Synchronoss (SNCR) 9 Nov 212021 Q3 Earnings call transcript

Good day and welcome to the Synchronoss Technologies Third Quarter 2021 Financial Results Conference Call. Today's conference is being recorded. At this time I would like to turn the conference over to Todd Kehrli of MKR Investor Relations. Please go ahead, sir.

Thank you, operator. to quarter welcome call. earnings and afternoon Synchronoss' XXXX third conference Good and of me Synchronoss' Resources Chief Jeff Greenwald, are today's Officer, Financial Vice and Taylor With call Officer, Lou President Ferraro. on Chief Operations Financial and Chief Executive officer, Executive Human President Miller,

our Before the everyone page financial that website Quarter. of Company's Any all at a that certain This be The statements and issued comments we'll press to of the announcing its not likely comments call prospects plans are release call factors and Jeff like the market historical the future business Third forward-looking Lou, is I'd over factors discuss These the long-term statements. for expectations management performance. Synchronoss I should discussed regarding on being is cover Internet This opportunities may Company's webcast today's on website. live going the a remind afternoon, interested synchronous.com. influence to forward-looking on for turn results the broadcast Company's the to Relations to few over particularly facts, and archived that available quick forward. about today items. call are and Investor will I include the want be parties release considered

review to Forward-looking XX-Q of these filings, statements SEC and results encourage complete which materially. description differ are recent listeners our actual subject most to cause We to a of number a uncertainties of risks risks. including could and for XX-K all our our

XXXX, new events, undertakes as contained obligation the and are a update forward-looking Whether call made statements Company or changes to this result any of no publicly as November on of otherwise. expectations, future statements Xth, of today, in information, Our revise herein. or the

not such differences and related X-K, as does be operations or non-GAAP deferred account certain for the on capitalization cash equate Adjusted adjusted that describe Variation a call as current EBITDA. to non-GAAP continued development. we'll now measures, Synchronoss. good items The EBITDA not With for this between in by the as release release. said, report throughout financial GAAP and it And earnings and Jeff. present the Thanks, such today of necessarily software call, does reporting to Additionally, the joining the your I'll discussing for everyone. between generated in for periods the revenue the Company's over afternoon, turn Form Thank Todd. reconciliation. our reported interest two us and you

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basis. reflected year. revenue we've cloud evidence explained prior can monthly for providing revenue the By in business. CCMI this digital Verizon XX% we're sequentially. confident for to business and and up revenue. Had not recognized metric most can accelerated to currently sustain and of in for than positive was results. Cloud both overall our QX profitability the treatment X% the year-over-year provide the of which drive that specific and QX second growth publicly. momentum strong reflecting solutions in fundamentals the are where cloud term the for EBITDA the that is sequentially, provide flattening on XXXX. prior higher customer, This accounting is of metric, the Recurring we calls, Cloud underlying subscriber contributions driven that I growth continued up XXXX, quarter increased was double-digit time expectations, largest was quarter providing to of we highlighted the first to subscriber onto quarter. over been our XX% total our strategic that and third across it Verizon XX-month contract. cloud higher growth of driving and revenue largest and Now, subscriber have masks the the unit. a XX% am was this were would the growth adjusted since improvements on adjusted our by EBITDA an ultimately in growth basis. quarter, And above million $XX.X to of the the in And $XX.X not on revenue from and want XXX was Strength our and the announce this of momentum versus cloud this will is which contract metric demonstrated revenue, results million points basis a reported ongoing of in performance XX% quarter year-over-year, cloud year-over-year growth revenue plan digital that by We I'm the subscriber revenue, double-digit pleased sequential by Verizon revenue -- in trailing basis everyone in provide we This the is underlying strong base Cloud sense customers. the growth as XX% primarily strength But revenue. was treatment of XX% a

follows Division is agreement subscribers. earlier second significant million Telkomsigma. quarter, the this wireless with a Indonesia with new year with Cloud and The This During our the largest closed Synchronoss with win Indonesia Telecom in carrier our win XXX Telkomsel. of

of process addition -- customer Glouc Verizon use enterprises coming backbone portfolio, we in deploy a and will Content Cloud U.S. those messaging XXX telecommunications our for subscribers. signed is the for media and quarters. RCS I innovation Japan, adoption, Company their to and our million agreement Also their large we Cloud, our plans our existing in simplify Through Plus message represented offering sincerely and coming we our part our improvements for -- potential Solution, leverage customers platform of product in base subscribers. this the is advanced a assigned employees growth an would remain who with in In Mobile agreements another we've foundation Cloud over agreement which Cloud messaging X and that laying to signed providers, secured subscriber agreement the messaging subscribers significant achieved broader like on special with with the modules. new new and in and discussions Synchronoss service RCS and global digital, other messaging customers thank quarter. of their With by million. expect and we the we set further digital business, to our milestone quarters. in bypassing we Cellular of as active our Canadian already net additional yield the In expansion an upgrade sales, and execution year. collaboration we messaging, leverages with for to with are focus driving your accomplishments Transfer global signed XX now our continued Telkomsel, this deployment. And to Cloud now We And multiyear a now base the

let's aforementioned in deeper Now dive subscribers. double-digit into XX% year-over-year growth performance take approximately cloud $XX revenue and X% the third quarter was up results. year-over-year, strong reflects million, The quarter-over-quarter. a Cloud

our solution. on streamlined that the of are onboarding making we to should experience for adoption fact, accelerate accessible help resulting cloud adjustment In the activate exceeded how a his to our and further further in performance. our ongoing color AT&T an AT&T our ahead to for counts this personal to will our QX, Lou provide in well revenue base. also original Cloud to increasing iOS report subscriber to of cloud experience Verizon users represents example teams continue contributing basis. favorable growth cloud on and prepared remarks. be as devices, subscriber in the quarterly recognition Apple the I'm more pleased model, This AT&T the reducing forecasts, within customer overall contributing friction development Recently another their forecast,

the QX major Cloud The in host base including the carrier our their new now the signed a the launch As laws. for scalability, local a international signed a primary million Synchronoss, Indonesia is in in who we're or data Telkomsel accordance subscriber size in behind quarter, Kitamura, we've Telecom with than XXXX. and platform, Protection planned to grade with mentioned larger in in Sigma, privacy to customers actually reliability locally AT&T option the is and Telecom of This Indonesia Synchronoss Telkomsel XXX cell. now carrier Plans, with Verizon. factors Year-to-date, and X we Allstate win win

their with our the agreement mobile Cloud In multiyear to extension portfolio our provider, addition, and to partnership mobile integrate of device, with we their digital subscribers. recently support protection Assurant, Synchronoss extended a and of services through

CCMI. XX% mentioned, they consumers ramp second more during new they customers these in Sailor as CCMI and to quarter, while significantly to want Solution, season. due as cloud up. current provide utilize the and with of down exceeds of solution the accelerated that to has was with upgrade our working of Transfer Japanese subscribers. announced service and received contribute was will speaks we part with well This streamlining now -- process launch the wins revenue the million QX messaging in been revenue that a under portfolio from Verizon calls, dissolution a onboard with that much year-over-year, of recognition U.S. carriers new their digital limited XX% the XXXX of RCS discussed following I their with expect Synchronoss umbrella that individually, realized for the began to customers we the QX, we as This end in quarter and do In Japan, the XXXX solution the for signed U.S. million process agreement during closely upgrade Now their I market. noted Verizon to signed critical for agreement the with Messaging Cellular how at Content holiday contribution message represents we In Plus RCS-based $XX.X of working protect to prepare And earlier XX to CCMI, Mobile largely new expansion. continuation our RCS our will million for content the Plus and the We're devices. announced I messaging they briefly ease with that to contract of financial quarter. XXXX XX during now cloud we and our migrate recently highlight it them the QX Verizon work compares quarter-over-quarter, our assist based an in Japan. in anticipated as in platform. as

saw a expect and incremental quarter the licenses some additional sell As QX. license result, revenue in we capacity in to

Over of platform. them from we like solutions million over migrated customers the our and also of Bell, a X.X to competitor's email many at course L-Keys QX, accounts Proximus,

additional net been a Additionally, quarter-over-quarter and large fiber, to co-ex, $X their modules and their telecommunications increase a a $XX.X using years customers additional design to and and has use X contract suite. up who's network we and accounts Company a network. for optimize significant multiyear copper will spacial these XX% very completed X email allow media Company, of closed migration satisfaction. In We growth. further And modules help investment network a in digital XX% Japan. our and Canadian its revenue that they'll now million, in them This XX to our expand maintain million was their one and with solution of customer includes network architectures to year-over-year complex

we deployment been new, product framework, product On enhanced a better modern, greatly platform, for expect By hindSIGHT the X market portfolio, our teams front, to media our Network an And R&D in client organization. of is access analysis provides the and for capacity integration network both have single our launched Inventory faster products extensive our that allowing spatialOFFICE. our ingestion, have of across within completed tool instantaneous Cloud U.S. R&D investments. the will enabling and and formally data This Facial with our cross-platform across the improved to spatialSUITE network label customers a platform hard wireless on overhaul code have working for innovation three we our digital and architecture. customers. Management utilizes products leveraging of white Within provides health our that a capability and insight key a wireless productivity visibility their spatial significant new reuse, of through we speed to network enable network finally, design activation Tier successfully a the U.S. based DXP viewing platform. the for activation overall Digital of platform. automated browser one all X three of integration carriers the reporting and into carriers, SpatialOFFICE our

it senior of Company, and structure. team. Human other CEO. and Vice year made we're responsibilities. and Executive recapitalization Company Before the his be tireless we summer, Officer more integral that thank our customers, progress Cloud of quarter, around been me Lou, will of global employees significant us resuming I taking increasing we're appointed an delivering in the we've will from all new a role the job he this customers It's in our Financial efforts, platform. a him acting process. put Operations President in on recapitalization he since remain to his He base Synchronoss. board comparison, growth role the to over across the Through capital completed me XX% our has addition of as place turning guiding to leadership of adding focus let Through the accelerated a sustainable on to turn of done, CFO, year-over-year Last for customers, Chief subscriber on XX% that our then the through fantastic Resources member a

managed to improved operating leading prudently which and our efficiencies, subscriber levels with incremental of expenses growth, enhance our combination have is profitability. in We

for platforms ever future easier their confident bright to accessible Synchronoss for to teams We ahead and your operational support. continue who functionality, Lou, R&D work with and have by and financial our to that for will opportunity the and for to it see ultimately will honored grateful more features, We Company. to let results. improve over more the you the I value use I'm on than enhanced opportunities to me continued thank detail provide Our innovation, And new bringing improve. deliver while results lead financial to shareholders. QX this capabilities our subscribers. all And turn more and I'm and continued in market lays making that,

us. the Thank you call evening you, for Jeff, in this thank joining and everyone

Officer. as want Greenwald welcome I Before new start, our to Taylor I Synchronoss to Chief Financial

Jeff Taylor financial to Operations As position. Financial made forward in have functions progress of we extensive brings capacity all Synchronoss the of my we as as mentioned experience in Human organizations. global Synchronoss' managing public and to improving large earlier, Resources look I working financial Officer, with Chief EVP continue Taylor

from X% revenue up quarter quarter. Now, for quarter and results. third onto second the from the $XX.X previous the Total our million, down X% was year,

and growth in adjusted year-over-year the The in call. of our the year-over-year cloud improvement on down points CCMI earlier revenue This the which sequentially. X% basis revenue, prior in our basis. the and CCMI. result dissolution prior consistent would year-over-year resulting year-over-year accelerated XX% from revenue from in digital Jeff call, contribution year, earnings up and the revenue with Cloud second of of solutions XX% by XX% QX was growth is of by and communications sequential Had the Recurring noted and our up was digital was accelerated continued both being business, quarter, not from from the XXX XX% quarter. a the X% revenue points of the increased quarter from subscriber is and a EBITDA on for up been As the this we in driven recognition total it sequentially second which have increased quarter

services which While XX% Verizon product on on likely percentage the professional was recovering the Cloud advanced year from XX% and we quarter. from to to revenue revenue strength increased to XX% prior as recognized the an in year basis, messaging continue the reflects anticipate expect absolute quarter in X% in to increase development of a year-over-year recurring subscriber ago. dollar Cloud this $XX.X in Cloud The revenue million continued base, one-time year-over-year compared prior of to basis, significant the grew a despite revenue due will Japanese of overall the up our the growth offering unlimited decrease sales carriers. QX license

projected beyond As reflect the contract, the just to have treatment over life This forecast than to the growth ASC be account each one-time XXX. Verizon. the Verizon increasing digital allowed recognition make higher discussed we life to as through positive subscriber in we earlier, will at we to from contract recognized Cloud also us conjunction the a adjustment cumulative the this, continuing Beginning favorable with QX our acceleration and Verizon of recorded contract has our of revenue quarter with required to revenue amount subscriber improvement of a the our In of growth. for is the specific by adjustment model.

subscription other Our have customers which and growth X where and follow we signed a the subscriber include year-to-date subscription customers linear. model more Cloud traditional AT&T new revenue are

product and of As Total profit revenue XX subscribers or and costs $X.X sequentially, based were for advanced Again, the RCS subscribers, decrease down XX% expenses existing and X approximately subscribers gross of gains XX% matters. the of down the the platform million our is new year, legal important of to strong more operations messaging signing expenses the the primarily remains down the increase associated Adjusted as Adjusting contract efficiency to contracts of from of million our telecommunications Company sweet year-over-year in with to prior and the and million and XX% an messaging decline driven X% improve Japan, leading the increased was will in largely achieved a and with portfolio the across organization. a down onto over once XX% operating follow several in was million EBITDA the to our from and million totaled XX% in and Messaging payment related revenue of primarily sales expenses our quarter. from revenue has business messaging up acceleration flat CCMI prior solid non-recurring CCMI as was The acceleration the result expansion including improvement The subscriber non-cash sequentially a contract million sequentially. million, growth. EBITDA result of items, in Plus revenue the due strongest of $XX.X using from the revenue new from result that the Verizon. decline than in was leading, operating sequentially million multiyear the revenue. was EBITDA costs by adjusted we Adjusted efficiency the professional The e-mail in litigation QX. due bonds of prior and and accelerated the Adjusted $X.X signed The from to of up in over the incremental $XX.X The surpassing growth spacial in media efforts ago of profit migration combination our matters issuance cash million the is growth gross $XX.X again $XX.X from quarter. $XX.X Cloud incremental million quarter. recognized prior termination quarter. and continue subscriber related time. large interest and operational ongoing benefited the QX CCMI commissions fees from for the higher quarter, was XX been from $XX.X with $XX.X XX% costs $XX.X the subscriber growth The which down the ongoing was year million, hosting million performance. prior from and years. quarter. %X.X and manage a were prior continued nearly from we was million better Cash is add and XXXX, of year, expenses revenue. the The XX% Cloud year-over-year adjusted million expect to quarter. gross prior prior of versus of reflected in from $XX.X result up decrease in to prior closely our year increase the revenue milestones, margin Digital equivalents

turning Now, guidance. to

of our $XXX maintaining the are XXXX for million revenue We million. to guidance full-year $XXX

full of $XX revision guidance. $XX This stated million low-end increasing to we our million million XX% XXXX guidance EBITDA our However, is to results. to $XX prior-year are growth the respectively year over represents of high-end the EBITDA EBITDA $XX upward our adjusted adjusted guidance the million. to above now of XX%, previously This revised reflects from

Xnd. to with the Operator conference On in let's you. XXth Relations November participating front, forward our will Discovery on the And and and on weeks. turn Investor via I Benchmark upcoming Technology look the Thalmann conference the December with calls one-on-one be Virtual it to we Ladenburg the for in coming Taylor investors Thank Expo that, over speaking Jeff, scheduled Q&A.

Mike Thank moment for opportunity first Capital Latimore from to everyone [Operator Markets. just take for Northland We'll you. allow question We'll questions. of to a an Instructions]. signal our pause

Great. Congratulations. the would great. track of new contributor in to biggest was trying the wins. all one incremental revenue XXXX? be Which keep I Looks

Of number Kitamura. in the parallel of Telkomsigma, of which will these X we will the will happen customers, actually XXXX. Those still launching for be will opportunity and we the early be to days, in I be a Telkomsel, new Mike, QX launch items it Cloud all while referenced think which that

Great.

provider. in color talked Do prior have that you the talked they was? replacing think I about Telkomsel their who announcement, you of -- any

arm we really No, recall by IT honestly, Telecom which enabled that service Indonesia. Telkomsigma, offering that I of new are don't a but is introducing

it's really replacing existing or So existing customer not an supplier.

when mentioned or that? ago, at subscriber the a two, guess growth then or messaging might sync say And I you up some that closely very growth. did the the revenue growth second more point strong. referenced with subscriber then why And that just And absolutely, is might you occur?

treatment as the Verizon as for And also revenue Verizon. point, has a we our today as we muted, I result all largest Cloud the at referenced, is that would subscriber growth customer. say, this discussed, provide So of been

that that our growth between will their overall our and linear growth. revenue a a relationship to anticipate are revenue growth will still customers, I as become who -- of newer providing growth base. there the there time, overall be a just gap subscriber over over indication subscriber the larger subscriber narrow So time of better as But described, on Lou the in percentage it

Thanks. you And then nice guess, ago, digital are to year win you business, relative a when I about in joined business? growth this going forward? a digital, Is feeling how the

we on Well, had very a basis solid and results this year-over-year both quarter, clearly basis. quarter-over-quarter

So, well opportunities have continue today. customers to in us that see to there of aspects over the cases, example as a growth. portfolio of time. some provided we've maturing There some just that the are for clearly for digital decade, are served, over we Many been these

it some I'll but growth a potential are, call those slowing still bit, we indicated see of this just little Some as we quarter.

Great, Congratulations. thanks a lot.

Thank you, Mike. joining Thanks for us.

We'll Riley, FBR. next B. Nichols from our you. Josh Thank of question take

the fair seeing. great highlight mid-teens are one, and subscriber you is this [Indiscernible] question see that you the the Cloud question; guys is there my taking adjusted assume than contract, layer for be you you margin Verizon subscriber that contribution in. could then just continue? to trajectory would average see part, these I'd growth higher from to much Two-part subs, to additional if to thanks Yeah, imagine those that growth expected that you highlight the for as guys type of the second corporate And you're likely Cloud given

could aspect. that believe start that XXXX. with we -- something would me still will enter strength and feel in do -- we expect see with growth that XXXX you first as conclude subscriber Let comfortable enter I mid-teens, we is sustained that the

biggest also It's new Company's business continue as customers see will part it on wide contribution largest margin and think have we add with is As I business. anticipate Cloud and business for today similar healthy customers our today. we the of clients contribution to It with our new our margins, the the gross enjoyed that you'll pertains margins that that overall in a network. to as contributor to the us

rec those every generation then And a a wondering build the that as month and contribution think And to growth about add flip between there the growth sustain business? you've to the start I as how was improve cloud one should subs. question just continues mentioned to rev I follow-up. subscribers know But from cash we Verizon. when obviously more your of revenue was before, you gap you on because subscriber the as for to continue and flow you free new expect cash to Verizon

My expectation be We're cash delivering X trajectory something strong of ongoing generation that expect operating can over And in XXXX. of a improvements the as is demonstrating delivered expense quarter. the flow free years. on last and result the improvements in we've terms that a delivered candidly, to you performance we that this been

any into direction So in for we're heading to you? from get as we the be joining right questions and you Josh other expect 'XX. to Thanks a strong, sustained position

was I quick. know of contract Verizon adjustments ASC real that part the like XXX. right some sounded question Last to it there retroactive as

that normalize trying that? had. the If the value EBITDA dollar impact Just you and -- that kind the and how, could just to of for was of what kind what quarter

Sure.

let The million. million-a-quarter of me quarter, from ongoing be the for Let about we you. Josh, forward benefit will enhanced $X the approximately $X.X the retro the outline was that ongoing. cumulative benefit subscriber will approximately in see growth Lou going adjustment

Thanks appreciate for it. clarifying. I

No problem. Sure.

I'm showing remarks. I this further at it would time back closing for to to Instructions]. no Management turn [Operator questions. And like

we Company, day. delighted to continued share QX appreciate Great. in I'd to joining the a results. us with Thank for your Have everyone and of We today. thank like our interest were your you you. good rest

you your Thank for today's participation. concludes This call.

disconnect. now may You