Synchronoss Technologies Inc. has announced its financial performance for the fourth quarter and full fiscal year ending December 31, 2024. The report highlights a significant year of growth and operational advancements within the company.
Fourth Quarter Operational Insights
- Total revenue reached $44.2 million, primarily fueled by a 6.0% increase in cloud subscribers year-over-year.
- Net income stood at $7.9 million, with operational income at $7.3 million. The company also reported $9.1 million in free cash flow and $13.9 million in adjusted EBITDA.
- A three-year contract extension was signed with a leading US telecom provider, which will allow them to offer the Synchronoss Personal Cloud solution to over 100 million subscribers. This follows a similar extension with a top French telecom provider announced earlier.
- Capsyl, a new personal cloud platform designed for mobile operators and broadband service providers, was unveiled, promising rapid deployment of secure and scalable cloud services.
- The next-gen Synchronoss Personal Cloud platform was launched, featuring AI capabilities for photo optimization and enhanced security, accessible through major carriers like AT&T and Verizon.
Financial Highlights for Q4 2024
- Comparing the results from Q4 2024 to Q4 2023 reveals total revenue increased from $41.4 million to $44.2 million.
- Recurring revenue constituted 91.0% of total revenue, up from 88.0% in the previous year.
- Gross profit rose 15.5% to $30.6 million, representing a gross margin of 69.1%, compared to 63.9% in the previous year.
- Adjusted gross profit increased by 12.7%, leading to an adjusted gross margin of 79.3%.
- Income from operations significantly improved to $7.3 million from $0.2 million year-over-year.
- Net income was $7.9 million, translating to $0.71 per diluted share, a recovery from a $35.0 million loss in the prior year.
- Adjusted EBITDA increased by 38.9% to $13.9 million, yielding an adjusted EBITDA margin of 31.4%.
- As of December 31, 2024, cash and cash equivalents totaled $33.4 million, an increase from $25.2 million at the end of the previous quarter.
Annual Financial Overview for 2024
- Total revenue for 2024 was $173.6 million, marking a 5.7% increase from $164.2 million in 2023.
- Recurring revenue was 91.2% of total revenue, up from 88.7% the previous year.
- Gross profit for the year increased by 12.1% to $118.6 million, with a gross margin of 68.3%.
- Adjusted gross profit grew 10.5% to $135.7 million, reflecting an adjusted gross margin of 78.2%.
- Operational income exhibited a positive turn, reaching $21.7 million compared to a loss of $10.6 million in 2023.
- Net income was reported at $4.6 million, or $0.43 per diluted share, contrasting sharply with the net loss of $64.5 million the previous year.
- Adjusted EBITDA soared by 60.6% to $50.4 million, establishing an adjusted EBITDA margin of 29%.
Future Outlook for 2025
- Projected revenue is anticipated to range from $170 million to $180 million.
- Recurring revenue is expected to remain at least 90% of total revenue.
- Adjusted gross margin is forecasted between 78% and 80%.
- Adjusted EBITDA is estimated to fall between $52 million and $56 million, ensuring a minimum 30% margin.
- Free cash flow is projected in the range of $11 to $16 million, excluding the anticipated tax refund expected in 2025.
- The company remains optimistic regarding the recovery of a $28 million tax refund from the IRS.
Management Insights
Jeff Miller, president and CEO of Synchronoss, remarked on the transformative year, emphasizing the transition to a high-margin cloud solutions provider and expressing confidence for 2025, citing solid contract renewals and growth potential.
Upcoming Conference Events
- Synchronoss will participate in the 37th Annual Roth Conference on March 16, 2025. Interested parties can register for one-on-one meetings with management through a Roth sales representative.
- The company will also be present at the 20th Annual Needham Technology, Media, & Consumer 1×1 Conference on May 15, 2025.