Ribbon Communications – Recurring Revenue Drives Growth

By Philip Seaworth • Wednesday, June 17 10:53 • Permanent Link

Ribbon Communications said recurring revenue remained the core of its business in 2025, with software and services accounting for 67% of the mix and maintenance renewals running at 90%+. The company also said average customer tenure was 20 years, underscoring how embedded its products are in telecom, enterprise and government networks.

Revenue has edged up over the last four years, rising from $815 million in 2022 to $820 million in 2023, $825 million in 2024 and $835 million in 2025. That is a gain of $20 million, or about 2.5%, from 2022 to 2025.

Profitability has expanded faster. Ribbon said trailing-twelve-month adjusted EBITDA rose at a 12% CAGR from 2022 through 2025, though the presentation did not give the exact dollar figures behind that growth. The company framed that improvement as the result of increasing software content and operating leverage across the portfolio.

The business is split between two segments: Cloud & Edge accounted for 61% of FY 2025 revenue, while IP Optical made up 39%. Ribbon put gross margin at about 64% for Cloud & Edge and about 39% for IP Optical.

Ribbon highlighted several growth areas tied to AI infrastructure. It pointed to secure AI voice, autonomous networking and data center interconnect as the main vectors, and said its cloud-native voice platform was selected by a leading CRM platform to power secure AI-driven voice infrastructure. It also said its first public customer for autonomous networking and AIOps is Optimum.

On the data center side, Ribbon said 67% of planned U.S. data center growth is in rural areas, representing 1,000 of the 1,500 planned datacenters. It also cited 2026 year-to-date data center spending of $49.5 billion, compared with $13.6 billion for 2025.

Ribbon’s pitch centered on a recurring-revenue base that it says is durable, with mission-critical deployments, long customer relationships and a growing AI-related opportunity set layered on top. Today the company's shares have moved -0.57% to a price of $2.595. If you want to know more, read the company's complete 8-K report here.

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