SNCR - Earnings call transcript Q1 2024 | Synchronoss Technologies, Inc.

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Operator

Good afternoon. Welcome to Synchronoss Technologies First Quarter 2024 Earnings Conference Call.

Joining us today are Synchronoss Technologies President and CEO, Jeff Miller; and CFO, Louis 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 link in the Investor Relations section of the company's website at synchronoss.com.

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

Jeffrey Miller

Welcome, thank provider, press of a everyone, us operator. A Relations first you, Thank and section XX, March available the our for XXXX. closed, in quarter announcing Investor ended today. of you In market we is release our issued the website. press copy results the release After joining as we for the approach quarter, on to solely a personal global high-margin continued profitability solutions to has streamline targeted transformation first the our enhance our cloud cloud top delivering in operations and execute profile, line focused us This improved our on QX. and strategic services. financial growth our allowed

adjusted to revenue earnings $X.XX of per to EPS of report the of million income the and improvement model business we to a to $XX revenue, quarter, cost gross in direct margins targets. XX% an income total grew respectively. we share our our from significant $XX.X the adjusted million we million, net of $X.XX, recurring optimization This year-over-year it are efforts following XX% the transition by cloud-only representing witnessing our we year-over-year, pleased representing The net quarter, the us businesses QX year, in performance the to year, in and our XX% positive positioning annual of revenue total $X.X of first of improvement to start a to million XX% highlighting well meet strong are financial quarter. additional in undertook in noncore EBITDA are accompanied such of gains for with the was grew a In divestiture XXXX. result led $XX.X while prior Further and

and in cash we QX generation million further elevate conversion. improvements XXXX, performance are to revenue at and in track we strategy, anticipate affirming enhance least as to we cash our With XXXX free on flow our financial $XX to

progress leading across are: and to with strategy embrace global our two, three, cloud and our we which main As growing features; X focused subscriber protecting base. our we're anchor substantial our base; expanding cloud innovative technology customer strategic making key deliver priorities, in XXXX, one,

efforts strong of foundation a the for advancements reflects in Our areas, year. QX setting each rest these in the solid of

Our consistent for as increases expectations growing continued in subscriber in we subscribers, is track of record which protecting and year. recorded X% base with our line our our the

developing our key relationships now and to million. partner Verizon, increasing build base, partners in growth our Our steadily subscriber strategies. exceeds well This multifaceted acquisition foster includes teams as strong and AT&T upon environment to which cloud SoftBank subscriber collaborative such to refining for with $XX a approaches

long-term revenue, base total vision shared leadership and XX% of over SoftBank, with secured brands growth our at its contracts contract about our subscribers particularly significant current meet for through continue X a of plan. least to gearing We're across a Verizon, Anshin Japan XXXX, for adoption further to upon capacity, under My our up our curve. of build of strong boasting to market Our XXX with offers stability highlights which capabilities has trajectory. boxes growth with visit the to SoftBank's team The the and extends data a seamless years. revenues recent entry recent expanding addition solidified excited million

to we're looking extends footprint, Anshin only working forward solidifies the rollout SoftBank of data driving of long cloud but subscriber prospect with growth, role in with box our and successful also the them not our Our global term.

the customers. anchor evolving Turning features needs of to priority. remain our to on focused key second We our meet delivering

the introduction pivotal our solid financial capacity capability for A development optimizing and foundation months This efficiency, personal not scaling, a also adjust only enhances dynamically auto drives costs. resource service to Our the laid operational usage continued demands. have but technology innovation cloud platform of ongoing fluctuating with is by efficiency our in align which minimizing of excellence. efforts enhance stack to in QX recent and

For customer, compute implementation through scaling. our we expenses reduced the one significantly by example, with XX% have auto over of

This tiered year. retention. Additionally, from rollout customer operators services, our growth Cloud approach offer their service flexibility Congress of to strategy Central Mobile which revenue Synchronoss value-added as such generative subscriber customer select present Platform, enhanced the enables earlier to to telecom is ranging we to basic providers growth, and plans to the service operators mobile fine-tune and offerings, the within premium. models, Personal and AI World driving thereby at introduced plans this Enhanced

for successful and my my successful such and cloud our of user for is Synchronoss not or accessibility. to affirms who just carriers time our account a our establishing engagement The increased complexity route broader operating ability to ever-tightening AT&T for adoption intricate visibility carrier acumen our development. systems. security SoftBank This and integrating potential the to offerings foster seamlessly as Verizon such customers applications also required a has capacity complexity IT the is internal choose demonstrates navigate to SoftBank solution mitigate decisive my increased the edge, as integrate environments a a get with systems This factor technical into strategy investment deployment across demands. often excessive to like amidst with Moreover, becomes technology step it of with competitive various solutions major

our priority advantage base. these types facilitate take penetration third These to integrations We market. of to we working expanding continuously are into strategic customer advancements so of global iOS the that further of our opportunities accelerate technology-focused support

has CES our major in Mobile healthy accelerated like and connections our Congress, at pipeline. events industry World discussions and presence Our

global across network operators including and We're with progressing various providers. discussions telecom markets,

prospects. relationships X customers In addition our We're quality and with who've former of capabilities to new meeting and messaging Network already with strong experienced maintaining service.

these as providers and service reducer. pursue generator opportunities, we our churn increasingly value are revenue As recognizing a a

value will as we We're deliver strong our our XXXX strategy. to of cloud our to and long-term start continue expect business benefits materialize by our the confident efforts that encouraged are shareholders. sustain will to that performance execute our focused We model and our

now pass the With and remainder who the our for Lou, financial detailed a will provide of outlook overview of Lou? XXXX. share that, to our performance I'll call

Lou Ferraro

benefits are Thanks, everyone. Jeff, reflected our The now being our and financial good transformation in of afternoon, results.

quarter performance was in of Our of with the financial as flexibility continue begin and is which total in years. quarter subscriber from our recorded simultaneously of subscriber been to last which X% revenue total years, strongest XXXX growth leasing first the We XX.X% of results of the the and our year. to it and in The approximately to and QX subscribers is that, We single elongated low success our base revenue, structure. exceeds in XX% growth goals XXXX. us metrics upgrade anticipate With high the our of allowing of XX.X% business. in recurring QX. revenue growing improvement serve operational has X.X cycle, capital in smartphone let's meet now an year-over-year reflect in Quarterly key for digits the indicators, which cloud some optimize double

the $XX.X a $XX first XXXX. revenue the quarter of results XX% million, result for to $XX.X measures year our total revenue margins increased of quarter profit resulting in million operations, revenues. The in period. to Total from XX.X% increased period. stream of post in of million taken X.X% of million, prior lower was growth revenue divestiture to from in increased in March XX, first cloud ended quarter prior first the subscribers. to financial result total performance the now Gross in as revenue the $XX on year cost the Gross Turning

income operations coupled was This with in significant taken quarter measures primarily $X streamline post-divestiture continued from loss the million a to was the due improvement year expense period. management, revenue, in operations. to million, from First of a $X.X rise prior and increase

to QX, in Net income prior $X.X in share XX.X% revenue. Net or a share a per was to share, significant million, per revenue or million was loss of QX per prior $X.XX EBITDA from $XX.X improved $X.XX operations $X.XX total $X.X or in XXXX. million million loss from year in period. $X.X XX% million compared the period. In $XX.X of QX total up discontinued XX.X% adjusted year of of or the improvement

to million previously. balance year. Cash an $XX.X Moving a our negative at March $X.X XXXX. on negative December In million period $XXX,XXX improved to XX, sheet. adjusted from flow Similarly, to million, were XX, $XXX,XXX last at free to in QX, million compared and XXXX, negative same $XX.X equivalents improvement cash compared to free the cash $X.X rose cash flow the our

in In QX, we that behind of restatement the $X.X to payment expect flow. SEC payment our completed With final related cash we made XXXX. us, increase the million to this company financial XXXX in natural the a our

compared and annual favorable to to expected due With higher managed pattern The XXXX. past to a and first vendor improve cost to cash on usage are the of historically quarter free commitments, divestiture sees and obligation this flow upon path a behind post restructuring, us we we our cash for performance. impact employee

approximately shortly completion receive receipt it company was federal lead the process tax period, during the the Material months documentation remaining of the of over expects complete leaving committee refund, coming of additional largely during The reviews made the the to tax thereafter. its receive including refunds due company completion the tax million. the steps balance portion towards to audit consisting The not refund of $XX process. did any the remaining to and at progress the and of quarter

receive use refund estimate down communications Once half the we funds in to service with the internal those the debt. of current to based revenue of Our receipt we further outstanding refund, plan second pay for later our upon this XXXX. is

guidance. Moving to

cash from in along cloud driven trends As in our still and flow. of stand-alone the by the to anticipate other of into with million outlook at We addition XXXX cash removal we continuation unchanged last the through portfolio, conversion least with further the obligations expiration and general expectation of our We of our throughout superior of our bolster costs the confident XXXX, we first what the quarter. flow certain positive $XX QX, XXXX, quarter. of to business. navigate our communicated revenue capabilities SoftBank customers continue experienced for net achieving in net cash remain positive to payment remains

expect indicated, cloud subscriber in we continue to high range low the double-digit already we've to to be growth single-digit throughout XXXX. As

revenue guidance ended to $XXX and revenue growth million GAAP to reiterating a -- For XXXX, range are $XXX of our X% December the year our million range between GAAP fiscal or year-over-year. for guidance we X% XX,

our and guidance $XX margin remains adjusted communications with previous expected also consistent between range Our $XX aligning million to range. targeted EBITDA and with XXXX, in is million

to I'll now much. turn the the Thank call Q&A. operator you for over very

Operator

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

Aditya Dagaonkar

This Latimore. we of number expect color on what is some the Could Aditya you give on Mike margin behalf could year? for kind of gross

Jeffrey Miller

for XXXX. gross margins we XX%-plus expectations said, Yes. range. We've we that expect given in the indications as to be our

note can of throughout our On XX%. performance performance, see, course, year. of basis. we and on type expect on a to that's basis, adjusted QX, execution quarter, that based the basis, you margin To continue just As GAAP that, the our not we've we of margin delivered our this gross gross GAAP Yes. reported that

you're So correct.

Aditya Dagaonkar

could of the year. some pool you on it. give the Got How for you color to ARPU? do expect rest And be also the the

Jeffrey Miller

user We any can In continue of the as with details But in don't per had revenue it, of same past. to participation expect stay contract. we to start going and about X% for we the our is in based see, expect steady revenue, continuous terms subscribers, in track. that to large, overall consumer right result the to customer growth reiterated, for growth you performance that growth somewhere by base, ARPU we've in the and the QX. divulge particular our between should that And that a as and just be Lou X%, we in on revenue. And off strong that, our on we're range, in

Operator

with question Schwartz next Investments. Maze comes Instructions] Our [Operator from Matt

Unknown Analyst

move? tax just you future talk of you're talked the cost ahead -- the the And maturities? million about evaluating pay are capital release -- Or is the in to that actively preps to return or bigger here $XX strategic you using structure. another something you the that of strategies or down decrease you pursuing to Can

Lou Ferraro

Matt, here, it's speak Lou. the Nice and thanks to for question.

capital Matt. Number the for the shortest we $XX that answer, one, the from million. improve X-part So our us the path is structure, anticipate federal debt to refund structure, our government

the capital need now flow anything we business. don't are looking the structure from from advantageous at our position right the right with However, to do cash now. of generation we

So look are everything, it's that at to doing an opportune currently. time we and

Unknown Analyst

which that second which Great. Okay. And cash to leads flow. free my question, is is the

improvements in the comments And made So a anticipate SEC was couple 'XX, $XX you in you things. that plus talked of highlighted further about you some 'XX. And in the and wondering know I payment. million release you I

If also, on flow else well I at cash you should free talked the things think And there? anything XX%. run in know some confidence there's you just than be gives then you and SEC, what XXXX you talk that about -- talk I higher conversion. but Can walk other you what think could you through about Maybe cash about side, you to legal even or you talked XXXX to highlight? the else revenue XXXX can about want level as

Jeffrey Miller

Yes.

our first, are go free continued Let's expectations in to, cash for flow. what drivers of the growth

of lead You them, first to but to and of number highlighted will growth a growth. continuation in start continue going revenue on a The revenue year-over-year to expectation it's with basis. growth subscribers

are grow growing. of customers and customers build. over continue that among that's over And still a represented million under as million X may contract, subscribers. our to by XX with today, That's because have you subscribers All And the to customers all XXX has to opportunities penetration we which in recall, upon of across we're those just already the companies. existing board big the many base our foundation great most

growth plenty of opportunities there. for So

in also cost paid be a we been direction are going to Yes, of further also XXXX. areas. restatement, our other still XXXX. certainly, to we that defending financial lower down materially the have those in has expect the expected we Those couple will go And SEC that we no individuals highlighted because primary have some will costs in related a You down expenses the anticipate legal drivers. penalty progressed favorable because such and

In of to cash we overall we we're we not get ourselves, free feel good had, about digits terms positive on double indicators, of going ahead where of delivering very stand but growth, flow in XXXX. is revenue and and lower expenses substantial we the well manage into to general, with how more think number we year with go a this expenses operating that going combined now to

Lou Ferraro

in only the for QX that Matt, quarter to foundation thing in to in order place I'd put a to add And pivotal that. was achieve us

Operator

I'm now remarks. showing his Miller I'll Mr. over at questions further turn call Instructions] [Operator back for time. to no closing the this

Jeffrey Miller

the wrap before up today's acknowledge team Thank your diligent you. we I dedication for call, And want your to and efforts. Synchronoss

continued I performance work Your the also for made for in more and strong support company transformation. agile years our our has thank financial better shareholders positioned ahead. your through our

upcoming focused are to quarters years this Operator, returns We momentum generate Thank leveraging and you. in to ahead. the on back you.

Operator

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

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

which today's as to of call, most SEC differ events, this expectations adjusted the cause All encouraged to as are as and during non-GAAP also including to and these forward-looking new Please undertake company's recent a not result to measures note could listeners of or or today, for management Forward-looking information, review does of that any XX-Q description throughout filings, of actual any a subject materially. Statements revise in update are certain and future statements, such company and otherwise. call whether uncertainties its risks, made discuss obligation changes financial a EBITDA. such made the risks statements are XX-K number results

revenue equate or account Although it items capitalization measures, the operations not does does non-GAAP by for adjusted deferred to are software such generated from GAAP as cash development. of necessarily as EBITDA measures derived not

describes GAAP reconciliation today Technologies company's Thank earnings between us the Conference differences release you Today's Earnings release. non-GAAP reporting the periods and and presents a in the for for Quarter XXXX First reported joining Call. Synchronoss for

now may You disconnect.

Synchronoss (SNCR) 7 May 242024 Q1 Earnings call transcript