Synchronoss Stock Falls as Q3 Earnings & Revenues Miss Estimates

Core Insights - Synchronoss Technologies (SNCR) reported a non-GAAP loss of 26 cents per share in Q3 2024, missing the Zacks Consensus Estimate of earnings of 25 cents and down from earnings of 35 cents in the same quarter last year [1] - Net revenues for the quarter were $43 million, an 8% increase year-over-year, but fell short of the Zacks Consensus Estimate by 0.79% [1][2] Financial Performance - Total revenues increased to $43 million from $39.8 million in the previous period, driven by a 5.1% increase in cloud subscriber growth [3] - Quarterly recurring revenues accounted for 92.2% of total revenues, up from 89.5% in the prior-year period [3] - Adjusted EBITDA for Q3 was $12.7 million, reflecting a 29.5% margin, an increase from $9.2 million and a 23.2% margin in the prior-year quarter [6] - Operating income was $5.5 million in Q3, compared to a loss of $3.8 million in the same quarter last year [6] Cost Management - Adjusted gross margin increased by 310 basis points year-over-year to 79.6% [5] - Research and development expenses grew 11.1% year-over-year to $10.3 million, representing 24.1% of total revenues [5] - Selling, general and administrative expenses decreased by 32.2% year-over-year to $13.8 million, accounting for 19% of total revenues [5] Cash Flow and Balance Sheet - As of September 30, 2024, cash and cash equivalents were $25.2 million, up from $23.6 million as of June 30, 2024 [7] - Operating cash flow was $3.4 million in the reported quarter, down from $6.7 million in the previous quarter [7] - Adjusted free cash flow declined to $1.8 million from $3.9 million in the prior quarter [7] Future Guidance - For 2024, Synchronoss expects revenues between $172 million and $175 million, indicating 6-8% year-over-year growth [8] - Recurring revenues are anticipated to be 90-92% of total revenues [8] - Adjusted gross margin is expected to be between 77-78%, an increase from the previously mentioned 73-77% [9] - Adjusted EBITDA is projected to be between $47 million and $48 million, up from the previously stated $43-$46 million [9]