Ribbon Communications Inc. 10-Q

Item 1. Financial Statements RIBBON COMMUNICATIONS INC. Condensed Consolidated Balance Sheets (in thousands, except share and per share data) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ December 31, ​ 2026 ​ ​ ​ 2025 Assets ​ ​ ​ ​ ​ Current assets: ​ ​ ​ ​ ​ Cash and cash equivalents $ 43,510 ​ $ 96,405 Restricted cash ​ 1,973 ​ ​ 1,726 Accounts receivable, net 220,203 ​ 231,885 Inventory 87,811 ​ 78,806 Other current assets 52,132 ​ 45,663 Total current assets 405,629 ​ 454,485 Property and equipment, net 61,137 ​ 65,559 Intangible assets, net 124,384 ​ 143,344 Goodwill 300,892 ​ 300,892 Deferred income taxes 182,727 ​ 174,318 Operating lease right-of-use assets 41,895 ​ 46,240 Other assets 26,158 ​ 27,417 ​ $ 1,142,822 ​ $ 1,212,255 Liabilities and Stockholders’ Equity ​ ​ ​ Current liabilities: ​ ​ ​ Current portion of term debt $ 8,750 ​ $ 8,750 Accounts payable 87,077 ​ 79,840 Accrued expenses and other 82,512 ​ 90,759 Operating lease liabilities 11,655 ​ 11,699 Warrant liability ​ 1,007 ​ ​ — Deferred revenue 118,333 ​ 124,425 Total current liabilities 309,334 ​ 315,473 Long-term debt, net of current 320,606 ​ 324,525 Warrant liability — ​ 1,919 Operating lease liabilities, net of current 56,000 ​ 60,159 Deferred revenue, net of current 34,632 ​ 31,654 Deferred income taxes 5,728 ​ 5,728 Other long-term liabilities 23,950 ​ 23,803 Total liabilities 750,250 ​ 763,261 Commitments and contingencies (Note 20) ​ ​ ​ Stockholders’ equity: ​ ​ ​ Common stock, $ 0.0001 par value per share; 390,000,000 shares authorized; 178,771,961 and 175,776,074 shares issued and outstanding at June 30, 2026, and December 31, 2025, respectively. 18 ​ 18 Additional paid-in capital 1,981,940 ​ 1,976,958 Accumulated deficit ( 1,595,909 ) ​ ( 1,534,549 ) Accumulated other comprehensive income 6,523 ​ 6,567 Total stockholders’ equity 392,572 ​ 448,994 ​ $ 1,142,822 ​ $ 1,212,255 ​ ​ ​ See notes to the unaudited condensed consolidated financial statements. ​ 4 Table of Contents RIBBON COMMUNICATIONS INC. Condensed Consolidated Statements of Operations (in thousands, except per share data) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ Six months ended ​ June 30, ​ June 30, ​ June 30, ​ June 30, ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2026 ​ ​ ​ 2025 Revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product $ 95,560 ​ $ 115,057 ​ $ 163,674 ​ $ 197,048 Service ​ 96,780 ​ 105,526 ​ 191,272 ​ 204,814 Total revenue ​ 192,340 ​ 220,583 ​ 354,946 ​ 401,862 Cost of revenue: ​ ​ ​ ​ ​ ​ ​ ​ Product ​ 58,877 ​ 66,746 ​ 108,302 ​ 124,639 Service ​ 38,766 ​ 39,253 ​ 77,694 ​ 74,881 Amortization of acquired technology ​ 4,354 ​ 5,277 ​ 8,916 ​ 10,665 Total cost of revenue ​ 101,997 ​ 111,276 ​ 194,912 ​ 210,185 Gross profit ​ 90,343 ​ 109,307 ​ 160,034 ​ 191,677 Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ Research and development ​ 44,858 ​ 44,696 ​ 89,303 ​ 88,264 Sales and marketing ​ 33,124 ​ 32,536 ​ 65,393 ​ 64,324 General and administrative ​ 14,643 ​ 16,630 ​ 31,621 ​ 31,758 Amortization of acquired intangible assets ​ 5,495 ​ 5,975 ​ 11,151 ​ 12,130 Acquisition-, disposal- and integration-related ​ — ​ 3,898 ​ — ​ 3,898 Restructuring and related ​ 4,442 ​ 1,346 ​ 6,480 ​ 6,687 Total operating expenses ​ 102,562 ​ 105,081 ​ 203,948 ​ 207,061 (Loss) income from operations ​ ( 12,219 ) ​ 4,226 ​ ( 43,914 ) ​ ( 15,384 ) Interest expense, net ​ ( 10,685 ) ​ ( 10,977 ) ​ ( 20,441 ) ​ ( 21,477 ) Other (expense) income, net ​ ( 2,258 ) ​ ( 2,159 ) ​ ( 1,744 ) ​ 970 Loss before income taxes ​ ( 25,162 ) ​ ( 8,910 ) ​ ( 66,099 ) ​ ( 35,891 ) Income tax (provision) benefit ​ ( 1,709 ) ​ ( 2,183 ) ​ 4,739 ​ ( 1,429 ) Net loss $ ( 26,871 ) ​ $ ( 11,093 ) ​ $ ( 61,360 ) ​ $ ( 37,320 ) Loss per share: ​ ​ ​ ​ ​ ​ ​ Basic $ ( 0.15 ) ​ $ ( 0.06 ) ​ $ ( 0.35 ) ​ $ ( 0.21 ) Diluted $ ( 0.15 ) ​ $ ( 0.06 ) ​ $ ( 0.35 ) ​ $ ( 0.21 ) Weighted average shares used to compute loss per share: ​ ​ ​ ​ ​ ​ ​ Basic 177,251 ​ 176,749 ​ 176,460 ​ 176,237 Diluted 177,251 ​ 176,749 ​ 176,460 ​ 176,237 ​ ​ ​ ​ ​ ​ ​ See notes to the unaudited condensed consolidated financial statements. 5 Table of Contents RIBBON COMMUNICATIONS INC. Condensed Consolidated Statements of Comprehensive Loss (in thousands) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ Six months ended ​ June 30, ​ June 30, ​ June 30, ​ June 30, ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2026 ​ ​ ​ 2025 Net loss $ ( 26,871 ) ​ $ ( 11,093 ) ​ $ ( 61,360 ) ​ $ ( 37,320 ) Other comprehensive income (loss), net of tax: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized gain on cash flow hedges, net of reclassifications into earnings 436 ​ — ​ 139 ​ — Foreign currency translation adjustments ( 47 ) ​ ( 58 ) ​ ( 183 ) ​ ( 148 ) Other comprehensive income (loss), net of tax 389 ​ ( 58 ) ​ ( 44 ) ​ ( 148 ) Comprehensive loss, net of tax $ ( 26,482 ) ​ $ ( 11,151 ) ​ $ ( 61,404 ) ​ $ ( 37,468 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ See notes to the unaudited condensed consolidated financial statements. 6 Table of Contents RIBBON COMMUNICATIONS INC. Condensed Consolidated Statements of Stockholders’ Equity (in thousands, except shares) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended June 30, 2026 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ ​ ​ other ​ Total ​ Common stock ​ paid-in ​ Accumulated ​ comprehensive ​ stockholders' ​ Shares ​ ​ ​ Amount ​ capital ​ deficit ​ (loss) income ​ equity Balances, April 1, 2026 175,507,629 ​ $ 18 ​ $ 1,981,988 ​ $ ( 1,569,038 ) ​ $ 6,134 ​ $ 419,102 Vesting of restricted stock awards and units 3,831,146 ​ — ​ — ​ — ​ — ​ — Vesting of performance-based stock units 1,272,210 ​ — ​ — ​ — ​ — ​ — Shares of restricted stock returned to the Company under net share settlements to satisfy tax withholding obligations ( 1,839,024 ) ​ — ​ ( 4,877 ) ​ — ​ — ​ ( 4,877 ) Stock-based compensation expense — ​ — ​ 4,829 ​ — ​ — ​ 4,829 Other comprehensive income — ​ — ​ — ​ — ​ 389 ​ 389 Net loss — ​ — ​ — ​ ( 26,871 ) ​ — ​ ( 26,871 ) Balances, June 30, 2026 178,771,961 ​ $ 18 ​ $ 1,981,940 ​ $ ( 1,595,909 ) ​ $ 6,523 ​ $ 392,572 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six months ended June 30, 2026 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ ​ ​ ​ ​ other ​ ​ ​ Total ​ Common stock ​ paid-in ​ Accumulated ​ comprehensive ​ stockholders' ​ Shares ​ ​ ​ Amount ​ capital ​ deficit ​ (loss) income ​ equity Balances, January 1, 2026 175,776,074 ​ $ 18 ​ $ 1,976,958 ​ $ ( 1,534,549 ) ​ $ 6,567 ​ $ 448,994 Repurchase of common stock ( 400,333 ) ​ — ​ ( 824 ) ​ — ​ — ​ ( 824 ) Vesting of restricted stock awards and units 4,008,489 ​ — ​ — ​ — ​ — ​ — Vesting of performance-based stock units 1,272,210 ​ — ​ — ​ — ​ — ​ — Shares of restricted stock returned to the Company under net share settlements to satisfy tax withholding obligations ( 1,884,479 ) ​ — ​ ( 4,980 ) ​ — ​ — ​ ( 4,980 ) Stock-based compensation expense — ​ — ​ 10,786 ​ — ​ — ​ 10,786 Other comprehensive loss — ​ — ​ — ​ — ​ ( 44 ) ​ ( 44 ) Net loss — ​ — ​ — ​ ( 61,360 ) ​ — ​ ( 61,360 ) Balances, June 30, 2026 178,771,961 ​ $ 18 ​ $ 1,981,940 ​ $ ( 1,595,909 ) ​ $ 6,523 ​ $ 392,572 ​ ​ ​ ​ ​ ​ See notes to the unaudited condensed consolidated financial statements. 7 Table of Contents RIBBON COMMUNICATIONS INC. Condensed Consolidated Statements of Stockholders’ Equity (continued) (in thousands, except shares) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended June 30, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ ​ ​ ​ ​ other ​ ​ ​ Total ​ Common stock ​ paid-in ​ Accumulated ​ comprehensive ​ stockholders' ​ Shares ​ ​ ​ Amount ​ capital ​ deficit ​ (loss) income ​ equity Balances, April 1, 2025 175,967,875 ​ $ 18 ​ $ 1,974,219 ​ $ ( 1,600,412 ) ​ $ 7,990 ​ $ 381,815 Exercise of stock options 3,273 ​ — ​ 5 ​ — ​ — ​ 5 Repurchase of common stock ( 572,810 ) ​ ​ — ​ ​ ( 2,253 ) ​ ​ — ​ ​ — ​ ​ ( 2,253 ) Vesting of restricted stock awards and units 2,439,889 ​ — ​ — ​ — ​ — ​ — Shares of restricted stock returned to the Company under net share settlements to satisfy tax withholding obligations ( 681,886 ) ​ — ​ ( 2,458 ) ​ — ​ — ​ ( 2,458 ) Stock-based compensation expense — ​ — ​ 4,477 ​ — ​ — ​ 4,477 Other comprehensive loss — ​ — ​ — ​ — ​ ( 58 ) ​ ( 58 ) Net loss — ​ — ​ — ​ ( 11,093 ) ​ — ​ ( 11,093 ) Balances, June 30, 2025 177,156,341 ​ $ 18 ​ $ 1,973,990 ​ $ ( 1,611,505 ) ​ $ 7,932 ​ $ 370,435 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six months ended June 30, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ other ​ ​ ​ Total ​ Common stock ​ paid-in ​ ​ ​ Accumulated ​ comprehensive ​ stockholders' ​ Shares ​ ​ ​ Amount ​ capital ​ deficit ​ (loss) income ​ equity Balances, January 1, 2025 175,599,250 ​ $ 18 ​ $ 1,970,708 ​ $ ( 1,574,185 ) ​ $ 8,080 ​ $ 404,621 Exercise of stock options 3,697 ​ — ​ 6 ​ — ​ — ​ 6 Exercise of warrants 32,573 ​ ​ — ​ ​ 150 ​ ​ — ​ ​ — ​ ​ 150 Repurchase of common stock ( 572,810 ) ​ ​ — ​ ​ ( 2,253 ) ​ ​ — ​ ​ — ​ ​ ( 2,253 ) Vesting of restricted stock awards and units 2,624,628 ​ — ​ — ​ — ​ — ​ — Vesting of performance-based stock units 377,751 ​ — ​ — ​ — ​ — ​ — Shares of restricted stock returned to the Company under net share settlements to satisfy tax withholding obligations ( 908,748 ) ​ — ​ ( 3,396 ) ​ — ​ — ​ ( 3,396 ) Stock-based compensation expense — ​ — ​ 8,775 ​ — ​ — ​ 8,775 Other comprehensive loss — ​ — ​ — ​ — ​ ( 148 ) ​ ( 148 ) Net loss — ​ — ​ — ​ ( 37,320 ) ​ — ​ ( 37,320 ) Balances, June 30, 2025 177,156,341 ​ $ 18 ​ $ 1,973,990 ​ $ ( 1,611,505 ) ​ $ 7,932 ​ $ 370,435 ​ ​ ​ ​ ​ See notes to the unaudited condensed consolidated financial statements. 8 Table of Contents RIBBON COMMUNICATIONS INC. Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ Six months ended ​ June 30, ​ June 30, ​ 2026 ​ ​ ​ 2025 Cash flows from operating activities: ​ ​ ​ ​ ​ Net loss $ ( 61,360 ) ​ $ ( 37,320 ) Adjustments to reconcile net loss to cash flows used in operating activities: ​ ​ ​ ​ ​ Depreciation and amortization of property and equipment 9,131 ​ 7,757 Amortization of intangible assets 20,067 ​ 22,795 Amortization of debt issuance costs and original issue discount 1,476 ​ 1,401 Stock-based compensation 10,786 ​ 8,775 Deferred income taxes ( 8,470 ) ​ ( 8,984 ) Change in fair value of warrant liability ( 912 ) ​ ( 1,641 ) Foreign currency exchange losses 2,844 ​ 587 Changes in operating assets and liabilities: ​ ​ ​ Accounts receivable 10,395 ​ 4,578 Inventory ( 11,319 ) ​ ( 2,820 ) Other operating assets 1,038 ​ ( 186 ) Accounts payable 9,128 ​ 5,083 Accrued expenses and other long-term liabilities ( 13,187 ) ​ ( 11,030 ) Deferred revenue ( 3,114 ) ​ 6,675 Net cash used in operating activities ( 33,497 ) ​ ( 4,330 ) Cash flows from investing activities: ​ ​ ​ Purchases of property and equipment ( 7,368 ) ​ ( 17,831 ) Purchases of software licenses ( 553 ) ​ — Net cash used in investing activities ( 7,921 ) ​ ( 17,831 ) Cash flows from financing activities: ​ ​ ​ Borrowings under revolving line of credit 15,000 ​ — Principal payments on revolving line of credit ( 15,000 ) ​ — Principal payments of term debt ( 4,375 ) ​ ( 1,750 ) Payment of debt issuance costs ( 977 ) ​ — Proceeds from the exercise of stock options ​ — ​ 6 Payment of tax obligations related to vested stock awards and units ​ ( 4,980 ) ​ ​ ( 3,396 ) Repurchase of common stock ​ ( 824 ) ​ ​ ( 2,253 ) Net cash used in financing activities ​ ( 11,156 ) ​ ​ ( 7,393 ) Effect of exchange rate changes on cash and cash equivalents ​ ( 74 ) ​ 1,349 Net decrease in cash and cash equivalents ​ ( 52,648 ) ​ ( 28,205 ) Cash, cash equivalents and restricted cash, beginning of year ​ 98,131 ​ 90,479 Cash, cash equivalents and restricted cash, end of period $ 45,483 ​ $ 62,274 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ See notes to the unaudited condensed consolidated financial statements. 9 Table of Contents RIBBON COMMUNICATIONS INC. Condensed Consolidated Statements of Cash Flows (continued) (in thousands) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ Six months ended ​ June 30, ​ June 30, ​ 2026 ​ ​ ​ 2025 Supplemental disclosure of cash flow information: ​ ​ ​ ​ ​ Interest paid $ 17,526 ​ $ 19,167 Income taxes paid $ 4,200 ​ $ 7,716 Income tax refunds received $ 327 ​ $ 474 Supplemental disclosure of non-cash investing activities: ​ ​ ​ ​ ​ Capital expenditures incurred, but not yet paid $ 1,303 ​ $ 5,436 Inventory transfers to property and equipment $ 549 ​ $ 874 Software licenses purchased, but not yet paid $ 553 ​ $ — 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 $ 13,923 ​ $ 11,253 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ See notes to the unaudited condensed consolidated financial statements. ​ ​ 10 Table of Contents RIBBON COMMUNICATIONS INC. Notes to Condensed Consolidated Financial Statements (unaudited) ​ (1) BASIS OF PRESENTATION 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 that provides network solutions that are scalable, elastic and cloud-centric, enabling the secure exchange of information. The Company is at the intersection of the adoption of Artificial Intelligence (“AI”) by service providers and enterprises addressing the rapid growth in fiber connectivity and integration of voice capabilities into Agentic AI platforms. The Company is headquartered in Plano, Texas, and has a global presence with research and development, or sales and support locations in over 30 countries around the world. Basis of Presentation In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting only of normal recurring items, necessary for their fair presentation with accounting principles generally accepted in the United States of America ("GAAP") and with the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). Interim results are not necessarily indicative of results for a full year or any future interim period. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (the "Annual Report"), which was filed with the SEC on February 26, 2026. 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 The Company’s significant accounting policies are disclosed in Note 2 to the Consolidated Financial Statements included in the Annual Report. There were no material changes to the Company’s significant accounting policies during the six months ended June 30, 2026. Principles of Consolidation The condensed consolidated financial statements include the accounts of Ribbon and its wholly-owned subsidiaries. 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 condensed consolidated financial statements include 11 Table of Contents RIBBON COMMUNICATIONS INC. Notes to Condensed Consolidated Financial Statements (Continued) (unaudited) ​ revenue recognition for arrangements that contain multiple performance obligations, inventory valuations, assumptions used to determine the fair value of stock-based compensation and warrants, intangible asset and goodwill valuations, including impairments, 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. 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 condensed consolidated statements of operations, and the proceeds from the sales of receivables are included in cash from operating activities in the condensed consolidated statements of cash flows. Factoring of accounts receivable and associated fees for the three and six months ended June 30, 2026 and 2025 were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ Six months ended ​ June 30, ​ June 30, ​ June 30, ​ June 30, ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2026 ​ ​ ​ 2025 Accounts receivable sold $ 36,905 ​ $ 25,957 ​ $ 71,073 ​ $ 54,723 Less: factoring fees ​ ( 783 ) ​ ​ ( 577 ) ​ ​ ( 1,354 ) ​ ​ ( 1,050 ) Net cash proceeds $ 36,122 ​ $ 25,380 ​ $ 69,719 ​ $ 53,673 ​ Recent Accounting Pronouncements In December 2025, the Financial Accounting Standards Board (the "FASB") issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements (“ASU 2025-11”), to improve the navigability of the required interim disclosures, to clarify when that guidance is applicable and to enhance disclosure requirements. The amendments add to Topic 270 a principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 will be effective for the Company beginning with its 2028 interim and annual financial statements, with early adoption permitted. The Company believes this ASU will have no material impact on its condensed consolidated financial statements. 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 condensed 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 12 Table of Contents RIBBON COMMUNICATIONS INC. Notes to Condensed Consolidated Financial Statements (Continued) (unaudited) ​ 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 condensed consolidated financial statements and related disclosures. In September 2025, the Financial Accounting Standards Board (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 “development 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 period. The Company is currently evaluating the impact of this accounting standard on its condensed consolidated financial statements and related disclosures. 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 its 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. ​ (2) 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): ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ Six months ended ​ June 30, ​ June 30, ​ June 30, ​ June 30, ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2026 ​ ​ ​ 2025 Weighted average shares outstanding—basic 177,251 176,749 176,460 176,237 Potential dilutive common shares — ​ — — — Weighted average shares outstanding—diluted 177,251 176,749 176,460 176,237 ​ Options to purchase the Company’s common stock and unvested restricted and performance-based stock units totaling 12.8 million and 13.6 million shares as of June 30, 2026 and 2025, respectively, were excluded from the computation of diluted loss per share because their effect would have been antidilutive. In connection with a private placement completed in March 2023, the Company issued 4.9 million warrants to purchase shares of the Company’s common stock at an exercise price of $ 3.77 per share, 4.7 million of which remain outstanding following the June 2024 redemption of the related preferred stock. No warrant exercises occurred during the six months ended June 30, 2026. In the six months ended June 30, 2025, holders exercised 0.2 million warrants, and the remaining warrants continue to remain outstanding without modification (See Note 11). 13 Table of Contents RIBBON COMMUNICATIONS INC. Notes to Condensed Consolidated Financial Statements (Continued) (unaudited) ​ The potential number of dilutive shares from the warrants outstanding totaled 4.7 million shares as of June 30, 2026 and 2025, respectively. There was no impact on weighted average shares outstanding from these warrants for the six months ended June 30, 2026 as the average market price of the Company’s common stock was below the exercise price of $ 3.77 per share and their effect would have been antidilutive. For the six months ended June 30, 2025, 0.2 million warrants would have been included in the calculation of diluted loss per share but had no impact due to the Company’s net loss position. (3) INVENTORY Inventory at June 30, 2026 and December 31, 2025 consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ June 30, ​ December 31, ​ 2026 ​ ​ ​ 2025 On-hand assemblies and finished goods inventories $ 103,283 ​ $ 92,981 Deferred cost of goods sold 2,888 ​ 2,421 ​ 106,171 ​ 95,402 Less noncurrent portion (included in Other assets) ( 18,360 ) ​ ( 16,596 ) Current portion $ 87,811 ​ $ 78,806 ​ ​ ​ (4) INTANGIBLE ASSETS AND GOODWILL The Company’s intangible assets at June 30, 2026 and December 31, 2025 consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ ​ ​ average ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ amortization ​ ​ ​ ​ ​ ​ ​ Net ​ ​ period ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ carrying June 30, 2026 ​ ​ ​ (years) ​ Cost ​ ​ ​ amortization ​ ​ ​ value Developed technology ​ 7.84 ​ $ 340,380 ​ $ 289,571 ​ $ 50,809 Customer relationships ​ 11.86 ​ ​ 268,140 ​ ​ 195,613 ​ ​ 72,527 Software licenses 3.00 ​ 6,855 ​ 5,807 ​ 1,048 Trade names ​ 3.88 ​ ​ 5,000 ​ ​ 5,000 ​ ​ — ​ ​ ​ $ 620,375 ​ $ 495,991 ​ $ 124,384 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 Software licenses 3.00 ​ 5,748 ​ 5,462 ​ 286 Trade names ​ 3.88 ​ ​ 5,000 ​ ​ 5,000 ​ ​ — ​ ​ ​ $ 619,268 ​ $ 475,924 ​ $ 143,344 ​ ​ 14 Table of Contents RIBBON COMMUNICATIONS INC. Notes to Condensed Consolidated Financial Statements (Continued) (unaudited) ​ Estimated future amortization expense for the Company’s intangible assets at June 30, 2026 was as follows (in thousands): ​ ​ ​ Years ending December 31, ​ ​ Remainder of 2026 $ 19,443 2027 ​ 34,347 2028 23,769 2029 18,380 2030 7,723 2031 ​ 5,927 Thereafter ​ 14,795 ​ $ 124,384 ​ There were no changes to the carrying value of the Company’s goodwill in the six months ended June 30, 2026. The components of goodwill at both June 30, 2026 and December 31, 2025 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 ​ ​ ​ (5) FAIR VALUE HIERARCHY The carrying amounts of the Company’s cash equivalents, accounts receivable, accounts payable and borrowings under a revolving credit facility in the condensed consolidated balance sheets approximate fair value due to the immediate or short-term nature of these financial instruments. The carrying amount of the Company’s term debt at June 30, 2026 and December 31, 2025 also approximates fair value, based on prevailing market conditions. The Company’s warrant liability had a fair value of $ 1.0 million and $ 1.9 million as of June 30, 2026 and December 31, 2025, respectively. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. 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 classification within the fair value hierarchy is based upon the lowest level of inputs 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 inputs at June 30, 2026 or December 31, 2025. ● 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, the Company determined the fair value of its defined benefit plans’ assets using Level 2 inputs. There were no significant changes to the Company’s defined benefit plans’ assets during the six months ended June 30, 2026 that required the calculation of their fair value as of June 30, 2026. Level 2 inputs were also used to determine the fair value of the Company’s derivative financial instruments at June 30, 2026. 15 Table of Contents RIBBON COMMUNICATIONS INC. Notes to Condensed Consolidated Financial Statements (Continued) (unaudited) ​ ● Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. Level 3 inputs were used to determine the fair value of the Company’s warrants at June 30, 2026 and December 31, 2025. The Company had no transfers between Level 2 and Level 3 fair value measurements during the three and six months ended June 30, 2026 or 2025. (6) ACCRUED EXPENSES AND OTHER Accrued expenses at June 30, 2026 and December 31, 2025 consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ June 30, ​ December 31, ​ 2026 ​ ​ ​ 2025 Employee compensation and related costs $ 31,708 ​ $ 37,857 Professional fees 13,330 ​ 14,400 Taxes payable 5,576 ​ 5,541 Other 31,898 ​ 32,961 ​ $ 82,512 ​ $ 90,759 ​ ​ ​ (7) WARRANTY The changes in the Company’s warranty accrual balance in the six months ended June 30, 2026 and 2025 were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ Six months ended ​ June 30, ​ June 30, ​ 2026 ​ 2025 Balance at beginning of year $ 12,819 ​ $ 12,300 Current period provisions 2,852 ​ ​ 3,209 Settlements ( 2,713 ) ​ ​ ( 2,596 ) Balance at end of period $ 12,958 ​ $ 12,913 ​ At June 30, 2026, the Company’s accrual for product warranties was reflected in its condensed consolidated balance sheet as a current liability in Accrued expenses and other of $ 5.3 million, and as a long-term liability in Other long-term liabilities of $ 7.7 million. ​ (8) RESTRUCTURING AND FACILITIES CONSOLIDATION INITIATIVES The Company recorded restructuring and related expense aggregating $ 4.4 million and $ 1.3 million in the three months ended June 30, 2026 and 2025, respectively and $ 6.5 million and $ 6.7 million in the six months ended June 30, 2026 and 2025, respectively. Restructuring and related expense includes restructuring expense (primarily severance and related costs), estimated future variable and other lease costs for vacated properties with no intent or ability to sublease, and accelerated rent amortization expense. 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 condensed consolidated statements of operations. 16 Table of Contents RIBBON COMMUNICATIONS INC. Notes to Condensed Consolidated Financial Statements (Continued) (unaudited) ​ 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. Amounts of accelerated rent amortization that are included as a component of restructuring and related expense are excluded from the tables below, as the liability for lease payments for each respective facility is included as a component of Operating lease liabilities in the Company’s condensed consolidated balance sheets at June 30, 2026 and December 31, 2025 (see Note 17). The Company may incur additional future expense if it is unable to sublease other locations included in the facilities initiative. The components of restructuring and related expense for the three and six months ended June 30, 2026 and 2025 were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ Six months ended ​ June 30, ​ June 30, ​ June 30, ​ June 30, ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2026 ​ ​ ​ 2025 Severance and related costs $ 3,275 ​ $ 137 ​ $ 4,128 ​ $ 2,413 Variable and other facilities-related costs 1,167 ​ 1,209 ​ 2,352 ​ 4,274 ​ $ 4,442 ​ $ 1,346 ​ $ 6,480 ​ $ 6,687 ​ The following table presents the rollforward of accrued restructuring liabilities for the Company’s restructuring plans for the six months ended June 30, 2026 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 and Prior ​ 2025 ​ 2026 ​ ​ ​ Restructuring ​ Restructuring ​ Restructuring ​ ​ ​ ​ Plans ​ Plan ​ Plan ​ Total Balances, January 1, 2026 $ 806 ​ $ 622 ​ $ 8,461 ​ $ 9,889 Charged to expense 1,313 ​ 40 ​ ​ 5,127 ​ 6,480 Payments ( 1,493 ) ​ ( 339 ) ​ ( 9,530 ) ​ ( 11,362 ) Balances, June 30, 2026 $ 626 ​ $ 323 ​ $ 4,058 ​ $ 5,007 ​ 2026 Restructuring Plan During the fourth quarter of 2025, the Company’s President and Chief Executive Officer (“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. Any positions eliminated in countries outside the United States are subject to local law and consultation requirements. In connection with the 2026 Restructuring Plan, the Company recorded restructuring and related expense of $ 3.8 million and $ 5.1 million in the three and six months ended June 30, 2026, respectively. 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 positions eliminated in countries outside the United States are subject to local law and consultation requirements. In connection with the 2025 17 Table of Contents RIBBON COMMUNICATIONS INC. Notes to Condensed Consolidated Financial Statements (Continued) (unaudited) ​ Restructuring Plan, the Company did no t incur any restructuring and related expense in the three months ended June 30, 2026, but did incur nominal expense in the six months ended June 30, 2026. The Company recorded restructuring and related expense of $ 0.2 million and $ 2.6 million in the three and six months ended June 30, 2025, respectively. 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 periods presented relate to variable and other facilities-related costs. In connection with these plans, the Company recorded restructuring and related expense of $ 0.6 million and $ 1.3 million in the three and six months ended June 30, 2026, respectively, and $ 1.2 million and $ 4.3 million in the three and six months ended June 30, 2025, respectively. ​ Balance Sheet Classification The current portions of accrued restructuring and related expense were $ 4.7 million and $ 9.4 million at June 30, 2026 and December 31, 2025, respectively, and are included as components of Accrued expenses and other in the condensed consolidated balance sheets. The long-term portions of accrued restructuring and related expense are included as components of Other long-term liabilities in the condensed consolidated balance sheets. The long-term portions of accrued restructuring and related expense were $ 0.3 million and $ 0.5 million at June 30, 2026 and December 31, 2025, respectively. 18 Table of Contents RIBBON COMMUNICATIONS INC. Notes to Condensed Consolidated Financial Statements (Continued) (unaudited) ​ (9) DEBT As of June 30, 2026, the Company had $ 337.8 million outstanding under its credit facility (the Credit Facility), all of which relate to its term loan. Scheduled quarterly principal repayments continued during the period in accordance with the terms of the Company’s Senior Secured Credit Facilities Credit Agreement (the “Credit Agreement”). There were no amounts outstanding under the Company’s revolving credit facility under its Credit Agreement, and the Company had $ 35.0 million of available borrowing capacity under the revolving credit facility as of June 30, 2026. On May 5, 2026, the Company entered into the First Amendment and Limited Waiver to Credit Agreement (the “First Amendment”) with Ribbon Communications Operating Company, Inc., HPS Investment Partners, LLC, as administrative agent, and the consenting lenders. The First Amendment (1) waives compliance with the maximum consolidated net leverage ratio financial covenant as of and for the period ending June 30, 2026, (2) increases the Maximum Consolidated Net Leverage Ratio (as defined in the 2024 Credit Facility) to 4.50 :1.00 as of and for the period ending September 30, 2026, and sets the ratio for all subsequent quarters to 4.00 :1.00, and (3) modifies the applicable interest rate margins for any quarter in which the Consolidated Net Leverage Ratio exceeds 3.75 :1.00 to 7.00 %. Debt issuance costs associated with the First Amendment totaled $ 1.0 million and are being amortized on a straight-line basis over the remaining life of the 2024 Credit Facility to Interest expense, net. The Company remained in compliance with all financial covenants under the Credit Facility as of June 30, 2026. 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 Credit Facility as of June 30, 2026 and December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ December 31, ​ 2026 ​ 2025 Current portion of Term Debt $ 8,750 ​ $ 8,750 ​ ​ ​ ​ ​ ​ ​ ​ Long-term Debt, net of Current: ​ ​ ​ ​ ​ ​ Long-term Debt, net of Current (Face Amount) $ 329,000 ​ $ 333,375 ​ Original Issue Discount ​ ( 4,161 ) ​ ​ ( 4,861 ) ​ Unamortized Debt Issuance Costs - Contra-Liability ( 4,233 ) ​ ( 3,989 ) ​ Long-term Debt, net of Current $ 320,606 ​ $ 324,525 ​ ​ ​ ​ ​ ​ ​ ​ Total Face Amount of Borrowings $ 337,750 ​ $ 342,125 ​ ​ ​ ​ ​ ​ ​ ​ Unamortized Original Issue Discount and Debt Issuance Costs: ​ ​ ​ ​ Other Assets $ 838 ​ $ 881 ​ Long-Term Debt - Contra Liability 8,394 ​ 8,850 ​ Total Unamortized Original Issue Discount and Debt Issuance Costs $ 9,232 ​ $ 9,731 ​ ​ ​ ​ ​ ​ ​ ​ Available Borrowing Capacity $ 35,000 ​ $ 35,000 ​ ​ ​ ​ ​ ​ ​ ​ Average Interest Rates: ​ ​ ​ ​ ​ ​ Term Loan 9.9 % 10.3 % Revolving line of credit ​ 10.5 % ​ — % ​ ​ 19 Table of Contents RIBBON COMMUNICATIONS INC. Notes to Condensed Consolidated Financial Statements (Continued) (unaudited) ​ The Company’s debt maturities as of June 30, 2026 were as follows: ​ ​ ​ Years ending December 31, ​ ​ Remainder of 2026 $ 4,375 2027 ​ 13,125 2028 ​ 17,500 2029 ​ 302,750 ​ $ 337,750 ​ Letters of Credit and Other Guarantees In the course of its business, the Company uses letters of credit, bank guarantees, and surety bonds (collectively, "Guarantees"). The Company had $ 11.5 million and $ 11.1 million of Guarantees under various uncommitted facilities as of June 30, 2026 and December 31, 2025, respectively. The Company had no letters of credit outstanding under its Credit Facility as of June 30, 2026 or December 31, 2025. At June 30, 2026 and December 31, 2025, the Company had cash collateral of $ 2.0 million and $ 1.7 million supporting the Guarantees, respectively, which are reported as Restricted cash in the Company’s condensed consolidated balance sheets. (10) DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES The Company is exposed to financial market risk, primarily arising from fluctuations in foreign currency exchange rates, and management actively monitors these exposures. As part of its overall risk management strategy, the Company may use derivative financial instruments to reduce volatility in earnings and cash flows resulting from changes in foreign exchange rates. Ribbon’s policies and practices limit the use of derivative instruments to risk management activities only, and the Company does not use derivatives 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 Foreign Exchange Rate Risk The Company is exposed to foreign currency exchange rate risk related to forecasted operating expenses denominated in a foreign currency. To manage this exposure, the Company entered into foreign exchange forward arrangements, which were designated as hedging instruments beginning in January 2026. These derivatives are intended to reduce the variability in cash flows associated with changes in foreign currency exchange rates. The Company’s objectives in using foreign exchange rate derivatives are to mitigate risk, add stability to cash flows, and manage its exposure to foreign exchange rate movements. To accomplish these objectives, the Company uses foreign exchange rate forward contracts as part of its foreign currency risk management strategy. Foreign exchange rate 20 Table of Contents RIBBON COMMUNICATIONS INC. Notes to Condensed Consolidated Financial Statements (Continued) (unaudited) ​ forward contracts designated as cash flow hedges involve the exchange of fixed USD payments for fixed ILS receipts at predetermined exchange rates, thereby reducing the variability of forecasted ILS‑denominated expenditures. 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 condensed consolidated balance sheet and is subsequently reclassified into earnings in the period that the hedged forecasted transactions affect earnings. Amounts reported in Accumulated other comprehensive income related to the Company’s derivative are reclassified to product cost of revenue, service cost of revenue, research and development, sales and marketing, and general and administrative expenses in the condensed consolidated statement of operations. The impact of the Company’s derivative financial instruments designated as cash flow hedges on the Company’s condensed consolidated statements of operations and condensed consolidated statements of comprehensive loss for the three and six months ended June 30, 2026 was as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ Three months ended ​ ​ ​ Six months ended ​ June 30, ​ June 30, ​ 2026 ​ ​ ​ 2026 Amount recognized in other comprehensive income (loss) on the derivative (effective portion) $ ( 220 ) ​ $ ( 524 ) Amount reclassified from accumulated other comprehensive income to the condensed consolidated statement of operations 656 ​ 663 Unrealized gain on cash flow hedges, net of reclassifications into earnings $ 436 ​ $ 139 ​ The Company expects that all amounts recorded in Accumulated other comprehensive income related to outstanding foreign exchange forward contracts will be reclassified into earnings within the next twelve months, as all contracts outstanding at June 30, 2026 mature no later than October 2026. The Company's derivative asset designated as a hedging instrument and the related fair value and location in the condensed consolidated balance sheet at June 30, 2026 are as follows (in thousands): ​ ​ ​ ​ ​ ​ June 30, Balance sheet location ​ ​ ​ 2026 Other current assets ​ $ 139 ​ The aggregate notional amounts and maturities of the Company’s outstanding foreign exchange rate forward contracts at June 30, 2026 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Notional ​ ​ Notional ​ ​ Derivative Instrument ​ ​ ​ ​ ​ ​ Amount ​ ​ ​ ​ ​ ​ Amount ​ Maturity Foreign exchange rate forward contracts (cash flow hedges) ​ USD 19,786 ​ ILS 59,288 ​ July 2026 - October 2026 ​ The Company has classified the foreign exchange derivative aggregating $ 0.1 million at June 30, 2026 as Level 2 within the fair value hierarchy (see Note 5). (11) PREFERRED STOCK AND WARRANTS In connection with a private placement completed in March 2023, the Company issued 4.9 million warrants to purchase shares of the Company’s common stock at an exercise price of $ 3.77 per share, 4.7 million of which remain outstanding following the June 2024 redemption of the related preferred stock. No warrant exercises occurred during the 21 Table of Contents RIBBON COMMUNICATIONS INC. Notes to Condensed Consolidated Financial Statements (Continued) (unaudited) ​ six months ended June 30, 2026. In the six months ended June 30, 2025, holders exercised 0.2 million warrants, and the remaining warrants continue to be outstanding without modification. The Company accounts for the warrants as liability‑classified instruments under ASC 480, Distinguishing Liabilities from Equity , and remeasures them to fair value at each reporting date using a Black‑Scholes option‑pricing model. Changes in fair value are recognized within Other income, net in the condensed consolidated statements of operations. The Company determined the fair value of the warrants using Level 3 inputs. The key assumptions into the model utilized were as follows as of June 30, 2026 and December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ ​ ​ December 31, ​ ​ 2026 ​ 2025 Stock price $ 2.34 ​ ​ $ 2.88 ​ Strike price $ 3.77 ​ ​ $ 3.77 ​ Risk-free rate 4.00 % ​ 3.48 % Volatility 67.7 % ​ 50.7 % Dividend yield 0.0 % ​ 0.0 % Time to expiration (years) 0.8 ​ ​ 1.2 ​ Fair value of warrant per share $ 0.22 ​ ​ $ 0.41 ​ ​ The changes in the Company’s warrant liabilities for the six months ended June 30, 2026 and 2025 were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ Six months ended ​ June 30, ​ June 30, ​ 2026 ​ 2025 Balance at beginning of year $ 1,919 ​ $ 8,064 Exercise of warrants ​ — ​ ​ ( 150 ) Fair value change ( 912 ) ​ ( 1,641 ) Balance at end of period $ 1,007 ​ $ 6,273 ​ 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. During the six months ended June 30, 2025, 176,658 of the warrants were exercised in cashless exercises, resulting in the issuance of 32,573 shares of the Company’s common stock at a weighted average fair value of $ 4.62 per share. There were 4,681,432 remaining warrants outstanding as of June 30, 2026. (12) 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. 22 Table of Contents RIBBON COMMUNICATIONS INC. Notes to Condensed Consolidated Financial Statements (Continued) (unaudited) ​ 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. 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 23 Table of Contents RIBBON COMMUNICATIONS INC. Notes to Condensed Consolidated Financial Statements (Continued) (unaudited) ​ 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, the Company 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 three and six months ended June 30, 2026, 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. ​ 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. 24 Table of Contents RIBBON COMMUNICATIONS INC. Notes to Condensed Consolidated Financial Statements (Continued) (unaudited) ​ 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. ​ 25 Table of Contents RIBBON COMMUNICATIONS INC. Notes to Condensed Consolidated Financial Statements (Continued) (unaudited) ​ 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 three and six months ended June 30, 2026 and 2025 was disaggregated geographically as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Service revenue ​ ​ ​ ​ ​ ​ Product ​ Service revenue ​ (professional ​ ​ ​ Three months ended June 30, 2026 revenue ​ (maintenance) ​ services) ​ Total revenue United States $ 37,011 ​ $ 34,977 ​ $ 17,379 ​ $ 89,367 Europe, Middle East and Africa ​ 24,695 ​ ​ 15,398 ​ ​ 8,999 ​ ​ 49,092 Asia Pacific ​ 30,291 ​ ​ 9,407 ​ ​ 2,940 ​ ​ 42,638 Other ​ 3,563 ​ ​ 6,240 ​ ​ 1,440 ​ ​ 11,243 ​ $ 95,560 ​ $ 66,022 ​ $ 30,758 ​ $ 192,340 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Service revenue ​ ​ ​ ​ ​ ​ Product ​ Service revenue ​ (professional ​ ​ ​ Three months ended June 30, 2025 revenue ​ (maintenance) ​ services) ​ Total revenue United States $ 59,101 ​ $ 33,546 ​ $ 23,575 ​ $ 116,222 Europe, Middle East and Africa 25,534 ​ 18,362 ​ 8,217 ​ 52,113 Asia Pacific 27,966 ​ 9,708 ​ 4,078 ​ 41,752 Other 2,456 ​ 6,681 ​ 1,359 ​ 10,496 ​ $ 115,057 ​ $ 68,297 ​ $ 37,229 ​ $ 220,583 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Service revenue ​ ​ ​ ​ ​ ​ Product ​ Service revenue ​ (professional ​ ​ ​ Six months ended June 30, 2026 revenue ​ (maintenance) ​ services) ​ Total revenue United States $ 57,952 ​ $ 68,710 ​ $ 35,283 ​ $ 161,945 Europe, Middle East and Africa 41,657 ​ ​ 30,081 ​ ​ 16,424 ​ 88,162 Asia Pacific 58,225 ​ ​ 18,637 ​ ​ 6,703 ​ 83,565 Other 5,840 ​ ​ 12,261 ​ ​ 3,173 ​ 21,274 ​ $ 163,674 ​ $ 129,689 ​ $ 61,583 ​ $ 354,946 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Service revenue ​ ​ ​ ​ ​ ​ Product ​ Service revenue ​ (professional ​ ​ ​ Six months ended June 30, 2025 revenue ​ (maintenance) ​ services) ​ Total revenue United States $ 88,442 ​ $ 66,870 ​ $ 43,605 ​ $ 198,917 Europe, Middle East and Africa 44,994 ​ 35,745 ​ 16,873 ​ 97,612 Asia Pacific 59,005 ​ 19,108 ​ 6,818 ​ 84,931 Other 4,607 ​ 12,996 ​ 2,799 ​ 20,402 ​ $ 197,048 ​ $ 134,719 ​ $ 70,095 ​ $ 401,862 ​ The Company’s product revenue from its direct sales program and from indirect sales through its channel partner program for the three and six months ended June 30, 2026 and 2025 was as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ Six months ended ​ ​ June 30, ​ June 30, ​ June 30, ​ June 30, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2026 ​ ​ ​ 2025 Indirect sales through channel partner program ​ $ 32,566 ​ $ 38,988 ​ $ 51,895 ​ $ 61,723 Direct sales ​ 62,994 ​ 76,069 ​ 111,779 ​ 135,325 ​ ​ $ 95,560 ​ $ 115,057 ​ $ 163,674 ​ $ 197,048 26 Table of Contents RIBBON COMMUNICATIONS INC. Notes to Condensed Consolidated Financial Statements (Continued) (unaudited) ​ ​ The Company’s product revenue from sales to enterprise customers and from sales to service provider customers for the three and six months ended June 30, 2026 and 2025 was as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ Six months ended ​ ​ June 30, ​ June 30, ​ June 30, ​ June 30, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2026 ​ ​ ​ 2025 Sales to enterprise customers ​ $ 39,335 ​ $ 39,052 ​ $ 60,851 ​ $ 62,284 Sales to service provider customers ​ 56,225 ​ 76,005 ​ 102,823 ​ 134,764 ​ ​ $ 95,560 ​ $ 115,057 ​ $ 163,674 ​ $ 197,048 ​ The Company’s product revenue and service revenue components by segment for the three and six months ended June 30, 2026 and 2025 were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ Six months ended ​ ​ June 30, ​ June 30, ​ June 30, ​ June 30, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2026 ​ ​ ​ 2025 Product revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cloud and Edge $ 37,722 $ 56,112 $ 63,981 $ 87,973 IP Optical Networks ​ 57,838 ​ 58,945 ​ 99,693 ​ 109,075 Total product revenue $ 95,560 $ 115,057 $ 163,674 $ 197,048 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Service revenue: ​ ​ ​ ​ ​ ​ ​ ​ Maintenance: ​ ​ ​ ​ ​ ​ ​ ​ Cloud and Edge $ 51,878 $ 51,816 $ 102,110 $ 102,584 IP Optical Networks ​ 14,144 ​ 16,481 ​ 27,579 ​ 32,135 Total maintenance revenue ​ 66,022 ​ 68,297 ​ 129,689 ​ 134,719 Professional services: ​ ​ ​ ​ ​ ​ ​ ​ Cloud and Edge ​ 20,905 ​ 29,120 ​ 43,926 ​ 54,082 IP Optical Networks ​ 9,853 ​ 8,109 ​ 17,657 ​ 16,013 Total professional services revenue ​ 30,758 ​ 37,229 ​ 61,583 ​ 70,095 Total service revenue $ 96,780 $ 105,526 $ 191,272 $ 204,814 ​ 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 condensed 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 condensed consolidated balance sheets on a contract-by-contract basis as of the end of each reporting period. Changes in the contract asset and liability balances during the six months ended June 30, 2026 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 27 Table of Contents RIBBON COMMUNICATIONS INC. Notes to Condensed Consolidated Financial Statements (Continued) (unaudited) ​ payment terms over the term of the SaaS agreement. Amounts recognized as revenue in excess of amounts billed are recorded as unbilled receivables. Unbilled receivables that are anticipated to be invoiced in the next twelve months are included in Accounts receivable on the Company’s condensed consolidated balance sheets. The changes in the Company’s accounts receivable, unbilled receivables and deferred revenue balances for the six months ended June 30, 2026 were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unbilled ​ Deferred ​ Deferred ​ Accounts ​ accounts ​ revenue ​ revenue ​ receivable ​ ​ ​ receivable ​ ​ ​ (current) ​ ​ ​ (long-term) Balance at January 1, 2026 $ 161,007 ​ $ 70,878 ​ $ 124,425 ​ $ 31,654 Increase (decrease), net ( 17,660 ) ​ 5,978 ​ ( 6,092 ) ​ 2,978 Balance at June 30, 2026 $ 143,347 ​ $ 76,856 ​ $ 118,333 ​ $ 34,632 ​ The Company recognized approximately $ 70 million of revenue in the six months ended June 30, 2026 that was recorded as deferred revenue at December 31, 2025 and approximately $ 75 million of revenue in the six months ended June 30, 2025 that was recorded as deferred revenue at December 31, 2024. Of the Company’s deferred revenue reported as long-term in its condensed consolidated balance sheet at June 30, 2026, the Company expects that approximately $ 15 million will be recognized as revenue in 2027 , approximately $ 8 million will be recognized as revenue in 2028 and approximately $ 12 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 approximately $ 155 million and $ 171 million as of June 30, 2026 and December 31, 2025, 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 condensed 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 have been deferred on our condensed consolidated balance sheet and are being amortized over the expected life of the customer contract, which is generally five years . At June 30, 2026 and December 31, 2025, the Company had $ 2.1 million of deferred sales commissions capitalized. (13) 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 28 Table of Contents RIBBON COMMUNICATIONS INC. Notes to Condensed Consolidated Financial Statements (Continued) (unaudited) ​ and within service provider networks. Ribbon's Cloud and Edge product portfolio consists primarily of its Session Border Controller ("SBC") products and its Network Transformation products. ​ The IP Optical Networks segment provides high-performance, secure solutions for IP networking and optical transport, supporting wireless networks including 5G, metro and edge aggregation, core networking, data center interconnect, legacy transformation and transport solutions for wholesale carriers. This portfolio is offered to service provider, enterprise and industry verticals with critical transport network infrastructures including utilities, government, defense, transportation, and education and research. ​ 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 4 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. ​ 29 Table of Contents RIBBON COMMUNICATIONS INC. Notes to Condensed Consolidated Financial Statements (Continued) (unaudited) ​ The tables below present significant segment expenses regularly reviewed by the CODM for the three and six months ended June 30, 2026 and 2025 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ Six months ended ​ ​ June 30, ​ June 30, ​ June 30, ​ June 30, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2026 ​ ​ ​ 2025 Segment revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cloud and Edge $ 110,505 $ 137,048 $ 210,017 $ 244,639 IP Optical Networks ​ 81,835 ​ 83,535 ​ 144,929 ​ 157,223 Revenue $ 192,340 $ 220,583 $ 354,946 $ 401,862 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ Six months ended ​ ​ June 30, ​ June 30, ​ June 30, ​ June 30, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2026 ​ ​ ​ 2025 Segment adjusted gross profit: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cloud and Edge $ 66,069 $ 84,854 $ 122,591 $ 152,150 IP Optical Networks ​ 28,842 ​ 29,961 ​ 46,777 ​ 50,775 Total segment adjusted gross profit ​ 94,911 ​ 114,815 ​ 169,368 ​ 202,925 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Reconciliation of segment adjusted gross profit to gross profit and loss before income taxes ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock-based compensation expense ​ ​ ( 214 ) ​ ​ ( 231 ) ​ ​ ( 418 ) ​ ​ ( 583 ) Amortization of acquired technology ​ ( 4,354 ) ​ ( 5,277 ) ​ ( 8,916 ) ​ ( 10,665 ) Gross profit ​ 90,343 ​ 109,307 ​ 160,034 ​ 191,677 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development expense ​ ​ 44,858 ​ ​ 44,696 ​ ​ 89,303 ​ ​ 88,264 Sales and marketing expense ​ ​ 33,124 ​ ​ 32,536 ​ ​ 65,393 ​ ​ 64,324 General and administrative expense ​ ​ 14,643 ​ ​ 16,630 ​ ​ 31,621 ​ ​ 31,758 Amortization of acquired intangible assets ​ ​ 5,495 ​ ​ 5,975 ​ ​ 11,151 ​ ​ 12,130 Acquisition-, disposal- and integration-related expense ​ ​ — ​ ​ 3,898 ​ ​ — ​ ​ 3,898 Restructuring and related expense ​ ​ 4,442 ​ ​ 1,346 ​ ​ 6,480 ​ ​ 6,687 Interest expense, net ​ ​ 10,685 ​ ​ 10,977 ​ ​ 20,441 ​ ​ 21,477 Other expense (income), net ​ ​ 2,258 ​ ​ 2,159 ​ ​ 1,744 ​ ​ ( 970 ) Loss before income taxes ​ $ ( 25,162 ) ​ $ ( 8,910 ) ​ $ ( 66,099 ) ​ $ ( 35,891 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ Six months ended ​ ​ June 30, ​ June 30, ​ June 30, ​ June 30, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2026 ​ ​ ​ 2025 Segment depreciation expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cloud and Edge $ 2,564 $ 2,399 $ 4,886 $ 4,752 IP Optical Networks ​ 2,107 ​ 1,889 ​ 4,245 ​ 3,005 Depreciation expense $ 4,671 $ 4,288 $ 9,131 $ 7,757 ​ ​ ​ ​ 30 Table of Contents RIBBON COMMUNICATIONS INC. Notes to Condensed Consolidated Financial Statements (Continued) (unaudited) ​ (14) MAJOR CUSTOMERS The following customers contributed 10% or more of the Company’s revenue in the three and six months ended June 30, 2026 and 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ Six months ended ​ ​ June 30, ​ June 30, ​ June 30, ​ June 30, ​ ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2026 ​ ​ ​ 2025 Verizon Communications Inc. ​ 13 % 21 % 13 % 18 % Bharti Telecom Limited ​ 10 % * ​ 12 % * ​ * Less than 10% of total revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At June 30, 2026 and December 31, 2025, no customer accounted for 10% or more of the Company’s accounts receivable balance. The Company performs ongoing credit evaluations of its customers and generally does not require collateral on accounts receivable. The Company maintains an allowance for doubtful accounts and such losses have historically been within management’s expectations. (15) COMMON STOCK REPURCHASES ​ In the second quarter of 2025, the Company's Board of Directors approved a program to repurchase up to $ 50 million of the Company’s common stock (the “2025 Repurchase Program” or the “Repurchase Program”). Commencing on June 5, 2025 and continuing through December 31, 2027, the Repurchase Program is being funded with cash on hand or cash generated from operations. During the six months ended June 30, 2026, the Company used $ 0.8 million, including transaction fees, to repurchase and retire 0.4 million shares of its common stock under the Repurchase Program. Since the start of the Repurchase Program, the Company has used $ 9.8 million, including transaction fees, to repurchase and retire 2.9 million shares of its common stock. Repurchases are subject to the terms of the Company’s Credit Facility, which limits aggregate share repurchases to $ 15 million and subjects such repurchases to compliance with specified financial covenants and leverage requirements. (16) STOCK-BASED COMPENSATION PLANS The Company grants stock-based compensation to employees, officers and non-employee directors, as well as consultants and advisors of the Company and its subsidiaries under its 2025 Incentive Award Plan (the “2025 Plan”) which provides for the award of stock options, stock appreciation rights ("SARs"), restricted stock awards ("RSAs"), performance-based stock awards ("PSAs"), restricted stock units ("RSUs"), performance-based stock units ("PSUs") and other stock- or cash-based awards. The 2025 Plan has been approved by the Company’s stockholders. 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 target Performance PSUs or 200 % of the target Market PSUs. Shares subject to PSUs that fail to be earned will be forfeited. 31 Table of Contents RIBBON COMMUNICATIONS INC. Notes to Condensed Consolidated Financial Statements (Continued) (unaudited) ​ Restricted Stock Units The activity related to the Company’s RSUs for the six months ended June 30, 2026 was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ Average ​ ​ ​ ​ Grant Date ​ ​ Shares ​ Fair Value Unvested balance at January 1, 2026 9,928,256 ​ $ 3.12 Granted 3,163,781 ​ $ 2.72 Vested ( 4,008,489 ) ​ $ 3.58 Forfeited ( 275,065 ) ​ $ 3.44 Unvested balance at June 30, 2026 8,808,483 ​ $ 3.27 ​ The total grant date fair value of shares of restricted stock underlying RSUs that vested during the six months ended June 30, 2026 was $ 14.3 million. Performance-Based Stock Units The activity related to the Company’s PSUs for the six months ended June 30, 2026 was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ Average ​ ​ ​ ​ Grant Date ​ ​ Shares ​ Fair Value Unvested balance at January 1, 2026 5,054,723 ​ $ 3.93 Granted 1,546,236 ​ $ 2.88 Vested ( 1,272,210 ) ​ $ 3.79 Forfeited ( 1,330,797 ) ​ $ 3.24 Unvested balance at June 30, 2026 3,997,952 ​ $ 3.80 ​ The total grant date fair value of shares of restricted stock underlying PSUs that vested during the six months ended June 30, 2026 was $ 4.8 million. Stock-Based Compensation The condensed consolidated statements of operations include stock-based compensation for the three and six months ended June 30, 2026 and 2025 as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ Six months ended ​ June 30, ​ June 30, ​ June 30, ​ June 30, ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2026 ​ ​ ​ 2025 Product cost of revenue $ 39 $ 33 $ 82 $ 99 Service cost of revenue ​ 175 ​ 198 ​ 336 ​ 484 Research and development ​ 460 ​ ​ 455 ​ ​ 937 ​ ​ 1,180 Sales and marketing ​ 1,103 ​ ​ 1,066 ​ ​ 2,233 ​ ​ 2,239 General and administrative ​ 3,052 ​ ​ 2,725 ​ ​ 7,198 ​ ​ 4,773 ​ $ 4,829 $ 4,477 $ 10,786 $ 8,775 ​ 32 Table of Contents RIBBON COMMUNICATIONS INC. Notes to Condensed Consolidated Financial Statements (Continued) (unaudited) ​ At June 30, 2026, there was $ 29.0 million, net of expected forfeitures, of unrecognized stock-based compensation expense related to unvested RSUs and PSUs. This expense is expected to be recognized over a weighted average period of approximately two years . (17) LEASES The Company has operating leases for corporate offices and research and development facilities. Operating leases are reported separately in the Company’s condensed 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 June 30, 2026 and December 31, 2025 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. 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 may accelerate the amortization of those lease assets through the planned cease-use date of each facility, resulting in additional amortization expense. No such accelerated amortization was recorded in three and six months ended June 30, 2026 or 2025. The Company did no t record estimated future variable lease costs in the three and six months ended June 30, 2026 or 2025 related to the 2022 Restructuring Plan. All incremental accelerated amortization and accruals for estimated future variable costs are included in Restructuring and related expense in the Company’s condensed consolidated statements of operations. At June 30, 2026 and December 31, 2025, the Company had accruals of $ 0.6 million and $ 0.8 million, respectively, for all future 33 Table of Contents RIBBON COMMUNICATIONS INC. Notes to Condensed Consolidated Financial Statements (Continued) (unaudited) ​ anticipated variable lease costs related to these facilities. The Company may incur additional future expense if it is unable to sublease other locations included in the facilities initiative. The Company leases its corporate offices and other facilities under operating leases, which expire at various times through 2036. The Company’s right-of-use lease assets and lease liabilities at June 30, 2026 and December 31, 2025 were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ December 31, ​ ​ ​ ​ Classification ​ ​ ​ 2026 ​ ​ ​ 2025 Assets: ​ ​ ​ ​ ​ ​ Operating lease assets ​ Operating lease right-of-use assets ​ $ 41,895 ​ $ 46,240 ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: ​ ​ ​ ​ ​ ​ Current Operating ​ Operating lease liabilities ​ $ 11,655 ​ $ 11,699 Non-Current Operating ​ Operating lease liabilities, net of current ​ 56,000 ​ 60,159 Total Operating lease liabilities ​ ​ ​ $ 67,655 ​ $ 71,858 ​ The components of lease expense for the three and six months ended June 30, 2026 and 2025 were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ Six months ended ​ ​ June 30, ​ June 30, ​ June 30, ​ June 30, ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2026 ​ ​ ​ 2025 Operating lease cost* ​ $ 3,669 ​ $ 3,597 ​ $ 7,359 ​ $ 6,822 Short-term lease cost ​ 3,533 ​ 3,553 ​ 7,104 ​ 7,080 Variable lease costs (costs excluded from minimum fixed lease payments)** ​ 1,483 ​ 867 ​ 2,997 ​ 1,739 Sublease income ​ ( 46 ) ​ ( 96 ) ​ ( 112 ) ​ ( 216 ) Net lease cost ​ $ 8,639 ​ $ 7,921 ​ $ 17,348 ​ $ 15,425 * No accelerated amortization was recorded in the three and six months ended June 30, 2026 or 2025. ** No variable lease costs were expensed in the three and six months ended June 30, 2026 or 2025 for future estimated variable expenses related to certain assets partially or fully vacated with no intent or ability to sublease. Cash flows related to the Company’s leases included in the measurement of operating lease liabilities were classified as operating cash flows and totaled $ 8.8 million and $ 7.7 million in the six months ended June 30, 2026 and 2025, respectively. The Company’s non-cash investing and financing activities in the six months ended June 30, 2025 related to the addition of operating leases resulted in right-of-use assets (“ROUs”) obtained in exchange for lease obligations of $ 17.3 million and operating lease liabilities recorded of $ 28.0 million. There were no material non‑cash investing or financing activities related to operating leases in the six months ended June 30, 2026. 34 Table of Contents RIBBON COMMUNICATIONS INC. Notes to Condensed Consolidated Financial Statements (Continued) (unaudited) ​ Other information related to the Company’s leases as of June 30, 2026 and December 31, 2025 was as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ December 31, ​ ​ ​ ​ ​ 2026 ​ ​ ​ 2025 Weighted average remaining lease term (years): ​ ​ ​ Operating leases 6.77 6.91 ​ Weighted average discount rate: ​ ​ ​ ​ Operating leases 9.59 % 9.50 % ​ Future minimum fixed lease payments under noncancelable leases at June 30, 2026 were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ Operating ​ ​ leases Remainder of 2026 ​ $ 8,914 2027 ​ ​ 16,892 2028 ​ 14,210 2029 ​ 11,844 2030 ​ 8,752 2031 and beyond ​ 33,380 Total lease payments ​ 93,992 Less: interest ​ ( 26,337 ) Present value of lease liabilities ​ $ 67,655 ​ ​ (18) INCOME TAXES The Company recorded an income tax benefit of $ 4.7 million and an income tax provision $ 1.4 million in the six months ended June 30, 2026 and 2025, respectively. These amounts reflect the Company’s estimates of the effective rates expected to be applicable for the respective full years, adjusted for any discrete events, which are recorded in the period in which they occur. These estimates are reevaluated each quarter based on the Company’s estimated tax expense for the full fiscal year. The estimated effective tax rate includes the impact of valuation allowances in various jurisdictions. The Company intends to continue to maintain a valuation allowance on its deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of the respective allowances. ​ (19) RELATED PARTIES The Company recognized revenue from its largest stockholder of $ 1.1 million and $ 1.3 million in the three months ended June 30, 2026 and 2025, respectively, and $ 2.1 million and $ 3.0 million in the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, the Company had accounts receivable of $ 6.5 million outstanding from its largest stockholder, compared to $ 8.5 million as of December 31, 2025. (20) COMMITMENTS AND CONTINGENCIES Contingencies Liabilities for Royalty Payments to the IIA In connection with the Company’s acquisition of ECI Telecom Group Ltd. ("ECI") in 2020, ECI had previously received research and development grants from the Office of the Innovation Authority of the Israeli Ministry of Economics (the "IIA"). The Company assumed ECI’s contract with the IIA, which requires the Company to pay 35 Table of Contents RIBBON COMMUNICATIONS INC. Notes to Condensed Consolidated Financial Statements (Continued) (unaudited) ​ royalties to the IIA on proceeds from the sale of products that 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 research and development (“R&D”) centers, up to an amount not exceeding 100 % of such grants plus interest at the London Inter-Bank Offered Rate (“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 the Secured Overnight Financing Rate (“SOFR”). At June 30, 2026, the Company had $ 3.3 million of unpaid royalties accrued. The Company’s maximum possible future royalties commitment at June 30, 2026 of $ 11.6 million, including interest of $ 0.8 million, was based upon estimates of future sales of product and services and the grants received from the IIA not yet repaid. 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 filed 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 the Company’s dispositive motion for summary judgment and denied Charter’s motion for partial summary judgment. Charter appealed the Delaware court’s decision, but on December 18, 2025, the Delaware Supreme Court affirmed the lower court’s judgment. This resolved the case in Delaware. On May 28, 2026, the New York court also granted the Company’s dispositive motion for summary judgment and denied Charter’s motion for partial summary judgment. Charter has appealed the New York court’s decision. ​ ​ 36 Table of Contents