued restructuring were $ 9.4 million and $ 1.4 million at December 31, 2025 and 2024, respectively, and are included as components of Accrued expenses in the consolidated balance sheets. The long-term portions of accrued restructuring are included as components of Other long-term liabilities in the consolidated balance sheets. The long-term portions of accrued restructuring were $ 0.5 million and $ 0.8 million at December 31, 2025 and 2024, respectively. (13) DEBT 2024 Credit Facility On June 21, 2024, the Company entered into a Senior Secured Credit Facilities Credit Agreement (the “2024 Credit Facility” or “Credit Agreement”) as guarantor, with the Company’s wholly-owned subsidiary, Ribbon Communications Operating Company, Inc., as the borrower (the “Borrower”), HPS Investment Partners, LLC ("HPS"), as administrative agent, and HPS and WhiteHorse Capital Management, LLC ("WhiteHorse" and, together with HPS, the "Lenders"), pursuant to which the Lenders provided the Company with a $ 385 million Credit Agreement comprised of (i) a $ 350 million term loan (the “2024 Term Loan”) and (ii) a $ 35 million revolving credit facility (the “2024 Revolver”), including a $ 20 million sublimit for letters of credit. The proceeds received from the 2024 Term Loan were used to (a) repay 100 % of the amounts outstanding under the 2020 Credit Facility, (b) redeem in full the Preferred Stock and (c) pay fees and expenses related to the 2024 Credit Facility. The excess proceeds are being used by the Company for working capital and other general corporate purposes. The 2024 Term Loan and the 2024 Revolver bear interest, at the Borrower’s option, at either the Alternate Base Rate (“ABR”) or Term Secured Overnight Financing Rate ("SOFR") with an Applicable Margin for each (all as defined in the 2024 Credit Facility). Margins for the first six months are 5.25 % per annum for ABR Loans and 6.25 % per annum for SOFR Loans. Thereafter, margins vary based on the Company’s Consolidated Net Leverage Ratio, ranging from 4.75 % to 5.25 % per annum for ABR Loans and 5.75 % to 6.25 % per annum for SOFR Loans. The 2024 Term Loan and the 2024 Revolver will both mature on June 21, 2029. The 2024 Term Loan is being repaid in equal quarterly installments: approximately $ 0.9 million beginning with the third quarter of 2024 through the second quarter of 2025; approximately $ 2.2 million beginning with the third quarter of 2025 and ending with the second quarter of 2027; and approximately $ 4.4 million quarterly thereafter, with the remaining principal balance of approximately $ 298.4 million due on the maturity date of June 21, 2029. In connection with the establishment of the 2024 Credit Facility, $ 7.7 million of original issue discount was withheld by the Lenders and the Company incurred $ 6.3 million of debt issuance costs for a total of $ 14.0 million that is being amortized to Interest expense, net over the term of the 2024 Credit Facility. 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 December 31, 2025. 85 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ 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. 2020 Credit Facility On June 21, 2024, the Company used the proceeds from the 2024 Credit Facility to, among other things, repay all amounts outstanding under its Senior Secured Credit Facilities Credit Agreement, dated March 3, 2020 (as amended, the "2020 Credit Facility"), by and among the Company, as a guarantor, Ribbon Communications Operating Company, Inc., as the borrower (the "Borrower"), Citizens Bank, N.A., Santander Bank, N.A., and others as lenders ("2020 Credit Facility Lenders"). The Company wrote off $ 2.0 million of debt issuance costs in conjunction with the early extinguishment of the 2020 Credit Facility. On March 3, 2020, the Company entered into a Senior Secured Credit Facilities Credit Agreement (as amended, the “2020 Credit Facility”), by and among the Company, as a guarantor, Ribbon Communications Operating Company, Inc., as the borrower (“Borrower”), Citizens Bank, N.A. (“Citizens”), Santander Bank, N.A., and others as lenders, (“Lenders”). The proceeds of the Credit Agreement were used, in part, to pay off in full all obligations of the Company under the 2019 Credit Facility. The 2020 Credit Facility had a maturity date of March 2025 and originally provided for $ 500 million of commitments from the 2020 Credit Facility Lenders to the Borrower, comprised of $ 400 million in term loans (the “2020 Term Loan Facility”) and a $ 100 million facility available for revolving loans (the “2020 Revolving Credit Facility”). Under the 2020 Revolving Credit Facility, a $ 30 million sublimit was originally available for letters of credit and a $ 20 million sublimit was available for swingline loans. The indebtedness and other obligations under the 2020 Credit Facility were unconditionally guaranteed on a senior secured basis by the Company, Edgewater Networks, Inc., a wholly-owned subsidiary of the Company, and GENBAND Inc., wholly-owned subsidiary of the Company (together, the “2020 Credit Facility Guarantors”). The 2020 Credit Facility was secured by first-priority liens on substantially all of the assets of the Borrower and the 2020 Credit Facility Guarantors, including substantially all of the assets of the Company. The 2020 Credit Facility required compliance with certain financial covenants, including a minimum Consolidated Fixed Charge Coverage Ratio and a maximum Consolidated Net Leverage Ratio (each as defined in the 2020 Credit Facility, and each tested on a quarterly basis). On March 10, 2022, the Company entered into the Fourth Amendment to the 2020 Credit Facility to increase the Maximum Consolidated Net Leverage Ratio (as defined in the 2020 Credit Facility) and in conjunction, the Company made a $ 15.0 million prepayment that was applied to the final payment due on the maturity date. On June 30, 2022, the Company entered into the Fifth Amendment to the 2020 Credit Facility (the “Fifth Amendment”) to increase the Maximum Consolidated Net Leverage Ratio (as defined in the 2020 Credit Facility) for 2022, with the fourth quarter of 2022 increased to 4.75 :1.00, the first and second quarters of 2023 declining to 3.25 :1.00, and in all subsequent quarters the ratio was to be fixed at 3.00 :1.00. Also, the Fifth Amendment reduced the minimum Consolidated Fixed Charge Coverage Ratio (as defined in the 2020 Credit Facility) in 2022, with the fourth quarter of 2022 reduced to 1.10 :1.00 and in all subsequent quarters the ratio was to be fixed at 1.25 :1.00. In addition, the Fifth Amendment increased the maximum rate at which loans were to bear interest if the Company’s Consolidated Net Leverage Ratio for any quarter was greater than 4.50 :1.00. Specifically, loans incurred were to bear interest, at the Borrower’s option, at either LIBOR plus a margin ranging from 1.50 % to 4.50 % per year, or the base rate plus 0.50 %, or the prime rate plus a margin ranging from 0.50 % to 3.50 % per year. The Fifth Amendment also allowed the Company to incur junior secured or unsecured debt in an amount no less than $ 50 million, subject to certain conditions, including the requirement that 50 % of the aggregate amount of such incurred debt (net of certain costs, fees and other amounts) must be applied to prepay the 2020 Credit Facility, and compliance with certain leverage ratio-based covenant exceptions. In connection with the Fifth Amendment, the Company made a $ 10.0 million voluntary prepayment that was applied to the 86 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ final payment due on the maturity date. Subsequent to the Fifth Amendment, the Company was required to make quarterly principal payments on the 2020 Term Loan aggregating approximately $ 5.0 million per quarter through March 31, 2024 and $ 10.0 million in each of the three quarters thereafter, with the remaining and final payment due on the maturity date in March 2025. On March 24, 2023, the Company entered into the Sixth Amendment to the 2020 Credit Facility (the “Sixth Amendment”) effective March 30, 2023. The Sixth Amendment, among other things, increased the Maximum Consolidated Net Leverage Ratio (as defined in the 2020 Credit Facility), for the first, second and third quarters of 2023 to 4.50 :1.00. In the fourth quarter of 2023 and the first quarter of 2024, the Maximum Consolidated Net Leverage Ratio declined to 4.25 :1.00 and 4.00 :1.00, respectively. Also, the Sixth Amendment reduced the minimum Consolidated Fixed Charge Coverage Ratio (as defined in the 2020 Credit Facility) to 1.10 :1.00 through the first quarter of 2024. The Sixth Amendment reduced the maximum borrowings allowed under the 2020 Revolving Credit Facility from $ 100 million to $ 75 million and the sublimit available for letters of credit was reduced from $ 30 million to $ 20 million. In addition, the Sixth Amendment replaced LIBOR with SOFR as the alternative rate available to the Company for calculating interest owed under the 2020 Credit Facility with the margin fixed at 4.5 %. In conjunction with the Sixth Amendment, the Company made a $ 75 million prepayment that was applied to the final payment due upon maturity in March 2025. The $ 75 million prepayment was almost entirely funded with the net proceeds from the Private Placement and the sales of the Company’s interest rate swap. 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’s interest rates under the 2020 Term Loan benefited from a hedge instrument that was in place, specifically a fixed rate swap, until it was sold in March 2023 (see Note 14). Following the sale of the fixed rate swap in March 2023, the Company’s interest rate was based upon U.S. dollar SOFR plus a fixed margin of 4.5 %. The Company 87 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ was in compliance with all covenants of the 2020 Credit Facility at December 31, 2023, including the Consolidated Net Leverage Ratio calculation that considered the Company’s debt to include Preferred Stock. 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 and the 2020 Credit Facility as of December 31, 2025 and 2024, respectively: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ December 31, ​ ​ 2025 ​ 2024 Current portion of Term Debt ​ $ 8,750 ​ $ 6,125 ​ ​ ​ ​ ​ ​ ​ ​ ​ Long-term Debt, net of Current: ​ ​ ​ ​ ​ ​ ​ Long-term Debt, net of Current (Face Amount) ​ $ 333,375 ​ $ 342,125 ​ Original Issue Discount ​ ​ ( 4,861 ) ​ ​ ( 6,261 ) ​ Unamortized Debt Issuance Costs - Contra-Liability ​ ( 3,989 ) ​ ( 5,138 ) ​ Long-term Debt, net of Current ​ $ 324,525 ​ $ 330,726 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Face Amount of Borrowings ​ $ 342,125 ​ $ 348,250 ​ ​ ​ ​ ​ ​ ​ ​ ​ Unamortized Original Issue Discount and Debt Issuance Costs: ​ ​ ​ ​ ​ Other Assets ​ $ 881 ​ $ 1,134 ​ Long-Term Debt - Contra Liability ​ 8,850 ​ 11,399 ​ Total Unamortized Original Issue Discount and Debt Issuance Costs ​ $ 9,731 ​ $ 12,533 ​ ​ ​ ​ ​ ​ ​ ​ ​ Remaining Borrowing Capacity ​ $ 35,000 ​ $ 35,000 ​ ​ ​ ​ ​ ​ ​ ​ ​ Average Interest Rates: ​ ​ ​ ​ ​ ​ ​ Term Loan ​ 10.3 % 10.6 % ​ The Company’s debt maturities as of December 31, 2025 were as follows: ​ ​ ​ ​ Years ending December 31, ​ ​ ​ ​ ​ 2026 ​ $ 8,750 2027 ​ ​ 13,125 2028 ​ ​ 17,500 2029 ​ ​ 302,750 ​ $ 342,125 ​ Letters of Credit and Other Guarantees The Company uses letters of credit, bank guarantees, and surety bonds in the course of its business. At December 31, 2025 and 2024, the Company had $ 11.1 million and $ 10.9 million, respectively, of letters of credit, bank guarantees, and surety bonds outstanding (collectively, "Guarantees") under various uncommitted facilities and no letters of credit outstanding under the 2024 Credit Facility. At December 31, 2025 and 2024, the Company had cash collateral of $ 1.7 million and $ 2.7 million, respectively, supporting the Guarantees, which are reported in Restricted cash in the Company’s consolidated balance sheets. (14) DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES The Company is exposed to financial market risk related to foreign currency fluctuations and changes in interest rates. These exposures are actively monitored by management. 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 88 RIBBON COMMUNICATIONS INC. Notes to 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. Ribbon does not hold or issue derivative financial instruments for trading or speculative purposes. The Company records derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a specific risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge, or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk even though hedge accounting does not apply or the Company elects not to apply hedge accounting. Cash Flow Hedge of Interest Rate Risk As of December 31, 2023, the 2020 Term Loan Facility had an outstanding balance of $ 235.4 million and the Revolving Credit Facility was undrawn. Borrowings under the 2020 Credit Facility had variable interest rates based on SOFR (see Note 13). As a result of exposure to interest rate movements, during March 2020, the Company entered into an interest rate swap arrangement, 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. On July 22, 2022, the Company sold $ 30 million of the notional amount of its interest rate swap back to its counterparty for $ 1.5 million, reducing the notional amount of this swap to $ 370 million. On August 16, 2022, the Company sold another $ 30 million of the notional amount of its interest rate swap back to its counterparty for $ 1.6 million, reducing the notional amount to $ 340 million, which approximated the current level of our term loan debt then outstanding. The gain in accumulated other comprehensive income (loss) related to the $ 60 million notional amount sold of $ 3.1 million 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 until it was refinanced on June 21, 2024, the amortization of which totaled $ 0.4 million and $ 0.9 million for the years ended December 31, 2024 and 2023, respectively. The remaining unamortized gain in accumulated other comprehensive income (loss) 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. See Note 13 for a description of the refinancing. On March 24, 2023, the Company received $ 9.4 million, consisting of $ 0.4 million of interest and $ 9.0 million for the sale of $ 170 million of its $ 340 million notional amount interest rate swap back to its counterparty, reducing the notional amount to $ 170 million. On March 27, 2023, the Company received $ 9.8 million, consisting of $ 0.4 million of interest and $ 9.4 million for the sale of the remaining $ 170 million of its interest rate swap back to its counterparty. The portion of the gain in accumulated other comprehensive income (loss) related to the term loan debt prepaid on the date of the final sale of our swap totaled $ 7.3 million and was released into earnings immediately as Other expense, net. The portion of the gain in accumulated other comprehensive income (loss) related to our remaining term loan debt balance was $ 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 until it was refinanced on June 21, 2024, the amortization of which totaled $ 3.0 million and $ 4.7 million for the years ended December 31, 2024 and 2023, respectively. The remaining unamortized gain in accumulated other comprehensive income (loss) of $ 4.4 million was written off to interest expense in conjunction with the refinancing of the 2020 Credit Facility on June 21, 2024. See Note 13 for a description of the refinancing. 89 RIBBON COMMUNICATIONS INC. Notes to 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. To accomplish this objective, the Company has used an interest rate swap as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The effective portion of changes in the fair value of designated derivatives that qualify as cash flow hedges is recorded in Accumulated other comprehensive income in the consolidated balance sheet and is subsequently reclassified into earnings in the period that the hedged forecasted transactions affect earnings. During the year ended December 31, 2023, such a derivative was used to hedge the variable cash flows associated with the outstanding borrowings under the 2020 Credit Facility and the Company accounted for this derivative as an effective hedge until the final portion of the swap was sold on March 27, 2023. Any ineffective portion of the change in the fair value of the derivative would have been recognized directly in earnings. However, there was no hedge ineffectiveness recorded over the life of the swap. Amounts reported in Accumulated other comprehensive income related to the Company’s derivative were reclassified to interest expense as interest was accrued on the Company’s variable-rate debt. The impact of the Company’s derivative financial instrument on its consolidated statements of comprehensive income (loss) for the years ended December 31, 2025, 2024 and 2023 was as follows, net of tax (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Amount recognized in other comprehensive income (loss) on swap, net of tax ​ $ — ​ $ — ​ $ ( 2,715 ) Amount reclassified from accumulated other comprehensive income to other expense, net upon sale of swap, net of tax ​ — ​ — ​ ( 5,099 ) Amount reclassified from accumulated other comprehensive income to interest expense ​ — ​ ( 6,019 ) ​ ( 7,300 ) Unrealized loss on interest rate swap, net of reclassifications and amortization ​ $ — ​ $ ( 6,019 ) ​ $ ( 15,114 ) ​ The Company had no derivative assets or liabilities at December 31, 2025 or 2024. (15) PREFERRED STOCK AND WARRANTS On March 28, 2023, the Company issued 55,000 shares of Preferred Stock to investors in the Private Placement at a price of $ 970 per share, along with 4,858,090 Warrants with an exercise price of $ 3.77 per share. 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. The Warrants remain outstanding and without modification. See Note 13 for a description of the refinancing of the 2020 Credit Facility. The Company accounted for the Preferred Stock until it was redeemed and continues to account for the Warrants as liability-classified instruments based on an assessment of their specific terms in accordance with ASC Topic 480, Distinguishing Liabilities from Equity . The fair value option was elected for the Preferred Stock, as the Company considered fair value to best reflect its expected future economic value. The Warrants are remeasured to fair value at each reporting date using the same valuation methodology applied upon issuance using current input assumptions. The value of the Preferred Stock was calculated quarterly through March 31, 2024 using the Black-Derman-Toy (BDT) stochastic yield lattice model to capture the optimal timing of repayment, increasing dividend rate and other features and the value of the Warrants is calculated using the Black-Scholes Pricing Model. Changes in the fair value of the Preferred Stock and Warrants are reported as Other expense, net in the Company’s consolidated statements of operations. 90 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ The Company determined the fair value of the Warrants using Level 3 input. The key assumptions input into the models utilized were as follows as of December 31, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ December 31, ​ ​ ​ ​ ​ 2025 ​ 2024 Stock price ​ $ 2.88 ​ ​ $ 4.16 ​ Strike price ​ $ 3.77 ​ ​ $ 3.77 ​ Risk-free rate ​ 3.48 % ​ 4.21 % Volatility ​ 50.7 % ​ 57.5 % Dividend yield ​ 0.0 % ​ 0.0 % Time to expiration (years) ​ 1.2 ​ ​ 2.2 ​ Fair value of Warrant per share ​ $ 0.41 ​ ​ $ 1.66 ​ ​ The change in the Company’s Preferred Stock for the year ended December 31, 2024 and 2023 was as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ ​ ​ 2024 ​ ​ 2023 Balance at beginning of year ​ $ 53,337 ​ $ — Issued ​ ​ — ​ ​ 47,854 Payable in-kind dividends ​ 2,743 ​ 3,935 Fair value adjustments ​ ​ 5,605 ​ ​ 1,548 Call premium ( 3 %) ​ 1,851 ​ — Redemption (June 25, 2024) ​ ​ ( 63,536 ) ​ ​ — Balance at end of year ​ $ — ​ $ 53,337 ​ The changes in the Company’s Warrant liabilities for the years ended December 31, 2025 and 2024 were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ 2025 ​ 2024 Balance at beginning of year ​ $ 8,064 ​ $ 5,295 Exercise of warrants ​ ​ ( 150 ) ​ ​ — Fair value change ​ ( 5,995 ) ​ 2,769 Balance at end of period ​ $ 1,919 ​ $ 8,064 ​ 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. Holders of the Preferred Stock were entitled to cumulative dividends that accrued quarterly. Dividends were payable in-kind during the first year at a rate of 9.25 %. At the Company’s option, the dividends were payable in-kind or in cash during the second year at a rate of 9.75 %. Dividends thereafter were to be payable in cash at a rate of 12.00 %. The proceeds from the Preferred Stock issuance were approximately $ 53.4 million, including $ 10.0 million from existing related party stockholders. Offering costs paid by the Company of approximately $ 3.5 million were recorded in Other expense, net in the year ended December 31, 2023. The net proceeds from the Private Placement were used for the repayment of debt. The Preferred Stock was redeemable on or after the first and second anniversaries of the closing date at a rate of 103 % and 102 %, respectively. The Warrants are immediately exercisable and upon an event such as a merger, consolidation, asset sale or similar change of control, the Warrants may be exercised and the holders may vote the underlying shares of common stock. In connection with the Private Placement, the Company provided the investors with certain registration rights relating to the Preferred Stock, the Warrants and the shares of the Company’s common stock underlying the Warrants, that required the Company to file a registration statement on Form S-3 with the SEC within 30 days following the closing date of the Private Placement. The registration requirement was completed on May 19, 2023. 91 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ During the year ended December 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 December 31, 2025. ​ 92 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ ​ (16) REVENUE RECOGNITION The Company’s typical performance obligations include the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ When Performance Obligation is Typically ​ ​ ​ ​ Performance Obligation ​ Satisfied ​ When Payment is Typically Due Software and Product Revenue ​ ​ ​ ​ Software licenses (perpetual or term) For perpetual licenses, typically when made available for download (point in time); for term-based licenses, at the beginning of the specified term (point in time) Generally, within 30-60 days of invoicing, except for term licenses which may be paid for over time Software licenses (subscription) Upon activation of hosted site (over time) ​ Generally, within 30-60 days of invoicing Hardware When control of the hardware passes to the customer; typically, upon delivery (point in time) Generally, within 30-60 days of invoicing Software upgrades Upon transfer of control; typically, when made available for download (point in time) Generally, within 30-60 days of invoicing Customer Support Revenue ​ ​ Customer support Ratably over the course of the support contract (over time) Generally, within 30-60 days of invoicing Professional Services ​ ​ Other professional services (excluding training services) As work is performed (over time), typically on the input method based on hours incurred Generally, within 30-60 days of invoicing (upon completion of services) Training As the training is delivered (over time), typically one to five days Generally, within 30-60 days of services being performed ​ Significant Judgments The Company’s contracts with customers often include promises to transfer multiple products and services to the customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Judgment is required to determine the SSP for each distinct performance obligation. The Company typically has more than one SSP for individual products and services due to the stratification of those products and services by customers and circumstances. In these instances, the Company may use information such as the size of the customer and geographic region in determining the SSP. Deferred Revenue Deferred revenue is a contract liability representing amounts collected from or invoiced to customers in excess of revenue recognized. This results primarily from the billing of annual customer support agreements where the revenue is recognized over the term of the agreement. The value of deferred revenue will increase or decrease based on the timing of invoices and recognition of revenue. ​ 93 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ Disaggregation of Revenue 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 years ended December 31, 2025, 2024 and 2023 was disaggregated geographically as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Service ​ ​ ​ ​ ​ ​ ​ ​ Service ​ revenue ​ ​ ​ ​ ​ Product ​ revenue ​ (professional ​ ​ ​ Year ended December 31, 2025 ​ ​ ​ revenue ​ ​ ​ (maintenance) ​ ​ ​ services) ​ ​ ​ Total revenue United States ​ $ 179,660 ​ $ 136,452 ​ $ 86,845 ​ $ 402,957 Europe, Middle East and Africa ​ 111,235 ​ 69,594 ​ 33,322 ​ 214,151 Asia Pacific ​ 129,298 ​ 38,474 ​ 13,213 ​ 180,985 Other ​ 14,394 ​ 26,031 ​ 6,038 ​ 46,463 ​ ​ $ 434,587 ​ $ 270,551 ​ $ 139,418 ​ $ 844,556 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Service ​ ​ ​ ​ ​ ​ ​ ​ Service ​ revenue ​ ​ ​ ​ ​ Product ​ revenue ​ (professional ​ ​ ​ Year ended December 31, 2024 ​ ​ ​ revenue ​ ​ ​ (maintenance) ​ ​ ​ services) ​ ​ ​ Total revenue United States ​ $ 201,340 ​ $ 133,182 ​ $ 61,462 ​ $ 395,984 Europe, Middle East and Africa ​ 129,824 ​ 71,856 ​ 32,999 ​ 234,679 Asia Pacific ​ 100,766 ​ 39,863 ​ 10,941 ​ 151,570 Other ​ 15,299 ​ 29,681 ​ 6,668 ​ 51,648 ​ ​ $ 447,229 ​ $ 274,582 ​ $ 112,070 ​ $ 833,881 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Service ​ ​ ​ ​ ​ ​ ​ ​ Service ​ revenue ​ ​ ​ ​ ​ Product ​ revenue ​ (professional ​ ​ ​ Year ended December 31, 2023 ​ ​ ​ revenue ​ ​ ​ (maintenance) ​ ​ ​ services) ​ ​ ​ Total revenue United States ​ $ 161,945 ​ $ 133,737 ​ $ 48,733 ​ $ 344,415 Europe, Middle East and Africa ​ 151,938 ​ 75,478 ​ 34,485 ​ 261,901 Asia Pacific ​ 115,923 ​ 39,891 ​ 11,269 ​ 167,083 Other ​ 15,344 ​ 30,546 ​ 7,050 ​ 52,940 ​ ​ $ 445,150 ​ $ 279,652 ​ $ 101,537 ​ $ 826,339 ​ The Company’s product revenue from its direct sales program and from indirect sales through its channel partner program for the years ended December 31, 2025, 2024 and 2023 was as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Indirect sales through channel partner program ​ $ 134,154 ​ $ 170,426 ​ $ 157,495 Direct sales ​ 300,433 ​ 276,803 ​ 287,655 ​ ​ $ 434,587 ​ $ 447,229 ​ $ 445,150 ​ ​ 94 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ The Company’s product revenue from sales to enterprise customers and from sales to service provider customers for the years ended December 31, 2025, 2024 and 2023 was as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Sales to enterprise customers ​ $ 148,758 ​ $ 176,064 ​ $ 143,853 Sales to service provider customers ​ 285,829 ​ 271,165 ​ 301,297 ​ ​ $ 434,587 ​ $ 447,229 ​ $ 445,150 ​ The Company’s product revenue and service revenue components by segment for the years ended December 31, 2025, 2024 and 2023 was as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Product revenue: ​ ​ ​ ​ ​ ​ Cloud and Edge 198,163 211,001 184,730 IP Optical Networks 236,424 236,228 260,420 Total product revenue 434,587 447,229 445,150 ​ ​ ​ ​ ​ ​ ​ Service revenue: ​ ​ ​ Maintenance: ​ ​ ​ Cloud and Edge 206,604 212,988 219,939 IP Optical Networks 63,947 61,594 59,713 Total maintenance revenue 270,551 274,582 279,652 Professional services: ​ ​ ​ Cloud and Edge 106,663 81,168 72,979 IP Optical Networks 32,755 30,902 28,558 Total professional services revenue 139,418 112,070 101,537 Total service revenue 409,969 386,652 381,189 ​ Revenue Contract Balances The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables, which are contract assets, and customer advances and deposits, which are contract liabilities, in the Company’s consolidated balance sheets. Amounts are billed as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals or upon achievement of contractual milestones. Billing may occur subsequent to revenue recognition, resulting in contract assets. The Company may receive advances or deposits from its customers before revenue is recognized, resulting in contract liabilities which are classified as deferred revenue. These assets and liabilities are reported in the Company’s 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 years ended December 31, 2025 and 2024 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. Unbilled receivables stem primarily from engagements where services have been performed; however, billing cannot occur until services are completed. 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 consolidated balance sheets. The changes in the Company’s accounts 95 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ receivable, unbilled receivables and deferred revenue balances for the years ended December 31, 2025 and 2024 were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unbilled ​ Deferred ​ Deferred ​ ​ Accounts ​ accounts ​ revenue ​ revenue ​ ​ ​ ​ receivable ​ ​ ​ receivable ​ ​ ​ (current) ​ ​ ​ (long-term) Balance at January 1, 2025 ​ $ 176,575 ​ $ 78,143 ​ $ 119,295 ​ $ 20,991 Increase (decrease), net ​ ( 15,568 ) ​ ( 7,265 ) ​ 5,130 ​ 10,663 Balance at December 31, 2025 ​ $ 161,007 ​ $ 70,878 ​ $ 124,425 ​ $ 31,654 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unbilled ​ Deferred ​ Deferred ​ ​ Accounts ​ accounts ​ revenue ​ revenue ​ ​ ​ ​ receivable ​ ​ ​ receivable ​ ​ ​ (current) ​ ​ ​ (long-term) Balance at January 1, 2024 ​ $ 186,938 ​ $ 81,483 ​ $ 113,381 ​ $ 19,218 Increase (decrease), net ​ ( 10,363 ) ​ ( 3,340 ) ​ 5,914 ​ 1,773 Balance at December 31, 2024 ​ $ 176,575 ​ $ 78,143 ​ $ 119,295 ​ $ 20,991 ​ The Company recognized approximately $ 115 million of revenue in the year ended December 31, 2025 that was recorded as deferred revenue at December 31, 2024 and approximately $ 110 million of revenue in the year ended December 31, 2024 that was recorded as deferred revenue at December 31, 2023. Of the Company’s deferred revenue reported as long-term in its consolidated balance sheet at December 31, 2025, the Company expects that approximately $ 14 million will be recognized as revenue in 2027 , approximately $ 8 million will be recognized as revenue in 2028 and approximately $ 10 million will be recognized as revenue in 2029 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 $ 171 million and $ 285 million as of December 31, 2025 and 2024, respectively. At this time, the Company expects to recognize the majority of the revenue related to this contract in the years 2026 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 consolidated statements of operations. Deferred Commissions Cost Sales commissions earned by the Company’s employees are considered incremental and recoverable costs of obtaining a contract with a customer. These costs on our consolidated balance sheet have been deferred and are being amortized over the expected life of the customer contract, which is generally five years . At December 31, 2025 and 2024, the Company had $ 2.1 million and $ 2.8 million, respectively, of deferred sales commissions capitalized. (17) OPERATING SEGMENT INFORMATION The Company has two operating and reportable segments, Cloud and Edge and IP Optical Networks, that align with the way the business is managed. The Company’s CODM, its President and Chief Executive Officer, makes key operating decisions and assesses performance based upon these reportable segments. ​ 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 96 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ 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, along with related services such as large data analytics, fraud detection and prevention, and element management. The portfolio also includes the new Acumen AIOps and Automation platform. ​ 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. ​ The Company does not provide segment asset information as such information is not provided to the CODM and accordingly, asset information is not used in assessing segment performance. Segment revenue and expenses included in the tables below represent direct revenue and expense attributable to each segment. Please see Note 9 for information regarding the allocation of goodwill between segments. ​ The CODM utilizes adjusted gross profit to evaluate each segment's performance. The Company calculates adjusted gross profit by excluding from cost of revenue both amortization of acquired technology and stock-based compensation and may also exclude other items in future periods that the Company believes are not part of the Company's core business. The Company uses adjusted gross profit to develop its annual budget and quarterly forecasts. The CODM analyzes adjusted gross profit compared to the annual budget and quarterly forecasts to allocate resources. Ribbon’s calculation of adjusted gross profit may not be comparable to similarly titled measures used by other companies. See below for a reconciliation of segment adjusted gross profit to gross profit and loss before income taxes. ​ 97 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ ​ The tables below present significant segment expenses regularly reviewed by the CODM for the years ended December 31, 2025, 2024 and 2023 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Segment revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ Cloud and Edge $ 511,430 $ 505,157 $ 477,647 IP Optical Networks ​ 333,126 ​ 328,724 ​ 348,692 Revenue $ 844,556 $ 833,881 $ 826,339 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Segment cost of revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ Cloud and Edge ​ $ 188,355 $ 175,940 $ 177,629 IP Optical Networks ​ ​ 235,495 ​ 218,429 ​ 240,627 Cost of revenue ​ $ 423,850 $ 394,369 $ 418,256 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Segment adjusted gross profit: ​ ​ ​ ​ ​ ​ ​ ​ ​ Cloud and Edge $ 326,717 $ 338,194 $ 314,594 IP Optical Networks ​ 115,293 ​ 127,836 ​ 124,436 Total segment adjusted gross profit ​ 442,010 ​ 466,030 ​ 439,030 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Reconciliation of segment adjusted gross profit to gross profit and loss before income taxes ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock-based compensation expense ​ ​ ( 960 ) ​ ​ ( 1,625 ) ​ ​ ( 2,657 ) Amortization of acquired technology ​ ( 20,344 ) ​ ( 24,893 ) ​ ( 28,290 ) Gross profit ​ 420,706 ​ 439,512 ​ 408,083 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development expense ​ ​ 178,872 ​ ​ 179,941 ​ ​ 190,660 Sales and marketing expense ​ ​ 133,075 ​ ​ 137,830 ​ ​ 137,460 General and administrative expense ​ ​ 64,239 ​ ​ 68,740 ​ ​ 54,962 Amortization of acquired intangible assets ​ ​ 23,849 ​ ​ 25,969 ​ ​ 28,601 Acquisition-, disposal- and integration-related expense ​ ​ 4,337 ​ ​ — ​ ​ 4,476 Restructuring and related expense ​ ​ 19,658 ​ ​ 10,160 ​ ​ 16,209 Interest expense, net ​ ​ 44,011 ​ ​ 33,821 ​ ​ 27,320 Other (income) expense, net ​ ​ ( 2,226 ) ​ ​ 29,119 ​ ​ 3,768 Loss before income taxes ​ $ ( 45,109 ) ​ $ ( 46,068 ) ​ $ ( 55,373 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Segment depreciation expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ Cloud and Edge $ 9,554 $ 9,337 $ 9,798 IP Optical Networks ​ 7,174 ​ 4,202 ​ 4,307 Depreciation expense $ 16,728 $ 13,539 $ 14,105 ​ ​ ​ 98 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ (18) MAJOR CUSTOMERS The following customers contributed 10% or more of the Company’s revenue in at least one of the years ended December 31, 2025, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Verizon Communications Inc. ​ 17 % 14 % 11 % ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, 2025 and 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. (19) 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. On February 19, 2025 (the “Effective Date”), our Board adopted the Ribbon Communications Inc. 2025 Incentive Award Plan (the “2025 Incentive Award Plan”), which replaced the Amended and Restated 2019 Incentive Award Plan. The 2025 Incentive Award Plan 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 may also grant certain one-time stand-alone inducement awards outside of the 2025 Incentive Award Plan. Executive Equity Arrangements Performance-Based Stock Grants In addition to granting RSAs and RSUs to its executives and certain of its employees, the Company also grants PSUs to certain of its executives and certain other employees. Vesting periods for RSAs, RSUs, and PSUs granted range from one to three years . PSUs granted consist of 60 % that have both performance and service conditions (the “Performance PSUs”) and 40 % that have both market and service conditions (the “Market PSUs”). Each Performance PSU is comprised of three consecutive fiscal year performance periods beginning in the year of grant, with one -third of the Performance PSUs attributable to each fiscal year performance period. The Market PSUs have one three-year performance period, beginning January 1 in the year of grant and ending on December 31, three years thereafter. The number of shares of common stock underlying the PSUs that can be earned will not exceed 150 % of the Performance or 200 % Market PSUs. Shares subject to PSUs that fail to be earned will be forfeited. Restricted Stock Units The activity related to the Company’s RSUs for the year ended December 31, 2025 was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ Average ​ ​ ​ ​ Grant Date ​ ​ Shares ​ Fair Value Unvested balance at January 1, 2025 3,997,108 ​ $ 3.04 Granted 9,489,433 ​ $ 3.13 Vested ( 3,334,571 ) ​ $ 3.08 Forfeited ( 223,714 ) ​ $ 2.80 Unvested balance at December 31, 2025 9,928,256 ​ $ 3.12 ​ 99 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ The total grant date fair value of restricted stock underlying RSUs that vested was $ 10.3 million, $ 15.5 million and $ 19.3 million, in the years ended December 31, 2025, 2024 and 2023, respectively. Performance-Based Stock Units The activity related to the Company’s PSUs for the year ended December 31, 2025 was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ Average ​ ​ ​ ​ Grant Date ​ ​ Shares ​ Fair Value Unvested balance at January 1, 2025 3,605,892 ​ $ 3.75 Granted 2,334,302 ​ $ 4.04 Vested ( 423,677 ) ​ $ 3.52 Forfeited ( 461,794 ) ​ $ 3.53 Unvested balance at December 31, 2025 5,054,723 ​ $ 3.93 ​ The total grant date fair value of restricted stock underlying PSUs that vested was $ 1.5 million, $ 0.9 million and $ 2.6 million, in the years ended December 31, 2025, 2024 and 2023, respectively. Stock-Based Compensation The consolidated statements of operations included stock-based compensation for the years ended December 31, 2025, 2024 and 2023 as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Product cost of revenue ​ $ 159 $ 300 $ 510 Service cost of revenue ​ 801 ​ 1,325 ​ 2,147 Research and development ​ 2,014 ​ ​ 3,166 ​ ​ 4,933 Sales and marketing ​ ​ 4,647 ​ ​ 4,397 ​ ​ 7,111 General and administrative ​ ​ 11,785 ​ ​ 6,898 ​ ​ 7,105 ​ ​ $ 19,406 $ 16,086 $ 21,806 ​ At December 31, 2025, there was $ 30.2 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 1.6 years. The Company issues authorized and unissued shares under its equity plans and at December 31, 2025, there were approximately 5.5 million total shares of common stock reserved for that purpose with no shares authorized only for issuance of shares upon exercise of stock options. (20) 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 year ended December 31, 2025, the Company used $ 9.0 million, including transaction fees, to repurchase and retire 2.5 million shares of its common stock, under the Repurchase Program, with $ 41.0 million remaining for future repurchases as of December 31, 2025. (21) LEASES The Company has operating leases for corporate offices and research and development facilities and has historically had finance leases for certain equipment. Operating leases are reported separately in the Company’s consolidated 100 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ balance sheets. Assets acquired under finance leases, if any, are included in Property and equipment, net, in the consolidated balance sheets. The Company determines if an arrangement is a lease at inception. A contract is determined to contain a lease component if the arrangement provides the Company with a right to control the use of an identified asset. Lease agreements may include lease and non-lease components. In such instances for all classes of underlying assets, the Company does not separate lease and non-lease components but rather, accounts for the entire arrangement under leasing guidance. Leases with an initial term of 12 months or less are not recorded on the balance sheet and lease expense for these leases is recognized on a straight-line basis over the lease term. Right-of-use assets and lease liabilities are initially measured based on the present value of the future minimum fixed lease payments (i.e., fixed payments in the lease contract) over the lease term at the commencement date. As the Company’s existing leases do not have a readily determinable implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of future minimum fixed lease payments. The Company calculates its incremental borrowing rate to reflect the interest rate that it would have to pay to borrow on a collateralized basis an amount equal to the lease payments in a similar economic environment over a similar term and considers its historical borrowing activities and market data from entities with comparable credit ratings in this determination. 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 December 31, 2025 and 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. In making this determination, the Company considers its prior renewal and termination history and planned usage of the assets under lease, incorporating expected market conditions. For operating leases, lease expense for minimum fixed lease payments is recognized on a straight-line basis over the lease term. The expense for finance leases includes both interest and amortization expense components, with the interest component calculated based on the effective interest method and the amortization component calculated based on straight-line amortization of the right-of-use asset over the lease term. Lease contracts may contain variable lease costs, such as common area maintenance, utilities and tax reimbursements that vary over the term of the contract. Variable lease costs are not included in minimum fixed lease payments and as a result, are excluded from the measurement of the right-of-use assets and lease liabilities. The Company expenses all variable lease costs as incurred. Certain leased facilities are being partially or fully vacated as part of the 2022 Restructuring Plan and for some of those facilities, the Company has no plans to enter into sublease agreements. Accordingly, the Company accelerated the amortization of those lease assets through the planned cease-use date of each facility, resulting in additional amortization expense of $ 1.0 million in the year ended December 31, 2023. No additional amortization was recorded in the years ended December 31, 2025 and 2024. No variable lease costs were accrued in the years ended December 31, 2025 and 2024 for future estimated variable expenses related to assets partially or fully vacated with no intent or ability to sublease. All incremental accelerated amortization and accrual for all estimated future variable lease costs are included in Restructuring and related expense in the Company’s consolidated statements of operations for the years ended December 31, 2025, 2024 and 2023. At December 31, 2025 and 2024, the Company had accruals of $ 0.8 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. ​ 101 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ The Company’s right-of-use lease assets and lease liabilities at December 31, 2025 and 2024 were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ Classification ​ ​ ​ 2025 ​ ​ ​ 2024 Assets: ​ ​ ​ ​ ​ ​ Operating lease assets ​ Operating lease right-of-use assets ​ $ 46,240 ​ $ 34,544 ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: ​ ​ ​ ​ ​ ​ Current Operating ​ Operating lease liabilities ​ $ 11,699 ​ $ 9,443 Non-Current Operating ​ Operating lease liabilities, net of current ​ 60,159 ​ 37,376 Total Operating lease liabilities ​ ​ ​ $ 71,858 ​ $ 46,819 ​ The components of lease expense for the years ended December 31, 2025, 2024 and 2023 were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ 2025 ​ 2024 ​ 2023 Operating lease cost* $ 14,300 ​ $ 16,637 ​ $ 18,767 Short-term lease cost 14,105 ​ 13,616 ​ 13,978 Variable lease costs (costs excluded from minimum fixed lease payments)** 4,573 ​ 3,308 ​ 3,364 Sublease income ( 293 ) ​ ( 788 ) ​ ( 1,376 ) Net lease cost $ 32,685 ​ $ 32,773 ​ $ 34,733 * No accelerated amortization was recorded in the years ended December 31, 2025 and 2024. Operating lease costs for the year ended December 31, 2023 include $ 1.0 million, of accelerated amortization for certain assets partially or fully vacated with no intent or ability to sublease. ** No variable costs were accrued in the years ended December 31, 2025, 2024 and 2023. Cash flow information related to the Company’s leases for the years ended December 31, 2025, 2024 and 2023 was as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ 2025 ​ 2024 ​ ​ 2023 Cash paid for amounts included in the measurement of lease liabilities: ​ ​ ​ ​ ​ ​ Operating cash flows from operating leases ​ $ 16,482 ​ $ 18,619 $ 19,021 ​ The Company’s non-cash investing and financing activities in the years ended December 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 $ 20.6 million and $ 9.5 million, respectively, and operating lease liabilities recorded of $ 31.3 million and $ 9.5 million, respectively. ​ Other information related to the Company’s leases as of December 31, 2025 and 2024 was as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Weighted average remaining lease term (years): ​ ​ ​ Operating leases 6.91 5.35 ​ Weighted average discount rate: ​ ​ ​ Operating leases 9.50 % 7.73 % ​ ​ 102 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ Future minimum fixed lease payments under noncancelable leases at December 31, 2025 were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ Operating ​ ​ leases 2026 ​ $ 17,957 2027 ​ ​ 16,730 2028 ​ 14,032 2029 ​ 11,624 2030 ​ 8,448 2031 and beyond ​ 31,539 Total lease payments ​ 100,330 Less: interest ​ ( 28,472 ) Present value of lease liabilities ​ $ 71,858 ​ ​ ​ (22) EMPLOYEE DEFINED CONTRIBUTION PLANS The Company offers 401(k) savings plans to eligible employees. The Company matches 50 % of each employee’s contributions to the 401(k) program up to 4 % of the employee’s eligible earnings, for a maximum match of 2 % of eligible earnings. The Company recorded expense related to its employee defined contribution plans aggregating $ 3.2 million, $ 3.0 million and $ 3.0 million in the years ended December 31, 2025, 2024 and 2023, respectively. (23) NON-U.S. EMPLOYEE DEFINED BENEFIT PLANS The Company has defined benefit retirement plans that cover certain employees at various international locations. The Company’s policy is to contribute amounts at least sufficient to satisfy the minimum amount required by applicable law and regulations or to directly pay benefits where appropriate. Benefits under the defined benefit plans are typically based either on years of service and the employee’s compensation (generally during a fixed number of years immediately before retirement) or on annual credits. The range of assumptions that are used for these non-U.S. defined benefit plans reflect the different economic environments within the various countries. ​ 103 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ A reconciliation of the changes in the benefit obligations and fair value of the assets of the defined benefit plans for the years ended December 31, 2025 and 2024, the funded status of the plans, and the amounts recognized in the consolidated balance sheets as of December 31, 2025 and 2024 were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ 2025 ​ 2024 Changes in projected benefit obligations: ​ ​ ​ ​ Projected benefit obligation, beginning of year ​ $ 22,137 ​ $ 20,769 Service cost ​ 1,389 ​ 1,325 Interest cost ​ 925 ​ 926 Net actuarial loss on obligation ​ 1,862 ​ 343 Settlement ​ ( 1,197 ) ​ ( 945 ) Benefits paid ​ ( 394 ) ​ ( 281 ) Projected benefit obligation, end of year ​ $ 24,722 ​ $ 22,137 ​ ​ ​ ​ ​ ​ ​ Changes in plan assets: ​ ​ ​ ​ Fair value of plan assets, beginning of year ​ $ 14,486 ​ $ 13,609 Actual return on plan assets ​ 2,874 ​ 1,367 Employer contributions ​ 657 ​ 707 Participant contributions ​ 36 ​ 29 Benefits paid ​ ( 1,444 ) ​ ( 1,226 ) Fair value of plan assets, end of year ​ $ 16,609 ​ $ 14,486 ​ ​ ​ ​ ​ ​ ​ Funded status at end of year ​ $ ( 8,113 ) ​ $ ( 7,651 ) ​ ​ ​ ​ ​ ​ ​ Amounts recognized in accumulated other comprehensive income consist of: ​ ​ ​ ​ Prior service (credit) cost ​ $ ( 2,521 ) ​ $ ( 2,841 ) Net actuarial (gain) loss ​ ( 479 ) ​ ( 1,148 ) ​ ​ $ ( 3,000 ) ​ $ ( 3,989 ) ​ ​ ​ ​ ​ ​ ​ Amounts recognized in the consolidated balance sheets consist of: ​ ​ ​ ​ Other assets (non-current pension asset) ​ $ 731 ​ $ 1,567 Accrued expenses and other (current pension liability) ​ ( 606 ) ​ ( 848 ) Other long-term liabilities (non-current pension liability) ​ ( 8,238 ) ​ ( 8,370 ) Net amount recognized ​ $ ( 8,113 ) ​ $ ( 7,651 ) ​ The increase in the underfunded status of the Company’s defined benefit plans at December 31, 2025 compared to December 31, 2024 was primarily due to normal benefit accruals combined with significant lump sum payments in Israel of $ 1.2 million. Plans with underfunded or non-funded accumulated benefit obligations at December 31, 2025 and 2024 were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2025 ​ 2024 Aggregate projected benefit obligation ​ $ 12,839 ​ $ 11,997 Aggregate accumulated benefit obligation ​ $ 10,479 ​ $ 9,586 Aggregate fair value of plan assets ​ $ 3,995 ​ $ 2,779 ​ ​ 104 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ Plans with overfunded accumulated benefit obligations at December 31, 2025 and 2024 were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2025 ​ 2024 Aggregate projected benefit obligation ​ $ 11,883 ​ $ 10,140 Aggregate accumulated benefit obligation ​ $ 9,781 ​ $ 8,160 Aggregate fair value of plan assets ​ $ 12,614 ​ $ 11,707 ​ Net periodic benefit costs for the years ended December 31, 2025, 2024 and 2023 were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Service cost ​ $ 1,389 ​ $ 1,325 ​ $ 1,193 Interest cost ​ 925 ​ 926 ​ 938 Expected return on plan assets ​ ( 590 ) ​ ( 592 ) ​ ( 607 ) Settlement (credit) charge ​ ( 138 ) ​ ( 234 ) ​ ( 417 ) Amortization of prior service cost ​ ( 320 ) ​ ( 320 ) ​ ( 320 ) Amortization of net (gain) loss ​ ( 161 ) ​ ( 150 ) ​ ( 165 ) Net periodic benefit costs ​ $ 1,105 ​ $ 955 ​ $ 622 ​ Expected benefit payments for the next ten years are as follows (in thousands): ​ ​ ​ ​ Years ending December 31, ​ ​ ​ ​ ​ 2026 ​ $ 1,632 2027 ​ 1,943 2028 ​ 2,678 2029 ​ 2,466 2030 ​ 2,078 2031 to 2035 ​ 13,017 ​ ​ $ 23,814 ​ The changes in plan assets and benefit obligations recognized in other comprehensive income (loss) before tax for the years ended December 31, 2025, 2024 and 2023 were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Net loss (gain) ​ $ 370 ​ $ ( 432 ) ​ $ 22 Amortization of net gain ​ 161 ​ 150 ​ 165 Amortization of prior service credit ​ 320 ​ 320 ​ 320 Settlement credit ​ 138 ​ 234 ​ 417 Total recognized in other comprehensive income (loss) ​ $ 989 ​ $ 272 ​ $ 924 ​ 105 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ The Company defers all actuarial gains and losses resulting from variances between actual results and economic estimates or actuarial assumptions. The unrecognized actuarial gains and losses are recorded as unrealized pension actuarial gains (losses) in the Company’s consolidated balance sheets as a component of Accumulated other comprehensive income. These unrecognized gains and losses are amortized as a component of net periodic benefit cost when the net gains and losses exceed 10 % of the greater of the market value of plan assets or the projected benefit obligation at the beginning of the year. The principal weighted average assumptions used to determine the benefit obligation at December 31, 2025 and 2024 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ 2025 ​ ​ ​ 2024 Discount rate 4.09 % 4.33 % Rate of compensation increase 3.98 % 4.06 % Interest crediting rate ​ 1.25 % 1.25 % ​ The principal weighted average assumptions used to determine net period benefit cost for the years ended December 31, 2025, 2024 and 2023 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Discount rate 4.33 % 4.65 % 4.74 % Expected long-term return on plan assets 3.80 % 4.19 % 4.34 % Rate of compensation increase 4.19 % 4.08 % 4.02 % Interest crediting rate ​ 1.25 % 1.25 % 1.25 % ​ Assumed discount rates are used in the measurement of the projected and accumulated benefit obligations, as well as the service and interest cost components of net periodic pension cost. Estimated discount rates reflect the rates at which the pension benefits could be effectively settled. For each defined benefit plan, the Company chooses an estimated discount rate from a readily available market index rate, based upon high-quality fixed income investments, specific to the country or economic zone in which the benefits are paid and taking into account the duration of the plan and the number of participants. The Company’s plans in both the Netherlands and Switzerland are funded through insurance contracts, which have historically provided guaranteed interest credit. The fair value of these contracts is derived from the insurance companies’ assessment of the minimum value of the benefits provided by the insurance contracts. Due to the plan amendment in 2020 that changed the benefit structure of the Netherlands plan, the Company no longer has any obligation related to this plan beyond the payment of insurance premiums. Therefore, there is no projected benefit obligation and no plan assets in the Netherlands. The methodology used to value the Switzerland plan assets assumes that the value of the plan assets equals the guaranteed insured benefits. For consistency, the same discount rate used in the valuation of the benefit obligations is used to place a value on the plan assets. The assets are assumed to grow each year in line with the discount rate, and therefore, the expected return on the assets is set equal to the discount rate. The fair value of the plan assets in Switzerland was $ 3.2 million at December 31, 2025 and $ 2.8 million at December 31, 2024. The Company classifies the fair value of its plan assets as Level 2 in the fair value hierarchy as discussed in Note 5. During the years ended December 31, 2025 and 2024, employees in Switzerland made contributions aggregating $ 36,000 and $ 29,000 each year, respectively. Employee contributions to this plan are based on a fixed 5 % of the relevant pensionable earnings. The Company funds this plan by contributing at least the minimum amount required by applicable regulations and as recommended by an independent actuary. 106 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ During the years ended December 31, 2025, 2024 and 2023, the Company contributed $ 0.7 million, $ 0.7 million and $ 1.0 million, respectively, in total to its defined benefit plans. The Company expects to contribute $ 1.4 million in total to its defined benefit plans in 2026. (24) INCOME TAXES The components of loss from continuing operations before income taxes consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Loss before income taxes: ​ ​ ​ ​ ​ ​ United States ​ $ 88,257 ​ $ 22,685 ​ $ ( 5,363 ) Foreign ​ ( 133,366 ) ​ ( 68,753 ) ​ ( 50,010 ) ​ ​ $ ( 45,109 ) ​ $ ( 46,068 ) ​ $ ( 55,373 ) ​ The (benefit) provision for income taxes from continuing operations consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Income tax (benefit) provision: ​ ​ ​ ​ ​ ​ Current: ​ ​ ​ ​ ​ ​ Federal ​ $ ( 7,702 ) ​ $ 21,619 ​ $ 9,927 State ​ ( 1,489 ) ​ 3,313 ​ 2,790 Foreign ​ 10,049 ​ 122 ​ 7,312 Total current ​ 858 ​ 25,054 ​ 20,029 Deferred: ​ ​ ​ ​ ​ ​ Federal ​ ( 71,702 ) ​ ( 13,822 ) ​ ( 10,417 ) State ​ ( 10,807 ) ​ ( 2,266 ) ​ ( 1,059 ) Foreign ​ ( 3,094 ) ​ ( 799 ) ​ 2,280 Total deferred ​ ( 85,603 ) ​ ( 16,887 ) ​ ( 9,196 ) Total ​ $ ( 84,745 ) ​ $ 8,167 ​ $ 10,833 ​ ​ 107 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ ​ A reconciliation of the Company’s effective tax rate for continuing operations to the U.S. statutory federal rate for the year ended December 31, 2025 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ ​ 2025 ​ ​ ​ Loss before income taxes $ ( 45,109 ) ​ ​ ​ U.S. federal statutory tax rate ​ ( 9,473 ) ​ 21.0 % United States ​ ​ ​ ​ ​ State and local income taxes ​ ( 11,983 ) ​ 26.6 Federal ​ ​ ​ ​ Effect of cross-border tax laws ​ ​ ​ ​ Subpart F income ​ 2,224 ​ ( 4.9 ) Income from branches ​ 1,642 ​ ( 3.6 ) Withholding tax ​ 788 ​ ( 1.7 ) ​ Worthless stock deduction ​ ( 90,862 ) ​ 201.4 ​ Foreign tax credit ​ ( 1,301 ) ​ 2.9 ​ Tax credits ​ ​ ​ ​ ​ R&D tax credit ​ ( 826 ) ​ 1.8 ​ Changes in valuation allowances ​ 3,449 ​ ( 7.6 ) ​ Nontaxable or nondeductible items ​ ​ ​ ​ ​ Fair value adjustment ​ ( 1,259 ) ​ 2.8 ​ Other ​ 596 ​ ( 1.3 ) ​ Other adjustments ​ ( 19 ) ​ 0.0 ​ Foreign tax effects ​ ​ ​ ​ ​ India ​ ​ ​ ​ ​ Withholding tax ​ 1,535 ​ ( 3.4 ) ​ India audit settlement ​ 1,160 ​ ( 2.6 ) ​ Other ​ 1,017 ​ ( 2.3 ) ​ Ireland ​ ​ ​ ​ ​ Changes in valuation allowances ​ ( 1,207 ) ​ 2.7 ​ Capital loss carryforward ​ 1,207 ​ ( 2.7 ) ​ Other ​ ( 151 ) ​ 0.3 ​ Israel ​ ​ ​ ​ ​ Effect of rates different than statutory ​ ( 1,940 ) ​ 4.3 ​ Permanent adjustments - foreign exchange ​ 1,306 ​ ( 2.9 ) ​ Changes in valuation allowances ​ 20,978 ​ ( 46.5 ) ​ Withholding tax ​ ( 757 ) ​ 1.7 ​ Intercompany dividend ​ 1,097 ​ ( 2.4 ) ​ Nontaxable accruals ​ ( 490 ) ​ 1.1 ​ Other ​ ( 280 ) ​ 0.6 ​ Other foreign jurisdictions ​ 1,604 ​ ( 3.6 ) ​ Changes in unrecognized tax benefits ​ ( 2,800 ) ​ 6.2 ​ Income tax benefit $ ( 84,745 ) ​ 187.9 % ​ 108 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ The state and local jurisdictions that make up the majority (greater than 50%) of the state and local income tax category in the above table, for the year ended December 31, 2025, are as follows, beginning with the largest effect in descending order: Pennsylvania, New York, New Jersey, Georgia, and California. ​ A reconciliation of the Company’s effective tax rate for continuing operations to the U.S. statutory federal rate for the years ended December 31, 2024 and 2023 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ 2024 ​ ​ ​ 2023 U.S. statutory income tax rate 21.0 % 21.0 % State income taxes, net of federal benefit ( 0.8 ) ( 2.1 ) ​ Foreign income taxes 2.6 ​ ( 9.9 ) ​ Stock-based compensation ( 4.2 ) ( 5.4 ) ​ Tax credits 2.2 7.7 ​ Uncertain tax positions 15.2 2.0 ​ Valuation allowance ( 37.2 ) ( 27.0 ) ​ Other permanent adjustments ( 14.2 ) ( 1.3 ) ​ Permanent foreign exchange adjustments ( 3.9 ) ( 2.3 ) ​ Other, net 1.5 ( 2.3 ) ​ Effective income tax rate ( 17.8 ) % ( 19.6 ) % ​ The amount of income taxes paid, net of refunds received, by the Company for the year ended December 31, 2025 is as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ ​ December 31, ​ ​ ​ ​ 2025 Federal ​ $ 1,600 State ​ ​ 792 Foreign: ​ ​ India ​ ​ 4,574 Russia ​ ​ 775 All other foreign ​ 2,781 ​ ​ $ 10,522 ​ ​ ​ ​ 109 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ The following is a summary of the significant components of deferred income tax assets and liabilities (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Assets: ​ ​ ​ ​ ​ Net operating loss carryforwards ​ $ 491,584 ​ $ 399,412 Capital loss carryforwards ​ 98,862 ​ 100,069 Tax credit carryforwards ​ 27,410 ​ 25,405 Capitalized research and development expenses ​ 62,480 ​ 71,587 Deferred revenue ​ 2,350 ​ 7,687 Accrued expenses ​ 13,299 ​ 12,106 Inventory ​ 1,853 ​ 1,899 Stock-based compensation ​ 1,844 ​ 1,299 Fixed assets ​ 1,333 ​ 624 Lease liabilities ​ 18,007 ​ 11,993 Interest Limitation Carryforward ​ ​ 11,283 ​ ​ — Other temporary differences ​ 4,066 ​ 1,551 ​ ​ 734,371 ​ 633,632 Valuation allowance ​ ( 512,621 ) ​ ( 493,855 ) Total deferred tax assets ​ 221,750 ​ 139,777 Liabilities: ​ ​ ​ ​ Intangible assets ​ ( 30,384 ) ​ ( 37,488 ) Operating lease right-of-use assets ​ ( 11,711 ) ​ ( 8,712 ) Unremitted foreign income ​ ( 11,065 ) ​ ( 10,536 ) Total deferred tax liabilities ​ ( 53,160 ) ​ ( 56,736 ) Total net deferred tax assets ​ $ 168,590 ​ $ 83,041 ​ The deferred tax assets and liabilities based on tax jurisdictions are presented in the Company’s consolidated balance sheets as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Deferred income taxes - net noncurrent assets ​ $ 174,318 ​ $ 88,982 Deferred income taxes - net noncurrent liabilities ​ ( 5,728 ) ​ ( 5,941 ) ​ ​ $ 168,590 ​ $ 83,041 ​ The One Big Beautiful Bill Act (the "Act") was signed into law on July 4, 2025. The Act reinstates bonus depreciation, allows for full expensing of R&D expenses, and increases the limitation of interest deductibility for 2025, amongst many other provisions. Since the Act became law during the third quarter of 2025, the Company accounted for the effects of the Act on our tax provision in the third quarter of 2025. The most significant impact of the Act for the Company is the ability to deduct the unamortized balance of capitalized R&D costs. The Company plans to accelerate this deduction over two years as permitted by the Act. At December 31, 2025, the Company had U.S. federal net operating losses (“NOLs”) of $ 462.1 million, including $ 362.4 million of indefinite-lived federal NOLs. The Company also had U.S. state NOLs of $ 271.5 million. In addition, the Company had $ 1.6 billion of Israel NOLs. The U.S. federal NOL carryforwards that are not indefinite-lived expire between 2026 and 2038. The U.S. state NOLs begin to expire in 2026, and the Company also has indefinite-lived state NOLs. The Israel NOLs do not expire. The Company also has available federal, state and foreign income tax credit carryforwards of $ 27.4 million. The federal foreign tax credit carryforwards expire between 2030 and 2032. The state tax credits, which are primarily 110 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ research and development credits, begin to expire in 2026, while others can be carried forward until exhausted. The foreign income tax credits expire in various periods. The Company has provided for income taxes on the undistributed earnings of its non-U.S. subsidiaries as of December 31, 2025, excluding Ireland and Israel. These subsidiaries, excluding Ireland and Israel, are cost-plus or limited risk distributors that are not anticipated to need to use excess funds locally. Accordingly, the Company is required to recognize and record deferred taxes in 2025. The deferred taxes, which are primarily future withholding taxes, are recorded on the entire outside basis differences related to the foreign subsidiaries, the largest of these differences being undistributed earnings. Undistributed profits of Ireland and Israel, as well as other outside basis differences in foreign subsidiaries, were indefinitely reinvested in foreign operations. Quantification of the deferred tax liability, if any, associated with indefinitely reinvested earnings and outside basis differences was not practicable. Under the provisions of the Internal Revenue Code, the net operating losses and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service. As a result of the Sonus and GENBAND merger in 2017, the Company has $ 92.8 million of U.S. federal net operating loss carryforwards remaining as of December 31, 2025 with an annual section 382 limitation of $ 9.7 million. The Company believes these NOLs are fully realizable. As a result of the ECI Acquisition in 2020, the Company has $ 9.6 million of U.S. federal NOLs remaining as of December 31, 2025 with an annual section 382 limitation of $ 1.1 million. The Company does not believe all of these NOLs are realizable and, therefore, have recorded a partial valuation allowance against these NOLs. The Company performed an analysis to determine if, based on all available evidence, it considered it more likely than not that some portion or all of the recorded deferred tax assets will not be realized in a future period. Accordingly, the Company has recorded a valuation allowance against its U.S. deferred tax assets of $ 21.5 million at December 31, 2025 and $ 18.6 million at December 31, 2024. The increase to the U.S. valuation allowance is a result of the current year taxable loss, which does not allow the Company to utilize NOLs that are section 382 limited and therefore will expire unutilized in a future period. The Company also maintains a valuation allowance against certain of its foreign deferred tax assets, predominantly Israel, amounting to approximately $ 491 million at December 31, 2025 and approximately $ 475 million at December 31, 2024, respectively. The deferred tax assets recognized with no valuation allowance at December 31, 2025 and 2024 primarily relate to other foreign subsidiaries where recoverability is concluded to be more likely than not based on the Company’s cost-plus compensation policy, as well as NOLs and tax credits in the U.S. that are expected to be utilized prior to expiration. A reconciliation of the Company’s unrecognized tax benefits is as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Unrecognized tax benefits at January 1 ​ $ 5,866 ​ $ 10,932 ​ $ 12,001 Increases related to current year tax positions ​ 560 ​ 607 ​ — Increases related to prior period tax positions ​ — ​ 53 ​ 52 Decreases related to the lapse of the applicable statute of limitations ​ — ​ ( 1,268 ) ​ ( 821 ) Decreases related to prior period tax positions ​ ​ ( 4,126 ) ​ ​ ( 4,458 ) ​ ​ ( 300 ) Unrecognized tax benefits at December 31, ​ $ 2,300 ​ $ 5,866 ​ $ 10,932 ​ The Company accounts for interest and penalties related to uncertain tax positions as part of its provision for income taxes. The Company had $ 2.9 million, $ 6.7 million and $ 14.0 million of unrecognized tax benefits, including penalties and interest, at December 31, 2025, 2024 and 2023, respectively. Of these amounts, $ 2.4 million, $ 3.6 million and $ 10.5 million represent the amount of unrecognized tax benefits that, if recognized, would impact the effective income tax rate for the years ended December 31, 2025, 2024 and 2023, respectively. The Company recorded income tax expense (benefit) for potential penalties and interest of $( 0.2 ) million, $( 2.2 ) million and $ 0.2 million for the years ended December 31, 2025, 2024 and 2023, respectively. The Company had $ 0.7 million and $ 0.9 million accrued in Other long-term liabilities for penalties and interest at December 31, 2025 and 2024, respectively. The Company believes that it is reasonably possible that $ 0.9 million in tax positions related to its unrecognized tax benefits will be recognized within the next twelve months. 111 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction as well as various state and foreign jurisdictions. Generally, the tax years 2022 through 2025 remain open to examination by the major taxing jurisdictions in which the Company operates. The Company’s federal and state NOLs generated prior to 2020 could be adjusted on examination even though the year in which the loss was generated is otherwise closed by the statute of limitations. As of December 31, 2025, the Company had ongoing income tax audits in certain foreign countries. Management believes that an adequate provision has been recorded for any adjustments that may result from tax examinations. (25) RELATED PARTIES The Company recognized revenue from its largest stockholder of $ 13.6 million, $ 11.3 million and $ 12.8 million in the years ended December 31, 2025, 2024 and 2023, respectively. The Company’s accounts receivable from its largest shareholder totaled $ 8.5 million and $ 5.5 million as of December 31, 2025 and 2024, respectively. Additionally, as discussed in Note 15, certain related party stockholders participated in the Private Placement. (26) COMMITMENTS AND CONTINGENCIES Contingencies Liabilities for Royalty Payments to the IIA Prior to the ECI Acquisition, ECI had received research and development grants from the IIA. The Company assumed ECI’s contract with the IIA, which requires the Company to pay royalties to the IIA on proceeds from the sale of products which the Israeli government has supported by way of research and development grants. The royalties for grants prior to 2017 were calculated at the rates of 1.3 % to 5.0 % of the aggregated proceeds from the sale of such products developed at certain of the Company’s R&D centers, up to an amount not exceeding 100 % of such grants plus interest at LIBOR. Effective for grants approved in 2017 and effective through 2023, interest was calculated at the higher of LIBOR plus 1.5 % to 2.75 %. For grants approved in 2024 and thereafter, interest is calculated based on SOFR. At December 31, 2025, the Company had $ 1.4 million of unpaid royalties accrued. The Company’s maximum possible future royalties commitment at December 31, 2025 of $ 11.3 million, including interest of $ 0.8 million, was based upon estimates of future sales of products and services and the grants received from the IIA not yet repaid. Litigation The Company is often a party to disputes and legal proceedings that it considers routine and incidental to its business, including those described below. The Company believes that it has meritorious defenses to the allegations made in the pending cases and intends to vigorously defend these lawsuits; however, the Company is currently unable to forecast the ultimate outcome of these or similar matters. Since it is difficult to predict the outcome of legal proceedings, it is possible that the ultimate outcomes could materially and adversely affect the Company’s business, financial position, results of operations or cash flows. Accordingly, with respect to these proceedings, the Company is currently unable to reasonably estimate the possible loss or range of possible loss. Charter Complaint. 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 March 2022. One complaint was filed in the Supreme Court of the State of New York, in New York County; the second complaint was filed by Charter as well as co-plaintiffs Charter Communications Holding Company, LLC and Bright House Networks, LLC, in the Superior Court of the State of Delaware in and for New Castle County. In both complaints, Charter is seeking monetary damages. 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. On May 14, 2025, the Delaware court granted our dispositive motion for summary judgement and denied Charter’s motion for partial summary 112 RIBBON COMMUNICATIONS INC. Notes to Consolidated Financial Statements (Continued) ​ judgement. Charter appealed the Delaware court’s decision, but on December 18, 2025, the Delaware Supreme Court affirmed the lower court’s judgment. This ended the case in Delaware. No trial date has been set for the case in New York. WideOpenWest Complaint. On August 9, 2023, WideOpenWest, Inc. and WideOpenWest Finance, LLC (collectively, “WOW”) filed a complaint against Ribbon alleging breach of contract with respect to indemnification obligations purportedly owed to WOW in connection with WOW’s legal dispute with Sprint Communications Company L.P., which was settled by WOW in the second quarter of 2023. The complaint was filed in the 429th Judicial District of the District Court of the State of Texas, in Collin County, Texas and has since been transferred to the 493rd Judicial District Court in Collin County. In the complaint, WOW is seeking monetary damages. The Company filed its answer to the complaint on October 5, 2023. On October 14, 2024, the Company and WOW agreed to settle this matter. In connection with the settlement, the Company will pay WOW a total of $ 5.0 million, with $ 2.0 million paid at the time of settlement and the remaining $ 3.0 million paid over the next 18-months in equal quarterly installments. ​ 113 Table of Contents ​ Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure None.