Ribbon's Agentic AI Voice Pivot Gains Steam, but Verizon Drags on Full-Year Outlook

Record IP Optical bookings and a Salesforce partnership signal a strategic turn, while slower Tier-1 voice upgrades temper near-term growth.

RBBN · Earnings Call · 2026-07-28

The Turn

Ribbon Communications delivered a solid second quarter, with revenue of $192 million, up 18% sequentially and down 13% year-over-year—a rebound from a weak Q1. Adjusted EBITDA swung to $12 million, a $20 million sequential improvement. The standout was IP Optical, where product and service bookings hit an all-time high with a book-to-bill of 1.6x, and backlog grew over 60% since the start of the year. As CEO Bruce McClelland noted: “We had a solid second quarter with key financial metrics above the midpoint of our guidance.” — Bruce McClelland, Chief Executive Officer · 2026-07-28 Growth was broad-based, with particularly strong demand from data-center interconnect projects and mission-critical infrastructure in North America.

Agentic AI: The New Growth Vector

The most consequential development is the strategic partnership with Salesforce to integrate Ribbon's secure voice capabilities into Agentforce, Salesforce's Agentic AI contact center platform. This validates a new market where AI agents become the primary callers, potentially driving a massive increase in voice sessions.

As AI agents augment or even replace human agents and tasks, we expect a dramatic increase in total voice call sessions as contact center capacity will no longer be limited by human agent capacity and instead will be driven by available GPU compute capacity.
Bruce McClelland, Chief Executive Officer · 2026-07-28

This echoes a theme from the prior quarter, when Bruce first framed the opportunity: “We think the connection between the user and the Agentic applications will be voice driven.” — Bruce McClelland, Chief Executive Officer · 2026-04-28 Now, with Salesforce's traction, Ribbon is positioning its AI voice portfolio, including cloud-native SBCs acting as AI agent firewalls, as a critical enabler for Contact Center automation. The company also highlighted five additional AWS-based customer wins, reinforcing the pivot toward public cloud and AI-enabled communications.

The Verizon Overhang

Despite the momentum, Ribbon moderated its second-half outlook due to slower-than-expected voice network modernization at Verizon. Bruce explained: “Given the latest view on these key voice modernization projects, we have moderated our expected revenue increase for the second half of the year, but expect a good setup for 2027.” — Bruce McClelland, Chief Executive Officer · 2026-07-28 This is a continuation of the caution flagged in Q1, when he noted: “We don't expect a significant increase in revenue here in the second quarter with our top customer.” — Bruce McClelland, Chief Executive Officer · 2026-04-28 Verizon remains a 10%+ customer, and the company sees a large legacy-voice replacement opportunity, but near-term deployment velocity is lagging. The full-year guidance was trimmed to revenue of $810–840 million and adjusted EBITDA of $78–88 million, reflecting the Verizon drag partially offset by strength in IP Optical.

Supply Chain and Financials

Ribbon is also absorbing higher component costs, guided at approximately $2 million per quarter, with potential supply constraints on key technologies. CFO Eric Marmurek noted: “In the second quarter of 2026, Ribbon generated revenue of $192 million, up 18% sequentially and down 13% year-over-year.” — Eric Marmurek, Chief Financial Officer · 2026-07-28 The balance sheet remains leveraged, with net debt leverage at 4.0x and cash of $45 million. The company's total revenue shows the typical seasonal pattern, but the optical segment's margin expansion—up 680 basis points sequentially—is encouraging as the company scales. With data center interconnect appearing across the global momentum list, Ribbon is riding a broader industry wave even as it manages its own concentrated customer risk.