Synchronoss Technologies(US:SNCR)2025-11-04 22:30Revenue Performance - Net revenues for the three months ended September 30, 2025, decreased by $0.961 million to $42.003 million compared to $42.964 million in the same period of 2024[148] - The company's top five customers accounted for 99.1% of net revenues for the nine months ended September 30, 2025, with Verizon and AT&T each contributing over 10%[146] - Net revenues decreased by $2.7 million to $126.7 million for the nine months ended September 30, 2025, compared to the same period in 2024, primarily due to a $3.6 million decrease in professional services and a $4.0 million impact from an expired customer contract[160] Expenses and Costs - Research and development expenses increased by $0.5 million to $10.8 million for the three months ended September 30, 2025, primarily due to higher personnel-related costs[150] - Total costs and expenses for the nine months ended September 30, 2025, decreased by $9.255 million to $105.744 million compared to $114.999 million in 2024[158] - Selling, general and administrative expenses decreased by $1.581 million to $12.174 million for the three months ended September 30, 2025, due to lower performance-based compensation[151] - Cost of revenues decreased by $3.3 million to $26.3 million for the nine months ended September 30, 2025, mainly due to lower employee expenses from restructuring measures[161] - Research and development expenses decreased by $1.6 million to $30.9 million for the nine months ended September 30, 2025, attributed to cost-saving initiatives[162] - Selling, general and administrative expenses decreased by $4.4 million to $35.4 million for the nine months ended September 30, 2025, primarily due to cost-saving initiatives and lower performance-based compensation[163] Income and Loss - Net loss for the nine months ended September 30, 2025, was $17.608 million, compared to a loss of $1.734 million in the same period of 2024, representing an increase in loss of $15.874 million[158] - Interest income rose significantly by $5.239 million to $5.404 million for the three months ended September 30, 2025, mainly due to interest from a federal tax refund[153] - Interest income increased by $5.4 million to $5.9 million for the nine months ended September 30, 2025, mainly due to a federal tax refund received[166] - Interest expense increased by $7.2 million to $19.8 million for the nine months ended September 30, 2025, driven by higher interest on the 2025 Term Loan[167] Cash Flow and Liquidity - Cash provided by operating activities was $41.9 million for the nine months ended September 30, 2025, compared to $15.2 million for the same period in 2024, driven by growth in cloud subscribers and a federal tax refund[177] - Cash used in investing activities was $10.2 million for the nine months ended September 30, 2025, compared to $9.1 million in the same period in 2024, primarily funding product development for the Cloud offering[178] - Cash used in financing activities was $30.3 million for the nine months ended September 30, 2025, compared to $5.4 million in the same period in 2024, mainly related to the 2025 Term Loan and repayment of the 2021 Senior Notes[179] - The Company had an aggregate of $34.8 million in cash and cash equivalents at September 30, 2025, with sufficient liquidity to meet obligations for at least the next twelve months[173] Foreign Currency Risk - The company is exposed to foreign currency translation risk due to certain foreign operations using local currencies, affecting comparability of financial results[192] - The company does not hold derivative instruments or engage in hedging activities, making it susceptible to foreign currency transaction risk[193] - Future fluctuations in exchange rates could impact the company's net sales, cost of sales, and expenses, with increased exposure expected if international activities in local currencies rise[194] Interest Rate Sensitivity - A hypothetical 100 basis point increase in interest rates would increase interest income by approximately $0.3 million annually based on cash and cash equivalents as of September 30, 2025[195] - Borrowings under the 2025 Term Loan Agreement bear interest at a rate equal to the secured overnight financing rate plus a margin of 7.00%, with a floor of 2.50%[196] - A hypothetical 100 basis point increase in interest rates would increase interest expense on the 2025 Term Loan by $1.8 million annually[196]