Non-GAAP total revenue for the fourth quarter
was $157.8 million, increasing 21% year-over-year
Cloud Services revenue for the fourth quarter
was $90.9 million, increasing 43% year-over-year
Non-GAAP EPS for the fourth quarter was $0.61,
increasing 16% year-over-year
Synchronoss Technologies, Inc. (NASDAQ: SNCR), the leader in
mobile cloud innovation and software-based activation for mobile
carriers, enterprises, retailers and OEMs around the world, today
announced financial results for the fourth quarter and full year
2015.
“The fourth quarter marked a strong end to an exciting year at
Synchronoss,” said Stephen G. Waldis, Founder and Chief Executive
Officer of Synchronoss. “Our Cloud Services business continues to
perform well, driven by increasing subscriber adoption across our
expanding customer base. We are also seeing strong, early interest
in our Enterprise Business Unit, including the addition of identity
management service offering to the Synchronoss Secure Mobility
Suite. Overall, 2015 was a pivotal year for Synchronoss as we
executed well against our go-to-market strategy while also
expanding our market footprint by introducing several new
initiatives. As a result, we believe there is a long runway of
opportunity ahead that will lead us through the next phase of
growth.”
On a GAAP basis, Synchronoss reported fourth quarter net
revenues of $157.2 million, representing an increase of 21%
compared to the fourth quarter of 2014. Gross profit was $90.2
million and income from operations was $15.4 million in the fourth
quarter of 2015. Net income attributable to Synchronoss was $5.3
million, leading to diluted earnings per share of $0.12, compared
to $0.30 for the fourth quarter of 2014.
On a non-GAAP basis, Synchronoss reported fourth quarter net
revenues, which adds back the purchase accounting adjustment
related to revenues for certain acquisitions, of $157.8 million, an
increase of 21% compared to the fourth quarter of 2014. Gross
profit for the fourth quarter of 2015 was $98.3 million,
representing a gross margin of 62%. Income from operations was
$44.3 million in the fourth quarter of 2015, representing a
year-over-year increase of 22% and an operating margin of 28%. Net
income attributable to Synchronoss was $28.7 million in the fourth
quarter of 2015, up from $24.2 million in the year ago period.
Diluted earnings per share were $0.61 for the fourth quarter of
2015, compared to $0.53 for the fourth quarter of 2014.
A reconciliation of GAAP to non-GAAP results has been provided
in the financial statement tables included in this press release.
An explanation of these measures is also included below under the
heading "Non-GAAP Financial Measures."
“We are pleased with our financial and operational performance
in the fourth quarter and the full year, particularly our ability
to generate strong free cash flow,” said Karen L. Rosenberger,
Chief Financial Officer and Treasurer. “We believe the investments
we have made in our business over the last year position us well to
generate significant value for our shareholders.”
Fourth Quarter and Recent Business Highlights:
- Cloud Services revenue accounted for
$90.9 million of non-GAAP revenue, representing approximately 58%
of total non-GAAP revenue and growing 43% on a year-over-year
basis.
- Extended our agreement with AT&T
through 2018.
- Entered into a joint venture with
Verizon (NYSE: VZ) to establish a next generation platform for
multifactor authentication and identity management adding another
core component to Synchronoss’ Secure Mobility Platform.
- Formed the Board of Advisors for the
Enterprise Business Unit (EBU), comprised of current and former
representatives from Synchronoss, Goldman
Sachs, Verizon, Vodafone and Morgan Stanley. This
Board of Advisors will provide insight into the growing enterprise
market demand for digital solutions and assist in the development
of innovative business opportunities for the EBU.
Full Year 2015 Financial Results
- On a GAAP basis: revenues for the full
year 2015 were $578.8 million, an increase of 27% compared to
$457.3 million in the prior year. Gross profit was $339.8 million,
income from operations was $79.6 million and net income
attributable to Synchronoss was $40.6 million, leading to full year
2015 diluted earnings per share of $0.89.
- On a Non-GAAP basis: revenues for the
full year 2015 were $580.1 million, an increase of 26% compared to
$458.6 million in 2014. Gross profit was $356.8 million,
representing a gross margin of 62%, and income from operations was
$162.6 million, representing an operating margin of 28%. Net income
attributable to Synchronoss was $104.1 million for the full year
2015, leading to diluted earnings per share of $2.23, an increase
of 25% from $1.79 in the prior year.
Conference Call Details
In conjunction with this announcement, Synchronoss will host a
conference call today, February 3, 2016, at 8:30 a.m. (ET) to
discuss the company's financial results. To access this call, dial
877-930-7767 (domestic) or 253-336-7416 (international). The pass
code for the call is 24932884. Additionally, a live web cast of the
conference call will be available on the “Investor Relations” page
on the company’s web site www.synchronoss.com.
Following the conference call, a replay will be available for a
limited time at 855-859-2056 (domestic) or 404-537-3406
(international). The replay pass code is 24932884. An archived web
cast of this conference call will also be available on the
“Investor Relations” page of the company’s web site,
www.synchronoss.com.
Non-GAAP Financial Measures
Synchronoss has provided in this release selected financial
information that has not been prepared in accordance with GAAP.
This information includes historical non-GAAP revenues, gross
profit, operating income, net income, effective tax rate, earnings
per share and cash flows from operating activities. Synchronoss
uses these non-GAAP financial measures internally in analyzing its
financial results and believes they are useful to investors, as a
supplement to GAAP measures, in evaluating Synchronoss’ ongoing
operational performance. Synchronoss believes that the use of these
non-GAAP financial measures provides an additional tool for
investors to use in evaluating ongoing operating results and
trends, and in comparing its financial results with other companies
in Synchronoss’ industry, many of which present similar non-GAAP
financial measures to investors. As noted, the non-GAAP financial
results discussed above add back the deferred revenue write-down
associated with acquisitions, fair value stock-based compensation
expense, acquisition-related costs which includes integration
costs, changes in the contingent consideration obligation, deferred
compensation expense related to earn outs and amortization of
intangibles associated with acquisitions.
Non-GAAP financial measures should not be considered in
isolation from, or as a substitute for, financial information
prepared in accordance with GAAP. Investors are encouraged to
review the reconciliation of these non-GAAP measures to their most
directly comparable GAAP financial measures as detailed above. As
previously mentioned, a reconciliation of GAAP to non-GAAP results
has been provided in the financial statement tables included in
this press release.
About Synchronoss Technologies, Inc.
Synchronoss (NASDAQ: SNCR) is the mobile innovation leader that
provides personal cloud solutions and software-based activation for
connected devices across the globe. The company’s proven and
scalable technology solutions allow customers to connect,
synchronize and activate connected devices and services that
empower enterprises and consumers to live in a connected world. For
more information visit us at www.synchronoss.com.
Forward-looking Statements
This document may include certain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995. These forward-looking statements include, but are not
limited to, plans, objectives, expectations and intentions and
other statements contained in this press release that are not
historical facts and statements identified by words such as
"expects," "anticipates," "intends," "plans," "believes," "seeks,"
"estimates," “outlook” or words of similar meanings. These
statements are based on our current beliefs or expectations and are
inherently subject to various risks and uncertainties, including
those set forth under the caption "Risk Factors" in Synchronoss’
Annual Report on Form 10-K for the year ended December 31, 2015 and
other documents filed with the U.S. Securities and Exchange
Commission. Actual results may differ materially from these
expectations due to changes in global political, economic,
business, competitive, market and regulatory factors. Synchronoss
does not undertake any obligation to update any forward-looking
statements contained in this document as a result of new
information, future events or otherwise.
The Synchronoss logo, Synchronoss and Synchronoss Integrated
Life are trademarks of Synchronoss Technologies, Inc. All other
trademarks are property of their respective owners.
SYNCHRONOSS TECHNOLOGIES, INC. BALANCE SHEETS
(in thousands, except per share data) (Unaudited)
December 31, 2015 December
31, 2014 ASSETS Current assets: Cash and cash
equivalents $ 147,634 $ 235,967 Marketable securities 66,357 51,097
Accounts receivable, net of allowance for doubtful accounts of
$3,029 and $88 at December 31, 2015 and 2014, respectively 143,692
118,371 Prepaid expenses and other assets 49,262 35,023 Deferred
tax assets — 1,475 Total current assets 406,945
441,933 Marketable securities 19,635 3,313 Property and equipment,
net 168,280 151,171 Goodwill 221,271 147,135 Intangible assets, net
174,322 99,489 Deferred tax assets 3,560 1,232 Other assets
21,337 18,549 Total assets $ 1,015,350 $ 862,822
LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities:
Accounts payable $ 26,038 $ 25,059 Accrued expenses 45,819 42,679
Deferred revenues 8,323 11,897 Contingent consideration obligation
— 8,000 Total current liabilities 80,180 87,635 Lease
financing obligation - long term 13,343 9,204 Contingent
consideration obligation - long-term 930 — Convertible debt 230,000
230,000 Deferred tax liability 16,404 3,698 Other liabilities 3,227
3,178 Redeemable noncontrolling interest 61,452 — Stockholders’
equity: Preferred stock, $0.0001 par value; 10,000 shares
authorized, 0 shares issued and outstanding at December 31, 2015
and 2014 — — Common stock, $0.0001 par value; 100,000 shares
authorized, 48,084 and 46,444 shares issued; 44,405 and 42,711
outstanding at December 31, 2015 and December 31, 2014,
respectively 4 4 Treasury stock, at cost (3,679 and 3,733 shares at
December 31, 2015 and 2014, respectively) (65,651) (66,336)
Additional paid-in capital 512,802 454,740 Accumulated other
comprehensive loss (38,684) (20,014) Retained earnings
201,343 160,713 Total stockholders’ equity 609,814
529,107 Total liabilities and stockholders’ equity $
1,015,350 $ 862,822
SYNCHRONOSS TECHNOLOGIES, INC.
STATEMENT OF INCOME (in thousands, except per share
data) (Unaudited)
Three Months Ended December 31,
Year Ended December 31, 2015 2014 2015
2014 Net revenues $ 157,211 $ 130,211 $ 578,831 $
457,314 Costs and expenses: Cost of services (1)(2)(3)* 67,061
52,649 239,074 184,414 Research and development (1)(2)(3) 22,958
19,718 91,430 73,620 Selling, general and administrative (1)(2)(3)
30,132 23,568 90,735 79,227 Net change in contingent consideration
obligation 760 118 760 1,799 Restructuring charges — — 5,090 —
Depreciation and amortization 20,931 13,664
72,152 55,956 Total costs and
expenses 141,842 109,717 499,241
395,016 Income from operations 15,369 20,494
79,590 62,298 Interest income 564 398 2,047 1,265 Interest expense
(1,503 ) (1,172 ) (5,711 ) (3,430 ) Other (expense) income (4)
973 (614 ) 372 441
Income before income tax expense 15,403 19,106 76,298 60,574 Income
tax expense (4,081 ) (5,486 ) (29,616 )
(21,679 ) Net income 11,322 13,620 46,682 38,895 Net income
attributable to noncontrolling interests 6,052
— 6,052 — Net income
attributable to Synchronoss $ 5,270 $ 13,620 $ 40,630
$ 38,895 Net income attributable to
Synchronoss 5,270 13,620 40,630 38,895 Add: After-tax interest on
convertible debt 554 557 1,920
754 Net income for diluted EPS calculation $
5,824 $ 14,177 $ 42,550 $ 39,649
Net income per common share: Basic $ 0.12 $ 0.33 $
0.96 $ 0.96 Diluted $ 0.12 $ 0.30 $
0.89 $ 0.92 Weighted-average common shares
outstanding: Basic 42,817 41,210
42,284 40,418 Diluted 47,862
46,785 47,653 43,297
* Cost of services excludes depreciation which is shown
separately. ** Includes an add back for the convertible debt
interest (1) Amounts include fair value stock-based
compensation as follows: Cost of services $ 1,965 $ 1,638 $ 6,935 $
5,924 Research and development 2,374 1,647 7,487 5,950 Selling,
general and administrative 6,138 5,232
17,289 17,113 Total fair value
stock-based compensation expense $ 10,477 $ 8,517 $
31,711 $ 28,987 (2) Amounts include
acquisition costs as follows: Cost of services $ 5,612 $ — $ 8,814
$ 31 Research and development 2,375 398 7,307 475 Selling, general
and administrative 963 146 1,412
2,432 Total acquisition costs $ 8,950 $
544 $ 17,533 $ 2,938 (3) Amounts
include fair value earn-out cash and stock compensation as follows:
Cost of services $ — $ — $ — $ 16 Research and development — — — —
Selling, general and administrative — 535
— 1,767 Total fair value
earn-out cash and stock compensation expense $ — $ 535
$ — $ 1,783 (4) Amounts include Fx
change of the contingent consideration obligation as follows: Other
income (expense) $ — $ 15 $ — $ 56
SYNCHRONOSS
TECHNOLOGIES, INC. Reconciliation of GAAP to Non-GAAP
Financial Measures (in thousands, except per share data)
(Unaudited) Three Months Ended December 31,
Year Ended December 31, 2015 2014 2015
2014 Non-GAAP financial measures and reconciliation:
GAAP Revenue $ 157,211 $ 130,211 $ 578,831 $ 457,314 Add:
Deferred Revenue Write-Down 568 651
1,260 1,299
Non-GAAP Revenue $
157,779 $ 130,862 $ 580,091 $ 458,613
GAAP Revenue $ 157,211 $ 130,211 $ 578,831 $ 457,314
Less: Cost of Services 67,061 52,649
239,074 184,414
GAAP Gross
Margin 90,150 77,562 339,757 272,900 Add: Deferred revenue
write-down 568 651 1,260 1,299 Add: Fair value stock-based
compensation 1,965 1,638 6,935 5,924 Add: Acquisition and
restructuring costs 5,612 — 8,814 31 Add: Deferred compensation
expense - earn-out — — —
16
Non-GAAP Gross Margin $ 98,295 $
79,851 $ 356,766 $ 280,170
Non-GAAP Gross
Margin % 62 % 61 % 62 % 61 %
GAAP income from
operations $ 15,369 $ 20,494 $ 79,590 $ 62,298 Add: Deferred
revenue write-down 568 651 1,260 1,299 Add: Fair value stock-based
compensation 10,477 8,517 31,711 28,987 Add: Acquisition and
restructuring costs 8,950 544 22,623 2,938 Add: Net change in
contingent consideration obligation 760 118 760 1,799 Add: Deferred
compensation expense - earn-out — 535 — 1,783 Add: Amortization
expense 8,150 5,303 26,659
18,953
Non-GAAP income from operations
$ 44,274 $ 36,162 $ 162,603 $ 118,057
GAAP net income attributable to Synchronoss $ 5,270 $
13,620 $ 40,630 $ 38,895 Add: Deferred revenue write-down, net of
tax 451 436 964 868 Add: Fair value stock-based compensation, net
of tax 8,519 5,696 24,249 19,358 Add: Acquisition and restructuring
costs, net of taxes 7,153 365 17,282 1,962 Add: Net change in
contingent consideration obligation, net of Fx change, net of tax
760 134 760 1,855 Add: Deferred compensation expense - earn-out,
net of tax — 358 — 1,191 Add: Amortization expense, net of tax
6,555 3,547 20,264
12,657
Non-GAAP net income attributable to
Synchronoss 28,708 24,156 104,149 76,786 Add: After-tax
interest on convertible debt 591 543
2,135 776
Net income for diluted EPS
calculation $ 29,299 $ 24,699 $ 106,284 $
77,562 Diluted non-GAAP net income per share $ 0.61
$ 0.53 $ 2.23 $ 1.79 Weighted
shares outstanding - Diluted 47,862 46,785
47,653 43,297
SYNCHRONOSS TECHNOLOGIES, INC. STATEMENT OF CASH
FLOWS (in thousands) (Unaudited)
Year Ended December 31, 2015
2014 Operating activities: Net income $ 46,682 $
38,895 Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization expense 72,152
55,956 Amortization of debt issuance costs 1,501 618 Loss on
disposal of asset 16 33 Amortization of bond premium 1,705 384
Deferred income taxes 8,319 3,207 Non-cash interest on leased
facility 924 946 Stock-based compensation 31,711 28,987 Changes in
operating assets and liabilities: Accounts receivable, net of
allowance for doubtful accounts (27,577) (50,924) Prepaid expenses
and other current assets (8,543) (14,660) Other assets (4,282)
(1,930) Accounts payable 6,185 4,169 Accrued expenses (710) 1,263
Contingent consideration obligation (772) 3,532 Excess tax benefit
from the exercise of stock options (5,198) (1,203) Other
liabilities (402) 5,825 Deferred revenues (4,130)
(4,119) Net cash provided by operating activities 117,581 70,979
Investing activities: Purchases of fixed assets
(59,960) (73,885) Purchases of intangible assets (1,200) —
Purchases of marketable securities available-for-sale (139,569)
(50,275) Sales and maturities of marketable securities
available-for-sale 106,210 9,265 Business acquired, net of cash
(131,592) (38,085) Net cash used in investing
activities (226,111) (152,980)
Financing activities:
Proceeds from the exercise of stock options 19,936 30,003 Payments
on contingent consideration obligation (4,468) — Debt issuance
costs related to convertible notes — (7,065) Proceeds from issuance
of convertible notes — 230,000 Borrowings on revolving line of
credit — 40,000 Repayment of revolving line of credit — (40,000)
Excess tax benefit from the exercise of stock option 5,198 1,203
Proceeds from the sale of Treasury Stock in connection with an
employee stock purchase plan 1,903 1,677 Repayments of capital
obligations (2,021) (1,515) Net cash provided by
financing activities 20,548 254,303 Effect of exchange rate
changes on cash (351) 153 Net (decrease)
increase in cash and cash equivalents (88,333) 172,455 Cash and
cash equivalents at beginning of year 235,967 63,512
Cash and cash equivalents at end of year $ 147,634 $ 235,967
SYNCHRONOSS TECHNOLOGIES, INC.
Reconciliation of GAAP to Non-GAAP Cash Provided by Operating
Activities (in thousands) (Unaudited) Year
Ended December 31,
2015 2014
Non-GAAP cash provided by operating activities and reconciliation:
Net cash provided by operating activities (GAAP) $ 117,581 $
70,979
Add: Tax benefits from stock options exercised 5,198 1,203
Add: Cash payments on settlement of Earn-out 3,532 —
Adjusted cash flow provided by operating activities
(Non-GAAP) $ 126,311 $ 72,182
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160203005777/en/
Synchronoss Technologies, Inc.Media:Stacie Hiras,
+1-908-674-0758Stacie.hiras@synchronoss.comorInvestor:Seth
Potter, +1-646-277-1230investor@synchronoss.com