Synchronoss Technologies Reports Fourth Quarter and Full Year 2024 Results

Fourth Quarter Revenue Grew 6.8% Year-Over-Year to $44.2 Million, Including 91% Recurring Revenue GAAP Gross Margin Expands to 69.1%; Adjusted Gross Margin Rises to 79.3% Announced Three-Year Contract Extension with Major U.S. Telecom Provider in December Unveiled Capsyl, a Turn-Key Personal Cloud Solution for Global Operators, in March 2025 BRIDGEWATER, N.J., March 11, 2025 (GLOBE NEWSWIRE) -- Synchronoss Technologies Inc. (“Synchronoss” or the “Company”) (Nasdaq: SNCR), a global leader and innovator in Personal Cloud platforms, today reported financial results for its fourth quarter and full year ended December 31, 2024. Fourth Quarter and Recent Operational Highlights Reported total revenue of $44.2 million, driven primarily by 6.0% cloud subscriber growth year-over-year.Quarterly results included net income of $7.9 million, $7.3 million in income from operations, $9.1 million in free cash flow, and $13.9 million in adjusted EBITDA.Signed a three-year extension with a major U.S. telecom provider to continue offering white labeled Synchronoss Personal Cloud solution to their 100+ million subscribers, which follows last quarter’s announcement of a three-year extension with a leading French telecom service provider.Unveiled Capsyl, a new turn-key Synchronoss-branded personal cloud platform designed for mobile operators and broadband service providers to deploy secure, scalable, and revenue-generating personal cloud services with minimal deployment time.Announced the launch of the next-generation Synchronoss Personal Cloud platform including AI-powered genius tools to edit and optimize photos as well as improved security and storage, which is available through AT&T, Verizon, SoftBank, and other global carriers. “We just completed a transformational year for Synchronoss, opening a new chapter for us as a high margin, free cash flow positive global cloud solutions provider. We achieved revenue growth of 5.7% and reported total revenue of $173.6 million for the year and adjusted EBITDA of $50 million, which was a 61% improvement year-over-year and above the high end of our raised financial outlook,” stated Jeff Miller, President and CEO of Synchronoss. “Looking ahead to 2025, we now have over 90% of our revenue under contract for the year thanks to key contract renewals that the team secured in 2024. We’re confident in our business, product offering, and strategy, and believe that there is near-term opportunity for growth in our existing customers, our ability to add new customers, and the promising rollout of Capsyl.” Fourth Quarter 2024 Financial Results:Results compare the three months ended December 31, 2024 to three months ended December 31, 2023.On October 31, 2023, the Company entered into an Asset Purchase Agreement to divest its Messaging and NetworkX businesses. As such, unless otherwise noted, all financial metrics herein represent continuing operations, except for comparative purposes to the Consolidated Statements of Cash Flows for full year 2023, which were presented for the whole company at the time. Total revenue increased to $44.2 million from $41.4 million in the prior year period, driven primarily by 6.0% cloud subscriber growth.Quarterly recurring revenue was 91.0% of total revenue, compared to 88.0% in the prior year period.Gross profit increased 15.5% to $30.6 million (gross margin of 69.1%) from $26.5 million (gross margin of 63.9%) in the prior year period.Adjusted Gross profit increased 12.7% to $35.0 million (adjusted gross margin of 79.3%) from $31.1 million (adjusted gross margin of 75.1%) in the prior year period.Income from operations was $7.3 million, a significant improvement from $0.2 million in the prior year period.Net income (loss) was income of $7.9 million, or $0.71 per diluted share, compared to a loss of $35.0 million, or $(3.56) per diluted share, in the prior year period. Net income (loss) from continuing operations was $0.71 per diluted share, compared to $(1.64) in the prior year. Net loss from discontinued operations was $(1.92) per diluted share in the prior year.Adjusted EBITDA* increased 38.9% to $13.9 million (adjusted EBITDA margin of 31.4%) from $10.0 million (adjusted EBITDA margin of 24.1%) in the prior year period.Cash and cash equivalents were $33.4 million on December 31, 2024, compared to $25.2 million on September 30, 2024. In the fourth quarter of 2024, free cash flow was $9.1 million and adjusted free cash flow was $12.0 million, compared to cash flow of $(4.4) million and positive adjusted free cash flow of $1.4 million in the prior year period. The Company did not receive additional U.S. federal tax refunds during the period, leaving its remaining anticipated balance due at approximately $28 million plus applicable interest, which is expected to be received in 2025. * 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.” Full Year 2024 Financial Results:Results compare 2024 fiscal year end (December 31, 2024) to 2023 fiscal year end (December 31, 2023) unless otherwise indicated. Total revenue increased 5.7% to $173.6 million from $164.2 million in the prior year, driven primarily by 6.0% cloud subscriber growth.Annual recurring revenue was 91.2% of total revenue, compared to 88.7% in the year prior.Gross profit increased 12.1% to $118.6 million (gross margin of 68.3%) from $105.8 million (gross margin of 64.4%) in the prior year.Adjusted Gross profit increased 10.5% to $135.7 million (adjusted gross margin of 78.2%) from $122.7 million (adjusted gross margin of 74.7%) in the year prior.Income (loss) from operations was income of $21.7 million, a significant improvement compared to a loss of $10.6 million in the prior year.Net income (loss) was $4.6 million, or $0.43 per diluted share, compared to net loss of $64.5 million, or $(6.62) per diluted share, in the prior year. Net income (loss) from continuing operations was $0.43 per diluted share, compared to $(4.52) in the prior year. Net loss from discontinued operations was $(2.10) per share in the prior year.Adjusted EBITDA* increased 60.6% to $50.4 million (adjusted EBITDA margin of 29%) from $31.4 million (adjusted EBITDA margin of 19.1%) in the prior year. * 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.” 2025 Financial Outlook Based on information available as of March 11, 2025, the Company is announcing full 2025 outlook items as follows: Revenue range of between $170 and $180 million.Recurring revenue of at least 90% of total revenue.Adjusted gross margin of between 78%-80%.Adjusted EBITDA of between $52 million and $56 million, which equals at least 30% adjusted EBITDA margin.Free Cash Flow of between $11 and $16 million. This excludes the effect of the federal tax refund that the Company expects to receive in 2025.The Company continues to receive indications from the IRS that solidifies our high level of confidence in receiving the entire $28 million tax refund plus applicable interest in 2025. These statements are forward-looking and actual results may differ materially. Refer to the “Forward-Looking Statements” below for information on the factors that could cause Synchronoss' actual results to differ materially from these forward-looking statements. Upcoming Conference ParticipationThe Company today announced that members of the management team will participate in two upcoming investor conferences: 37th Annual Roth Conference on March 16, 2025. To register for one-one-one meetings with management, please contact a Roth sales representative.20th Annual Needham Technology, Media, & Consumer 1x1 Conference on May 15, 2025. To register for one-one-one meetings with management, please contact a Needham sales representative. 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." With respect to forward-looking statements related to adjusted EBITDA, adjusted gross margin and free cash flow, the Company has relied upon the exception in item 10(e)(1)(i)(B) of Regulation S-K and has not provided a quantitative reconciliation of (i) forecasted adjusted EBITDA to forecasted GAAP net income (loss) attributable to Synchronoss or to forecasted GAAP income (loss) from operations, before taxes, (ii) adjusted gross margin to GAAP gross margin and (iii) free cash flow to income (loss) from operations within this earnings release because the Company is unable, without making unreasonable efforts, to calculate certain reconciling items relating to those financial measures with confidence. These items include, but are not limited to, other income, other expense, (provision) benefit for income taxes, depreciation and amortization expense, stock-based compensation expense, restructuring charges, gain (loss) on divestitures, net (loss) income attributable to redeemable non-controlling interests. Conference CallSynchronoss will hold a conference call today, March 11, 2025, at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss these results. Synchronoss management will host the call, followed by a question-and-answer period. Dial-In Number: 877-451-6152 (domestic) or 201-389-0879 (international)Conference ID: 13751475 The conference call will be broadcast live and available for replay here and via the Investor Relations section of Synchronoss' website at www.synchronoss.com. Non-GAAP Financial Measures Synchronoss has provided in this release selected financial information that has not been prepared in accordance with GAAP although this non-GAAP financial information is derived from numbers that have been prepared in accordance with GAAP. This information includes adjusted gross profit, adjusted gross margin, adjusted EBITDA, non-GAAP net income (loss) attributable to Synchronoss, diluted non-GAAP net income (loss) per share, free cash flow, adjusted free cash flow (which excludes cash payments and receipts related to non-core business activities) and recurring revenue. The Company believes that the exclusion of non-routine cash-settled expenses, such as litigation and remediation costs (net) and restructuring costs in the calculation of adjusted free cash flow which do not correlate to the operation of its business, provide for more useful period-to-period comparisons of the Company’s results. 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 or deduct certain expenses. These expenses include but are not limited to the following: fair value of stock-based compensation expense, acquisition-related costs, restructuring, transition and cease-use lease expense, litigation, remediation and refiling costs, depreciation and amortization, interest income, interest expense, net loss (income) from discontinued operations, loss (gain) on divestitures, other (income) expense, provision (benefit) for income taxes, net loss (income) attributable to non-controlling interests and preferred dividends. 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. Forward-Looking StatementsThis press release includes statements concerning Synchronoss and its future expectations, plans and prospects that constitute “forward-looking statements” within the meaning of federal securities law. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, though not always made through the use of words or phrases such as “may,” “might,” “should,” “could,” “predict,” “will,” “seek,” “estimate,” “project,” “projection,” “outlook,” “annualized,” “strive,” “goal,” “target,” “outlook,” “aim,” “expect,” “plan,” “anticipate,” “intends,” “believes,” “potential” or “continue” or other similar expressions are intended to identify forward-looking statements. These forward-looking statements are not historical facts and are based on current expectations and projections about future events and financial trends that management believes may affect its business, financial condition and results of operations, any of which, by their nature, are uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, estimates and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. Except as otherwise indicated, 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 legal proceedings involving the Company, 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, 2023, and the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, which are on file with the Securities and Exchange Commission (“SEC”) and available on the SEC’s website at www.sec.gov. Additional factors may be described in those sections of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, expected to be filed with the SEC in the first quarter of 2025. 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. About SynchronossSynchronoss Technologies (Nasdaq: SNCR), a global leader in personal Cloud solutions, empowers service providers to establish secure and meaningful connections with their subscribers. Our SaaS Cloud platform simplifies onboarding processes and fosters subscriber engagement, resulting in enhanced revenue streams, reduced expenses, and faster time-to-market. Millions of subscribers trust Synchronoss to safeguard their most cherished memories and important digital content. Explore how our Cloud-focused solutions redefine the way you connect with your digital world at www.synchronoss.com. Media Relations Contact:Domenick CileaSpringboarddcilea@springboardpr.com Investor Relations Contact:Ryan GardellaICR for Synchronosssncrir@icrinc.com --------Tables to follow------- SYNCHRONOSS TECHNOLOGIES, INC.CONDENSED CONSOLIDATED BALANCE SHEETS(In thousands) December 31,2024 December 31,2023ASSETS Cash and cash equivalents$33,375 $24,572 Accounts receivable, net 18,129 23,477 Operating lease right-of-use assets 8,445 14,791 Goodwill 179,408 183,908 Other assets 54,468 63,589 Total assets$293,825 $310,337 LIABILITIES AND STOCKHOLDERS’ EQUITY Accounts payable and accrued expenses$37,586 $46,602 Debt, current 1,875 — Deferred revenues 837 1,095 Debt, non-current 184,840 136,215 Operating lease liabilities, non-current 16,776 23,593 Other liabilities 9,636 4,898 Preferred stock — 58,802 Redeemable noncontrolling interest 12,500 12,500 Stockholders’ equity 29,775 26,632 Total liabilities and stockholders’ equity$293,825 $310,337 SYNCHRONOSS TECHNOLOGIES, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except per share data) Three Months EndedDecember 31, Year Ended December 31, 2024 2023 2024 2023 2022 Net revenues$44,207 $41,402 $173,594 $164,196 $173,756 Costs and expenses: Cost of revenues1 9,442 10,292 39,041 42,218 46,500 Research and development 10,259 11,243 42,819 46,565 49,598 Selling, general and administrative 11,888 11,709 51,688 65,216 61,153 Restructuring charges 1,006 3,622 1,273 4,013 1,443 Depreciation and amortization 4,318 4,352 17,091 16,830 14,756 Total costs and expenses 36,913 41,218 151,912 174,842 173,450 Income (loss) from operations 7,294 184 21,682 (10,646) 306 Interest income 254 56 810 426 453 Interest expense (5,474) (3,566) (18,003) (13,963) (13,639)Other income (expense), net 9,488 (6,341) 9,278 (5,128) 3,553 Income (loss) from continuing operations, before taxes 11,562 (9,667) 13,767 (29,311) (6,778)Provision for income taxes (3,674) (3,893) (7,613) (4,743) 59 Net income (loss) from continuing operations 7,888 (13,560) 6,154 (34,054) (6,719)Discontinued operations: (Loss) income from discontinued operations, before taxes — (2,424) — (2,200) 921 Loss on divestiture — (16,382) — (16,382) — Provision for income taxes — (77) — (1,935) (1,918)Net loss from discontinued operations — (18,883) — (20,517) (997)Net income (loss) 7,888 (32,443) 6,154 (54,571) (7,716)Net income (loss) attributable to redeemable non-controlling interests 1 26 15 36 (200)Preferred stock dividend, net of gain on repurchase of preferred stock — (2,584) (1,562) (10,007) (9,552)Net income (loss) attributable to Synchronoss$7,889 $(35,001) $4,607 $(64,542) $(17,468) SYNCHRONOSS TECHNOLOGIES, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except per share data) (Continued) Three Months EndedDecember 31, Year Ended December 31, 2024 2023 2024 2023 2022 Earnings (loss) per share: Basic: Net income (loss) from continuing operations$0.78 $(1.64) $0.46 $(4.52) $(1.71)Net loss from discontinued operations — (1.92) — (2.10) (0.10)Basic$0.78 $(3.56) $0.46 $(6.62) $(1.81)Diluted: Net income (loss) from continuing operations$0.71 $(1.64) $0.43 $(4.52) $(1.71)Net loss from discontinued operations — (1.92) — (2.10) (0.10)Diluted$0.71 $(3.56) $0.43 $(6.62) $(1.81)Weighted-average common shares outstanding: Basic 10,112 9,822 10,023 9,745 9,626 Diluted 11,038 9,822 10,668 9,745 9,626 ________________________1 Cost of revenues excludes depreciation and amortization which are shown separately. SYNCHRONOSS TECHNOLOGIES, INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands) Year Ended December 31, 2024 2023 2022 Net income (loss) from continuing operations$6,154 $(34,054) $(6,719)Net loss from discontinued operations — (20,517) (997)Adjustments to reconcile net income (loss) to net cash from operating activities: Non-cash items 20,783 66,239 39,919 Changes in operating assets and liabilities 1,343 7,161 (14,844)Net cash provided by operating activities 28,280 18,829 17,359 Investing activities: Purchases of fixed assets (1,896) (1,302) (1,408)Purchases of intangible assets and capitalized software (13,027) (18,572) (19,758)Other investing activities 1,793 23,674 8,000 Net cash (used in) provided by investing activities (13,130) 3,800 (13,166)Financing activities: Net cash used in financing activities (5,853) (19,979) (13,276)Effect of exchange rate changes on cash (494) 1 (500)Net increase in cash and cash equivalents$8,803 $2,651 $(9,583) Beginning cash and cash equivalents from continuing operations 24,572 18,310 29,336 Beginning cash and cash equivalents from discontinued operations — 3,611 2,168 Beginning cash and cash equivalents 24,572 21,921 31,504 Ending cash and cash equivalents from continuing operations 33,375 24,572 18,310 Ending cash and cash equivalents from discontinued operations — — 3,611 Ending cash and cash equivalents$33,375 $24,572 $21,921 SYNCHRONOSS TECHNOLOGIES, INC.RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES(In thousands, except per share data) Three Months EndedDecember 31, Year EndedDecember 31, 2024 2023 2024 2023 Non-GAAP financial measures and reconciliation: GAAP Revenue$44,207 $41,402 $173,594 $164,196 Less: Cost of revenues 9,442 10,292 39,041 42,218 Less: Restructuring1 187 654 187 746 Less: Depreciation and amortization2 4,014 4,002 15,806 15,446 Gross profit 30,564 26,454 118,560 105,786 Gross margin 69.1% 63.9% 68.3% 64.4% Add / (Less): Stock-based compensation expense1 67 (105) 325 109 Restructuring, transition and cease-use lease expense1 397 755 982 1,389 Depreciation and amortization2 4,014 4,002 15,806 15,446 Adjusted gross profit$35,042 $31,106 $135,673 $122,730 Adjusted gross margin 79.3% 75.1% 78.2% 74.7% ________________________1 Amounts associated with cost of revenues.2 Depreciation and amortization contains a reasonable allocation for expenses associated with cost of revenues. SYNCHRONOSS TECHNOLOGIES, INC.RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES(In thousands, except per share data) Three Months EndedDecember 31, Year EndedDecember 31, 2024 2023 2024 2023 GAAP Net income (loss) attributable to Synchronoss$7,889 $(35,001) $4,607 $(64,542)Less: Net loss from discontinued operations — 18,883 — 20,517 GAAP Net income (loss) attributable to Synchronoss excluding discontinued operations 7,889 (16,118) 4,607 (44,025)Add / (Less): Stock-based compensation expense 996 501 6,372 4,390 Restructuring, transition and cease-use lease expense 1,976 4,140 4,933 7,701 Amortization expense1 275 270 1,094 1,076 Sublease receivable impairment — — 806 — STI Note receivable impairment — — — 4,834 Change in contingent consideration (100) — (100) 1,483 Litigation, remediation and refiling costs, net (617) 807 (370) 6,804 Non-GAAP Net income (loss) attributable to Synchronoss$10,419 $(10,400) $17,342 $(17,737) Non-GAAP Net income (loss) per share: Basic$1.03 $(1.06) $1.73 $(1.82)Diluted$0.94 $(1.06) $1.63 $(1.82)Weighted-average shares outstanding: Basic 10,112 9,822 10,023 9,745 Diluted 11,038 9,822 10,668 9,745 ________________________1 Amortization from acquired intangible assets. SYNCHRONOSS TECHNOLOGIES, INC.RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES(In thousands) Three Months Ended Year Ended December 31,2024 Sep 30,2024 Jun 30,2024 Mar 31,2024 Dec 31,2023 December 31,2024 December 31,2023Net income (loss) attributable to Synchronoss$7,889 $(5,701) $78 $2,341 $(35,001) $4,607 $(64,542)Add / (Less): Stock-based compensation expense 996 3,021 1,245 1,110 501 6,372 4,390 Restructuring, transition and cease-use lease expense 1,976 157 2,333 467 4,140 4,933 7,701 Sublease receivable impairment — — 806 — — 806 — STIN Note receivable impairment — — — — — — 4,834 Change in contingent consideration (100) — — — — (100) 1,483 Litigation, remediation and refiling costs, net (617) (425) 291 381 807 (370) 6,804 Net loss (income) from discontinued operations — — — — 2,501 — 4,135 Loss on sale of discontinued operations — — — — 16,382 — 16,382 Depreciation and amortization 4,318 4,386 4,028 4,359 4,352 17,091 16,830 Interest income (254) (165) (183) (208) (56) (810) (426)Interest expense 5,474 5,526 3,486 3,517 3,566 18,003 13,963 Other expense (income), net (9,488) 5,241 (1,220) (3,811) 6,341 (9,278) 5,128 Provision (benefit) for income taxes 3,674 628 2,708 603 3,893 7,613 4,743 Net (income) loss attributable to non-controlling interests (1) (14) (5) 5 (26) (15) (36)Preferred stock dividend, net of gain on repurchase of preferred stock — — (567) 2,129 2,584 1,562 10,007 Adjusted EBITDA (non-GAAP)$13,867 $12,654 $13,000 $10,893 $9,984 $50,414 $31,396 SYNCHRONOSS TECHNOLOGIES, INC.RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES(In thousands) Three Months EndedDecember 31, Year EndedDecember 31, 2024 2023 2024 2023 Net cash provided by (used in) operating activities$13,075 $(407) $28,280 $18,829 Add / (Less): Capitalized software (3,163) (3,912) (13,027) (18,572)Property and equipment (858) (73) (1,896) (1,302)Free cashflow 9,054 (4,392) 13,357 (1,045)Add: Litigation and remediation costs, net 829 3,914 4,549 11,523 Add: Restructuring 2,080 1,889 5,383 4,292 Adjusted free cashflow$11,963 $1,411 $23,289 $14,770

Synchronoss Technologies Reports Fourth Quarter and Full Year 2024 Results

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