BRIDGEWATER, N.J., May 11, 2020 (GLOBE NEWSWIRE) -- Synchronoss Technologies Inc. (NASDAQ: SNCR), a global leader and innovator in cloud, messaging, digital and IoT platforms and products, today announced financial results for its first quarter ended March 31, 2020.

Financial quarter highlights:

• Revenue for the quarter was $77.1 million.
• GAAP net loss for the quarter was $12.0 million.
• Synchronoss delivered $1.8 million of adjusted EBITDA for the quarter.
• Total costs and expenses were down 12.9 percent in the first quarter.
• Synchronoss ended the quarter with $30.9 million of cash on the balance sheet.

Glenn Lurie, president and chief executive officer, stated “The strong foundation of long-term recurring revenue business that we have built with blue chip customers, and the new business wins that we added to our revenue base in 2019 and early 2020, enabled Synchronoss to deliver a solid first quarter. Synchronoss and our customers provide services and infrastructure that enable people to stay connected, which is especially important in the current environment of stay-at-home orders and social distancing.”

Mr. Lurie added, “The first quarter of 2020 was an incredible test for Synchronoss on our ability to rise above the global health and economic crisis caused by COVID-19. In response to the pandemic, we acted swiftly to adjust our daily business practices and protect our employees. Over the course of a few days in March, our company shifted to a predominantly work-from-home virtual model and found new ways to work with and serve our customers and prospects. Our team quickly adapted and launched three new cloud customers including AT&T, TracFone, and Assurant; advanced our U.S. Advanced Messaging initiative with AT&T, Sprint, T-Mobile, and Verizon; and continued the strong momentum in our Digital and IoT platforms around the world. I am incredibly proud of the hard work and continued sense of purpose and determination of the Synchronoss team.”

Aggressive Cost Cutting and Cash Preservation Actions Taken

In light of the uncertain economic environment caused by COVID-19, Synchronoss took additional action to reduce operating expenses. These additional actions are expected to reduce annual expenses by over $40 million and to deliver in-year 2020 savings of approximately $30 million. These actions are in addition to the previously announced $15 million of expense savings initiatives operationalized by Synchronoss for 2020. Accordingly, total expense savings initiatives implemented by Synchronoss in 2020 are expected to deliver approximately $55 million of annualized operating expense reductions, of which approximately $45 million are expected to be realized in 2020. Steps taken include our executive team agreeing to take reductions in their base salary, workforce and contractor reductions, renegotiation of contracts with vendors and suppliers, facilities rationalizations, and merit increase and bonus deferrals, among others.

David Clark, chief financial officer, added, “We believe our high percentage of recurring revenue from our customers in the essential telecommunications, media, and technology industries will enable Synchronoss to weather the impact of COVID-19 on the economy. While our first quarter results were solid, and exceeded our internal plan, we felt it necessary to take action in these unprecedented times to shore up our cash and further reduce expenses. We believe these actions are prudent, long-term strategic adjustments that put Synchronoss in an increased position of strength once COVID-19 related uncertainties subside in the marketplace. We also believe these actions will enable us to significantly improve the earnings leverage of the company in 2020, preserve healthy balance sheet liquidity, and deliver on our EBITDA goals, even in the event of an impact on revenue due to COVID-19.”

Mr. Clark continued, “We ended the quarter with $31 million of cash, and our liquidity has since grown to $41 million presently. We have developed our internal financial plans to maximize liquidity throughout the year, and we believe we have sufficient liquidity for the foreseeable future.”

2020 Guidance

Given ongoing COVID-19-related economic uncertainties, and potential impact on our customers, Synchronoss is withdrawing revenue guidance for the balance of the year. However, in light of our strong foundation of recurring revenue and the cost cutting actions mentioned above, the company reaffirms Adjusted EBITDA guidance for the year of $25-$35 million.

New Business Update

New customer agreements and partnerships that the company has completed since the last earnings announcement include:

• AT&T Mobility has launched the Synchronoss Personal Cloud solution for its wireless customers on its first set of brands. The Synchronoss Personal Cloud solution will fully integrate into a suite of AT&T services, leveraging the cloud to vastly improve the subscriber’s overall experience. It will also give AT&T the ability to provide and monetize new value-added services to its wireless customers. Additional AT&T brands will be launched later in 2020.
• Tracfone has launched the Synchronoss Personal Cloud solution on its first sets of brands, and we are executing on plans to launch on additional brands later in 2020.
• Synchronoss’ Personal Cloud Solution has been fully integrated with Pocket Geek by Assurant to provide an enhanced device and content protection solution for a leading North American MVNO and a major carrier in Europe.
• Several new agreements have been booked with CCMI related to expansion and enhancements of the RCS-based Advanced Messaging offering. We continue to believe the RCS-based advanced messaging service will be launched by the CCMI joint venture in 2020.
• In Japan, +Message subscriber growth continues to outpace expectations beyond the 15 million subscribers announced in December. We recently booked another contract for additional license purchases by one of the operators and expect more in 2020.

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."

About Synchronoss Technologies, Inc.

Synchronoss transforms the way companies create new revenue, reduce costs and delight their subscribers with cloud, messaging, digital and IoT products, supporting hundreds of millions of subscribers across the globe. Synchronoss’ secure, scalable and groundbreaking new technologies, trusted partnerships, and talented people change the way TMT customers grow their businesses. For more information, visit us at www.synchronoss.com.