Synchronoss 2025 Q1 Earnings Revenue Declines as Net Income Plummets

Synchronoss (SNCR) reported its fiscal 2025 Q1 earnings on May 06th, 2025. The company's revenue fell short of expectations, showing a decrease compared to the previous year. Despite maintaining its full-year guidance, Synchronoss struggled with a significant drop in net income, driven primarily by non-cash foreign exchange losses. The company remains focused on empowering global carrier partners with advanced personal cloud solutions, which continues to yield meaningful outcomes. Synchronoss reaffirmed its full-year financial outlook, projecting steady subscription growth amidst volatile economic conditions.

Revenue

In fiscal 2025 Q1, Synchronoss reported a total revenue of $42.21 million, marking a 1.8% decrease from the $42.97 million achieved in the same quarter of 2024. Professional Services generated revenue of $2.73 million, whereas Subscription Services contributed substantially with $39.29 million. The License segment added $194,000, bringing the total revenue to $42.21 million for the quarter.

Earnings/Net Income

Synchronoss swung to a loss of $0.37 per share in 2025 Q1 compared to a profit of $0.24 per share in 2024 Q1, reflecting a 254.2% negative change. The company reported a net loss of $-3.82 million in 2025 Q1, a 185.3% decline from the net income of $4.47 million in 2024 Q1. The significant EPS decline highlights challenges faced by Synchronoss during the quarter.

Price Action

The stock price of Synchronoss has edged up 2.08% during the latest trading day, has edged down 1.15% during the most recent full trading week, and has dropped 6.18% month-to-date.

Post Earnings Price Action Review

The strategy of purchasing Synchronoss shares following a quarterly revenue increase and holding them for 30 days yielded moderate returns over the past five years, with a 4.46% annualized gain. This performance was influenced by the broader market environment and Synchronoss's business outcomes. From May 2020 to April 2025, the strategy achieved a total return of 28.54%, slightly underperforming the S&P 500's 31.31% return. Although offering steady returns, the strategy's Sharpe ratio of 0.56 suggests it managed risk relatively well compared to the benchmark's 0.51. The strategy experienced a maximum drawdown of -18.57% in February 2023, less severe than the S&P 500's drawdown of -20.57%. Overall, the strategy provided reasonable returns with a focus on risk management, although the returns were modest compared to the broader market.

CEO Commentary

“I am pleased with our Q1 results and the positive start to 2025, delivering solid growth in our subscriber base, meeting expectations for the quarter and reaffirming our full-year guidance,” stated Jeff Miller, President and CEO of Synchronoss. The successful execution of a $200 million term loan extends our debt maturity until 2029, strengthening our capital structure and providing financial stability. Our 93.1% recurring revenue and improved adjusted EBITDA and gross margins enhance our confidence in achieving our annual results, even amidst global economic volatility. Our focus on empowering global carrier partners with advanced personal cloud solutions continues to yield meaningful outcomes.

Guidance

The Company is reiterating its full 2025 outlook with revenue projected between $170 and $180 million, recurring revenue expected to be at least 90% of total revenue, and adjusted gross margin anticipated between 78% and 80%. Adjusted EBITDA is guided to be between $52 million and $56 million, reflecting at least a 30% margin, while free cash flow is forecasted to range from $11 to $16 million, excluding the expected federal tax refund of $28 million plus interest in 2025.

Additional News

Recently, Synchronoss Technologies announced the successful refinancing of a $200 million term loan, extending debt maturity until 2029, which strengthens its financial position. Furthermore, Synchronoss notified of an impending stock sale by the President, indicating strategic moves by the leadership. The company has also scheduled its Annual General Meeting for June 10, 2025, where shareholders and executives will discuss ongoing strategies and future plans. These developments reflect Synchronoss’s commitment to maintaining financial stability and executing strategic initiatives to enhance shareholder value amidst fluctuating market conditions.