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Mar 31, 2023
Synchronoss Q1 2023 Earnings Report
Reported solid progress toward achieving cash flow targets for 2023, driven by focus on the core Cloud business and commitment to cost management.
Key Takeaways
Synchronoss Technologies reported a 12.4% decrease in total revenue to $57.7 million, but invoiced cloud revenue increased 11.8% year over year. The company reaffirmed its 2023 guidance and expects to be cash flow positive in Q2 and return to GAAP revenue growth in the second half of the year.
Achieved 11% year-over-year Cloud subscriber growth and exceeded milestone of 10 million global Cloud subscribers.
Unveiled next generation Personal Cloud platform at CES with new and enhanced features.
Progressed significantly toward the launch of Synchronoss Personal Cloud with the new Tier One operator in APAC, scheduled for the second half of 2023.
Reached milestone of more than 32.5 million RCS-based Messaging subscribers in Japan.
Synchronoss
Synchronoss
Forward Guidance
Synchronoss expects second quarter revenue and adjusted EBITDA to moderately improve compared to the first quarter of 2023. The company is reiterating its expectation to be cash flow positive for 2023 and expects Cloud subscriber growth to continue at a double-digit rate. For the fiscal year ending December 31, 2023, the Company expects GAAP revenue to range between $242.0 million and $255.0 million and adjusted EBITDA to range between $44.0 million and $55.0 million.
Positive Outlook
- Expects to be cash flow positive in Q2 2023
- Forecasting improved profitability in the second half of 2023
- Expects a return to GAAP revenue growth in the second half of 2023
- Expects Cloud subscriber growth to continue at a double-digit rate in 2023
- Strategic actions taken over the past year led to a nearly $6 million decrease in total costs and expenses during the first quarter.
Challenges Ahead
- Macroeconomic conditions are slowing the pace of customer decision making.
- Revenue in the second quarter of 2023 is expected to decline moderately year over year on a GAAP basis.
- The net contribution to GAAP revenue from non-cash deferred revenue is expected to be $7.4 million less in 2023 than it was in 2022, most of which is related to the first half of the year.
- Total revenue decreased 12.4% to $57.7 million from $65.9 million in the prior year period.
- Adjusted EBITDA decreased 28% to $8.4 million from $11.6 million in the prior year period.