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 )