Synchronoss Technologies Inc. (NASDAQ: SNCR), a global leader
and innovator in cloud, messaging, and digital platforms and
products, today announced financial results for its first quarter
ended March 31, 2021.
First Quarter Highlights:
- GAAP revenue for the quarter was
$65.5 million.
- Recurring revenue for the quarter
represented 86% of total GAAP revenue.
- GAAP net loss for the quarter was
$22.6 million or $0.53 per share.
- Non-GAAP net loss for the quarter
was $14.2 million, or $0.33 per share.
- Adjusted EBITDA for the quarter was
$5.5 million.
- Cash and cash equivalent were $29.8
million at quarter end.
- Signed two new customers to
contracts in Southeast Asia:
- Signed a new contract with
Telkomsigma to deliver the Synchronoss Personal Cloud® Solution to
enable 25 universities to securely store, share and transfer
academic documents with their professors, students, school groups
and peers.
- Signed a contract with an advanced
messaging customer that leverages Synchronoss’ complete end-to-end
RCS messaging platform.
- Renewed and expanded core messaging
contract with Telecom Italia Mobile (TIM) and added security
functionality.
- Accelerated growth in cloud
subscribers in the US market.
Commenting on the results, Jeff Miller, President and
CEO of Synchronoss, said:
“During the quarter, we closed several new
meaningful customer contracts, experienced continued growth in our
cloud subscriber base, and delivered on some significant product
milestones. I am proud of the Synchronoss team’s hard work as we
continue to be driven by delivery and execution for our customers,
disciplined cost containment, continued product innovation, and new
customer acquisition. Our solid start to the year has provided us
with the confidence to raise adjusted EBITDA guidance for
2021.”
|
|
Three Months Ended March 31, |
|
|
2021 |
|
2020 |
|
% Change |
Revenues |
|
$ |
65,499 |
|
|
|
$ |
77,122 |
|
|
|
(15.1 |
) |
% |
Net loss |
|
(22,560 |
) |
|
|
(12,276 |
) |
|
|
(83.8 |
) |
% |
Loss from continuing
operations, before taxes |
|
(12,529 |
) |
|
|
(15,782 |
) |
|
|
20.6 |
|
% |
Adjusted EBITDA |
|
$ |
5,537 |
|
|
|
$ |
1,758 |
|
|
|
215.0 |
|
% |
David Clark, CFO of Synchronoss,
added:
“We continue to see the benefits of our cost
management efforts, which allowed us to deliver adjusted EBITDA
growth of 215% year over year. We also continue to streamline our
operations to drive profitability and free cash flow.”
2021 Adjusted EBITDA Guidance
The company expects its revenue for full year
2021 to be in the range of $275 million to $285 million and is
raising its adjusted EBITDA guidance for the full year 2021 to be
in the range of $32 million to $37 million, representing adjusted
EBITDA growth of 15% to 33% year over year, respectively.
A reconciliation of GAAP to non-GAAP results has
been provided in the financial statement tables included in this
press release. An explanation of these measures is included below
under the heading "Non-GAAP Financial Measures."
Conference Call Details
Synchronoss will host a conference call at 4:30
p.m. (Eastern Time) today to discuss the financial results. To
access the live call, dial 877-930-7767 or +1 253-336-7416
(International) and give the participant passcode 7379831.
A live and archived webcast of the conference
call will be accessible on the Investor Relations section of the
company’s website at www.synchronoss.com. In addition, a phone
replay will be available approximately two hours following the end
of the call and will be available for one week. To access the call
replay dial 855-859-2056 and enter the conference ID, 7379831.
Non-GAAP Financial Measures
Synchronoss has provided in this release
selected financial information that has not been prepared in
accordance with GAAP. This information includes historical non-GAAP
revenues, gross profit, adjusted EBITDA, operating income (loss),
net income (loss), effective tax rate, and earnings (loss) per
share. Synchronoss uses these non-GAAP financial measures
internally in analyzing its financial results and believes they are
useful to investors, as a supplement to GAAP measures, in
evaluating Synchronoss’ ongoing operational performance.
Synchronoss believes that the use of these non-GAAP financial
measures provides an additional tool for investors to use in
evaluating ongoing operating results and trends, and in comparing
its financial results with other companies in Synchronoss’
industry, many of which present similar non-GAAP financial measures
to investors. As noted, the non-GAAP financial results discussed
above add back fair value stock-based compensation expense,
acquisition-related costs, which include restructuring and
cease-use lease expense, litigation, remediation and refiling costs
and amortization of intangibles associated with acquisitions.
Non-GAAP financial measures should not be
considered in isolation from, or as a substitute for, financial
information prepared in accordance with GAAP. Investors are
encouraged to review the reconciliation of these non-GAAP measures
to their most directly comparable GAAP financial measures as
detailed above. Investors are encouraged to also review the Balance
Sheet, Statement of Operations, and Statement of Cash Flow. As
previously mentioned, a reconciliation of GAAP to non-GAAP results
has been provided in the financial statement tables included in
this press release.
About Synchronoss Technologies,
Inc.
Synchronoss transforms the way companies create
new revenue, reduce costs and delight their subscribers with cloud,
messaging, and digital products, supporting hundreds of millions of
subscribers across the globe. Synchronoss’ secure, scalable and
groundbreaking new technologies, trusted partnerships, and talented
people change the way TMT customers grow their businesses. For more
information, visit us at www.synchronoss.com.
Forward-looking Statements
This press release includes statements
concerning Synchronoss and its future expectations, plans and
prospects that constitute “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995.
For this purpose, any statements contained herein that are not
statements of historical fact may be deemed to be forward-looking
statements. Without limiting the foregoing, the words “may,”
“should,” “expects,” “plans,” “anticipates,” “could,” “intends,”
“believes,” “potential” or “continue” or other similar expressions
are intended to identify forward-looking statements. Synchronoss
has based these forward-looking statements largely on its current
expectations and projections about future events and financial
trends that it believes may affect its business, financial
condition and results of operations. These forward-looking
statements speak only as of the date of this press release and are
subject to a number of risks, uncertainties and assumptions
including, without limitation, risks relating to the Company’s
ability to sustain or increase revenue from its larger customers
and generate revenue from new customers, the Company’s expectations
regarding expenses and revenue, the sufficiency of the Company’s
cash resources, the Company’s growth strategies, the anticipated
trends and challenges in the business and the market in which the
Company operates, the Company’s expectations regarding federal,
state and foreign regulatory requirements, the pending lawsuits
against the Company described in its most recent SEC filings, and
other risks and factors that are described in the “Risk Factors”
and “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” sections of the Company’s Annual Report
on Form 10-K for the year ended December 31, 2020, which is on file
with the SEC and available on the SEC’s website at www.sec.gov. The
company does not undertake any obligation to update any
forward-looking statements contained in this press release as a
result of new information, future events or otherwise.
Contact:
Investors:Todd Kehrli or Joo-Hun KimMKR Investor
Relations623-745-4046investor@synchronoss.com
SYNCHRONOSS
TECHNOLOGIES, INC.CONDENSED CONSOLIDATED
BALANCE SHEETS(In thousands)
|
March 31, 2021 |
|
December 31, 2020 |
Assets |
|
|
|
Cash and cash equivalents |
$ |
29,818 |
|
|
$ |
33,671 |
|
Accounts receivable, net |
46,236 |
|
|
47,849 |
|
Operating lease right-of-use assets |
31,960 |
|
|
34,538 |
|
Goodwill |
228,537 |
|
|
232,771 |
|
Other Assets |
128,579 |
|
|
133,426 |
|
Total assets |
$ |
465,130 |
|
|
$ |
482,255 |
|
|
|
|
|
Liabilities and stockholders’ equity |
|
|
|
Accounts Payable and Accrued expenses |
$ |
84,592 |
|
|
$ |
82,075 |
|
Debt, current |
10,000 |
|
|
10,000 |
|
Deferred revenues |
39,853 |
|
|
45,614 |
|
Operating lease liabilities, non-current |
42,088 |
|
|
44,273 |
|
Other liabilities |
18,692 |
|
|
19,370 |
|
Preferred Stock |
247,842 |
|
|
237,641 |
|
Stockholders’ equity |
22,063 |
|
|
43,282 |
|
Total liabilities and stockholders’ equity |
$ |
465,130 |
|
|
$ |
482,255 |
|
SYNCHRONOSS
TECHNOLOGIES, INC.CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS(In thousands, except per
share data)
|
Three Months Ended March 31, |
|
2021 |
|
2020 |
Net revenues |
$ |
65,499 |
|
|
|
$ |
77,122 |
|
|
Costs and expenses: |
|
|
|
Cost of revenues* |
28,637 |
|
|
|
35,471 |
|
|
Research and development |
17,397 |
|
|
|
19,788 |
|
|
Selling, general and administrative |
17,928 |
|
|
|
26,344 |
|
|
Restructuring charges |
713 |
|
|
|
1,450 |
|
|
Depreciation and amortization |
9,867 |
|
|
|
11,356 |
|
|
Total costs and expenses |
74,542 |
|
|
|
94,409 |
|
|
Loss from continuing
operations |
(9,043 |
) |
|
|
(17,287 |
) |
|
Interest income |
5 |
|
|
|
58 |
|
|
Interest expense |
(95 |
) |
|
|
(245 |
) |
|
Other Income (expense) |
(3,396 |
) |
|
|
1,692 |
|
|
Loss from continuing
operations, before taxes |
(12,529 |
) |
|
|
(15,782 |
) |
|
Benefit for income taxes |
163 |
|
|
|
12,432 |
|
|
Net loss |
(12,366 |
) |
|
|
(3,350 |
) |
|
Net income (loss) attributable to redeemable noncontrolling
interests |
336 |
|
|
|
(17 |
) |
|
Preferred stock dividend |
(10,530 |
) |
|
|
(8,909 |
) |
|
Net loss attributable to
Synchronoss |
$ |
(22,560 |
) |
|
|
$ |
(12,276 |
) |
|
|
|
|
|
Earnings (loss) per share |
|
|
|
Basic |
$ |
(0.53 |
) |
|
|
$ |
(0.30 |
) |
|
Diluted |
$ |
(0.53 |
) |
|
|
$ |
(0.30 |
) |
|
Weighted-average common shares
outstanding: |
|
|
|
Basic |
42,737 |
|
|
|
41,483 |
|
|
Diluted |
42,737 |
|
|
|
41,483 |
|
|
________________________________* Cost of
revenues excludes depreciation and amortization which are shown
separately.
SYNCHRONOSS
TECHNOLOGIES, INC.CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (In
thousands)
|
Three Months Ended March 31, |
|
2021 |
|
2020 |
Net loss continuing operations |
$ |
(12,366 |
) |
|
|
$ |
(3,350 |
) |
|
Adjustments to reconcile net loss to net cash provided by operating
activities: |
|
|
|
Non-cash items |
12,097 |
|
|
|
14,690 |
|
|
Changes in operating assets and liabilities: |
2,530 |
|
|
|
(26,356 |
) |
|
Net cash provided by (used in) operating
activities |
2,261 |
|
|
|
(15,016 |
) |
|
|
|
|
|
Investing activities: |
|
|
|
Purchases of fixed assets |
(721 |
) |
|
|
(249 |
) |
|
Purchases of intangible assets and capitalized software |
(5,042 |
) |
|
|
(4,428 |
) |
|
Other investing activities |
— |
|
|
|
1,854 |
|
|
Net cash used in investing activities |
(5,763 |
) |
|
|
(2,823 |
) |
|
|
|
|
|
Net cash provided by financing activities |
— |
|
|
|
9,996 |
|
|
Effect of exchange rate changes on cash |
(351 |
) |
|
|
(252 |
) |
|
Net decrease in cash
and cash equivalents |
(3,853 |
) |
|
|
(8,095 |
) |
|
|
|
|
|
Cash, restricted cash and cash
equivalents, beginning of period |
33,671 |
|
|
|
39,001 |
|
|
Cash, restricted cash and cash
equivalents, end of period |
$ |
29,818 |
|
|
|
$ |
30,906 |
|
|
SYNCHRONOSS
TECHNOLOGIES, INC.RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES(In thousands, except
per share data)
|
Three Months Ended March 31, |
|
2021 |
|
2020 |
Non-GAAP financial measures
and reconciliation: |
|
|
|
GAAP Revenue |
$ |
65,499 |
|
|
|
$ |
77,122 |
|
|
Less: Cost of revenues |
28,637 |
|
|
|
35,471 |
|
|
Gross Profit |
36,862 |
|
|
|
41,651 |
|
|
Add / (Less): |
|
|
|
Stock-based compensation expense |
478 |
|
|
|
752 |
|
|
Restructuring, transition and cease-use lease expense |
27 |
|
|
|
— |
|
|
Adjusted Gross Profit |
37,367 |
|
|
|
42,403 |
|
|
Adjusted Gross Margin |
57.0 |
|
% |
|
55.0 |
|
% |
|
|
|
|
|
Three Months Ended March 31, |
|
2021 |
|
2020 |
GAAP Net loss attributable to Synchronoss |
$ |
(22,560 |
) |
|
|
$ |
(12,275 |
) |
|
Add / (Less): |
|
|
|
Stock-based compensation expense |
2,721 |
|
|
|
5,169 |
|
|
Restructuring, transition and cease-use lease expense |
2,057 |
|
|
|
1,696 |
|
|
Amortization expense |
3,609 |
|
|
|
6,915 |
|
|
Litigation, remediation and refiling costs |
(65 |
) |
|
|
824 |
|
|
Non-GAAP Net (loss) income
attributable to Synchronoss |
$ |
(14,238 |
) |
|
|
$ |
2,329 |
|
|
|
|
|
|
Diluted Non-GAAP Net loss per
share |
$ |
(0.33 |
) |
|
|
$ |
0.06 |
|
|
|
|
|
|
Weighted shares outstanding -
Dilutive |
42,737 |
|
|
|
41,483 |
|
|
SYNCHRONOSS
TECHNOLOGIES, INC.RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES(In thousands, except
per share data)
|
Three Months Ended |
|
Mar 31, 2020 |
|
Jun 30, 2020 |
|
Sep 30, 2020 |
|
Dec 31, 2020 |
|
Mar 31, 2021 |
Net loss attributable to Synchronoss |
$ |
(12,275 |
) |
|
|
$ |
(10,148 |
) |
|
|
$ |
(15,367 |
) |
|
|
$ |
(10,892 |
) |
|
|
$ |
(22,560 |
) |
|
Add / (Less): |
|
|
|
|
|
|
|
|
|
Stock-based compensation expense |
5,169 |
|
|
|
4,987 |
|
|
|
4,391 |
|
|
|
(3,410 |
) |
|
|
2,721 |
|
|
Restructuring, transition and cease-use lease expense |
1,696 |
|
|
|
7,003 |
|
|
|
6,580 |
|
|
|
1,222 |
|
|
|
2,057 |
|
|
Litigation, remediation and refiling costs, net |
824 |
|
|
|
733 |
|
|
|
1,943 |
|
|
|
1,145 |
|
|
|
(65 |
) |
|
Depreciation and amortization |
11,356 |
|
|
|
10,284 |
|
|
|
12,212 |
|
|
|
9,834 |
|
|
|
9,867 |
|
|
Interest income |
(58 |
) |
|
|
(1,509 |
) |
|
|
(20 |
) |
|
|
(9 |
) |
|
|
(5 |
) |
|
Interest Expense |
245 |
|
|
|
84 |
|
|
|
72 |
|
|
|
75 |
|
|
|
95 |
|
|
Other Income, net |
(1,692 |
) |
|
|
(1,367 |
) |
|
|
(2,684 |
) |
|
|
(3,793 |
) |
|
|
3,396 |
|
|
Provision (benefit) for income taxes |
(12,432 |
) |
|
|
(7,972 |
) |
|
|
(8,744 |
) |
|
|
2,039 |
|
|
|
(163 |
) |
|
Net loss attributable to noncontrolling interests |
17 |
|
|
|
165 |
|
|
|
60 |
|
|
|
101 |
|
|
|
(336 |
) |
|
Preferred dividend |
8,908 |
|
|
|
9,289 |
|
|
|
9,685 |
|
|
|
10,099 |
|
|
|
10,530 |
|
|
Adjusted EBITDA
(non-GAAP) |
$ |
1,758 |
|
|
|
$ |
11,549 |
|
|
|
$ |
8,128 |
|
|
|
$ |
6,411 |
|
|
|
$ |
5,537 |
|
|
|
Three Months Ended March 31, |
|
2021 |
|
2020 |
Net Cash (used in) provided by operating activities |
$ |
2,261 |
|
|
|
$ |
(15,016 |
) |
|
Add / (Less): |
|
|
|
Capitalized software |
(5,042 |
) |
|
|
(4,428 |
) |
|
Property and equipment |
(721 |
) |
|
|
(249 |
) |
|
Free Cashflow |
(3,502 |
) |
|
|
(19,693 |
) |
|
Add: One-Time Expenses due to Restatement, etc. |
(65 |
) |
|
|
824 |
|
|
Adjusted Free Cashflow |
$ |
(3,567 |
) |
|
|
$ |
(18,869 |
) |
|
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