Synchronoss Technologies Q2 2025 Earnings Report

Synchronoss Technologies EPS Results

• Actual EPS: $0.10
• Consensus EPS: $0.25
• Beat/Miss: Missed by -$0.15
• One Year Ago EPS: N/A

Synchronoss Technologies Revenue Results

• Actual Revenue: $42.49 million
• Expected Revenue: $42.79 million
• Beat/Miss: Missed by -$308.00 thousand
• YoY Revenue Growth: N/A

Synchronoss Technologies Announcement Details

• Quarter: Q2 2025
• Date: 8/11/2025
• Time: After Market Closes
• Conference Call Date: Monday, August 11, 2025
• Conference Call Time: 4:30PM ET

Synchronoss Technologies (NASDAQ:SNCR) provides cloud, messaging, digital, and network management solutions in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company offers Synchronoss Personal Cloud platform that allows customers' subscribers to backup and protect, engage with, and manage their personal content. It also provides Synchronoss' Messaging platform comprising advanced messaging platform and email suites; and OnboardX products, including mobile content transfer solution that offers wireless transfer of content from one mobile smart device to another in a carrier retail location or at home/work, etc., as well as out of box experience solution, a device setup solution that assists customers in setting up the features of new device, such as Wi-Fi, email, social network accounts and voicemail, prompting restoration of content, and enrollment in a cloud service. In addition, the company provides NetworkX products comprising spatialNX, an enterprise-wide access to network information, including physical location, specifications, attributes, connectivity, and capacity for every plant asset; ConnectNX, a system that eliminates manual handling of service orders and manages the full order lifecycle between customer and supplier through automation and rules-based validation; and ExpenseNX, a financial analytics platform. Further, it offers professional services, such as consulting, installation and deployment, configuration, systems integration, and support services; and software development and customization services. The company markets and sells its services through direct sales force and strategic partners. Synchronoss Technologies, Inc. was incorporated in 2000 and is headquartered in Bridgewater, New Jersey.

Synchronoss Technologies Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Revenue for Q2 was $42.5 M, up sequentially from $42.2 M, driven by 2% year-over-year global subscriber growth.
• Positive Sentiment: Received the full $33.9 M CARES Act refund and applied a $25.4 M mandatory prepayment at par to the term loan, reducing debt by over $100 M in four years and cutting interest expense.
• Positive Sentiment: Achieved a third consecutive quarter with an adjusted EBITDA margin above 30% (30.2%) and maintained 92.6% of total revenue as recurring SaaS revenue.
• Negative Sentiment: Reported a net loss of $19.6 M (–$1.08 per share), primarily due to $12.5 M of non-cash foreign exchange losses and $6.4 M of debt refinancing costs.
• Positive Sentiment: Pipeline remains strong with management expecting to sign at least one new customer in 2025, as discussions advance with multiple large carriers across various geographies.

Presentation

[Operator]

Ladies and gentlemen, greetings, and welcome to the Synchronoss Technologies Second Quarter twenty twenty five Earnings Call. At this time, all participants are in listen only mode. A brief question and answer session will follow the formal presentation. If anyone requires operator assistance during the conference, please signal the operator by pressing star and zero on your telephone keypad. As a reminder, this conference is being recorded.

[Operator]

It is now my pleasure to introduce your host for today, Ryan Gardella, Investor Relations. Please go ahead.

[Ryan Gardella, SVP - IR at ICR Inc.]

Thank you. Good afternoon. Welcome to the Synchronoss Technologies second quarter twenty twenty five earnings conference call. Joining us from Synchronoss today is President and CFO, Jeff Miller and CFO, Lou Ferrero. By now, everybody should have access to the company's second quarter twenty twenty five earnings press release issued this afternoon, which is available on the Investor Relations section of our website.

[Ryan Gardella, SVP - IR at ICR Inc.]

Today's call will begin with remarks from Jeff and Lou, after which we'll host a question and answer session. Before we conclude, I'll provide the necessary cautions regarding the forward looking statements made by management during this call. I'd like to remind everyone that this call will be recorded and made available for replay via a link in the Investor Relations section of the company's website. Now I'd like to turn the call over to Jeff Miller, President and CEO of Synchronoss. Jeff?

[Jeff Miller, President & CEO at Synchronoss]

Thank you, Ryan. Welcome, everyone, and thank you for joining today's call. We're delighted to report another quarter of progress against our planned initiatives and solid results across our operational and financial metrics. Our strategic transformation this past year to a leading global cloud solutions provider has resulted in a more predictable and stable business model, strengthening our financial profile and delivering improved profitability. Revenue for the quarter was $42,500,000 up slightly from $42,200,000 in the prior quarter, driven by year over year subscriber growth of 2% across our global customer base.

[Jeff Miller, President & CEO at Synchronoss]

Adjusted EBITDA was also up sequentially to $12,800,000 with an adjusted EBITDA margin of 30.2%, representing the third consecutive quarter of 30% or more adjusted EBITDA margin performance. Recurring revenue was 92.6% of quarterly total, demonstrating the consistency and predictability of our SaaS business model. I'd like to start off by highlighting the receipt of our CARES Act federal tax refund. In the time since we announced receiving the first portion of our tax refund, I'm pleased to share that we received our final federal CARES Act tax refund payment of $3,700,000 This brings the total amount of our refund to $33,900,000 which includes $5,200,000 in interest. This long awaited milestone initiated a $25,400,000 mandatory prepayment at par that we applied against our term loan, resulting in reduced interest payments and significantly strengthening the company's financial position.

[Jeff Miller, President & CEO at Synchronoss]

We conclude the refund process with a reduced debt load, lower interest payments and the remaining $8,500,000 of the tax refund proceeds available to enhance operational flexibility. Lou will discuss this more in detail shortly. Taken together with our previous actions to improve our balance sheet, this prepayment towards our term loan represents a total debt reduction of over $100,000,000 in the last four years. We're pleased to have a satisfactory conclusion on what was a long and tedious process to get what was properly owed to Synchronoss and our shareholders, and we're happy to put this chapter of the company's history behind us. Moving on to operations.

[Jeff Miller, President & CEO at Synchronoss]

The improved profitability of the business has been achieved by driving high margin top subscriber revenue, while continuing to streamline costs of delivering our global cloud solution. The 9% year over year reduction in our operating expenses substantiates our ongoing commitment to tightly manage costs. With more capital on the balance sheet, lower debt and interest expense and a sharp eye on expenses, we're well positioned to continue the investment in our product, expand the capabilities of our cloud solution and explore adjacent products and verticals to create greater value for our shareholders now and in the future. In May, we added new features to improve our user experience by releasing Personal Cloud version 25.5. Among the changes in this version were significantly enhanced Genius AI functionality to improve photo discovery and engagement for users.

[Jeff Miller, President & CEO at Synchronoss]

This new release included AI curated personalized memories with auto styled photos and innovative timeline comparisons that feature the then and now retrospectives. New features like stylized moments dynamically apply artistic effects to photos with preview notifications for easy interaction, while the locations map organizes content geographically for spatial memory browsing. These enhancements built on synchronous Genius AI address digital content overload by intelligently indexing and categorizing photos, enabling users to unlock and relive meaningful memories. This update underscores Synchronoss' commitment to AI driven innovation and that we will be rolling this out to our 11,000,000 subscribers worldwide. Through our Tier one carrier partners, we are empowering users to protect and personalize their digital lives, while delivering enhanced value to carriers through improved subscriber engagement and increased customer loyalty.

[Jeff Miller, President & CEO at Synchronoss]

We also validated our privacy framework with a third party and self certified under the EU US data privacy framework certification, demonstrating our commitment to security of our users' data. Administered by the US Department of Commerce, achieving this certification reinforces our resolve to comply with international privacy standards and enhances trust with our tier one telecom operators and their subscribers worldwide. This certification confirms our adherence to applicable European privacy laws and validates the robust safeguards that we have in place for cross border data transfers, underscoring Synchronoss' dedication to responsible data governments, governance, security, and transparency. It also complements our existing credentials, including SOC two Type two, ISO 27,001 and TRUST e certifications, further solidifying our position as a trusted provider of secure, scalable cloud solutions. Next, I want to provide an update on each of our core customers.

[Jeff Miller, President & CEO at Synchronoss]

For AT and T, we're experiencing sustained momentum in subscriber growth that has exceeded our expectations, with notable year over year improvements in adoption and performance of our cloud offerings. This growth is driven by enhanced digital onboarding processes that continue to boost cloud awareness and increase take rates among their customer base. We're particularly excited about the potential uplift from Samsung's recent launch of new flagship devices just this past week, which we anticipate to further contribute to subscriber additions. Overall, our partnership with AT and T remains a key positive contributor to Synchronoss' success, reinforcing our position as a trusted provider of innovative personal cloud solutions. Next, at Verizon, we've sustained growth by expanding our retail presence through both direct and more recently indirect channel partners, with retail activations now comprising a growing share of our subscriber base.

[Jeff Miller, President & CEO at Synchronoss]

Our cloud offering continues to hold a prominent position within Verizon's go to market PERC portfolio strategy, encompassing My Plan for their consumers, My Home for their broadband users, and My Biz for small business. This reinforces our integral role in their ecosystem. At SoftBank, their retail channel continues to drive robust performance, and we're now expanding our presence into their digital channels to further accelerate growth. In the second quarter, we signed an agreement to integrate the cloud technology via SDK or software development kit into their native account management applications with the SoftBank Corporation, mirroring our successful implementation with Verizon's integration, which we expect to boost uptakes in there heading as we head into 2026. This strategic expansion will enhance the visibility and accessible accessibility of Anshen Data Box Cloud offered through SoftBank's mobile brands.

[Jeff Miller, President & CEO at Synchronoss]

Our Capsule solution, Synchronoss' branded personal cloud platform tailored for smaller and international operators, continues to gain traction with encouraging early results. In Q2, our partnership with TelkomCell saw progress following their revised go to market strategy, which eliminated the need for monthly opt in for their subscribers, driving favorability on the growth trends in adoption. We expect this streamlined approach to enhance the accessibility and appeal of Capsule's plug and play model, enabling operators to efficiently deploy our cloud solution to their users. As we highlighted last quarter, the macroeconomic environment continues to present uncertainties, including tariffs, global trade tensions and broader economic fluctuations. Despite some modest growth in The U.

[Jeff Miller, President & CEO at Synchronoss]

S. Handset market, U. S. Carriers are grappling with elongated device upgrade cycles and the widespread adoption of multi year price locks, prompting them to increasingly prioritize value added services as a key driver of revenue growth. This strategic shift is reflected in the robust expansion in The U.

[Jeff Miller, President & CEO at Synchronoss]

S. Mobile market of value added services, estimated to be growing at least 10% annually. We're confident that Synchronoss is in an ideal position to capitalize on this trend through our strong relationships with leading carriers and our role as a trusted provider of secure and innovative cloud storage solutions. With this backdrop, we remain confident in our ability to sign at least one new customer in 2025, as we previously indicated. The conversations that we're having with prospects are progressing well, and we are deep in the process with several potential new clients.

[Jeff Miller, President & CEO at Synchronoss]

While we don't have anything new specific today to share, we'll update the financial community as soon as we have more to discuss. To wrap up, we created another quarter of solid results across the business through the team's steady execution. We generated $12,800,000 of adjusted EBITDA at greater than 30% margins and with 92% recurring revenue for the quarter. We closed a chapter of our story with the receipt of the $33,900,000 in the CARES Act refund, which allowed us to pay down our term loan by $25,400,000 at par and add $8,500,000 of cash to the balance sheet. The refund enabled us to reduce our annual interest expenses by approximately $2,900,000 and that capped off in over $100,000,000 reduction in debt over the last four years.

[Jeff Miller, President & CEO at Synchronoss]

We saw a 9% year over year reduction in our operating expenses, contributing to improved profitability. And we have growing confidence in our pipeline and remain on track to deliver at least one new customer in 2025, as we previously mentioned. Now, I'd like to turn the call over to Lou. Thank you, Jeff, and thank you everyone for joining us today. First, I'll review our key financial metrics for the 2025, which we believe serve as a critical benchmark for our performance and then we'll provide an update on our financial results and outlook.

[Jeff Miller, President & CEO at Synchronoss]

Starting with our key performance indicators, quarterly revenue was 92.6% of total revenue, reflecting our stable cloud business model, which is driven by cloud subscriber growth of 2%. Turning to our financial results for the second quarter ended 06/30/2025. Total revenue was $42,500,000 down slightly from $43,500,000 in the prior year period due to the expiration of a customer contract in December 2024, as disclosed last quarter, partially offset by cloud subscriber growth. Adjusted gross profit was $33,700,000 or 79.3% of total revenue compared to the same dollar amount in the prior year, which amounted to 77.5% of revenue. The improvement in adjusted gross profit was due to recurring revenue representing a higher percentage of the revenue mix in 2025.

[Jeff Miller, President & CEO at Synchronoss]

Income from operations was up 59.6% year over year from 4,300,000 to $6,900,000 driven by further reductions in operating expenses. As Jeff mentioned, we've now received our entire CARES Act refund, which allowed us to pay down $25,400,000 of our existing term loan at par with the remaining 25 percent of the refund applied to our balance sheet for additional operational flexibility. According to the terms of the agreement, the prepayment was all applied towards the scheduled amortization payments. Therefore, we do not foresee having to make another scheduled amortization payment prior to 2028. This should provide us with more free cash flow going to the bottom line over the next three years.

[Jeff Miller, President & CEO at Synchronoss]

Moving down the income statement. Our total operating expenses decreased 9% from $39,200,000 to $35,600,000 All components, including cost of revenues, research and development, sales, general and administrative, restructuring charges and depreciation and amortization were down year over year. We are going to continue to be focused on intense cost control to help our profitability. Net loss was $19,600,000 or negative $1.0.8 per share. As in the first quarter, this negative result was primarily driven by the impact of $12,500,000 of non cash foreign exchange losses, primarily due to reevaluations of intercompany payables and receivables between our U.

[Jeff Miller, President & CEO at Synchronoss]

S. And our subsidiaries, as well as $6,400,000 in debt refinancing costs. I want to stress that the foreign exchange charge is a non cash paper loss that has no impact on the financial viability of the business nor does it reflect on the fundamentals of our performance. Adjusted EBITDA was $12,800,000 representing a 30.2 margin consistent with our high margin model and supported by cost control, including a reduction in operating expenses on a year over year basis as we previously mentioned. Moving to the balance sheet.

[Jeff Miller, President & CEO at Synchronoss]

Cash and cash equivalents were 24,600,000.0 as of 06/30/2025. This does not include approximately $8,500,000 in cash that was not used for the repayment of debt from the tax refund that received subsequent to the end of the quarter. Free cash flow was negative $1,100,000 and adjusted free cash flow was positive $500,000 As we've communicated previously and consistent with our company seasonality, we have full confidence in our ability to hit our free cash flow guidance for the year. With that in mind, we reaffirming our 2025 outlook and are currently expecting the following: revenue of $170,000,000 to $180,000,000 adjusted gross margin of between 7880% recurring revenue of at least 90% of total revenue, adjusted EBITDA of between $52,000,000 and $56,000,000 and free cash flow of between 11,000,000 and $16,000,000 The company's free cash flow guidance excludes proceeds from the federal tax refund as previously communicated. Additionally, the guidance excludes approximately $4,400,000 of transaction fees from the 2025 term loan reflected in cash flow from operations and included in free cash flow.

[Jeff Miller, President & CEO at Synchronoss]

These fees resulted from the company's recent capitalization in which the $75,000,000 term loan and a portion of the senior notes were considered modified under accounting principles when replaced with a new $200,000,000 term loan due to participation by existing lenders. These projections reflect our confidence in subscriber growth, cost discipline and financial flexibility from our refinancing and refund despite macroeconomic challenges. I'll now turn the call over to the operator for Q and A. Thank you for joining us.

[Operator]

Thank you. Ladies and gentlemen, we will now begin the question and answer session. A confirmation tone will indicate your line is in the question queue. You may press star and 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

[Operator]

Ladies and gentlemen, we will wait for a moment while we poll for questions. The first question comes from John Hickman with Ladenburg. Please go ahead.

[Jon Hickman, MD - Equity Research at Ladenburg Thalmann]

Hi. Just a couple of questions. The foreign exchange, is that going to be an ongoing non cash expense?

[Jeff Miller, President & CEO at Synchronoss]

Hi John, it's Luke. John, it's similar to the first quarter. That foreign exchange item is the reevaluation of our intercompany payables and receivables and really ties to the strength of the dollar as it relates primarily to the Euro. There's been the constantly strengthening position of the dollar and it's very hard for us to predict how that fluctuation will happen in the future. So, I do think there will be some level of performance there.

[Jeff Miller, President & CEO at Synchronoss]

Hopefully, it won't continue to be as negative it is. But again, it's a non cash item for us.

[Jon Hickman, MD - Equity Research at Ladenburg Thalmann]

Okay. And then going forward, the debt restructuring, is that all done or are you going to keep like amortizing those expenses?

[Jeff Miller, President & CEO at Synchronoss]

So the debt cost, John, that we recorded, there will be pieces in the third and fourth quarter that flow through. But in terms of the P and L impact, that's primarily now behind us.

[Jon Hickman, MD - Equity Research at Ladenburg Thalmann]

Okay. And then when you say you're gonna get one new customer, does that mean like a NT type customer or any kind of customer?

[Jeff Miller, President & CEO at Synchronoss]

We have conversations yeah. We have conversations going on with actually a a wide variety of customers, prospects in a wide variety of geographies. Some represent similar scale to AT and T. Some of them are smaller. Some of them are primarily mobile, and some are broadband and mobile.

[Jeff Miller, President & CEO at Synchronoss]

So we do have a number of prospects. What we're indicating now is that we've made enough progress through enough of these customer conversations that we expect to have at least one new customer contract in before the end of the year and contributions made by those customers as we enter 2026.

[Jon Hickman, MD - Equity Research at Ladenburg Thalmann]

Okay. And your guidance would imply a somewhat stronger second half. Is that

[Jeff Miller, President & CEO at Synchronoss]

Yes, that's correct.

[Jon Hickman, MD - Equity Research at Ladenburg Thalmann]

Half right there? Okay. Thanks. That's it for me.

[Jeff Miller, President & CEO at Synchronoss]

Thank you, John. K.

[Operator]

Thank you. Ladies and gentlemen, as there are no further questions, I would now like to hand the conference over to Jeff Miller for the closing comments.

[Jeff Miller, President & CEO at Synchronoss]

I'd simply like to thank the members of the Synchronoss team who do an amazing job of serving our customers, enhancing our products, and supporting each other to deliver the results that we just spoke about. And again, would like to thank all of those who are stakeholders and shareholders of Synchronoss Technologies for your ongoing support. With that, I'll turn it back to Ryan.

[Ryan Gardella, SVP - IR at ICR Inc.]

Thanks, Jeff. Before we conclude today's call, I'd like provide Synchronoss' Safe Harbor statement that includes important cautions regarding forward looking statements made during this call. During this call, management will discuss certain factors that are likely to influence the company's business going forward. Any factors that are discussed today that are not historical, particularly comments regarding and market opportunities, are considered forward looking statements within the meaning of applicable securities laws. These forward looking statements include comments about the company's plans and expectations about future performance.

[Ryan Gardella, SVP - IR at ICR Inc.]

Forward looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially. All listeners are encouraged to review the company's SEC filings, including its most recent 10 ks and 10 Q for a description of these risks. Statements made during the call are as of today, and the company does not undertake any obligation to update or revise any such forward looking statements, whether as a result of new information, future events or changes in expectations or otherwise. Please note that throughout today's call, management will discuss certain non GAAP financial measures such as adjusted EBITDA. Although the non GAAP financial measures are derived from GAAP numbers, adjusted EBITDA is not necessarily cash generated by operations.

[Ryan Gardella, SVP - IR at ICR Inc.]

This does not account for such items as deferred revenue or the capitalization of software development. Today's earnings release describes differences between the company's non GAAP and GAAP reporting measures and presents a reconciliation for the periods reported in that release. Thank you for joining to Synchronoss Technologies second quarter twenty twenty five earnings call. You may now disconnect.

[Operator]

Thank you. Ladies and gentlemen, the conference of Synchronoss Technologies has now concluded. Thank you for your participation. You may now disconnect your lines.

Participants

Analysts

• Ryan Gardella, SVP - IR at ICR Inc.
• Jeff Miller, President & CEO at Synchronoss
• Jon Hickman, MD - Equity Research at Ladenburg Thalmann