Core Viewpoint - Synchronoss reported a quarterly loss of $0.30 per share, missing the Zacks Consensus Estimate of $0.29, and a significant decline from earnings of $0.44 per share a year ago, indicating an earnings surprise of -203.45% [1] Financial Performance - The company posted revenues of $42.21 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.25%, but down from $42.97 million year-over-year [2] - Over the last four quarters, Synchronoss has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Performance - Synchronoss shares have increased by approximately 5.4% since the beginning of the year, contrasting with the S&P 500's decline of -3.9% [3] Future Outlook - The company's earnings outlook is crucial for assessing future stock performance, with current consensus EPS estimates at $0.39 for the coming quarter and $1.58 for the current fiscal year [4][7] - The estimate revisions trend for Synchronoss is currently favorable, resulting in a Zacks Rank 2 (Buy), suggesting the stock is expected to outperform the market in the near future [6] Industry Context - The Internet - Software industry, to which Synchronoss belongs, is currently in the top 35% of over 250 Zacks industries, indicating a positive outlook for stocks within this sector [8]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $42.4 million, reflecting a 3.3% subscriber growth across the global customer base [4] - Adjusted EBITDA increased 17% year over year to $12.7 million, representing an adjusted EBITDA margin of 30.2% [5] - Total revenue decreased slightly from $43 million in the prior year to $42.2 million due to the expiration of a customer contract [15] - Adjusted gross profit was $33.4 million, or 79% of total revenue, benefiting from cost efficiencies [16] - Net loss was $3.8 million, or a negative $0.37 per share, primarily due to non-cash foreign exchange losses [17] - Free cash flow was negative $3 million, with adjusted free cash flow at negative $3.3 million, consistent with historical expectations for Q1 [18] Business Line Data and Key Metrics Changes - Quarterly recurring revenue constituted 93.1% of total revenue, indicating a stable cloud business model [15] - Cloud subscriber growth was driven by demand for the personal cloud platform, achieving a 3.3% increase [15] Market Data and Key Metrics Changes - The company operates with over 90% of revenue classified as recurring, with significant contracts with Tier one carriers like AT&T, Verizon, and SoftBank [5] - Positive retail sales momentum for Anshin Data Box at SoftBank contributed to subscriber additions exceeding expectations [10] - Verizon's cloud offer transition to a premium My Plan PERC has led to continued growth in cloud PERC adoption [10] Company Strategy and Development Direction - The strategic transformation to a leading global cloud solutions provider has resulted in a more predictable and stable business model [4] - The company is focused on enhancing its personal cloud platform and pursuing growth opportunities, supported by a new $200 million term loan [6][7] - Cost control measures have led to an 11.5% reduction in overall operational expenses year over year [8] Management Comments on Operating Environment and Future Outlook - Management reiterated annual guidance metrics despite macroeconomic challenges, indicating confidence in subscriber growth and financial stability [5][19] - The company is optimistic about new customer prospects and is engaged in discussions with both new and existing carriers [12] - Management is closely monitoring industry headwinds, particularly tariffs affecting device costs, which could influence subscriber growth [13] Other Important Information - The company completed a refinancing of its debt, strengthening its capital structure and extending debt maturity to 2029 [7] - The anticipated IRS tax refund of $28 million will be used to prepay a portion of the term loan [19] Q&A Session Summary Question: What degree do you think you're now sort of getting that cost structure down where you want it to be? - Management believes the major reductions made position the company well, and the current cost structure is largely where it should be [23] Question: Are the new prospects international or expanding on existing customers? - Opportunities are global, with active conversations in the U.S., Asia Pacific, Europe, and Africa [25] Question: What kind of free cash flow can be expected this year? - Free cash flow is expected to be between $11 million and $16 million, with consistent performance anticipated [29] Question: Among AT&T and SoftBank, which one is growing faster? - Both AT&T and SoftBank are growing at a healthy rate and meeting expectations [31] Question: How should gross margins be modeled for the year? - Adjusted gross margins are expected to remain between 78% and 80% throughout the year [32]

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section provides the unaudited condensed consolidated financial statements and related notes for Synchronoss Technologies, Inc [Item 1. Condensed Consolidated Financial Statements and Notes](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20and%20Notes) This section presents the unaudited condensed consolidated financial statements of Synchronoss Technologies, Inc. for the three months ended March 31, 2025, and 2024, along with detailed notes explaining the Company's business, accounting policies, revenue disaggregation, segment information, debt, equity, and other financial commitments [Condensed Consolidated Balance Sheets (unaudited)](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(unaudited)) This statement provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific points in time - Total assets decreased slightly from **$293,825 thousand** at December 31, 2024, to **$293,336 thousand** at March 31, 2025[8](index=8&type=chunk) - Total liabilities decreased from **$251,550 thousand** to **$245,398 thousand**, while total stockholders' equity increased from **$29,775 thousand** to **$35,438 thousand**[8](index=8&type=chunk) Condensed Consolidated Balance Sheets (in thousands) | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | | :----------------------------- | :----------------------------- | :----------------------------- | :-------------------- | | Total assets | $293,336 | $293,825 | $(489) | | Total liabilities | $245,398 | $251,550 | $(6,152) | | Total stockholders' equity | $35,438 | $29,775 | $5,663 | | Cash and cash equivalents | $29,138 | $33,375 | $(4,237) | | Goodwill | $182,378 | $179,408 | $2,970 | | Long-term debt, net | $185,166 | $184,840 | $326 | [Condensed Consolidated Statements of Operations (unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20(unaudited)) This statement presents the company's revenues, expenses, and net income or loss over a specific period, highlighting operational performance - Net revenues decreased by **$752 thousand (1.75%)** year-over-year (YoY)[10](index=10&type=chunk) - Net loss attributable to Synchronoss was **$3,817 thousand** for Q1 2025, a significant decline from net income of **$2,341 thousand** in Q1 2024[10](index=10&type=chunk) - Interest expense increased by **$1,905 thousand (54.17%)** YoY, primarily due to the new Term Loan, and other (expense) income, net, shifted from an income of **$3,811 thousand** in Q1 2024 to an expense of **$5,579 thousand** in Q1 2025, mainly due to foreign exchange losses[10](index=10&type=chunk) Condensed Consolidated Statements of Operations (in thousands, except EPS) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | YoY Change (%) | | :------------------------------------ | :------------------------------------ | :------------------------------------ | :-------------------- | :------------- | | Net revenues | $42,213 | $42,965 | $(752) | -1.75% | | Total costs and expenses | $33,984 | $38,389 | $(4,405) | -11.47% | | Income from operations | $8,229 | $4,576 | $3,653 | 79.83% | | Interest expense | $(5,422) | $(3,517) | $(1,905) | 54.17% | | Other (expense) income, net | $(5,579) | $3,811 | $(9,390) | -246.39% | | Net (loss) income attributable to Synchronoss | $(3,817) | $2,341 | $(6,158) | -263.05% | | Basic EPS | $(0.37) | $0.24 | $(0.61) | -254.17% | [Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)%20(unaudited)) This statement details the company's comprehensive income or loss, including net income and other comprehensive income items not recognized in net income - Comprehensive income attributable to Synchronoss was **$5,036 thousand** for Q1 2025, a significant improvement from a loss of **$1,639 thousand** in Q1 2024[14](index=14&type=chunk) - This improvement was primarily driven by a positive foreign currency translation adjustment of **$8,853 thousand** in Q1 2025, compared to a loss of **$6,109 thousand** in Q1 2024[14](index=14&type=chunk) Condensed Consolidated Statements of Comprehensive Income (Loss) (in thousands) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :-------------------- | | Net (loss) income | $(3,817) | $4,475 | $(8,292) | | Foreign currency translation adjustments | $8,853 | $(6,109) | $14,962 | | Comprehensive income (loss) attributable to Synchronoss | $5,036 | $(1,639) | $6,675 | [Condensed Consolidated Statements of Stockholders' Equity (unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20(unaudited)) This statement outlines changes in the company's equity accounts, including common stock, additional paid-in capital, and accumulated deficit - Total stockholders' equity increased from **$29,775 thousand** at December 31, 2024, to **$35,438 thousand** at March 31, 2025[15](index=15&type=chunk) - This increase was mainly due to total other comprehensive income of **$8,853 thousand**, partially offset by a net loss of **$3,817 thousand**[15](index=15&type=chunk) Condensed Consolidated Statements of Stockholders' Equity (in thousands) | Metric | Balance at March 31, 2025 (in thousands) | Balance at December 31, 2024 (in thousands) | Change (in thousands) | | :----------------------------- | :----------------------------- | :----------------------------- | :-------------------- | | Total Stockholders' Equity | $35,438 | $29,775 | $5,663 | | Additional Paid-In Capital | $496,533 | $495,906 | $627 | | Accumulated Other Comprehensive (Loss) Income | $(32,284) | $(41,137) | $8,853 | | Accumulated Deficit | $(428,812) | $(424,995) | $(3,817) | [Condensed Consolidated Statements of Cash Flows (unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(unaudited)) This statement reports the cash generated and used by the company across operating, investing, and financing activities over a period - Net cash provided by operating activities decreased from **$527 thousand** in Q1 2024 to **$293 thousand** in Q1 2025[18](index=18&type=chunk) - Net cash used in investing activities decreased from **$3,803 thousand** in Q1 2024 to **$3,310 thousand** in Q1 2025, primarily due to lower additions to capitalized software[18](index=18&type=chunk) - Net cash used in financing activities decreased from **$2,129 thousand** in Q1 2024 to **$1,278 thousand** in Q1 2025, mainly due to the absence of preferred stock dividend payments in 2025[18](index=18&type=chunk) Condensed Consolidated Statements of Cash Flows (in thousands) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------- | | Net cash provided by operating activities | $293 | $527 | $(234) | | Net cash used in investing activities | $(3,310) | $(3,803) | $493 | | Net cash used in financing activities | $(1,278) | $(2,129) | $851 | | Net decrease in cash and cash equivalents | $(4,237) | $(5,472) | $1,235 | | Ending cash and cash equivalents | $29,138 | $19,100 | $10,038 | [Notes to Condensed Consolidated Financial Statements (unaudited)](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) This section provides detailed explanations and additional information supporting the condensed consolidated financial statements [Note 1. Description of Business](index=8&type=section&id=Note%201.%20Description%20of%20Business) This note describes Synchronoss Technologies, Inc.'s core business as a provider of white label cloud software and services - Synchronoss Technologies, Inc. is a leading provider of white label cloud software and services that enable customers to keep subscribers, systems, networks, and content in sync[20](index=20&type=chunk) - The Synchronoss Personal Cloud platform is a secure and highly scalable white label platform designed for smartphones, tablets, and desktops across all operating systems, helping operator customers increase average revenue per user (ARPU) and reduce churn[21](index=21&type=chunk) [Note 2. Basis of Presentation and Consolidation](index=8&type=section&id=Note%202.%20Basis%20of%20Presentation%20and%20Consolidation) This note details the accounting principles, consolidation policies, and recent accounting standard adoptions impacting the financial statements - The interim unaudited condensed consolidated financial statements include all adjustments necessary for fair presentation and should be read in conjunction with the Company's audited consolidated financial statements in its Annual Report on Form 10-K for the year ended December 31, 2024[22](index=22&type=chunk) - The Company adopted ASU 2024-01 (Compensation—Stock Compensation) on January 1, 2025, which did not have a material impact on its consolidated financial position or results of operations[26](index=26&type=chunk) - The Company is currently evaluating ASU 2024-03 (Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures) and ASU 2023-09 (Income Taxes), neither of which is anticipated to have a material impact upon adoption[27](index=27&type=chunk) [Note 3. Revenue](index=9&type=section&id=Note%203.%20Revenue) This note disaggregates revenue by service type and geographic region, detailing changes and remaining performance obligations - Total revenue decreased by **$752 thousand (1.75%)** YoY to **$42,213 thousand** for Q1 2025[29](index=29&type=chunk) - Professional Services revenue decreased by **$1,046 thousand (27.72%)** YoY, while Subscription Services revenue slightly increased by **$149 thousand (0.38%)** YoY[29](index=29&type=chunk) - As of March 31, 2025, the aggregate amount of transaction price allocated to remaining performance obligations was **$149.3 million**, with approximately **88.8%** expected to be recognized as revenues within 2 years[38](index=38&type=chunk) Revenue Disaggregation (in thousands) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | YoY Change (%) | | :-------------------- | :------------------------------------ | :------------------------------------ | :-------------------- | :------------- | | Total revenue | $42,213 | $42,965 | $(752) | -1.75% | | North America revenue | $40,355 | $39,641 | $714 | 1.80% | | APAC revenue | $1,506 | $1,548 | $(42) | -2.71% | | EMEA revenue | $352 | $1,776 | $(1,424) | -80.18% | | Professional Services | $2,727 | $3,773 | $(1,046) | -27.72% | | Subscription Services | $39,292 | $39,143 | $149 | 0.38% | | License | $194 | $49 | $145 | 295.92% | [Note 4. Segments](index=11&type=section&id=Note%204.%20Segments) This note clarifies the company's single reportable segment structure and its revenue derivation from cloud products - The Company operates as a single reportable segment, managed and assessed by the Chief Executive Officer (CODM) based on consolidated results[40](index=40&type=chunk) - The segment derives revenues from cloud products under software-as-a-service arrangements[41](index=41&type=chunk) - Segment net loss was **$3,817 thousand** for Q1 2025, compared to net income of **$4,475 thousand** for Q1 2024[44](index=44&type=chunk) Segment Information (in thousands) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | | :-------------------------- | :------------------------------------ | :------------------------------------ | :-------------------- | | Net revenues | $42,213 | $42,965 | $(752) | | Other segment items | $8,506 | $1,143 | $7,363 | | Segment net (loss) income | $(3,817) | $4,475 | $(8,292) | [Note 5. Accounts Receivable Securitization Facility](index=12&type=section&id=Note%205.%20Accounts%20Receivable%20Securitization%20Facility) This note describes the company's $15 million accounts receivable securitization facility and its utilization - The Company has a **$15 million** accounts receivable securitization facility (A/R Facility) with Norddeutsche Landesbank Girozentrale, set to expire on June 23, 2025[45](index=45&type=chunk)[50](index=50&type=chunk) - The Company did not draw on the A/R Facility for the three months ended March 31, 2025, but drew **$3.0 million** on April 21, 2025, which remained unrepaid as of the filing date[51](index=51&type=chunk)[52](index=52&type=chunk) - As of March 31, 2025, approximately **$2.3 million** of the Company's receivables were held by SN Technologies, and **$1.3 million** was available for draw under the A/R Facility[51](index=51&type=chunk) [Note 6. Fair Value Measurements](index=13&type=section&id=Note%206.%20Fair%20Value%20Measurements) This note outlines the company's fair value measurements, primarily for money market accounts and performance-based cash units - The Company's fair value measurements primarily consist of Level 1 assets (money market accounts) and Level 2 liabilities (performance-based cash units)[53](index=53&type=chunk)[54](index=54&type=chunk) - Money market accounts increased from **$9,552 thousand** at December 31, 2024, to **$12,110 thousand** at March 31, 2025[54](index=54&type=chunk) - Performance-based cash units (liabilities) increased from **$948 thousand** to **$1,643 thousand** over the same period[54](index=54&type=chunk) Fair Value Measurements (in thousands) | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------- | :----------------------------- | :----------------------------- | | Money market accounts (Level 1) | $12,110 | $9,552 | | Performance-based cash units (Level 2) | $1,643 | $948 | [Note 7. Note Receivable](index=14&type=section&id=Note%207.%20Note%20Receivable) This note details the amendment of a promissory note and its impact on the company's financial statements - In Q1 2024, the Company amended a promissory note with Sequential Technology International, LLC (STIN) and AP Capital Holdings II, LLC (APC), reducing the principal balance to **$3.0 million** and extending the maturity date to September 2027[57](index=57&type=chunk) - On January 8, 2025, a further Amended and Restated Settlement Agreement resulted in the Company receiving **$1.6 million** in past-due rent and contingent consideration[58](index=58&type=chunk)[59](index=59&type=chunk) - Due to a full allowance for credit losses recorded against the Note in 2023, the modification of terms in 2025 had no net impact on the consolidated financial statements for the period ended March 31, 2025[59](index=59&type=chunk) [Note 8. Leases](index=15&type=section&id=Note%208.%20Leases) This note provides information on the company's operating and finance lease liabilities, costs, and remaining lease terms - Total operating lease liabilities decreased from **$22,330 thousand** at December 31, 2024, to **$20,970 thousand** at March 31, 2025, while total finance lease liabilities increased from **$1,178 thousand** to **$1,441 thousand**[62](index=62&type=chunk) - Net lease cost shifted from an expense of **$741 thousand** in Q1 2024 to an income of **$(839) thousand** in Q1 2025, primarily due to the receipt of a **$1.6 million** past-due sublease payment[63](index=63&type=chunk) - The weighted-average remaining lease term for operating leases was **3.3 years** (3.7 years at Dec 31, 2024) and for finance leases was **2.1 years** (2.0 years at Dec 31, 2024)[65](index=65&type=chunk) Lease Liabilities and Costs (in thousands) | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------- | :----------------------------- | :----------------------------- | | Total operating lease liabilities | $20,970 | $22,330 | | Total finance lease liabilities | $1,441 | $1,178 | | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :-------------------------- | :------------------------------------ | :------------------------------------ | | Total net lease cost | $(839) | $741 | | Sublease income | $(2,452) | $(1,019) | [Note 9. Debt](index=17&type=section&id=Note%209.%20Debt) This note details the company's debt structure, including the Term Loan facility, Senior Notes, and associated interest expenses - The Company entered into a **$75.0 million** Term Loan facility on June 28, 2024, maturing on June 28, 2028, bearing interest at Adjusted Term SOFR + 5.50% (2.50% floor)[66](index=66&type=chunk)[67](index=67&type=chunk)[68](index=68&type=chunk) - On June 28, 2024, the Company repurchased all outstanding Series B Preferred Stock and **14%** of its Senior Notes using Term Loan proceeds and deferred consideration[74](index=74&type=chunk) - Total carrying value of debt was **$187,041 thousand** at March 31, 2025, and total interest expense increased by **$1.9 million** YoY, primarily due to **$1.8 million** interest from the new Term Loan[85](index=85&type=chunk)[89](index=89&type=chunk) Debt Carrying Value and Interest Expense (in thousands) | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------- | :----------------------------- | :----------------------------- | | Carrying value of Senior Notes | $119,173 | $118,762 | | Carrying value of Term Loan | $67,868 | $67,953 | | Total carrying value of debt | $187,041 | $186,715 | | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :-------------------------- | :------------------------------------ | :------------------------------------ | | Total interest expense | $5,422 | $3,517 | [Note 10. Accumulated Other Comprehensive Income](index=21&type=section&id=Note%2010.%20Accumulated%20Other%20Comprehensive%20Income) This note explains changes in accumulated other comprehensive income, primarily driven by foreign currency translation adjustments - Accumulated other comprehensive loss improved from **$(41,137) thousand** at December 31, 2024, to **$(32,284) thousand** at March 31, 2025[90](index=90&type=chunk) - This improvement was driven by **$8,853 thousand** in foreign currency translation adjustments during Q1 2025[90](index=90&type=chunk) Accumulated Other Comprehensive Income (in thousands) | Metric | Balance at March 31, 2025 (in thousands) | Balance at December 31, 2024 (in thousands) | Change (in thousands) | | :------------------------------------ | :------------------------------------ | :------------------------------------ | :-------------------- | | Foreign currency | $(28,764) | $(37,617) | $8,853 | | Unrealized loss on intercompany foreign currency transactions | $(3,520) | $(3,520) | $0 | | Total Accumulated Other Comprehensive (Loss) Income | $(32,284) | $(41,137) | $8,853 | [Note 11. Capital Structure](index=21&type=section&id=Note%2011.%20Capital%20Structure) This note outlines the company's authorized capital stock, common stock, and the repurchase of preferred stock - As of March 31, 2025, the Company's authorized capital stock included **16,666,667 shares** of common stock and **10,000,000 shares** of preferred stock[91](index=91&type=chunk) - No dividends have ever been declared or paid on common stock[92](index=92&type=chunk) - All outstanding shares of Series B Perpetual Non-Convertible Preferred Stock were repurchased on June 28, 2024, and no shares remain outstanding or authorized for issuance as of March 31, 2025[96](index=96&type=chunk) [Note 12. Stock Plans](index=22&type=section&id=Note%2012.%20Stock%20Plans) This note details the company's stock-based compensation plans, expenses, and unamortized costs for awards - The Company maintains two stock-based compensation plans (2015 and 2017 Plans) for employees, outside directors, and consultants[97](index=97&type=chunk) - Total stock-based compensation expense increased from **$1,110 thousand** in Q1 2024 to **$2,129 thousand** in Q1 2025, with performance-based cash units (PBCU) accounted for as liability awards increasing significantly from **$21 thousand** to **$693 thousand**[106](index=106&type=chunk) - As of March 31, 2025, the total unamortized stock-based compensation cost for unvested restricted stock awards and stock options was **$7.9 million**, and for unvested PBCU was **$4.5 million**, both expected to be recognized over approximately **2.3 years**[107](index=107&type=chunk) Stock-Based Compensation Expense (in thousands) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :------------------------------------ | :------------------------------------ | :------------------------------------ | | Total stock-based compensation expense | $2,129 | $1,110 | | Equity classified awards: | | | | Stock options | $115 | $198 | | Restricted stock awards | $940 | $428 | | Performance-based cash units | $381 | $463 | | Liability classified awards: | | | | Performance-based cash units | $693 | $21 | [Note 13. Restructuring](index=24&type=section&id=Note%2013.%20Restructuring) This note reports restructuring charges and accrual balances related to workforce reductions and associated costs - Restructuring charges were **$118 thousand** for Q1 2025, down from **$219 thousand** in Q1 2024, primarily related to employee termination costs from workforce reductions[108](index=108&type=chunk) - The restructuring accrual balance decreased from **$712 thousand** at December 31, 2024, to **$158 thousand** at March 31, 2025[108](index=108&type=chunk) Restructuring Charges and Accrual (in thousands) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :-------------------------- | :------------------------------------ | :------------------------------------ | | Restructuring charges | $118 | $219 | | Metric | Balance at March 31, 2025 (in thousands) | Balance at December 31, 2024 (in thousands) | | :-------------------------- | :----------------------------- | :----------------------------- | | Restructuring accrual | $158 | $712 | [Note 14. Income Taxes](index=25&type=section&id=Note%2014.%20Income%20Taxes) This note provides details on income tax expense, effective tax rate, and unrecognized tax benefits - Income tax expense increased from **$0.6 million** in Q1 2024 to **$1.3 million** in Q1 2025[109](index=109&type=chunk) - The effective tax rate was approximately **(50.3%)** for Q1 2025, primarily due to permanent adjustments (including Global Intangible Low-Taxed Income) and valuation allowances[109](index=109&type=chunk) - Unrecognized tax benefits were **$4.4 million** at March 31, 2025, with **$3.8 million** potentially recognized within the next 12 months due to the lapse of the statute of limitations[110](index=110&type=chunk) Income Tax Expense and Effective Tax Rate (in thousands) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :-------------------------- | :------------------------------------ | :------------------------------------ | | Income tax expense | $1,278 | $603 | | Effective tax rate | (50.3)% | 11.9% | [Note 15. Earnings Per Common Share](index=25&type=section&id=Note%2015.%20Earnings%20Per%20Common%20Share) This note presents basic and diluted earnings per common share and weighted average shares outstanding - Basic EPS was **$(0.37)** for Q1 2025, a decrease from **$0.24** in Q1 2024. Diluted EPS also decreased from **$0.23** to **$(0.37)**[115](index=115&type=chunk) - The weighted average common shares outstanding (basic) increased from **9,842 thousand** in Q1 2024 to **10,201 thousand** in Q1 2025[115](index=115&type=chunk) Earnings Per Common Share (in thousands, except per share) | Metric | Three Months Ended March 31, 2025 (in thousands, except per share) | Three Months Ended March 31, 2024 (in thousands, except per share) | | :------------------------------------ | :------------------------------------------------- | :------------------------------------------------- | | Net (loss) income attributable to Synchronoss | $(3,817) | $2,341 | | Basic EPS | $(0.37) | $0.24 | | Diluted EPS | $(0.37) | $0.23 | | Weighted average common shares outstanding — basic | 10,201 | 9,842 | | Weighted average common shares outstanding — diluted | 10,201 | 10,277 | [Note 16. Commitments](index=27&type=section&id=Note%2016.%20Commitments) This note outlines the company's non-cancelable agreements for hosting, support, and software, detailing future minimum payments - The Company has non-cancelable agreements for hosting, support, and software, with total future minimum payments of **$20,718 thousand** as of March 31, 2025[118](index=118&type=chunk)[119](index=119&type=chunk) - The majority of these payments (**$15,242 thousand**) are due in 2025[119](index=119&type=chunk) Non-cancelable Agreements (in thousands) | Year | Non-cancelable Agreements (in thousands) | | :--- | :------------------------------------ | | 2025 | $15,242 | | 2026 | $3,431 | | 2027 | $1,903 | | 2028 | $142 | | Total | $20,718 | [Note 17. Legal Matters](index=27&type=section&id=Note%2017.%20Legal%20Matters) This note discusses the conclusion of the SEC investigation and related civil actions, assessing their financial impact - The SEC investigation related to 2015-2016 financial transactions concluded with the Company paying a **$12.5 million** civil penalty by March 31, 2024[121](index=121&type=chunk) - Civil actions against two former management team members, related to the same transactions, resulted in penalties totaling **$145,000** and disgorgement of **$430,741**, with the Company reimbursing associated costs by March 31, 2024[121](index=121&type=chunk) - Management believes current legal matters will not have a material impact on the Company's business, financial position, results of operations, or cash flows[120](index=120&type=chunk)[122](index=122&type=chunk) [Note 18. Additional Financial Information](index=28&type=section&id=Note%2018.%20Additional%20Financial%20Information) This note provides further details on other income and expense, net, primarily focusing on foreign exchange impacts - Other income (expense), net, was an expense of **$5,579 thousand** for Q1 2025, a significant decrease from an income of **$3,811 thousand** in Q1 2024, primarily due to non-cash foreign exchange losses on intercompany payables and receivables[123](index=123&type=chunk) Other Income (Expense), Net (in thousands) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :-------------------------- | :------------------------------------ | :------------------------------------ | | Foreign exchange gains (losses) | $(5,579) | $3,801 | | Total Other Income (expense), net | $(5,579) | $3,811 | [Note 19. Subsequent Events](index=28&type=section&id=Note%2019.%20Subsequent%20Events) This note describes significant events occurring after the reporting period, including a new term loan facility and debt redemption plans - On April 24, 2025, Synchronoss entered into an Amendment to its Credit Agreement, establishing a new **$200 million**, four-year term loan facility[124](index=124&type=chunk)[125](index=125&type=chunk) - The proceeds from this new loan, along with cash on hand, are intended to redeem all **$121 million** outstanding Senior Notes around May 12, 2025[125](index=125&type=chunk) - The new loan matures on April 24, 2029 (subject to a springing maturity clause) and bears interest at SOFR (not less than **2.50%**) plus a **7.00%** margin (with one **0.50%** stepdown)[126](index=126&type=chunk) - The Amended Credit Agreement includes a quarterly covenant limiting the consolidated secured leverage ratio to **6.30 to 1.00** or under, and a monthly minimum subscriber covenant for certain material contracts[126](index=126&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition, results of operations, and liquidity for the three months ended March 31, 2025, compared to the same period in 2024. It highlights key revenue and expense trends, liquidity sources, cash flow activities, and critical accounting policies, along with forward-looking statements and risk factors [Forward-looking Statements](index=29&type=section&id=Forward-looking%20Statements) This section highlights the inherent uncertainties and risks associated with future financial results and business strategies - The report contains forward-looking statements regarding future results, financial condition, business strategy, and management plans, which are subject to substantial risks and uncertainties[129](index=129&type=chunk) - Key risks include adverse changes in economic environments (foreign currency, tariffs), market trends, new laws/regulations, technological advancements, security breaches, liquidity needs, legal proceedings, and geopolitical tensions[130](index=130&type=chunk) - The Company operates in a very competitive and rapidly changing environment, and actual results may differ materially from expectations[131](index=131&type=chunk) [Overview](index=30&type=section&id=Overview) This section provides a general description of Synchronoss Technologies, Inc.'s business, products, and market strategy - Synchronoss Technologies, Inc. is a leading provider of white label cloud software and services, helping customers keep subscribers, systems, networks, and content in sync[134](index=134&type=chunk) - The Synchronoss Personal Cloud platform is a secure, scalable white label solution designed for smartphones, tablets, and desktops, aiming to increase ARPU and reduce churn for operator customers[135](index=135&type=chunk) - Solutions are marketed through the corporate website, direct sales teams across North America, Europe, Middle East and Africa (EMEA), and Asia-Pacific (APAC), and industry partnerships[136](index=136&type=chunk) [Revenues](index=30&type=section&id=Revenues) This section discusses the company's revenue generation model, customer concentration, and future growth drivers - Most revenues are generated on a subscription basis from customer contracts typically ranging from three to five years[137](index=137&type=chunk) - The future success of the business depends on the continued growth of B2B and Business-to-Business-to-Consumer transactions and expansion into the telecom (TMT) market globally[138](index=138&type=chunk) - The Company's top five customers accounted for **99.1%** of net revenues in Q1 2025 (**97.2%** in Q1 2024), with Verizon and AT&T each accounting for more than **10%**. The loss of either would have a material negative impact[140](index=140&type=chunk) [Current Trends Affecting Our Results of Operations](index=30&type=section&id=Current%20Trends%20Affecting%20Our%20Results%20of%20Operations) This section identifies key market trends, such as mobile content growth and cloud storage demand, influencing the company's performance - Growth in the Synchronoss Personal Cloud™ solution is driven by the global increase in content-rich mobile devices replacing traditional PCs[141](index=141&type=chunk) - The essential need for secure backup, syncing, and sharing of content from mobile devices (smartphones, connected cars, personal health and wellness devices, and connected home devices) is a key driver[141](index=141&type=chunk) - The long-term business is expected to be driven by the need for content from these devices to be stored in a common cloud[141](index=141&type=chunk) [Discussion of the Condensed Consolidated Statements of Operations](index=31&type=section&id=Discussion%20of%20the%20Condensed%20Consolidated%20Statements%20of%20Operations) This section analyzes the company's operational performance, including revenue, expenses, and net income trends - Net revenues decreased by **$0.8 million (1.75%)** YoY to **$42.2 million** in Q1 2025, primarily due to a decline in professional services revenue from contract terminations[142](index=142&type=chunk) - Total costs and expenses decreased by **$4.4 million (11.47%)** YoY, driven by lower cost of revenues, R&D, and SG&A expenses due to restructuring and cost-saving initiatives[143](index=143&type=chunk)[144](index=144&type=chunk)[145](index=145&type=chunk) - Income from operations increased by **$3.7 million (79.83%)** YoY to **$8.2 million**, but net loss was **$3.8 million** in Q1 2025, a significant decline from net income of **$4.5 million** in Q1 2024, mainly due to increased interest expense and foreign exchange losses[142](index=142&type=chunk)[149](index=149&type=chunk)[150](index=150&type=chunk) Condensed Consolidated Statements of Operations (in thousands) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | YoY Change (%) | | :------------------------------------ | :------------------------------------ | :------------------------------------ | :-------------------- | :------------- | | Net revenues | $42,213 | $42,965 | $(752) | -1.75% | | Cost of revenues | $8,711 | $10,223 | $(1,512) | -14.79% | | Research and development | $9,698 | $10,331 | $(633) | -6.13% | | Selling, general and administrative | $11,379 | $13,257 | $(1,878) | -14.17% | | Income from operations | $8,229 | $4,576 | $3,653 | 79.83% | | Interest expense | $(5,422) | $(3,517) | $(1,905) | 54.17% | | Other (expense) income, net | $(5,579) | $3,811 | $(9,390) | -246.39% | | Net (loss) income | $(3,817) | $4,475 | $(8,292) | -185.31% | [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's ability to meet its short-term and long-term financial obligations, including cash position and funding sources - As of March 31, 2025, the Company had **$29.1 million** in cash and cash equivalents and generated **$0.3 million** in operating cash flows for Q1 2025[152](index=152&type=chunk) - Non-U.S. subsidiaries held approximately **$12.1 million** of cash and cash equivalents that are available for use by global operations[152](index=152&type=chunk) - Management believes current cash, financing sources, working capital management, and expected positive cash flows, combined with continued expense reductions, will be sufficient to fund operations for at least the next 12 months[154](index=154&type=chunk) - The Company maintains a policy of indefinite reinvestment of cumulative unremitted foreign earnings, except for its Indian subsidiary[153](index=153&type=chunk) [Discussion of Cash Flows](index=32&type=section&id=Discussion%20of%20Cash%20Flows) This section analyzes the company's cash generation and usage across operating, investing, and financing activities - Net cash provided by operating activities decreased from **$0.5 million** in Q1 2024 to **$0.3 million** in Q1 2025, driven by cloud subscriber growth and reduced operating costs, offset by unfavorable working capital movements[157](index=157&type=chunk) - Net cash used in investing activities decreased from **$3.8 million** in Q1 2024 to **$3.3 million** in Q1 2025, primarily funding product development for Cloud offerings[158](index=158&type=chunk) - Net cash used in financing activities decreased from **$2.1 million** in Q1 2024 to **$1.3 million** in Q1 2025, mainly due to Term Loan principal payments and stock-based withholding taxes, with no preferred stock dividend payments in 2025[159](index=159&type=chunk) Cash Flow Summary (in thousands) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------- | | Net cash provided by operating activities | $293 | $527 | $(234) | | Net cash used in investing activities | $(3,310) | $(3,803) | $493 | | Net cash used in financing activities | $(1,278) | $(2,129) | $851 | [Effect of Inflation](index=33&type=section&id=Effect%20of%20Inflation) This section evaluates the impact of inflationary pressures on the company's input costs and overall financial results - Inflationary increases in certain input costs, such as occupancy, labor and benefits, and general administrative costs, have impacted the business[160](index=160&type=chunk) - Management does not believe these impacts have had a material effect on the Company's results of operations during the three months ended March 31, 2025, and 2024[160](index=160&type=chunk) [Contractual Obligations](index=33&type=section&id=Contractual%20Obligations) This section details the company's future payment commitments, including debt, leases, and purchase obligations - Total contractual obligations as of March 31, 2025, were **$277,046 thousand**, including finance lease obligations, interest, operating lease obligations, purchase obligations, Senior Notes Payable, and Term Loan[161](index=161&type=chunk) - The largest portion of payments (**$172,174 thousand**) is due in 2026-2027, which includes **$121,387 thousand** for Senior Notes Payable[161](index=161&type=chunk) - A significant portion of the Term Loan principal (**$60,000 thousand**) is due in 2028[161](index=161&type=chunk) Contractual Obligations (in thousands) | Obligation Type | Total (in thousands) | 2025 (in thousands) | 2026-2027 (in thousands) | 2028 (in thousands) | | :-------------------- | :------------------- | :------------------ | :----------------------- | :------------------ | | Finance lease obligations | $1,538 | $733 | $805 | $0 | | Interest | $36,057 | $13,154 | $18,667 | $4,236 | | Operating lease obligations | $23,752 | $5,683 | $13,793 | $4,276 | | Purchase obligations | $20,718 | $15,242 | $5,334 | $142 | | Senior Notes Payable | $121,387 | $0 | $121,387 | $0 | | Term Loan | $73,594 | $1,406 | $12,188 | $60,000 | | Total | $277,046 | $36,218 | $172,174 | $68,654 | [Uncertain Tax Positions](index=33&type=section&id=Uncertain%20Tax%20Positions) This section discusses unrecognized tax benefits and their potential impact on the company's financial position - Unrecognized tax benefits associated with uncertain tax positions were **$4.4 million** at March 31, 2025[162](index=162&type=chunk) - The Company anticipates that **$3.8 million** of these benefits, primarily related to research and development credits and other U.S. tax positions, may be recognized within the next 12 months due to the lapse of the statute of limitations[162](index=162&type=chunk) - The ultimate settlement of these liabilities is not expected to materially affect the Company's liquidity[162](index=162&type=chunk) [Critical Accounting Policies and Estimates](index=34&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section highlights the significant judgments and estimates used in preparing the company's financial statements - The condensed consolidated financial statements are prepared in accordance with U.S. GAAP, requiring significant management judgment and estimates[164](index=164&type=chunk) - Estimates and assumptions take into account historical and forward-looking factors, including potential impacts from current geopolitical tensions[165](index=165&type=chunk) - There were no significant changes in critical accounting policies and estimates during the three months ended March 31, 2025, compared to the Annual Report on Form 10-K for the year ended December 31, 2024[166](index=166&type=chunk) [Recently Issued Accounting Standards](index=34&type=section&id=Recently%20Issued%20Accounting%20Standards) This section refers to Note 2 for a discussion of recently issued accounting standards and their potential impact - For a discussion of recently issued accounting standards, refer to Note 2. Basis of Presentation and Consolidation of the Notes to Condensed Consolidated Financial Statements in Item 1 of this Form 10-Q[167](index=167&type=chunk) [Off-Balance Sheet Arrangements](index=34&type=section&id=Off-Balance%20Sheet%20Arrangements) This section confirms the absence of material off-balance sheet arrangements for the reporting periods - The Company had no off-balance sheet arrangements as of March 31, 2025, and December 31, 2024, that are material to investors[168](index=168&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the Company's exposure to market risks, primarily related to interest rate fluctuations and foreign currency exchange rates, and its strategies for managing these risks [Market Risk](index=34&type=section&id=Market%20Risk) This section outlines the company's investment objectives and exposure to market fluctuations, primarily in financial instruments - The Company deposits its excess cash in high-quality financial instruments, primarily money market funds and certificates of deposit, denominated in United States dollars[169](index=169&type=chunk)[170](index=170&type=chunk) - The primary objective of investment activities is to preserve capital for funding operations while maximizing income without significantly increasing risk[170](index=170&type=chunk) - All market-risk sensitive instruments were entered into for non-trading purposes[170](index=170&type=chunk) [Foreign Currency Exchange Risk](index=35&type=section&id=Foreign%20Currency%20Exchange%20Risk) This section details the company's exposure to foreign currency translation and transaction risks from international operations - The Company is exposed to translation risk due to foreign operations using local currencies, which affects the comparability of financial results when translated into U.S. dollars[171](index=171&type=chunk) - The Company is also subject to foreign currency transaction risk from conducting business and incurring costs in local currencies in other countries[172](index=172&type=chunk) - The Company does not hold any derivative instruments or engage in hedging activities to mitigate foreign currency risk[172](index=172&type=chunk) [Interest Rate Risk](index=35&type=section&id=Interest%20Rate%20Risk) This section assesses the company's sensitivity to interest rate fluctuations on both interest income and variable-rate debt - The Company is exposed to the risk of interest rate fluctuations on interest income earned on cash and cash equivalents; a hypothetical **100 basis point** movement would increase annual interest income by approximately **$0.3 million**[174](index=174&type=chunk) - The Term Loan bears variable interest (Adjusted Term SOFR + **5.50%**, with a **2.50%** floor), making net income sensitive to interest rate movements; a hypothetical **100 basis point** increase would increase annual interest expense on the debt by **$0.7 million**[175](index=175&type=chunk) - The Company does not hold any derivative instruments or engage in hedging activities to mitigate interest rate risk[175](index=175&type=chunk) [Item 4. Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of the Company's disclosure controls and procedures and internal control over financial reporting, confirming their effectiveness and reporting no material changes [Evaluation of Disclosure Controls and Procedures](index=35&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures as evaluated by management - The Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of the registrant's disclosure controls and procedures as of March 31, 2025[176](index=176&type=chunk) - Based on this evaluation, they concluded that the registrant's disclosure controls and procedures were effective as of March 31, 2025[176](index=176&type=chunk) [Changes in Internal Control Over Financial Reporting](index=35&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) This section reports no material changes in the company's internal control over financial reporting during the period - No changes in internal control over financial reporting were identified during the three months ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[177](index=177&type=chunk) [Limitations on Effectiveness of Controls and Procedures](index=36&type=section&id=Limitations%20on%20Effectiveness%20of%20Controls%20and%20Procedures) This section acknowledges that controls provide reasonable, not absolute, assurance due to inherent limitations and resource constraints - Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives[178](index=178&type=chunk) - The design of disclosure controls and procedures and internal control over financial reporting must reflect resource constraints and management's judgment in evaluating benefits relative to costs[178](index=178&type=chunk) [PART II. OTHER INFORMATION](index=37&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers additional information not included in the financial statements, such as legal proceedings, risk factors, and exhibits [Item 1. Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 17 for details on material pending legal proceedings, which management believes will not have a material adverse effect on the Company's operations - For a discussion of material pending legal proceedings that could impact the Company's results of operations, financial condition, or cash flows, refer to Note 17. Legal Matters in Item 1 of this Form 10-Q[180](index=180&type=chunk) [Item 1A. Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) This section states that there have been no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 - There have been no material changes to the Company's risk factors as previously disclosed in Part I, Item 1A. included in its Annual Report on Form 10-K for the year ended December 31, 2024[181](index=181&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=37&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The Company reported no unregistered sales of equity securities or use of proceeds during the period - None[182](index=182&type=chunk) [Item 3. Defaults Upon Senior Securities](index=37&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The Company reported no defaults upon senior securities during the period - None[183](index=183&type=chunk) [Item 4. Mine Safety Disclosures](index=37&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company - Not Applicable[184](index=184&type=chunk) [Item 5. Other Information](index=37&type=section&id=Item%205.%20Other%20Information) This section states that no director or officer adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the reporting period - No director or officer of the Company 'adopted' or terminated a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement' during the period covered by this Quarterly Report on Form 10-Q[185](index=185&type=chunk) [Item 6. Exhibits](index=38&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including organizational documents, equity incentive plans, certifications, and XBRL documents - Exhibits include the Restated Certificate of Incorporation, Amended and Restated Bylaws, Certificate of Elimination of Series B Perpetual Non-Convertible Preferred Stock, and the Amended and Restated 2015 Equity Incentive Plan[186](index=186&type=chunk) - Certifications by the Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-14(a) and 13a-14(b) of the Exchange Act are filed[186](index=186&type=chunk) - XBRL Instance, Schema, Calculation Linkbase, Definition Linkbase, Labels Linkbase, and Presentation Linkbase Documents are included[186](index=186&type=chunk) [SIGNATURES](index=39&type=section&id=SIGNATURES) The report is signed by Jeff Miller, Chief Executive Officer, and Louis Ferraro, Chief Financial Officer, on May 6, 2025, certifying its accuracy - The report is signed by Jeff Miller, Chief Executive Officer (Principal Executive Officer), and Louis Ferraro, Chief Financial Officer, on behalf of Synchronoss Technologies, Inc[187](index=187&type=chunk)[188](index=188&type=chunk) - Date of signature: May 6, 2025[188](index=188&type=chunk)

Company Overview - Proactive is a financial news publisher that provides fast, accessible, informative, and actionable business and finance news content to a global investment audience [2] - The company has a team of experienced and qualified news journalists who produce independent content [2] Market Focus - Proactive specializes in medium and small-cap markets while also covering blue-chip companies, commodities, and broader investment stories [3] - The content delivered includes insights across various sectors such as biotech and pharma, mining and natural resources, battery metals, oil and gas, crypto, and emerging digital and EV technologies [3] Technology Adoption - Proactive is recognized for being a forward-looking technology adopter, utilizing technologies to assist and enhance workflows [4] - The company employs automation and software tools, including generative AI, while ensuring that all content is edited and authored by humans [5]

Revenue and Guidance - First quarter revenue was $42.2 million, with 93.1% of it being recurring revenue[1][6] - The company reaffirms its full-year revenue guidance of between $170 million and $180 million[1][12] - Recurring revenue is expected to be at least 90% of total revenue for the year[1][12] - Net revenues for Q1 2025 were $42,213 thousand, a decrease of 1.75% from $42,965 thousand in Q1 2024[27] Profitability and Margins - Gross margin expanded to 70.4%, while adjusted gross margin rose to 79.0%[1][7] - Adjusted EBITDA increased by 17.0% to $12.7 million, with an adjusted EBITDA margin of 30.2%[1][12] - Adjusted gross margin is projected to be between 78% and 80% for the full year[1][12] - Adjusted gross profit for Q1 2025 was $33,359 thousand, an increase from $32,789 thousand in Q1 2024, resulting in an adjusted gross margin of 79.0%[31] Net Income and Loss - The company reported a net loss of $3.8 million, compared to a net income of $4.5 million in the prior year period[1][7] - Net loss attributable to Synchronoss was $3,817 thousand in Q1 2025, compared to a net income of $2,341 thousand in Q1 2024[32] - Basic earnings per share for Q1 2025 was $(0.37), down from $0.24 in Q1 2024[27] Cash Flow and Expenses - Free cash flow for the first quarter was $(3.0) million, compared to $(3.3) million in the prior year period[1][12] - Free cash flow for Q1 2025 was $(3,017) thousand, compared to $(3,276) thousand in Q1 2024[34] - Cash and cash equivalents decreased to $29,138 thousand as of March 31, 2025, from $33,375 thousand at the end of 2024[30] - Total costs and expenses decreased by 11.5% to $33,984 thousand in Q1 2025 from $38,389 thousand in Q1 2024[27] Operational Performance - Income from operations increased significantly to $8,229 thousand in Q1 2025, compared to $4,576 thousand in Q1 2024[27] - Net cash provided by operating activities was $293 thousand in Q1 2025, down from $527 thousand in Q1 2024[34] Debt and Financing - The company closed a $200 million term loan refinancing, extending debt maturity until 2029[1][4] Stock-Based Compensation - The company reported a significant increase in stock-based compensation expense to $2,129 thousand in Q1 2025 from $1,110 thousand in Q1 2024[32]

Financial Data and Key Metrics Changes - Revenue for the quarter was $42,400,000, reflecting a subscriber growth of 3.3% across the global customer base [3] - Adjusted EBITDA increased 17% year over year to $12,700,000, representing an adjusted EBITDA margin of 30.2% [4] - Total revenue was $42,200,000, down slightly from $43,000,000 in the prior year period due to the expiration of a customer contract [13] - Adjusted gross profit was $33,400,000 or 79% of total revenue, benefiting from cost efficiencies [14] - Net loss was $3,800,000 or a negative $0.37 per share, primarily due to $5,600,000 in non-cash foreign exchange losses [15] - Cash and cash equivalents were $29,100,000 as of 03/31/2025, with free cash flow at negative $3,000,000 [16] Business Line Data and Key Metrics Changes - Quarterly recurring revenue was 93.1% of total revenue, indicating a stable cloud business model [13] - Cloud subscriber growth was 3.3%, driven by demand for the personal cloud platform [13] Market Data and Key Metrics Changes - The company is seeing accelerated adoption at AT&T through streamlined digital onboarding, increasing cloud awareness and elevating take rates [8] - Positive retail sales momentum for Anshin Data Box at SoftBank resulted in subscriber additions ahead of expectations [9] - Verizon's cloud offer transition to a premium My Plan PERC has led to continued growth in cloud PERC adoption [9] Company Strategy and Development Direction - The strategic transformation to a leading global cloud solutions provider has resulted in a more predictable and stable business model [3] - The company is focused on enhancing its personal cloud platform and pursuing growth opportunities, supported by a new $200,000,000 term loan [6] - The company is optimistic about new customer prospects and aims for double-digit revenue growth in the future [11] Management Comments on Operating Environment and Future Outlook - Management reiterated annual guidance metrics despite challenging macroeconomic conditions, including tariffs and global trade uncertainties [4] - The company is closely monitoring industry headwinds, particularly tariffs that could impact device costs and upgrade cycles [12] - Management expressed confidence in the sales pipeline, which is stronger than the previous quarter [11] Other Important Information - The company completed a refinancing of its debt, strengthening its capital structure and extending debt maturity to 2029 [6] - The company is committed to cost control, having cut overall operational expenses by 11.5% year over year [6] Q&A Session Summary Question: Cost structure and further reductions - Management believes the current cost structure is largely where it wants it to be, with major reductions made at the end of 2023 and 2024 [20] Question: New customer prospects - Opportunities for new customers are global, with active conversations in the U.S., Asia Pacific, Europe, and Africa [22] Question: Expected free cash flow - Free cash flow is expected to be between $11,000,000 and $16,000,000 for the year, with a consistent performance anticipated [26] Question: Growth comparison between AT&T and SoftBank - Both AT&T and SoftBank are growing at a healthy pace, contributing significantly to the first quarter's growth [27] Question: Modeling gross margins - Adjusted gross margins are expected to remain between 78% and 80% throughout the year [28]

Financial Performance - The company reported total revenue of $42.2 million for the first quarter of 2025, a decrease from $43.0 million in the prior year period, primarily due to the expiration of a customer contract in December 2024, despite a 3.3% growth in cloud subscribers year-over-year [5][6]. - Quarterly recurring revenue constituted 93.1% of total revenue, an increase from 91.1% in the prior year period [6]. - Gross profit increased by 3.4% to $29.7 million, resulting in a gross margin of 70.4%, compared to 66.9% in the prior year [6]. - Adjusted gross profit rose by 1.7% to $33.4 million, with an adjusted gross margin of 79.0%, up from 76.3% in the prior year [6]. - The company reported a net loss of $3.8 million, or $(0.37) per diluted share, compared to a net income of $4.5 million, or $0.23 per diluted share, in the prior year period [6][23]. - Adjusted EBITDA increased by 17.0% to $12.7 million, with an adjusted EBITDA margin of 30.2%, compared to 25.4% in the prior year [6][23]. Operational Highlights - The company successfully executed a $200 million term loan refinancing, extending debt maturity until 2029, which strengthens its capital structure and provides anticipated financial stability [3][5]. - The company reaffirmed its full-year guidance metrics, indicating confidence in achieving its financial targets despite a volatile global economy [3][7]. Cash Flow and Liquidity - Cash and cash equivalents were reported at $29.1 million as of March 31, 2025, down from $33.4 million as of December 31, 2024 [6][21]. - Free cash flow for the first quarter was $(3.0) million, compared to $(3.3) million in the prior year period, indicating a consistent cash spend during this historically heavy cash outflow period [6][26]. 2025 Financial Outlook - The company reiterated its full-year revenue guidance range of between $170 million and $180 million, with recurring revenue expected to be at least 90% of total revenue [11]. - Adjusted gross margin is projected to be between 78% and 80%, and adjusted EBITDA is expected to be between $52 million and $56 million, equating to at least a 30% adjusted EBITDA margin [11]. - Free cash flow is anticipated to be between $11 million and $16 million, excluding the expected federal tax refund of approximately $28 million plus applicable interest [11].

Synchronoss (SNCR) closed at $10.48 in the latest trading session, marking a +0.38% move from the prior day. The stock's performance was ahead of the S&P 500's daily gain of 0.15%. Meanwhile, the Dow gained 0.35%, and the Nasdaq, a tech-heavy index, lost 0.09%.Heading into today, shares of the mobile services company had lost 6.2% over the past month, lagging the Computer and Technology sector's gain of 1.15% and the S&P 500's loss of 0.21% in that time.The investment community will be paying close attentio ...

Core Viewpoint - Synchronoss Technologies Inc. has successfully entered into an agreement to refinance its existing senior notes and term loan facilities with a new $200 million, four-year term loan, enhancing its financial flexibility and extending the maturity of its debt until 2029 [1][4]. Financial Details - The proceeds from the new term loan will be utilized to repay the remaining $73.6 million principal of the original $75 million term loan facility and the $121 million remainder of the senior notes [2]. - Approximately $8 million from the company's balance sheet will be used to complete the transaction, covering fees, call protection payments, and accrued interest [2]. - The new term loan has a maturity date of April 24, 2029, and is priced at SOFR plus 700 basis points, with a leverage-based stepdown of 50 basis points [3]. Management Commentary - The Chief Financial Officer of Synchronoss expressed satisfaction with the completion of the new term loan facility, highlighting that it eliminates the near-term overhang associated with the now-retired senior notes and enhances the company's financial stability [4]. - The refinancing is expected to improve the capital structure, allowing Synchronoss to invest further in its Personal Cloud solution and provide greater operational flexibility [4]. Company Overview - Synchronoss Technologies is a global leader in personal Cloud solutions, enabling service providers to create secure connections with subscribers, thereby enhancing revenue streams and reducing expenses [5].

Group 1 - Synchronoss (SNCR) ended the recent trading session at $10.53, showing a +1.74% change from the previous day's closing price, which lagged behind the S&P 500's daily gain of 2.51% [1] - Over the past month, Synchronoss shares experienced a loss of 13.89%, underperforming the Computer and Technology sector's loss of 12.18% and the S&P 500's loss of 8.86% [1] Group 2 - The upcoming financial results for Synchronoss are anticipated to show an EPS of $0.29, reflecting a 34.09% decline compared to the same quarter last year, with a revenue estimate of $42.11 million, indicating a 2% decrease from the same quarter last year [2] - For the annual period, the Zacks Consensus Estimates predict earnings of $1.58 per share and revenue of $174.4 million, representing shifts of -3.07% and +0.46% respectively from the previous year [3] Group 3 - The Zacks Rank system, which assesses estimate changes, indicates that positive revisions can signal optimism about a company's business outlook [4] - Synchronoss currently holds a Zacks Rank of 2 (Buy), with the consensus EPS estimate remaining unchanged over the last 30 days [5] Group 4 - Synchronoss is trading at a Forward P/E ratio of 6.55, significantly lower than the industry average Forward P/E of 23.39, suggesting that the company is trading at a discount [6] - The Internet - Software industry, part of the Computer and Technology sector, has a current Zacks Industry Rank of 82, placing it in the top 34% of all industries [6]