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Synchronoss Technologies Reports 40% Increase Year Over Year in Third Quarter Adjusted EBITDA; Raises Adjusted EBITDA Guidance For Full Year 2020

BRIDGEWATER, N.J., Nov. 09, 2020 (GLOBE NEWSWIRE) -- Synchronoss Technologies Inc. (NASDAQ: SNCR), a global leader and innovator in cloud, messaging, digital and IoT platforms and products, today announced financial results for its third quarter ended September 30, 2020.

Third quarter highlights:

  • GAAP revenue was $68.6 million, compared to GAAP revenue of $52.2 million in the prior year’s third quarter (after giving effect to a $26 million unfavorable cumulative adjustment to prior year third quarter revenue).
  • Recurring revenue represented 80% of total GAAP revenue, up from 69% in the year ago quarter.
  • GAAP net loss for the quarter was $15.4 million, or $0.36 cents per share, compared to a GAAP net loss of $69.4 million, or $1.70 per share, in the prior year’s third quarter.
  • Non-GAAP net income was $1.7 million, or $0.04 cent per share, compared to a non-GAAP net loss of $25.4 million, or $0.62 cents per share, in the prior year’s third quarter.
  • Adjusted EBITDA increased 40% year over year to $8.1 million, compared to $5.8 million in the third quarter of 2019.
  • Adjusted EBITDA margin was 12% compared to 11% in the prior year's third quarter.
  • Cash and liquidity increased to $46.4 million at quarter end, up from $42.8 million at the end of the second quarter.

Commenting on the results, Jeff Miller, President and CEO of Synchronoss, said:

“We are taking a pragmatic approach to the business by focusing our resources on lines of business that are generating the highest return for shareholders and have the most potential for future growth and profitability. Despite the recent leadership change, we haven’t lost a step as an organization and we continue to execute and build momentum, including renewing our largest cloud client, Verizon, to a five-year contract extension. Our teams have deep relationships with our customers, and we look forward to building on that strength by expanding those relationships and adding new ones. Our improved adjusted EBITDA for the third quarter highlights our sharpened focus on increasing our profitability and cash flow going forward.”

                               Three Months Ended September 30,
$000s20202019% Change
Revenues$68,636  $52,210  31.5%
Net Loss$(15,367) $(69,432) 77.9%
Adjusted EBITDA$8,128  $5,799  40.2%

                               Nine Months Ended September 30,
$000s20202019% Change
Revenues$222,293  $218,161  1.9%
Net Loss$(37,790) $(122,049) 69.0%
Adjusted EBITDA$21,435  $21,098  1.6%

David Clark, CFO of Synchronoss, added:

“Our third quarter results reflect progress with our continued focus on expanding both our gross and adjusted EBITDA margins. We are continuing to see the benefits of our cost management efforts and remain on track to deliver $55 million of annualized savings by year-end.”


The company is raising its adjusted EBITDA guidance range for the full year to $23-$26 million, up from $20-$25 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 866-269-4260 or +1 313-209-6317 (International) and give the participant passcode 6435387.

A live and archived webcast of the conference call will be accessible on the Investor Relations section of the company’s website at 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-in information, please click here.

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, 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 includes integration costs, restructuring and cease-use lease expense, 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

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, 2019, which is on file with the SEC and available on the SEC’s website at 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.


Todd Kehrli or Joo-Hun Kim
MKR Investor Relations

(Unaudited) (In thousands)

  September 30, 2020 December 31, 2019
Cash and cash equivalents $46,359  $39,001 
Accounts receivable, net 47,705  65,863 
Operating lease right-of-use assets 37,019  53,965 
Goodwill 227,012  222,969 
Other Assets 140,479  150,225 
Total assets $498,574  $532,023 
Liabilities and stockholders’ equity    
Accounts Payable and Accrued expenses $88,985  $87,538 
Debt, current 10,000   
Deferred revenues 51,415  87,799 
Operating lease liabilities, non-current 48,787  60,976 
Other liabilities 18,271  18,768 
Preferred Stock 227,861  200,865 
Stockholders’ equity 53,255  76,077 
Total liabilities and stockholders’ equity $498,574  $532,023 

(In thousands, except per share data)

  Three Months Ended September 30, Nine Months Ended September 30,
  2020  2019  2020  2019 
Net revenues $68,636   $52,210   $222,293   $218,161  
Costs and expenses:        
Cost of revenues 28,452   35,602   93,403   107,958  
Research and development 20,885   18,575   59,769   57,282  
Selling, general and administrative 23,265   30,536   74,249   82,862  
Restructuring charges 820   (39)  6,763   738  
Depreciation and amortization 12,212   18,508   33,852   58,920  
Total costs and expenses 85,634   103,182   268,036   307,760  
Loss from continuing operations (16,998)  (50,972)  (45,743)  (89,599) 
Interest income 20   228   1,587   716  
Interest expense (72)  (203)  (401)  (1,251) 
Gain (loss) on extinguishment of debt    5      822  
Other Income (loss) 2,684   (422)  5,743   17  
Equity method investment loss          (1,619) 
Loss from continuing operations, before taxes (14,366)  (51,364)  (38,814)  (90,914) 
Benefit (provision) for income taxes 8,744   (9,849)  29,148   (6,614) 
Net loss from continuing operations (5,622)  (61,213)  (9,666)  (97,528) 
Net loss attributable to redeemable noncontrolling interests (60)  (25)  (242)  (931) 
Preferred stock dividend (9,685)  (8,194)  (27,882)  (23,590) 
Net loss attributable to Synchronoss $(15,367)  $(69,432)  $(37,790)  $(122,049) 
Earnings per share        
Basic (0.36) (1.70) (0.90) (3.01)
Diluted (0.36) (1.70) (0.90) (3.01)
Weighted-average common shares outstanding:         
Basic 42,360  40,910  41,777  40,564 
Diluted 42,360  40,910  41,777  40,564 

 (In thousands) (Unaudited)

 Nine Months Ended September 30,
 2020 2019
Net loss continuing operations$(9,666) $(97,528)
Adjustments to reconcile net loss to net cash provided by operating activities:   
Non-cash items52,835  109,291 
Changes in operating assets and liabilities:(34,508) 76 
Net cash provided by operating activities8,661  11,839 
Investing activities:   
Purchases of fixed assets(571) (7,077)
Purchases of intangible assets and capitalized software(12,610) (9,289)
Other investing activities1,775  34,091 
Net cash provided by (used in) investing activities(11,406) 17,725 
Net cash provided by (used in) financing activities9,991  (120,993)
Effect of exchange rate changes on cash112  783 
Net increase in cash and cash equivalents7,358  (90,646)
Cash, restricted cash and cash equivalents, beginning of period39,001  109,860 
Cash, restricted cash and cash equivalents, end of period$46,359  $19,214 

(In thousands, except per share data)

  Three Months Ended September 30, Nine Months Ended September 30,
  2020 2019 2020 2019
Non-GAAP financial measures and reconciliation:        
GAAP Revenue $68,636  $52,210  $222,293  $218,161 
Less: Cost of revenues 28,452  35,602  93,403  107,958 
Gross Profit 40,184  16,608  128,890  110,203 
Add / (Less):        
Stock-based compensation expense 505  803  1,899  2,147 
Restructuring, transition, and cease-use lease expense 89  141  372  405 
Adjusted Gross Profit $40,778  $43,596  $131,161  $138,799 
Adjusted Gross Margin 59.4% 83.5% 59.0% 63.6%
GAAP Net loss attributable to Synchronoss $(15,367) $(69,432) $(37,790) $(122,049)
Add / (Less):        
Stock-based compensation expense 4,391  6,000  14,547  17,028 
Acquisition costs       (230)
Restructuring, transition, and cease-use lease expense 6,580  6,215  15,280  7,429 
Amortization expense 4,107  5,808  20,207  19,072 
Cumulative adjustment to STI receivable   26,044    26,044 
Net change in contingent consideration obligation        
Litigation, remediation and refiling costs 1,943  4  3,500  1,506 
Loss on Extinguishment of Debt        
Net (loss) income attributable to noncontrolling interests        
Non-GAAP Expenses attributable to Non-Controlling Interest       (76)
Non-GAAP Net Income (loss) from continuing operations attributable to Synchronoss $1,654  $(25,361) $15,744  $(51,276)
Diluted Non-GAAP Net Income (loss) from continuing operations per share $0.04  $(0.62) $0.38  $(1.26)
Weighted shares outstanding - Diluted 42,360  40,910  41,777  40,564 

(In thousands, except per share data)

  Three Months Ended Nine Months Ended
  Sep 30, 2019 Dec 31, 2019 Mar 31, 2020 Jun 30, 2020 Sep 30, 2020 Sep 30, 2020 Sep 30, 2019
Net (loss) income attributable to Synchronoss $(69,432) $(14,678) $(12,275) $(10,148) $(15,367) $(37,790) $(122,049)
Add / (Less):              
Stock-based compensation expense 6,000  5,222  5,169  4,987  4,391  14,547  17,028 
Acquisition costs             (230)
Restructuring, transition, and cease-use lease expense 6,215  17  1,696  7,003  6,580  15,279  7,429 
Cumulative adjustment to STI receivable 26,044            26,044 
Litigation, remediation and refiling costs 4  1,320  824  733  1,943  3,500  1,506 
Depreciation and amortization 18,508  18,116  11,356  10,284  12,212  33,852  58,920 
Interest income (228) (542) (58) (1,509) (20) (1,587) (716)
Interest Expense 203  104  245  84  72  401  1,251 
Gain on Extinguishment of debt (5)           (822)
Other (Income) expense, net 422  (7,372) (1,692) (1,367) (2,684) (5,743) (17)
Equity method investment loss             1,619 
Provision (benefit) for income taxes 9,849  (4,439) (12,432) (7,972) (8,744) (29,148) 6,614 
Net (loss) income attributable to noncontrolling interests 25  194  17  165  60  242  931 
Preferred dividend 8,194  8,544  8,908  9,289  9,685  27,882  23,590 
Adjusted EBITDA (non-GAAP) $5,799  $6,486  $1,758  $11,549  $8,128  $21,435  $21,098 

  Three Months Ended September 30, Nine Months Ended September 30,
  2020 2019 2020 2019
Net Cash (used in) provided by operating activities $7,053  $(6,725) $8,661  $11,839 
Add / (Less):        
Capitalized software (3,926) (3,330) (12,610) (9,289)
Property and equipment (147) (2,137) (571) (7,077)
Free Cashflow $2,980  $(12,192) $(4,520) $(4,527)
Add: Litigation, remediation and refiling costs 1,943  4  3,500  1,506 
Adjusted Free Cashflow $4,923  $(12,188) $(1,020) $(3,021)

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