SNCR - Earnings call transcript Q4 2023 | Synchronoss Technologies, Inc.

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Operator

Good afternoon, and welcome to Synchronoss Technologies Fourth Quarter and Full Year 2023 Earnings Conference Call.

Joining us today are Synchronoss Technologies' President and CEO, Jeff Miller; and CFO, Lou Ferraro. [Operator Instructions] Then before we conclude, I'll provide the necessary cautions regarding the forward-looking statements made by management during this call. I would like to remind everyone that this call will be recorded and made available for replay via a link in the Investor Relations section of the company's website at synchronoss.com.

Now I would like to turn the call over to Synchronoss CEO, Jeff Miller. Sir, please proceed.

Jeffrey Miller

welcome, thank and us for operator, today. you, everyone, you and joining Thank closed, press ended issued results the we After market a fourth and XXXX. for quarter release full XX, year December the our announcing copy section our Synchronoss. Relations the the year a of release available website. XXXX is A in of Investor transformative was at press by defined to the a global premier and becoming solutions of provider. completion One, successful execution personal consistent shift our cloud strategic certain early our assets first on XXXX major setting when stage to digital in the strategic divested took iQmetrix, We reform. broader this we steps a journey for We value the thoroughly actions business. explored potential all focused unlocking options to Cloud increase around Personal and shareholder of high-margin our our XXXX dedicated of provider. This noncore Lumine NetworkX Messaging to process global strategic and QX to achieve to shift cloud culminated ultimately our the solutions a divestiture our businesses in in Group

to over necessary the divestiture, and Since profile, to efficiency fiscal our we've and the cost improve our reducing flow cost control remaining cloud fiscal an led in positive years, last financial operations performance. XXXX. financial Additionally, and our our streamline of $X.X enhance the implemented our refined by million we costs strengthen net cash ongoing X measures $XX to further million operations XXXX by additional for go-forward annual in the which

and a profitable at strategic more focus, we of global financial operation. stand with and XXXX, company, the a one clear start cloud a Now as a solutions pure-play model simplified aligned

a million. businesses. which of This by strategic million, foundation These EBITDA surpassing $XX in guidance. significant during were contributed increase onetime and a Our sale to for XXX% adjusted EBITDA adjusted results QX the realignment, costs cloud solutions a strong NetworkX results Messaging our of financial a period $XX.X upper achieved the full end company, highlighted Synchronoss' of as included underscore financial to year performance year-over-year of

our of we also $XXX.X million, delivered revenue year to leading exceeded million, previously $XX.X Additionally, communicated of which full QX guidance. revenue

the results for model QX growth the company expect increased from and of and simplified new the beyond. baseline clearly performance our we business heightened at sustained for that XXXX in benefited Our hints it and profitability

we priorities features. priorities. One, this grow base; focus to: will protect main these our three, As our anchor Again, cloud and year, number maintain our are strategic cloud global and X expand our embrace deliver customer base; two, new subscriber we

record our subscriber track base strong and Our X% growth we QX, subscriber year-over-year. protecting growing And consistent. and saw remains for in of

SoftBank's partnership an support important quarter. to SoftBank reached SoftBank with needs perfectly LINE, trends to Japanese now devices during further alignment marketing the of see for our X,XXX their addition testament strategies, recent supported Y!mobile X to of Cloud. relevance Mobile, significant our the in secure effective mobile additional is shown Synchronoss on commitment for extensive our contracts mind long-time as is of exceeds subscriber brands, expected our Cloud including growth over Japan. Successful regard provide global customers. solution the second launched than network under and brands, milestone years. at XXX The XXXX. and and subscribers With us. In that further the at of through well revenue total customers that's global of in important of their and the the growth We to in least secure local sales million SoftBank's customers. strong our the Data to proof agreement revenue market basis. cloud traction SoftBank allows coming leveraging with launch Japanese handling a among with and service its million-plus success by customers SoftBank extended fourth our We subscribers our the the of We more sales stores the across with provides garnered partnerships expectations. With base providing a of offering's base, partnership and files, early the customer value has Box reflects which backup the points long our on SoftBank's X-year AI-enhanced early XXX Personal to Synchronoss to and to to Anshin encouraging Anshin strong of Box subscriber content with extends resonating AT&T. our photos, its by terms digital This and a Synchronoss is Tier continue expanding as restoring subscriber entered of by Cloud meaning providers. XX% have our well which business its with continue And with launch pipeline us powered We new product's half result, we exists. Anshin, XXXX with Data ahead opportunities runway Synchronoss Personal AT&T of And with Verizon pursue exercised videos across of of XXXX, a we peace of extension across an Verizon subscribers, of

attendance encouraging. In where of fact, in and Congress from the World we activity was buzz recently the remarkable Mobile Barcelona, returned and quite

clear proposition customers. customers discussions solutions, rich priorities and global key about and current service exchanged from customer seeking revenue the dynamics are differentiations as our our churn our the with demonstrated urgently prospects by we their ideas communications as avenues and value from complement reduction by shared latest AI Synchronoss future were Synchronoss' competitors. delivered for Our innovations. These industry providers growth, discussions and Cloud mobile of and It's that

of the pursuit key Our our in cloud technologies in years. will a be excellence factor in coming success

Personal to updates monetization, features is their technology important the customer retention. At offerings to value-added more enhanced developed strive enabling closely in subscribers service alongside a out. choose subscriber made Synchronoss tailor Central Among innovations. enhanced anchor model, for This our Genius Platform. to options. of these from to allows operators providers to feature stands we plans Congress, These basic, to we to facilitating and tiered needs, and within Cloud further service introduction World the enhancement subscriber plans service enhanced QX. providers this updates and are to empower deliver we offer mobile to customers, flexible engagement designed As them, key premium display significant Mobile the these their new avenues other plans service telecom

capabilities cloud photos versatility and advanced Now effects integration subscriber with vision including engagement platform's for and enhancing unique AI our the and enriching computer filters, and the personalizing demonstrates experience.

cloud the by mission in to they digital also collectively We subscriber quickly that content. to onboarding provide simplifying process users their streamlined personalized refinements comprehensive, secure setup, ensuring the thereby boost securely our leap aiming and add can forward These adoption a signify initial solutions. and

of instrumental of Directors partners to Capital Synchronoss. Kevin brings of financial Board we December. the future a team Kevin our we of our QX, welcomed to XXX that in Rendino shape be as knowledge Degree will leadership in Finally, wealth

So entering we are XXXX, for company. cloud sustained positioned as growth a dedicated

add XXXX. base, year to industry-leading As outlook global over technology and Lou, our that value share are focus the turn and to will I a for to Lou? customer our will beyond. With provide model who on supplying our performance and confident value of our we overview financial financial shareholder that, this call simplified we continue unlock detailed will

Lou Ferraro

Jeff. Thanks,

annualized profile Lumine of has our facilitated superior meaningful it to our upfront Group pay not capital portion obligation preferred structure estimated the Our improvement a down successful as only reduces of our by the last This we on $XX transaction financial $X.X about we consideration million the stock. cloud. call, dividend to used spoke our approximately with of But a million. as an unlocked

balance serve improve in indicators have our leading that the which on success payment sheet. With business. that, of expirations some the performance with as horizon and several will metrics XXXX our We our other further financial for let's begin catalysts key

was fourth First, of to anticipate and of be revenue revenue to total total XX% last XXX% total The cloud forward, With the was digits exceeds year. low in results consistent over XXXX our comprising our is of million total approximately growth revenue we X.X earnings, single with revenue a the which growing in and our in going the was in XXX% Cloud on the XX.X% XXXX. of will and QX. elongated of revenue, revenue of which now on revenue basis. in revenue recurring guidance year-over-year X% consistent XX% XX.X% revenue in we've the cloud to XX% We a comprise of in and smartphone the in cycle, of QX quarter of double approach with XXXX. Quarterly quarter forecasted subscriber year-over-year years. XXXX $XX recurring revenue fourth long-term quarter X% we QX base consistent subscribers total represented high during anticipate provided upgrade now that of growth Cloud basis. up the of achieved reflect subscriber

prior the Messaging fourth the and quarter the The to December during consistent and million which moderation revenue with results ended as our a in the million, quarter result Total financial expected NetworkX from Turning fourth XX, performance expected well full of revenue growth. was the quarter $XX.X in businesses year the in the as now period. fourth was subscriber was XXXX. year $XX.X of for divestiture impact

the revenue $XXX.X full The the of revenue revenue year. X depreciation from the total at $XX.X decreased from prior primarily Looking software $XXX.X factors: year, XX.X% from associated deferred of total million of in prior period. restructuring of to capitalized concentration Gross as The runoff resulted as increased X.X% in XX.X% result margins costs revenue revenue. with million recognized X.X% in quarter first the This million, $XX.X the sale offset and of million the XXXX XXXX. Gross and assets as with a DXP in year in product $X.X revenue partially and profit was to increased amortization million cost to the and of of associated Activation total half in well sunsetting higher approximately nonstrategic of change fourth by the a revenue development. cloud increased or of effect revenues lower total

million in reduction due effect the Messaging NetworkX. Fourth and expenses after loss was selling, partially was year, of quarter profit of was improving half deferred An revenue a million of decrease observed of the $XXX.X from The in year, This For cloud largely trend profit away million the was $X.X the period. a restructuring prior to the gross general following in divestiture. or $XXX.X a legacy share cloud and due XXXX million from gross This driven runoff from $X.X in charges by cost $X.X to rationalization to half product margins the that shift in in to of improvement offset XX.X% first XXXX. from total the the the income million, and and indicating which in decreased revenue change previously performance X.X% efforts full revenue noted. XXXX, significant administrative $XXX,XXX, XX.X% and year a in was strategic growing by in divestiture. divestiture profit of gross an revenue latter upturn sunsetting operations a total margin followed related

$X.XX costs, full the higher the loss revenue, net compared nonrecurring or a initiatives income with on loss was operations to offset. Net increase a increased loss or lease year The operations For Net $XX.X per impairment of or operating charge share provided in in share Net $X.XX in primarily from spend XXXX, per professional R&D loss million was $X.XX from operations. in of the income or loss from per compared year prior was changes continuing employee discontinued was positive million million $XX.X in per the operations loss divestiture QX $X.X compared fourth partial due the associated in was improved $XX.X to executed to million discontinued to net share loss result quarter. net QX per share year, sale million in operations $XX or throughout in $XX.X of $X.XX XXXX. loss from from primarily Cost $XXX,XXX period. or the $X.XX million XXXX. $XX.X million increase the The a from savings of prior share of and share $X.XX in period. the a per to expenses

Net total per compared For million from to $X.XX share loss per was share per QX, noncash increase was full EBITDA the net to operations XXXX. from compared loss the or loss million million. continuing the year, $X.XX foreign net the compared in The prior to share share in XX.X% Messaging and the $X.XX changes NetworkX. In was per or year. and of primarily of in share, XXX% and year. loss or due prior was total sale $XX aforementioned revenue discontinued impairment of operations Net $X.XX $X.XX from the to in in the in to period. from $X.XX $XX.X $X.X exchange the $XX.X loss adjusted year share prior increased XX.X% per million per lower revenue, revenue

$XX.X prior to to adjusted XX.X% XX.X% the favorable The the of full of in increase increased EBITDA from the EBITDA higher-margin margin $XX.X revenue million of million, year. the year. year, total half adjusted XX.X% especially For resulted in revenue from the or total revenue cloud, latter in mix

cash Cash financial free also flow to For cash sequentially Moving from adjusted compared QX, related that from million the to to $XX.X and full December cash the XXXX. In million our SEC In to and $X.X $XX.X XXXX XX, XXXX. $X.X $XXX,XXX. flow a balance at at restatement company a adjusted in million $X.X sheet. million $XX.X in equivalents $X.X XX, positive in Cash we flow the year, cash XXXX. at [ $X.X million and XX, ] to million free increased now XXXX, have final ] negative [ million to increased negative $XX.X flow free negative completed payment December QX cash ] million free to September $X a improved made the million million was XXXX, was the XXXX. [ improved from

go costs naturally cash these $X.X in million As away, XXXX. flow improve by will

still included our in As prepaid $XX a assets have federal million tax reminder, balance refund the that of sheet. claims we are on about

are tax expected, during of rest receive period, refunds the the and refunds any we being As additional audited. the didn't still

our are further We tax currently audit ongoing. the middle the the those in shares. use Once down their responding data refund, pay XXXX. we and to request IRS, the of to funds receive on preferred with anticipate is refund We plan received to be we to the time cooperating

for the now me our certain of recent guidance. the continuation cash QX, of of add and other Entering with least trends to with XXXX, anticipate we business, experienced customers addition alongside general revenue net throughout to the at be $XX superior flow of expectation generation the for our XXXX. combined removal to stand-alone in XXXX. turn Let The positive million cash the cloud SoftBank, payment capabilities expiration costs obligation of

be to high single-digit growth low to subscriber cloud double-digit XXXX. expect We throughout range in the

very For the margin $XXX XXXX, $XXX million adjusted range. I X% EBITDA million turn for range GAAP much million and operator we range expect communicated will We now $XX joining our over again, Q&A. in all to X% million, fiscal between previously growth. XXXX, range between with will $XX you the consistent year ended our XX, us. to back December to the revenue communicated consistent with of call for previously Thank anticipate and

Operator

from Mike Latimore [Operator Northland with Instructions] comes Markets. Our first Capital question

Mike Latimore

Congrats on big year the here.

a You the of is guess, talked about color little SoftBank This being, I more ahead that? launch. expectations. Can you new put on

here So attachment successor? kind how other to on the any of other Or of new the color had? the is rate relative launches quantification you've

Jeffrey Miller

bit it of us. different launch are little Yes. And Thanks the for Mike. Thank a is SoftBank we at out right joining you, the gates. And pleased dynamic. of of launch a

have Verizon those, our and through said activations U.S.-based come have In quickly they're than -- the of the traditionally fact, If reflect the digital and out with more onboarding consumers just of that, SoftBank, I anticipated setup more one strategy. of on a really for we customers. we've then with flow employed with was most rapidly of reasons what in seen AT&T. the case they've Having why in that may we of retail-first a gates our be the little

value-added this Box or organization and device Whether X,XXX a points are So their digital flow. leveraging they presence, sales their introduce consumers. service the and add-on onboarding in sales to to directly not Data Anshin upgrading of their just they're of not,

November, you'll QX trial we in start in because numerically to that our QX but periods, a of that see So situation they will numbers. some growth not the launched quantifying growth numbers they just reflected subscriber where in impact subscriber in see that, our are are and you in

Mike Latimore

World SoftBank know, I does new from about then you And how for Congress. customers for Mobile customers? of back from current new or Great. just pipeline cloud year obviously, this coming look? I launched. come will about But talked most the just just What the growth the pipeline customers guess,

Jeffrey Miller

clients on contribution new modest will XXXX. the customers, some any expectations revenue in we course have XXXX anticipate do We new bring that during on we from but of

a Our need they're conversations drive a Asia anticipate XXXX. we seeing would in two contribution from expect Europe, is I contributions America, course, would fortunate a that that make might were incremental Mobile at even of throughout or therefore, larger contract the revenue. likely what for new XXXX. the finding And and We Congress clients that from to to ways secure to North World those revenue and circumstance announce would encouraging

Mike Latimore

the on talk see those also Great. growth on plans. there? on of enhanced potential the -- just to ARPU little you last how plans the a service And then average potential Can and about relative bit -- you the those subscriber kind

Jeffrey Miller

of leverage enhanced a they things one that's is the to Well, would our the clients all the one is the has reason key And plans that of single about not way like every that flexibility. introduced we Yes. and deploy platform.

which more allows So service intelligence, way so that And only that each services if some those employ they unlimited to offering, their not on choose in customers monetize it higher result, for to offerings, as tiers the different and, price to like subscriber and artificial ability differentiate want many further offerings it they plans, our available make a value that them XXX tiers. terabyte differentiate capabilities at tier or to their to to just gigabytes between of populations. those provide that cases, they have do now XXX of if the they

Operator

[Operator Ladenburg Instructions] Hickman from Our Thalmann. Jon next question with comes

Jon Hickman

of revenues? the the you reflect -- in do NetworkX as will with comparisons you and when quarters elimination are your go to other by the XXXX, going the So that XXXX,

Lou Ferraro

what performance our for is on sequential to we're on and go-forward did we a Yes. we'll a a cloud this Jon, continue cloud going quarter-by-quarter quarter on to do basis, basis. reflect

Jon Hickman

Yes.

then if be so But see what able Okay. as in happened XXXX NetworkX was of -- to I'll gone? QX

Lou Ferraro

That's correct.

Jon Hickman

Okay.

for in have So wait year, basis change the reflected reported throughout that the we'll you become is ] just to year how [ million see available? $XXX those quotes as on a the that to quarterly

Lou Ferraro

Yes.

so year, seen. for cloud comparison $XXX.X quarter, sure the cloud-only comparison next but is reported and make million, provide we So easily that primarily was which visibly a only, that of to we cloud, we very will that,

Jon Hickman

Okay. That numbers at your total. was my little I when total and looked a your confusing and

Operator

I'll now our any over remarks. this session. Miller time, question-and-answer back call At this turn the to closing for concludes Mr.

Jeffrey Miller

very Great. Yes. you much. Thank

just my to value best to To our Synchronoss appreciation like are financial entire conclude, now we changes we've emerged operator, years. It last your seen which and some Before I your express today many we've we the the that performance focused Synchronoss to several years, support, commitment and for ever, consistent more dedicated your remain I'd you of conclude. and to delivering undergone positioned shareholders, long-term you. the to to innovation, continued where team. have we over appreciate in Thank to we -- contributions, is have pretty significant spirit than in and back you, and customers

Operator

like Before would provide I includes that safe important during forward-looking this we statement harbor to statements call, call. Synchronoss conclude today's made regarding cautions

that particularly expectations plans forward-looking the discussed and laws. statements of considered meaning management regarding are likely that factors applicable be historical, securities the this forward. discussed include prospects comments that comments factors -- should not are are about forward-looking of within the performance. going influence company's opportunities company's During future today business statements Any market our certain and These are call, to

does or as All adjusted a which forward-looking undertake today, statements most and necessarily during are us for XXXX such revenue capitalization and a the today's company's the made call, of release future Fourth not non-GAAP Conference filings, adjusted generated differ and statements Statements as measures the events, in Earnings earnings although GAAP this update expectations of made materially. non-GAAP or does of such that and development. Today's new for for also does EBITDA periods actual of such its to subject results release. Thank call financial company revise deferred not cash a of and items Quarter are from any to and software any the whether for risks. not changes presents equate note throughout SEC numbers, as company's Full as measures result otherwise. Please it reporting management discussed recent to derived Forward-looking certain including Call. information, or these encouraged description joining review obligation uncertainties, cause account you are the GAAP reported non-GAAP a as EBITDA, number of Technologies are to to XX-Q risks operations XX-K listeners the today by for the describes in reconciliation Synchronoss differences Year between the could

You disconnect. may now

Synchronoss (SNCR) 12 Mar 242023 Q4 Earnings call transcript