Synchronoss Technologies SNCR reported a non-GAAP loss of 26 cents per share in the third quarter of 2024. This lagged the Zacks Consensus Estimate for earnings of 25 cents. SNCR had reported earnings of 35 cents in the year-ago quarter.
Net revenues of $43 million increased 8% year over year and missed the Zacks Consensus Estimate by 0.79%.
Following the results, SNCR shares fell 4.65% in the pre-market trading. However, Synchronoss’ stock has gained 78.3% against the Zacks Computer and Technology sector’s rise of 30.1% in the year-to-date period.
Synchronoss Technologies, Inc. Price, Consensus and EPS Surprise
Synchronoss Technologies, Inc. price-consensus-eps-surprise-chart | Synchronoss Technologies, Inc. Quote
SNCR’s Top-Line Results
Total revenues in the third quarter increased to $43 million from $39.8 million in the previous period, driven by a 5.1% increase in cloud subscriber growth.
Quarterly recurring revenues represented 92.2% of total revenues, up from 89.5% in the prior-year period.
SNCR inked a 3-year extension with SFR to continue offering its Personal Cloud storage platform to their 27 million subscribers.
Synchronoss introduced the latest version of its Personal Cloud platform, including several enhanced features and AI capabilities, including Memories, AI-Enhanced Genius with One-Click Editing and improved backups.
Rolled out auto-scaling, driving additional financial and operating efficiencies for Synchronoss and several of its major customers.
SNCR’s Operating Details
The adjusted gross margin increased 310 basis points (bps) on a year-over-year basis to 79.6%.
Research and development expenses grew 11.1% year over year to $10.3 million. R&D expenses, as a percentage of total revenues, increased 70 bps to 24.1%.
Selling, general and administrative expenses decreased 32.2% year over year to $13.8 million. As a percentage of total revenues, SG&A expenses declined to 19%.
Adjusted EBITDA for the third quarter was $12.7 million, reflecting a 29.5% margin. This marks an increase from the $9.2 million adjusted EBITDA and a 23.2% margin reported in the prior-year quarter. Operating income was $5.5 million in the third quarter against a loss of $3.8 million in the year-ago quarter.
Synchronoss Balance Sheet & Cash Flow
As of Sept. 30, 2024, SNCR had cash and cash equivalents of $25.2 million compared with $23.6 million as of June 30, 2024.
The operating cash flow was $3.4 million in the reported quarter, up from $6.7 million in the previous quarter.
The adjusted free cash flow declined to $1.8 million in the quarter from $3.9 million in the prior quarter.
SNCR Raises 2024 Guidance
For 2024, Synchronoss expects revenues between $172 million and $175 million, which indicates 6-8% year-over-year growth.
Recurring revenues are expected to be 90-92% of total revenues.
Synchronoss expects an adjusted gross margin of 77-78% (up from the previously mentioned 73-77%).
Adjusted EBITDA is expected between $47 million and $48 million, up from the previously stated $43-$46 million.
Zacks Rank & Stocks to Consider
Currently, Synchronoss has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Computer & Technology sector are Tuya TUYA, Palo Alto Networks PANW and NVIDIA NVDA. Tuya sports a Zacks Rank #1 (Strong Buy), and Palo Alto and NVIDIA each carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Tuya’s shares have lost 35.7% in the year-to-date period. TUYA is set to report third-quarter 2024 results on Nov. 18.
Palo Alto Networks’ shares have jumped 35% year to date. PANW is set to post first-quarter fiscal 2025 results on Nov. 20.
NVIDIA’s shares have jumped 199.3% year to date. NVDA is set to report third-quarter fiscal 2025 results on Nov. 20.
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