Ribbon Communications RBBN has significantly expanded its presence in Thailand and solidified its role in the region. The company began manufacturing key IP Optical products in Thailand in 2023. These products include advanced platforms such as the Apollo 9408 and 9600, which offer high-density, low-power optical transport solutions essential for modern network infrastructures.

The expansion supports Ribbon Communications' strategy to meet the rising demand for high-performance networking solutions, especially as Thailand’s digital economy is projected to account for 25% of the nation's GDP by 2027. By increasing production in Thailand, the company strengthens its global supply chain and enhances its ability to serve customers across the ASEAN region.

Ribbon Communications will also showcase its innovations at the Telecoms World Asia event in Bangkok.

RBBN’s Shares Up 32% Year to Date: Will the Momentum Last?

Ribbon Communications’ shares have gained 32.1% year to date (YTD), outperforming the broader Zacks Computer & Technology sector’s 25.7% rise and the Zacks Communication - Network Software industry’s 27.1% growth.

This growth can be attributed majorly to the expansion in the Cloud & Edge business, which grew 11% year over year and 16% sequentially.

Sales to Verizon VZ increased considerably in the quarter, contributing 15% of RBBN’s total sales.

Ribbon Communications’ outlook for the fourth quarter of 2024 projects 8% year-over-year sales growth, bolstered by strategic efforts such as expansion of its voice modernization programs with major carriers like Verizon and new federal defense agency contracts.

Strong Product and Service Revenues Boost RBBN’s Prospects

Product revenues, which make up 53.3% of total revenues, were $112.2 million, marking a 3.4% year-over-year increase. This growth reflects strong demand for Ribbon Communications' core product offerings, particularly within its Cloud & Edge business, which is key to its long-term growth prospects.

Service revenues, which make up 46.7% of total revenues, reached $98.1 million, reflecting 3.6% year-over-year growth. This increase in service revenues highlights the company's ongoing success in its service-driven segments, which include cloud services and network modernization projects.

RBBN’s Q4 Outlook Looks Promising

Ribbon Communications expects fourth-quarter sales to grow approximately 8% year over year at the midpoint. Revenues are anticipated to be between $235 million and $255 million.

The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $242.59 million, indicating a 7.15% increase year over year. 

The consensus mark for earnings is pegged at 12 cents a share. The estimate has remained unchanged over the past 30 days.

RBBN’s Zacks Rank & Stocks to Consider

Ribbon carries a Zacks Rank #3 (Hold) currently.

Better ranked stocks in the broader sector are Amphenol APH and Dropbox DBX, each sporting a Zacks Rank #1 (Strong Buy) at present. You can find the complete list of today’s Zacks #1 Rank stocks here.

The long-term earnings growth rate for Amphenol and Dropbox is currently pegged at 16.39% and 11.98%, respectively.

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Verizon Communications Inc. (VZ) : Free Stock Analysis Report

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