SNCR - Earnings call transcript Q2 2024 | Synchronoss Technologies, Inc.

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Operator

Good day, and thank you for standing by. Welcome to the Synchronoss Technologies Second Quarter 2024 Earnings Conference Call. [Operator Instructions] After the speaker's presentation, there will be a question-and-answer session. I would now like to hand the conference over to your first speaker today, Ryan Gardella, Investor Relations.

Ryan Gardella

Thank you. to Technologies welcome Earnings Quarter and Call. Conference afternoon, the Second Synchronoss XXXX Good

which from and are available Today's everyone with the Jeff today this our quarter us Joining company website. release press Investor Lou, CFO, to company's a from question-and-answer we issued Ferraro. remarks Relations XXXX access of earnings Miller; which will President begin Lou By the host have call now, is after will should afternoon, the Jeff second on and CEO, and section session.

for the Before I'll I Investor the cautions conclude, everyone statements be is we of replay forward-looking section to and Relations available made like management provide again company's via call. necessary this link recorded, website. regarding call this will being during in the the that remind by it would made

Miller, Now and I'll President CEO of to it over Jeff? turn Jeff Synchronoss.

Jeffrey Miller

joining notes comments and flexibility our make about of business, a in in quarter, our Thank including you our will we thank you, cost of to announce acceleration discounted In strengthen continued shortly. a for provider, all our several solutions stock flow the outstanding to our execute capital are strong Lou our We on EBITDA material call. cash our improves results, Welcome, revenue growth to and demonstrated our pleased second at everyone, Both including of QX, structure, business subscriber adjusted significantly operationally and repurchase growth, and as preferred Ryan. remove strategic this senior and fronts some financially, continued by global cloud continued progress additional highlighted operational strong from on costs made in increases capital. today's results. the a transformation price, reduction I and successful in and we to we QX and which of year-over-year

our cover topics. profitability, we our On additional can and conversion our free drive improve strengthen ahead, call, improvements number cash of balance we enhance X As I'll growth see we that profile, flow look a sheet. opportunities to today's

First, provide high how I'll high how last the the over key -- finally, of we're a out from at highlights on come business context the a business quarter. has forward. then some level, lay far level the year. thinking review the moving about And some

the represents This and EBITDA provide XX.X% So review our $XX.X let quarter contract customers of cost our adjusted the year-over-year, We year-over-year. revenue for with XXX% that million, versus tangible assets while produced driven more up margins margin period, margin, under million user's Over growth XX% continue at -- EBITDA our revenues sale our the start up million, me profit is of by primarily the and $XX up least to $XX years, a see for value And of X We with the XX.X% and income double business. X.X% was experience. we we non-core ago engaged in year was subscriber adoption. from was and adjusted a relationship carrier improvement the prior year-over-year our and XX.X% the generating X.X% $XX,XXX, partners strengthening a high of growth end are material quick period. gross second driven by subscriber revenue visible, through margins generated The an year-over-year. of EBITDA largely growth. diligent year gross control cloud adjusted within results. Net

our loyalty in improvements of solution the clientele, expect in blue conversion. stickiness cash flow profitability even further resulting Cloud chip build among depth our and to We and our Personal more free

their into with their unlimited launched customers how part such broadband how to Perks customers storage new Ultimate demonstrate platform offers, introduced build unlimited subscribers significant their program. we MyHome are personal of price of Verizon's as unlimited enable recently cloud another as a offers solution. subscribers. announced our in compelling represents value point storage cloud as storied latest key mobile broadband of during cloud as solutions a seamless a another cloud consumer our industry-leading set integrating marks to offerings, Further, a milestone part for Verizon's and digital consumer and to secure example, For Verizon point element upgrade of the that brands This for at provide storage. again, connection that and phone quarter, offerings Verizon home

been of service, to the our deployment in strengthened has power personal we business. box significant to data relationships customer also it invest SoftBank's of the our our platform opportunity us. a become announced there. year our and important late leadership Junji more for Japan operations. expanding Angel We represents long-standing and has will to believe manager global even appointment growth that as as Japanese for continue team presence us, market last of focus We country we for Nishihara a Japan new with the And the cloud

go year, new to more Next, money, some at a flexibility I context major loan. forward in and step through by think operational capital has senior that line. refinancing much Most how a a where repurchasing we term flow our the come save was the can just announced of streamlined it our discount want far here. which we some of recently, opportunistic business from position more can and bottom June million in structure, This on recently provide to our outstanding all and of now debt preferred financial $XX a an importantly, in resulted stock with Synchronoss this

allowed margin divestitures were strategically as growth to outpaced result, able cloud a non-core been Synchronoss number net revenue And in Synchronoss for income cash. important they from than to new including stage over business for these we moves focus the return growth, businesses. divested X investment One, of these different Two, divestitures. more messaging the core past the business. And years, costs big of angles. step profitability, company last a the businesses. part our taking the Further, our experience, ability capital million by preferred is digital and organization the us $XX these cloud improving Network noncore three, structure our go-forward year. our the X rapidly by stock set take higher Just generate to annualized to transaction the streamlined towards a first our and our significantly immediately since EBITDA a $XX down to to has for approximately allowed positive story reiterate, it improved removing whose million following of And

to this X% gross revenue in XX% inform we EBIT and surpassing margins margins than the key XX% Taken X% growth, our a business, a and stick to point the deliver for greater put to together, year, XXXX. adjusted we ground community that was plan able inflection were this where adjusted investment

an provide litigation and of the the Additionally, our update I on X matters former employees. wanted SEC briefly between to

related During to the was quarter, defense. future our this fund legal matter obligations settled, concluding

consistent forward. cleared few past results high for potential last In for actions a better XX XX position SaaS shareholders business, in multiple a going several opportunity and flow us have So present more margin, and company. cash put of core and the years, collectively, months, positive delivered rule shareholder in hurdles in a value provide creation opportunities these and success simpler this major investment with our for particular, compelling we

our was call execute made we we are are to playbook this to in intended. that, refinancing long-term Lou. to playing step With have going another recent And yet we in Lou? turn the out that confident ability strategic forward. I'd path that the as and like our Our decisions over

Lou Ferraro

here again Thanks to today. everyone joining us

our has term $XX Jeff financing mentioned, our reinforced June loan million already in financial position. As strong

B excluding repurchase of in Series annual of million, redemption basis these our further which closing, stock million million, With we discount stock notes SOFR prepayments was over a at of with the and savings of plus remainder of capital million $X term senior cost million, senior a million, saving a to cost transaction remaining of proceeds, of reduced XX% in a $XX.X proceeds and purchase the all We of repurchased going portion our immediately capital $XX.X XXX or of expenses. price our proceeds to dividend The of from the XX.XX%. preferred of million significantly potential points, outstanding the results loan. time of $X.X total price reduced savings any the the pre-tax preferred the notes at of used $X.X for of to $XX.X cost principal rate fees of $XX.X

commencing revenue value. prepay of X.X% Under to remaining we success. receive senior tax prior which million indicators, a of plan the of to flexibility. half for company's XXXX, the balance term our period. of approximately we financing, of new For growth in revenue reduction believe will of of proceeds notes our redeem in go year loan of at proceeds translates at term use financing operational business an of to loan reduction commitments tax over $X let's was to important Quarterly With cloud XXXX benchmark and the second of We QX. XX.X% in recurring year-over-year to the capital as the loan our further savings. for cash the additional subscriber provide versus XX.X% we We the serve apply par to approximately cash expect that, refund performance key quarterly the cost the end total the quarter. $XX term the the XX% some IRS portion to recorded anticipated from amortization million principal The for debt through provides third of

of million in million XXXX. This revenue from our period, of Turning the year the primarily ended million in performance second profit financial X.X%. Adjusted period. now quarter revenue prior increased second $XX.X from revenue or growth in results $XX.X XX.X% total $XX the was for in XX.X% gross $XX increased the result second revenue quarter and quarter total increase June of year of XX.X% Total prior the to subscribers. an million in the the XX, cloud to to

Net prior $X.XX The an quarter was improvement year of prior $X.X year and Second were prior period. share operations continued adjusted $XX in Net improvement representing post million prior XX.X% rise was $X.XX In increase from from per streamline margin EBITDA million, a $XX of $XX,XXX a the due management in the with income per or adjusted primarily loss of the operations the measures share million in or $X.X period. period. $X.XX coupled up improved significant in XX.X%, adjusted a income the period. EBITDA margin expense or from million loss significant to operations year in $X.X million QX profit $X.X year from revenue, was divestiture gross to share, to in QX, taken million, and in and compared per the operations. EBITDA adjusted loss from discontinued to income a

In XXXX. were Cash June balance our million flow the at XX, sheet. $X.X $X.X to at cash free XXXX, million cash on compared year. in and to Moving $XX.X XX, last period from the equivalents QX, improved $XX.X to million March million same

the Our prior free million cash $X.X costs in due of flow add-back adjusted in to the $X.X declined year to primarily prior, higher compared the litigation to and remediation period. year million

the As of continue the guidance cash flow flow Jeff we net year positive of to year remainder $XX with for being cash our mentioned, million. positive at the expect full least for

employees completed We our these obligation legal X reached. the between as settlements and have defendants the also for have been defense SEC of

We remaining lead documentation of completed the the did remaining to to line during federal additional believe company material its of committee SG&A shortly be due the will consisting coming the thereafter. will free also period, approximately largely a months The any going forward, refund cash on refunds the positive flow. receive $XX positive balance tax leading which our expect receipt and effect our steps We tax and this have not in contribute at reviews million.

the the estimate revenue Once use funds with as based Our XXXX. we to mentioned term to of the later we second of XX% refund to from of proceeds refund, internal par. that in $XX to of the refund continues anticipated upon portion loan apply current service million receipt the for at above, a the half receive plan be those communications prepay

to on Moving guidance.

upward X we of be to As revise the outlook our continue prudent items to navigate more and results through provide our accurately in it most order to XXXX, business. we determined of to

range adjusted is now EBITDA, For between $XX of a $XX a which margin, million up and from the range And range gross previous we from between of XX% million for expect which for million, to XX% previous XX%. we is year between million. XX% XXXX, $XX expect range $XX the up adjusted and of to now the full of

reduces a million the between range As of which a X.X% of debt. This free $XXX metrics today revenue have already least total the and $XX and XX% net to to range reminder, are which XXXX further growth we to year-over-year, recurring amortization are: revenue guided at of flow revenue full million, payments, for $XXX XX% is equals of net reiterating million. between of year cash and our

to Our turn of longer at recurring at at XX%, least the double-digit total least for revenue to gross EBITDA adjusted X-year revenue revenue, and flow. include growth, adjusted Q&A. call of the free XX% least operator X- now continued of positive of to I'll margin targets margin over cash XX%

Operator

At we question-and-answer this session. comes Hickman first Ladenburg. time, a conduct from Our [Operator will Jon Instructions] question with

Jon Hickman

legal from on you issues Can elaborate the the with the the management? savings end former cost legal of

Lou Ferraro

the former restructuring had say incurring regular costs. that for been we would I and quarter-by-quarter those those litigation a costs and expenses been cover reporting on legal our and we have that and to Controller basis CFO

which closed, now us pleased to will our financial results the it is And that into see just we're there In or go a legal disclosure not has that that or be We we'll result, great. see much obligations gone going away, will as put investment that. are part have of you now queue, operating expect forward. a to those how chapter our behind and of

Jon Hickman

a then can unusual, about paid -- on I also question you least amount quarter little a the elaborate this that? taxes income had And you you at

Lou Ferraro

an now, based the provision we we income income company. So so taxes. net producing a are recorded positive Jon, And for accrual upon are we yes, for where

through us million of for you what are XXXX. actually $X to million that date expect providing be that brings we QX $X.X for payment and And in XXXX. taxes So QX between to cash up income we a now taxes. amount of see in

Jon Hickman

like next year future And you future, then double-digit long-term did expect you growth the say future? or revenue in

Lou Ferraro

would be That Yes. X X next expectation. the to years'

from seen revenue can results, growth, this you area. the we've quarter's with in X% As that see acceleration year-over-year

X-year we continue think, we'll we X- And over time, throughout opportunity the over horizon. growth growth to the expect that We to double-digit the accelerate year. have to

Operator

Our with next Latimore Capital. Mike question Northland comes from

Aditya Dagaonkar

subscribers is Aditya behalf of color give And is on Michael on prepaid that on some growing? a are of category percentage This Could Latimore. you plan basis? how what

Ryan Gardella

would than Yes. overall subscriber subscriber the of base. represents prepaid our X% I base less say

you primarily by will. driven postpaid is business the So if a business model,

However, is we brands. a to been across Simple among the a great prior of successful example and acquisition have variety Verizon large brands TracFone. family, very within Mobile the example their a even of

prepaid with participate also area. We AT&T and AT&T the

As the have net the seen that of segment may was quarter, our and customers to of a of you it is where pertains reported one going, in Verizon. loss significant case in prepaid subscribers that

prepaid just base of we're expansion value platform, and the and in -- However, category. with major regulatory support low-paid growth see prepaid for in opportunity are segment, and the our result greater that see long-term they of have AT&T placing as at emphasis They working team change an was Verizon customers. value are prepaid cloud with our expansion through team we for as we as a further to the that actually or that a of a

Aditya Dagaonkar

you on that revenue can the a growth color we give sequential XQ? some expect in expect Do also, could you in. growth revenue And

Ryan Gardella

year. similar I we delivering will to guidance quarter. for for growth would say remain on expect for, that what that We growth we the or consistent full here revenue in are you X% have should the very with annualized X% strong the provided track be

certainly results very quarter's in This is indicate healthy that a place. trajectory

Operator

at closing this I'd Jeff time. back turn showing to no I'm questions further to Miller like remarks. now it for

Jeffrey Miller

platform of our employees thank business thank our the our and on like operate, our customers. help for that innovate organization, also support attending specifically today I'd everyone call and the the to members make

have questions calls schedule the I or journey and during all coming up who today follow over to last business press our shareholders way. for with you support stayed along information to you us of and to and this interesting us and to the follow-up interest thank with us, whose X over to the the follow-up with out joined an days to is to the want with As in stakeholders meetings Ryan look and we've you conversations release forward you in made reach information ongoing and any that particularly the additional we have on the improvements with I encourage the have to session, weeks. connected well guidance If business, your years,

Ryan Gardella

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

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

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

Synchronoss (SNCR) 6 Aug 242024 Q2 Earnings call transcript