Synchronoss Reports Second Quarter Revenue of $71.5 Million and Adjusted EBITDA of $13.3 Million, Up 15% Year Over Year
Recent Recapitalization Provides Flexibility To Support Long-Term Profitable Growth
BRIDGEWATER, N.J., Aug. 09, 2021 (GLOBE NEWSWIRE) -- Synchronoss Technologies Inc. (NASDAQ: SNCR), a global leader and innovator in cloud, messaging, and digital solutions, today announced financial results for its second quarter ended June 30, 2021.
Second Quarter Highlights & Corporate Updates:
Revenue for the quarter was $71.5 million.
Recurring revenue for the quarter represented 87% of total GAAP revenue.
GAAP net loss for the quarter was $23.9 million or $0.54 per share.
Non-GAAP net loss for the quarter was $11.9 million, or $0.27 per share.
Adjusted EBITDA for the quarter was $13.3 million.
Cash and cash equivalents were $32.6 million at quarter end.
Completed recapitalization with full year 2021 pro forma savings greater than 50% over the previous capital structure.
Cloud solution subscriber growth continues to exceed expectations.
Signed commercial agreement with Kitamura for our Cloud solution, our third new Cloud customer this year.
Lou Ferraro, EVP of Financial Operations and Chief Human Resources Officer named Acting CFO.
Reiterates full-year 2021 revenue and adjusted EBITDA guidance.
Commenting on the results, Jeff Miller, President and CEO of Synchronoss, said:
“I am pleased to report another solid quarter for Synchronoss and to share that we completed a comprehensive recapitalization during the quarter, that reduces our projected 2021 full year pro forma financial obligations by over 50%. With this recapitalization complete, we believe we will enable long-term sustainable growth in both revenue and profits, and as a result, deliver increased shareholder value. I want to thank the entire team at Synchronoss for their continued contributions to make these results possible.” He continued, “I also want to welcome Lou Ferraro as our Acting CFO. He has been with the Company for three and a half years most recently as our Executive Vice President of Financial Operations and Chief Human Resources Officer, and has spearheaded many of the improvements in the company’s operating expenses and financial controls.”
Three Months Ended June 30, | ||||||||||||||
(in thousands) | 2021 | 2020 | % Change | |||||||||||
Revenues | $ | 71,532 | $ | 76,535 | (6.5 | ) | % | |||||||
Loss from continuing operations, before taxes | (2,621 | ) | (8,666 | ) | 69.8 | % | ||||||||
Net loss1 | (23,946 | ) | (10,148 | ) | (136.0 | ) | % | |||||||
Adjusted EBITDA | $ | 13,277 | $ | 11,549 | 15.0 | % | ||||||||
Six Months Ended June 30, | ||||||||||||||
(in thousands) | 2021 | 2020 | % Change | |||||||||||
Revenues | $ | 137,031 | $ | 153,657 | (10.8 | ) | % | |||||||
Loss from continuing operations, before taxes | (15,150 | ) | (24,448 | ) | 38.0 | % | ||||||||
Net loss1 | (46,506 | ) | (22,423 | ) | (107.4 | ) | % | |||||||
Adjusted EBITDA | $ | 18,814 | $ | 13,307 | 41.4 | % | ||||||||
________________________
1 Includes $10.4 million preferred stock amortization costs accelerated due to Series A Preferred stock redemption.
Lou Ferraro, Acting CFO of Synchronoss, added:
"We are pleased with our continued growth in our Cloud solution subscribers, the addition of our third new Cloud customer this year, and improved operating results. With my expanded responsibilities, I look forward to continuing our focus on profitable revenue growth, continued cost management, and delivering improved shareholder value."
Reiterating full year 2021 Guidance
Synchronoss is reiterating its revenue and adjusted EBITDA guidance for the full year 2021. The Company continues to expect revenue for the full year 2021 to be in a range of $275-285 million, and adjusted EBITDA in the range of $32-37 million.
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 conference ID 1484858.
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, 1484858.
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 Technologies (NASDAQ: SNCR) builds software that empowers companies around the world to connect with their subscribers in trusted and meaningful ways. The company’s collection of products helps streamline networks, simplify onboarding, and engage subscribers to unleash new revenue streams, reduce costs and increase speed to market. Hundreds of millions of subscribers trust Synchronoss products to stay in sync with the people, services and content they love. That’s why more than 1,500 talented Synchronoss employees worldwide strive each day to reimagine a world in sync. Learn more 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 impact of investments and legal proceedings involving the Company, including the investigations by the Securities and Exchange Commission and the Department of Justice described in the Company’s 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, and the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2021, which are 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 Kim
MKR Investor Relations
623-745-4046
investor@synchronoss.com
SYNCHRONOSS TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) (In thousands)
June 30, 2021 | December 31, 2020 | |||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 32,570 | $ | 33,671 | ||||
Accounts receivable, net | 44,202 | 47,849 | ||||||
Operating lease right-of-use assets | 29,703 | 34,538 | ||||||
Goodwill | 229,610 | 232,771 | ||||||
Other Assets | 127,605 | 133,426 | ||||||
Total assets | $ | 463,690 | $ | 482,255 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Accounts Payable and Accrued expenses | $ | 72,777 | $ | 82,075 | ||||
Debt, current | — | 10,000 | ||||||
Deferred revenues | 41,095 | 45,614 | ||||||
Debt, non-current | 117,189 | — | ||||||
Operating lease liabilities, non-current | 40,315 | 44,273 | ||||||
Other liabilities | 17,852 | 19,370 | ||||||
Preferred Stock | 72,506 | 237,641 | ||||||
Stockholders’ equity | 101,956 | 43,282 | ||||||
Total liabilities and stockholders’ equity | $ | 463,690 | $ | 482,255 | ||||
SYNCHRONOSS TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) (In thousands, except per share data)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||
Net revenues | $ | 71,532 | $ | 76,535 | $ | 137,031 | $ | 153,657 | ||||||||||||
Costs and expenses: | ||||||||||||||||||||
Cost of revenues1 | 27,142 | 29,480 | 55,779 | 64,951 | ||||||||||||||||
Research and development | 17,197 | 19,096 | 34,594 | 38,884 | ||||||||||||||||
Selling, general and administrative | 21,909 | 24,640 | 39,837 | 50,984 | ||||||||||||||||
Restructuring charges | 877 | 4,493 | 1,590 | 5,943 | ||||||||||||||||
Depreciation and amortization | 8,485 | 10,284 | 18,352 | 21,640 | ||||||||||||||||
Total costs and expenses | 75,610 | 87,993 | 150,152 | 182,402 | ||||||||||||||||
Loss from continuing operations | (4,078 | ) | (11,458 | ) | (13,121 | ) | (28,745 | ) | ||||||||||||
Interest income | 25 | 1,509 | 30 | 1,568 | ||||||||||||||||
Interest expense | (144 | ) | (84 | ) | (239 | ) | (329 | ) | ||||||||||||
Other Income (expense) | 1,576 | 1,367 | (1,820 | ) | 3,058 | |||||||||||||||
Loss from continuing operations, before taxes | (2,621 | ) | (8,666 | ) | (15,150 | ) | (24,448 | ) | ||||||||||||
Benefit for income taxes | 201 | 7,972 | 364 | 20,404 | ||||||||||||||||
Net loss from continuing operations | (2,420 | ) | (694 | ) | (14,786 | ) | (4,044 | ) | ||||||||||||
Net income (loss) attributable to redeemable noncontrolling interests | (50 | ) | (165 | ) | 286 | (182 | ) | |||||||||||||
Preferred stock dividend | (21,476 | ) | (9,289 | ) | (32,006 | ) | (18,197 | ) | ||||||||||||
Net loss attributable to Synchronoss | $ | (23,946 | ) | $ | (10,148 | ) | $ | (46,506 | ) | $ | (22,423 | ) | ||||||||
Earnings (loss) per share | ||||||||||||||||||||
Basic | $ | (0.54 | ) | $ | (0.24 | ) | $ | (1.07 | ) | $ | (0.54 | ) | ||||||||
Diluted | $ | (0.54 | ) | $ | (0.24 | ) | $ | (1.07 | ) | $ | (0.54 | ) | ||||||||
Weighted-average common shares outstanding: | ||||||||||||||||||||
Basic | 44,131 | 41,697 | 43,438 | 41,482 | ||||||||||||||||
Diluted | 44,131 | 41,697 | 43,438 | 41,482 | ||||||||||||||||
________________________
1 Cost of revenues excludes depreciation and amortization which are shown separately.
SYNCHRONOSS TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) (In thousands)
Six Months Ended June 30, | |||||||||
2021 | 2020 | ||||||||
Net loss continuing operations | $ | (14,786 | ) | $ | (4,044 | ) | |||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||
Non-cash items | 22,584 | 30,122 | |||||||
Changes in operating assets and liabilities: | 369 | (24,470 | ) | ||||||
Net cash provided by (used in) operating activities | 8,167 | 1,608 | |||||||
Investing activities: | |||||||||
Purchases of fixed assets | (1,250 | ) | (424 | ) | |||||
Purchases of intangible assets and capitalized software | (10,959 | ) | (8,685 | ) | |||||
Other investing activities | 550 | 2,175 | |||||||
Net cash used in investing activities | (11,659 | ) | (6,934 | ) | |||||
Net cash provided by financing activities | 2,687 | 9,991 | |||||||
Effect of exchange rate changes on cash | (296 | ) | (895 | ) | |||||
Net decrease in cash and cash equivalents | (1,101 | ) | 3,770 | ||||||
Cash, restricted cash and cash equivalents, beginning of period | 33,671 | 39,001 | |||||||
Cash, restricted cash and cash equivalents, end of period | $ | 32,570 | $ | 42,771 | |||||
SYNCHRONOSS TECHNOLOGIES, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Unaudited) (In thousands, except per share data)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||
Non-GAAP financial measures and reconciliation: | ||||||||||||||||||||
GAAP Revenue | $ | 71,532 | $ | 76,535 | $ | 137,031 | $ | 153,657 | ||||||||||||
Less: Cost of revenues | 27,142 | 29,480 | 55,779 | 64,951 | ||||||||||||||||
Gross Profit | 44,390 | 47,055 | 81,252 | 88,706 | ||||||||||||||||
Add / (Less): | ||||||||||||||||||||
Stock-based compensation expense | 379 | 641 | 857 | 1,394 | ||||||||||||||||
Restructuring, transition and cease-use lease expense | — | 243 | 27 | 283 | ||||||||||||||||
Adjusted Gross Profit | 44,769 | 47,939 | 82,136 | 90,383 | ||||||||||||||||
Adjusted Gross Margin | 62.6 | % | 62.6 | % | 59.9 | % | 58.8 | % | ||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||
GAAP Net loss attributable to Synchronoss | (23,946 | ) | (10,148 | ) | (46,506 | ) | (22,423 | ) | ||||||||||||
Add / (Less): | ||||||||||||||||||||
Stock-based compensation expense | 2,345 | 4,987 | 5,066 | 10,156 | ||||||||||||||||
Restructuring, transition and cease-use lease expense | 2,918 | 7,003 | 4,975 | 8,699 | ||||||||||||||||
Amortization expense | 3,206 | 4,062 | 6,815 | 8,696 | ||||||||||||||||
Litigation, remediation and refiling costs | 3,607 | 733 | 3,542 | 1,557 | ||||||||||||||||
Non-GAAP Net (loss) income attributable to Synchronoss | $ | (11,870 | ) | $ | 6,637 | $ | (26,108 | ) | $ | 6,685 | ||||||||||
Diluted Non-GAAP Net (loss) income per share | $ | (0.27 | ) | $ | 0.16 | $ | (0.60 | ) | $ | 0.16 | ||||||||||
Weighted shares outstanding - Dilutive | 44,131 | 41,697 | 43,438 | 41,482 | ||||||||||||||||
SYNCHRONOSS TECHNOLOGIES, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Unaudited) (In thousands, except per share data)
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||
Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Jun 30, 2021 | Jun 30, 2020 | |||||||||||||||||||||||||||||
Net loss attributable to Synchronoss | $ | (23,946 | ) | $ | (22,560 | ) | $ | (10,892 | ) | $ | (15,367 | ) | $ | (10,148 | ) | $ | (46,506 | ) | $ | (22,423 | ) | ||||||||||||||
Add / (Less): | |||||||||||||||||||||||||||||||||||
Stock-based compensation expense | 2,345 | 2,721 | (3,410 | ) | 4,391 | 4,987 | 5,066 | 10,156 | |||||||||||||||||||||||||||
Restructuring, transition and cease-use lease expense | 2,918 | 2,057 | 1,222 | 6,580 | 7,003 | 4,975 | 8,699 | ||||||||||||||||||||||||||||
Litigation, remediation and refiling costs, net | 3,607 | (65 | ) | 1,145 | 1,943 | 733 | 3,542 | 1,557 | |||||||||||||||||||||||||||
Depreciation and amortization | 8,485 | 9,867 | 9,834 | 12,212 | 10,284 | 18,352 | 21,640 | ||||||||||||||||||||||||||||
Interest income | (25 | ) | (5 | ) | (9 | ) | (20 | ) | (1,509 | ) | (30 | ) | (1,567 | ) | |||||||||||||||||||||
Interest Expense | 144 | 95 | 75 | 72 | 84 | 239 | 329 | ||||||||||||||||||||||||||||
Other Income, net | (1,576 | ) | 3,396 | (3,793 | ) | (2,684 | ) | (1,367 | ) | 1,820 | (3,059 | ) | |||||||||||||||||||||||
Provision (benefit) for income taxes | (201 | ) | (163 | ) | 2,039 | (8,744 | ) | (7,972 | ) | (364 | ) | (20,404 | ) | ||||||||||||||||||||||
Net loss attributable to noncontrolling interests | 50 | (336 | ) | 101 | 60 | 165 | (286 | ) | 182 | ||||||||||||||||||||||||||
Preferred dividend1 | 21,476 | 10,530 | 10,099 | 9,685 | 9,289 | 32,006 | 18,197 | ||||||||||||||||||||||||||||
Adjusted EBITDA (non-GAAP) | $ | 13,277 | $ | 5,537 | $ | 6,411 | $ | 8,128 | $ | 11,549 | $ | 18,814 | $ | 13,307 | |||||||||||||||||||||
________________________
1 Includes $10.4 million preferred stock amortization costs accelerated due to Series A Preferred stock redemption.
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||
Net Cash (used in) provided by operating activities | $ | 5,906 | $ | 16,624 | $ | 8,167 | $ | 1,608 | ||||||||||||
Add / (Less): | ||||||||||||||||||||
Capitalized software | (5,917 | ) | (4,257 | ) | (10,959 | ) | (8,685 | ) | ||||||||||||
Property and equipment | (529 | ) | (175 | ) | (1,250 | ) | (424 | ) | ||||||||||||
Free Cashflow | (540 | ) | 12,192 | (4,042 | ) | (7,501 | ) | |||||||||||||
Add: Litigation, remediation and refiling costs | 3,607 | 733 | 3,542 | 1,557 | ||||||||||||||||
Adjusted Free Cashflow | $ | 3,067 | $ | 12,925 | $ | (500 | ) | $ | (5,944 | ) | ||||||||||
