GlobeNewswire Inc | Nov 8, 2021 04:05PM EST

November 08, 2021

BRIDGEWATER, N.J., Nov. 08, 2021 (GLOBE NEWSWIRE) -- Synchronoss Technologies Inc.(NASDAQ: SNCR), a global leader and innovator in cloud, messaging, and digital solutions, today announced financial results for its third quarter ended September 30, 2021.

Third Quarter Highlights

-- Revenue for the quarter was $69.8 million. -- Recurring revenue for the quarter represented 83% of total revenue. -- Cloud subscribers grew 16% year-over-year versus 12% in the prior year. -- Signed a commercial agreement with Telkomsel, Indonesias largest wireless carrier with 170 million subscribers, for our Cloud solution, the fourth new Cloud customer signed this year. -- Also signed a significant Digital contract with a Major Canadian Telecommunications & Media Company in the quarter. -- GAAP net loss for the quarter was $9.8 million or $0.11 per share, up from a loss of $15.4 million or $0.36 per share in the prior year. -- Non-GAAP net income for the quarter was $7.8 million, or $0.09 per share, up from $1.7 million, or $0.04 per share in the prior year. -- Adjusted EBITDA for the quarter was $12.3 million, up 51% year over year. -- Cash and cash equivalents were $24.1 million at quarter end. -- Full-year 2021 Adjusted EBITDA guidance raised to $39-43 million from $32-37 million.

Commenting on the results, Jeff Miller, President and CEO of Synchronoss, said:

I am pleased to report strong Q3 results that were driven by sustained year-over-year growth in our Cloud and Digital businesses, said Jeff Miller, President, and CEO of Synchronoss. I would like to highlight Cloud subscriber growth which grew 16% year-over-year, up from 12% in the prior year. We are providing this metric for the first time publicly to provide evidence of the strong underlying fundamentals driving Cloud revenue growth, our largest and most strategic business. With the closing of a significant Cloud win with Telkomsel, our fourth Cloud win year to date, I believe we are in a position to continue Cloud subscriber growth in the coming quarters."

Three Months Ended September 30,(in thousands) 2021 2020 % ChangeRevenues $ 69,753 $ 68,636 1.6 %Loss from continuing operations, before (15,091 ) (14,366 ) (5.0 )%taxesNet loss (9,831 ) (15,367 ) 36.0 %Adjusted EBITDA $ 12,288 $ 8,128 51.2 %

Nine Months Ended September 30,(in thousands) 2021 2020 % ChangeRevenues $ 206,784 $ 222,293 (7.0 ) %Loss from continuing operations, (30,241 ) (38,814 ) 22.1 %before taxesNet loss^1 (56,337 ) (37,790 ) (49.1 ) %Adjusted EBITDA $ 31,102 $ 21,435 45.1 %

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1 Includes $10.4million preferred stock amortization costs accelerated due to Series A Preferred stock redemption in the second quarter of 2021.

Lou Ferraro, EVP of Financial Operations and CHRO, added:

We are pleased that our continued growth in Cloud subscribers and improved operating results are allowing us to raise our Adjusted EBITDA guidance for 2021. We continue to focus on profitable revenue growth, diligently managing our cost structure, and delivering improved shareholder value.

2021 Adjusted EBITDA Guidance

The company continues to expect revenue for full year 2021 to be in the range of $275 to $285 million and is raising its adjusted EBITDA guidance for full year 2021 to $39-$43 million from $32-$37 million, representing adjusted EBITDA growth of 40% to 55% year-over-year, respectively.

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 included below under the heading "Non-GAAP Financial Measures."

Conference Call Details

Synchronoss will host a conference call at 4:30 p.m. (Eastern Time) today to discuss the financial results. To access the live call, dial 800-377-9510 or +1 334-454-0059 (International) and give the conference ID number, 6767984.

A live and archived webcast of the conference call will be accessible on the Investor Relations section of the companys website at www.synchronoss.com. In addition, a phone replay will be available approximately two hours following the end of the call and will be available for one week.

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, adjusted EBITDA, operating income (loss), net income (loss), effective tax rate, and earnings (loss) per share. 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 fair value stock-based compensation expense, acquisition-related costs, which include restructuring and cease-use lease expense, litigation, remediation and refiling costs 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. Investors are encouraged to also review the Balance Sheet, Statement of Operations, and Statement of Cash Flow. 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 Technologies (NASDAQ: SNCR) builds software that empowers companies around the world to connect with their subscribers in trusted and meaningful ways. The companys collection of products helps streamline networks, simplify onboarding, and engage subscribers to unleash new revenue streams, reduce costs and increase speed to market. Hundreds of millions of subscribers trust Synchronoss products to stay in sync with the people, services and content they love. Thats why more than 1,500 talented Synchronoss employees worldwide strive each day to reimagine a world in sync. Learn more at www.synchronoss.com.

Forward-looking Statements

This press release includes statements concerning Synchronoss and its future expectations, plans and prospects that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words may, should, expects, plans, anticipates, could, intends, believes, potential or continue or other similar expressions are intended to identify forward-looking statements. Synchronoss has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its business, financial condition and results of operations. These forward-looking statements speak only as of the date of this press release and are subject to a number of risks, uncertainties and assumptions including, without limitation, risks relating to the Companys ability to sustain or increase revenue from its larger customers and generate revenue from new customers, the Companys expectations regarding expenses and revenue, the sufficiency of the Companys cash resources, the impact of legal proceedings involving the Company, including the investigations by the Securities and Exchange Commission and the Department of Justice described in the Companys most recent SEC filings, and other risks and factors that are described in the Risk Factors and Managements Discussion and Analysis of Financial Condition and Results of Operations sections of the Companys Annual Report on Form 10-K for the year ended December 31, 2020 and the Companys Quarterly Report on Form 10-Q for the period ended June 30, 2021, which are on file with the SEC and available on the SECs website at www.sec.gov. The company does not undertake any obligation to update any forward-looking statements contained in this press release as a result of new information, future events or otherwise.

Contact:

Investors:Todd Kehrli or Joo-Hun KimMKR Investor Relations623-745-4046investor@synchronoss.com

SYNCHRONOSS TECHNOLOGIES,INC.CONDENSED CONSOLIDATED BALANCE SHEETS(Unaudited) (In thousands)

September 30, December 31, 2021 2020ASSETS Cash and cash equivalents $ 24,141 $ 33,671 Accounts receivable, net 39,073 47,849 Operating lease right-of-use assets 27,629 34,538 Goodwill 226,840 232,771 Other assets 130,692 133,426 Total assets $ 448,375 $ 482,255 LIABILITIES AND STOCKHOLDERS? EQUITY Accounts payable and accrued expenses $ 77,050 $ 82,075 Debt, current ? 10,000 Deferred revenues 32,351 45,614 Debt, non-current 117,494 ? Operating lease liabilities, non-current 38,013 44,273 Other liabilities 17,868 19,370 Preferred Stock 72,505 237,641 Stockholders? equity 93,094 43,282 Total liabilities and stockholders? $ 448,375 $ 482,255 equity

SYNCHRONOSS TECHNOLOGIES,INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited) (In thousands, except per share data)

Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020Net revenues $ 69,753 $ 68,636 $ 206,784 $ 222,293 Costs and expenses: Cost of revenues^1 27,245 28,452 83,024 93,403 Research and development 15,368 20,885 49,962 59,769 Selling, general and 27,953 23,265 67,790 74,249 administrativeRestructuring charges 1,485 820 3,075 6,763 Depreciation and 8,215 12,212 26,567 33,852 amortizationTotal costs and expenses 80,266 85,634 230,418 268,036 Loss from continuing (10,513 ) (16,998 ) (23,634 ) (45,743 )operationsInterest income 24 20 54 1,587 Interest expense (2,933 ) (72 ) (3,172 ) (401 )Other Income (expense) (1,669 ) 2,684 (3,489 ) 5,743 Loss from continuing (15,091 ) (14,366 ) (30,241 ) (38,814 )operations, before taxesBenefit for income taxes 6,982 8,744 7,346 29,148 Net loss from continuing (8,109 ) (5,622 ) (22,895 ) (9,666 )operationsNet income (loss)attributable to ? (60 ) 286 (242 )redeemablenoncontrolling interestsPreferred stock dividend (1,722 ) (9,685 ) (33,728 ) (27,882 )Net loss attributable to $ (9,831 ) $ (15,367 ) $ (56,337 ) $ (37,790 )Synchronoss Earnings (loss) per shareBasic $ (0.11 ) $ (0.36 ) $ (0.98 ) $ (0.90 )Diluted $ (0.11 ) $ (0.36 ) $ (0.98 ) $ (0.90 )Weighted-average common shares outstanding:Basic 85,646 42,360 57,662 41,777 Diluted 85,646 42,360 57,662 41,777

________________________________1Cost of revenues excludes depreciation and amortization which are shown separately.

SYNCHRONOSS TECHNOLOGIES,INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited) (In thousands)

Nine Months Ended September 30, 2021 2020Net loss continuing operations $ (22,895 ) $ (9,666 )Adjustments to reconcile net loss to net cash provided by operating activities:Non-cash items 33,830 52,835 Changes in operating assets and liabilities: (5,384 ) (34,508 )Net cash provided by (used in) operating activities 5,551 8,661 Investing activities: Purchases of fixed assets (1,386 ) (571 )Purchases of intangible assets and capitalized (17,004 ) (12,610 )softwareOther investing activities 550 1,775 Net cash used in investing activities (17,840 ) (11,406 ) Net cash provided by financing activities 2,687 9,991 Effect of exchange rate changes on cash 72 112 Net decrease in cash and cash equivalents (9,530 ) 7,358 Cash, restricted cash and cash equivalents, 33,671 39,001 beginning of periodCash, restricted cash and cash equivalents, end of $ 24,141 $ 46,359 period

SYNCHRONOSS TECHNOLOGIES,INC.RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES(Unaudited) (In thousands, except per share data)

Three Months Ended Nine Months Ended September September 30, 30, 2021 2020 2021 2020Non-GAAPfinancial measures andreconciliation:GAAP Revenue $ 69,753 $ 68,636 $ 206,784 $ 222,293 Less: Cost of 27,245 28,452 83,024 93,403 revenuesGross Profit 42,508 40,184 123,760 128,890 Add / (Less): Stock-basedcompensation 432 505 1,289 1,899 expenseRestructuring,transition and 405 89 432 372 cease-use leaseexpenseAdjusted Gross 43,345 40,778 125,481 131,161 ProfitAdjusted Gross 62.1 % 59.4 % 60.7 % 59.0 %Margin Three Months Ended Nine Months Ended September September 30, 30, 2021 2020 2021 2020GAAP Net lossattributable to (9,831 ) (15,367 ) (56,337 ) (37,790 )SynchronossAdd / (Less): Stock-basedcompensation 2,289 4,391 7,355 14,547 expenseRestructuring,transition and 2,981 6,580 7,956 15,280 cease-use leaseexpenseAmortization 3,036 4,107 9,851 20,207 expenseLitigation andremediation 9,316 1,943 12,858 3,500 costs, netNon-GAAP Net(loss) income $ 7,791 $ 1,654 $ (18,317 ) $ 15,744 attributable toSynchronoss Diluted Non-GAAPNet (loss) income $ 0.09 $ 0.04 $ (0.32 ) $ 0.38 per share Weighted sharesoutstanding - 85,646 42,360 57,662 41,777 Dilutive

SYNCHRONOSS TECHNOLOGIES,INC.RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES(Unaudited) (In thousands, except per share data)

Three Months Ended NineMonths Ended Sep 30, Jun 30, Mar 31, Dec 31, Sep 30, Sep 30, Sep 30, 2021 2021 2021 2020 2020 2021 2020 Net lossattributable $ (9,831 ) $ (23,946 ) $ (22,560 ) $ (10,892 ) $ (15,367 ) $ (56,337 ) $ (37,790 )to SynchronossAdd / (Less): Stock-basedcompensation 2,289 2,345 2,721 (3,410 ) 4,391 7,355 14,547 expenseRestructuring,transition and 2,981 2,918 2,057 1,222 6,580 7,956 15,279 cease-uselease expenseLitigation andremediation 9,316 3,607 (65 ) 1,145 1,943 12,858 3,500 costs, netDepreciationand 8,215 8,485 9,867 9,834 12,212 26,567 33,852 amortizationInterest (24 ) (25 ) (5 ) (9 ) (20 ) (54 ) (1,587 )incomeInterest 2,933 144 95 75 72 3,172 401 ExpenseOther Income, 1,669 (1,576 ) 3,396 (3,793 ) (2,684 ) 3,489 (5,743 )netProvision(benefit) for (6,982 ) (201 ) (163 ) 2,039 (8,744 ) (7,346 ) (29,148 )income taxesNet lossattributableto ? 50 (336 ) 101 60 (286 ) 242 noncontrollinginterestsPreferred 1,722 21,476 10,530 10,099 9,685 33,728 27,882 dividend^1AdjustedEBITDA $ 12,288 $ 13,277 $ 5,537 $ 6,411 $ 8,128 $ 31,102 $ 21,435 (non-GAAP)

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1 Includes $10.4million preferred stock amortization costs accelerated due to Series A Preferred stock redemption in the second quarter of 2021.

Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Net Cash (used in)provided by $ (2,616 ) $ 7,053 $ 5,551 $ 8,661 operating activitiesAdd / (Less): Capitalized software (6,045 ) (3,926 ) (17,004 ) (12,610 )Property and (136 ) (147 ) (1,386 ) (571 )equipmentFree Cashflow (8,797 ) 2,980 (12,839 ) (4,520 )Add: Litigation andremediation costs, 1,816 1,943 5,358 3,500 netAdjusted Free $ (6,981 ) $ 4,923 $ (7,481 ) $ (1,020 )Cashflow