Synchronoss Technologies Announces Third Quarter Results
BRIDGEWATER, N.J.--(BUSINESS WIRE)--Nov 7, 2018--Synchronoss Technologies Inc. (NASDAQ: SNCR), a global leader and innovator in digital, cloud, messaging and IoT platforms and products, today announced financial results for the third quarter of 2018. The highlights include:Synchronoss delivers $83.3 million of revenue compared to $76.7 million in the second quarter, up 8.5% sequentially. Synchronoss drives $4.5 million of adjusted EBITDA, which includes a one-time expense of $4.9 million from a prior quarter. Normalized adjusted EBITDA for the third quarter was $9.4 million with an EBITDA margin of 11.2%. Synchronoss cash flow provided by operations during the quarter was $10.7 million. Synchronoss is on track to achieve $20 million of annualized cost savings in 2018 and another $25 million in 2019. Synchronoss retires over 50% of its convertible debt, resulting in the dismissal of the litigation brought by those debt holders. Synchronoss decides to pay in cash and not issue additional shares for the payment of a third-quarter dividend on its convertible preferred stock. Synchronoss’ digital platform, DXP, has received exceptional market reception with the integration of the honeybee acquisition, as evident by more than 10 customer proofs of concept currently up and running.
“Synchronoss delivered on its promise to return to growth and profitability in the third quarter,” said Glenn Lurie, President and CEO of Synchronoss. “Our sequential quarterly revenue growth and positive adjusted EBITDA of $4.5 million were driven by improving trends across all parts of our business. Our adjusted EBITDA includes a one-time expense of $4.9 million. Excluding that one-time expense from a prior quarter, normalized adjusted EBITDA was $9.4 million with an EBITDA margin of 11.2% for the third quarter. We also continue to take actions to strengthen our balance sheet, including retiring over 50% of our convertible debt, which resulted in the dismissal of the litigation brought by those debt holders, and staying on track to deliver the targeted cost savings initiatives.”
David Clark, CFO of Synchronoss, said: “Our improved business performance, highlighted by positive EBITDA, strengthens our confidence in our business and has led us to take actions to de-lever our balance sheet by purchasing just over half of our outstanding convertible notes. Even with those actions, we still expect to end the year with a healthy cash balance of between $170 and $180 million.”
Lurie added, “We are pleased that Synchronoss delivered on its commitments and we reaffirm our financial guidance for the year. Our digital, cloud, messaging and IoT platforms are solving some of the most important challenges that TMT companies are facing as they compete in an increasingly digital and consumer-centric world. We have made significant progress and are confident that as we execute on opportunities we are targeting, we will continue to drive growth and profitability in the fourth quarter this year and beyond.”
Financial Highlights for the Third Quarter of 2018
GAAPTotal Revenue: $83.3 million compared to $76.7 million in the second quarter of 2018 and $91.0 million in the third quarter of 2017. Gross Profit: $39.6 million compared to $37.2 million in the second quarter of 2018 and $45.4 million in the third quarter of 2017. Operating Loss: ($34.6 million) compared to ($43.1 million) in the second quarter 2018 and ($36.1 million) in the third quarter of 2017. Net Loss Attributable to Synchronoss: ($54.5 million) compared to ($47.3 million) in the second quarter of 2018 and ($35.1 million) in the third quarter of 2017. Loss per Diluted Share: ($1.38) compared to ($1.20) in the second quarter of 2018 and ($0.78) in the third quarter of 2017.
Non-GAAPGross Profit: $40.6 million, or $45.5 million adjusting for the one-time expense of $4.9 million, compared to $38.5 million in the second quarter of 2018 and $46.9 million in the third quarter of 2017. Operating Income/Loss: ($10.7 million), or ($5.8 million) adjusting for the one-time expense of $4.9 million, compared to ($15.0 million) in the second quarter of 2018 and ($10.9 million) in the third quarter of 2017. Adjusted EBITDA: $4.5 million, or $9.4 million adjusting for the one-time expense of $4.9 million, compared to $0.0 million in the second quarter of 2018 and $4.3 million in the third quarter of 2017. Net Income/Loss Attributable to Synchronoss: ($33.5 million), or ($28.6 million) adjusting for the one-time expense of $4.9 million, compared to ($19.0 million) in the second quarter of 2018 and ($32.0 million) in the third quarter of 2017. Earnings/Loss per Diluted Share: ($0.84), or ($0.72) adjusting for the one-time expense of $4.9 million, compared to ($0.48) in the second quarter of 2018 and ($0.71) in the third quarter of 2017.
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 on Wednesday, Nov. 7, 2018, at 4:30 p.m. Eastern Time to discuss the company’s financial results. To access this call, dial 877-407-9208 in the United States or +1 201-493-6784 outside the United States. The passcode for the call is 13684255. Additionally, a live webcast of the conference call will be available on the Investor Relations page of the company’s website.
Following the conference call, a replay will be available for a limited time at 844-512-2921 in the United States or +1 412-317-6671 outside the United States. The replay passcode is 13684255. An archived webcast of this conference call will be available on the Investor Relations page of the company’s website.
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, operating income (loss), net income (loss), effective tax rate, earnings (loss) per share and cash flows from operating activities. 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 the deferred revenue write-down associated with acquisitions, fair value stock-based compensation expense, acquisition-related costs which includes integration costs, changes in the contingent consideration obligation, deferred compensation expense related to earn outs 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. 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, digital and IoT 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.
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 and its ability to satisfy or refinance its existing debt obligations, 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/A for the year ended December 31, 2017 and Quarterly Report on Form 10-Q/A for the quarter ended June 30, 2018, 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.
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SOURCE: Synchronoss Technologies, Inc.
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PUB: 11/07/2018 04:05 PM/DISC: 11/07/2018 04:05 PM