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Mar 31, 2022
Synchronoss Q1 2022 Earnings Report
Reported a 1% increase in total revenue, driven by cloud subscriber growth, the Brightspeed license, and the RCS platform launch, and a 109% increase in adjusted EBITDA.
Key Takeaways
Synchronoss Technologies reported a 1% increase in total revenue to $65.9 million and a 109% increase in adjusted EBITDA to $11.6 million, driven by strong cloud subscriber growth. The company is increasing its EBITDA expectations for the year to $45 to $55 million.
Announced 18% year-over-year Cloud subscriber growth.
Launched Synchronoss Cloud with Kitamura, marking the first implementation of Synchronoss Cloud in Japan.
Introduced Synchronoss Cloud for Home, enhancing the Company’s overall cloud offering.
Launched RCS-based Business Messaging Service with a major Tier One operator in the United States.
Synchronoss
Synchronoss
Forward Guidance
Management expects second quarter revenue to be up slightly and adjusted EBITDA to be in-line with the first quarter. The Company is maintaining its expectation for GAAP revenue to range between $260.0 million and $275.0 million and is increasing its expectations for adjusted EBITDA performance in 2022 and now expects to achieve between $45.0 million and $55.0 million.
Positive Outlook
- Second quarter revenue expected to be up slightly.
- Adjusted EBITDA expected to be in-line with the first quarter.
- Will be free cash flow positive, on an adjusted basis, in the second quarter.
- Reconfirming that it will be adjusted free cash flow positive for the full year 2022.
- Cloud subscriber growth to continue at a double-digit rate on a year-over-year basis in 2022.
Challenges Ahead
- Digital revenue is expected to decline on a full-year basis due to the pending asset sale.
- Messaging revenue will also decline as this business is operated for improved profitability rather than revenue growth.
- Net contribution to GAAP revenue from non-cash deferred revenue is expected to be approximately $10 million less in 2022 than it was in 2021.
- Cash flow during the first quarter was impacted by large, primarily vendor-related, annual payments.
- Pending sale of the DXP and Activation assets in the second quarter will have an impact.