Synchronoss Technologies (SNCR) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue grew to $43.5 million, up 5.9%-6% year-over-year, driven by 6.1% cloud subscriber growth and a strategic shift to cloud-centric, high-margin business.

• Adjusted EBITDA rose 115% year-over-year to $13 million, with a 29.9% margin, reflecting cost reductions and restructuring.

• Net income improved to $78,000, a turnaround from prior year losses; diluted EPS was $0.01, up from $(1.13).

• Completed divestiture of non-core businesses and repurchased all preferred stock and a portion of senior notes, funded by a $75 million term loan.

• Over 75% of revenues are under contract for at least four years, supporting long-term stability.

Financial highlights

• Revenue increased to $43.5 million from $41 million year-over-year; six-month revenues reached $86.4 million.

• Adjusted gross profit rose 12.1% to $33.7 million (77.5% of revenue); gross margin expanded to 77.5% (adjusted) and 67.5% (GAAP).

• Income from operations improved to $4.3 million from a $5.1 million loss.

• Free cash flow was $7.6 million; cash and cash equivalents at quarter end were $23.6 million.

• Diluted EPS for Q2 2024 was $0.01; weighted average shares outstanding were 10.0 million basic, 10.4 million diluted.

Outlook and guidance

• Full-year 2024 revenue expected between $170 million and $175 million (5-8% growth).

• Adjusted gross margin guidance raised to 73%-77% for 2024.

• Adjusted EBITDA guidance increased to $43-$46 million, with at least a 25% margin.

• Net free cash flow for 2024 expected to be at least $10 million.

• Long-term targets: double-digit revenue growth, recurring revenue ≥90%, adjusted gross margin ≥75%, adjusted EBITDA margin ≥30%.