Synchronoss Technologies, Inc. revenue dropped on 19.0% and EBITDA Margin dropped on 11.8 pp from -8.9% to -20.6%
03/12/2019 • About Synchronoss Technologies, Inc. (
$SNCR) • By InTwits
Synchronoss Technologies, Inc. reported 2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- The company operates at negative EBITDA Margin: -20.6%
- EBITDA Margin is quite volatile: -20.6% in 2018, -8.9% in 2017, -6.5% in 2016, 20.4% in 2015, 25.9% in 2014
- Synchronoss Technologies, Inc. has medium CAPEX intensity: 5 year average CAPEX/Revenue was 9.4%. At the same time it's in pair with industry average of 13.3%
- CAPEX is quite volatile: $12m in 2018, $12m in 2017, $43m in 2016, $61m in 2015, $74m in 2014
- The company has unprofitable business model: ROIC is -26.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue dropped on 19.0%. Revenue decline showed acceleration in 18Q4 - it was 22.7% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.3 pp from 3.6% to 5.8% in 2018. EBITDA Margin stuck to a declining trend at -12.2 pp per annum in the last 5 years.
Gross Margin decreased on 3.6 pp from 54.9% to 51.3% in 2018. SG&A as a % of Revenue decreased slightly on 0.81 pp from 38.3% to 37.5% in 2018. SG&A as a % of Revenue followed a growing trend at 5.8 pp per annum in the last 5 years.
Net Income margin dropped on 39.8 pp from -27.2% to -67.0% in 2018. Net Income margin declined at -18.8 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
Synchronoss Technologies, Inc.'s CAPEX/Revenue was 3.6% in 2018. CAPEX/Revenue dropped on 10.7 pp from 14.3% in 2015 to 3.6% in 2018. It's average CAPEX/Revenue for the last three years was 5.5%. CAPEX as a % of Revenue stuck to a declining trend at -3.6 pp per annum in 2014-2018.
Return on investment
The company operates at negative ROIC (-26.3%) and ROE (-76.9%). ROIC decreased on 9.6 pp from -16.6% to -26.3% in 2018. ROE dropped on 54.8 pp from -22.0% to -76.9% in 2018. ROIC stuck to a declining trend at -9.6 pp per annum in 2014-2018. ROE followed a declining trend at -19.9 pp per annum in 2014-2018.
Leverage (Debt)
Company's Net Debt / EBITDA is -1.0x and Debt / EBITDA is . Net Debt / EBITDA didn't change in 2018. Debt dropped on 48.5% while cash dropped on 33.6%.
Synchronoss Technologies, Inc. has short term refinancing risk: cash is only 91.4% of short term debt.
Management team
Glenn Lurie is a Synchronoss Technologies, Inc.'s CEO. Glenn Lurie is a founder and has spent 1 year with the company. The company's CFO is David D Clark IV. David D Clark IV has 1 year tenure at the company.
Financial and operational results
FY ended 12/31/2018
Synchronoss Technologies, Inc. ($SNCR) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 457.3 | 428.1 | 426.3 | 402.4 | 325.8 | -19.0% |
| Gross Profit | 272.9 | 272.8 | 231.6 | 220.9 | 167.0 | -24.4% |
| SG&A | 79.2 | 88.4 | 126.2 | 154.0 | 122.1 | -20.7% |
| EBITDA | 118.3 | 87.3 | -27.7 | -35.7 | -67.2 | |
| Net Income | 38.9 | 40.6 | 11.9 | -109.4 | -218.2 | |
Balance Sheet
|
|---|
| Cash | 236.0 | 147.6 | 169.8 | 156.3 | 103.8 | -33.6% |
| Short Term Debt | 0.0 | 0.0 | 29.0 | 0.0 | 113.5 | |
| Long Term Debt | 9.2 | 238.2 | 238.7 | 238.9 | 9.5 | -96.0% |
Cash flow
|
|---|
| Capex | 73.9 | 61.2 | 42.6 | 12.2 | 11.7 | -4.1% |
Ratios
|
|---|
| Revenue growth | 31.0% | -6.4% | -0.4% | -5.6% | -19.0% | |
| EBITDA growth | 55.6% | -26.2% | -131.7% | 28.8% | 88.3% | |
|
|---|
| Gross Margin | 59.7% | 63.7% | 54.3% | 54.9% | 51.3% | -3.6% |
| EBITDA Margin | 25.9% | 20.4% | -6.5% | -8.9% | -20.6% | -11.8% |
| SG&A, % of revenue | 17.3% | 20.7% | 29.6% | 38.3% | 37.5% | -0.8% |
| Net Income Margin | 8.5% | 9.5% | 2.8% | -27.2% | -67.0% | -39.8% |
| CAPEX, % of revenue | 16.2% | 14.3% | 10.0% | 3.0% | 3.6% | 0.6% |
|
|---|
| ROIC | 12.5% | 2.1% | -14.6% | -16.6% | -26.3% | -9.6% |
| ROE | 8.0% | 7.1% | 2.1% | -22.0% | -76.9% | -54.8% |
| Net Debt/EBITDA | -1.9x | 1.0x | | | |
Synchronoss Technologies, Inc. ($SNCR) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 84 | 77 | 83 | 82 | | -2.8% | -35.5% | -8.5% | -22.7% |
| EBITDA | -21 | -20 | -11 | -16 | | | -234.4% | | |
| Net Income | -37 | -40 | -47 | -94 | | | | | -964.8% |
Balance Sheet
|
|---|
| Cash | 310 | 223 | 222 | 104 | | 40.4% | 2.9% | 5.9% | -33.6% |
| Short Term Debt | 0 | 0 | 229 | 114 | | -100.0% | -100.0% | -73.7% | |
| Long Term Debt | 239 | 239 | 10 | 9 | | -78.5% | -0.1% | -95.8% | -96.0% |
Ratios
|
|---|
| Gross Margin | 46.8% | 48.5% | 47.5% | 62.2% | | 0.3% | -11.4% | -2.4% | 1.8% |
| EBITDA Margin | -25.0% | -25.7% | -13.2% | -18.9% | | 6.6% | -38.0% | 0.8% | -9.2% |
| Net Income Margin | -43.8% | -52.1% | -56.5% | -115.0% | | 24.3% | -29.8% | -18.0% | -125.2% |
Peers in Application Software
Below we provide Synchronoss Technologies, Inc. benchmarking against other companies in Application Software industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| nFusz Inc ($FUSZ) | | | | | 433.3% |
| CloudCommerce Inc ($CLWD) | | -38.1% | 247.6% | 40.9% | 301.1% |
| Seven Stars Cloud Group, Inc. ($SSC) | | 134.7% | 663.8% | 310.3% | 161.7% |
| Aurora Mobile Limited ($JG) | | | | 304.9% | 150.8% |
| Intelligent Systems Corporation ($INS) | | 14.2% | 71.0% | 12.2% | 119.0% |
| |
|---|
| Median (151 companies) | -43.3% | 14.0% | 14.3% | 15.7% | 15.2% |
|---|
| Synchronoss Technologies, Inc. ($SNCR) | | -6.4% | -0.4% | -5.6% | -19.0% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Skkynet Cloud Systems Inc ($SKKY) | 99.7% | 97.4% | 98.0% | 97.6% | 96.5% |
| hopTo Inc ($HPTO) | 91.8% | 87.8% | 95.9% | 98.2% | 95.4% |
| Aware, Inc. ($AWRE) | 75.4% | 87.2% | 90.3% | 94.6% | 92.3% |
| Alteryx, Inc. ($AYX) | 77.5% | 80.5% | 81.3% | 83.4% | 91.0% |
| Aspen Technology, Inc. ($AZPN) | 86.5% | 88.7% | 89.7% | 90.2% | 89.9% |
| |
|---|
| Median (150 companies) | 63.4% | 61.7% | 64.2% | 64.6% | 66.1% |
|---|
| Synchronoss Technologies, Inc. ($SNCR) | 59.7% | 63.7% | 54.3% | 54.9% | 51.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Aspen Technology, Inc. ($AZPN) | 34.5% | 42.2% | 46.0% | 45.2% | 43.3% |
| ANSYS, Inc. ($ANSS) | 45.9% | 45.8% | 45.1% | 41.9% | 41.4% |
| Paycom Software, Inc. ($PAYC) | 15.1% | 19.5% | 35.1% | 34.4% | 35.9% |
| j2 Global, Inc. ($JCOM) | 41.6% | 40.6% | 41.7% | 36.5% | 35.7% |
| Adobe Inc. ($ADBE) | 17.5% | 25.9% | 31.2% | 34.2% | 35.3% |
| |
|---|
| Median (152 companies) | -10.3% | -10.7% | -4.7% | -3.3% | -3.2% |
|---|
| Synchronoss Technologies, Inc. ($SNCR) | 25.9% | 20.4% | -6.5% | -8.9% | -20.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| TimefireVR Inc ($TFVR) | 0.0% | 350.5% | 4.3% | | 1,021.9% |
| MGT Capital Investments Inc ($MGTI) | 0.0% | 36.5% | 221.4% | 129.8% | 344.5% |
| Integrated Ventures Inc ($INTV) | | | | | 199.9% |
| ShotSpotter, Inc. ($SSTI) | | 18.3% | 28.9% | 27.1% | 24.3% |
| Ellie Mae, Inc. ($ELLI) | 12.3% | 20.6% | 16.7% | 21.1% | 19.4% |
| |
|---|
| Median (153 companies) | 2.8% | 2.7% | 2.9% | 2.3% | 2.4% |
|---|
| Synchronoss Technologies, Inc. ($SNCR) | 16.2% | 14.3% | 10.0% | 3.0% | 3.6% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| InsPro Technologies Corp ($ITCC) | -558.9% | | | | 127.4% |
| Manhattan Associates, Inc. ($MANH) | 64.8% | 78.7% | 99.3% | 102.5% | 80.9% |
| Intuit Inc. ($INTU) | 34.2% | 23.7% | 52.1% | 72.6% | 66.8% |
| Aspen Technology, Inc. ($AZPN) | 133.4% | | | | 58.1% |
| Paycom Software, Inc. ($PAYC) | 16.7% | 30.5% | 75.4% | 51.1% | 47.5% |
| |
|---|
| Median (179 companies) | -14.4% | -13.1% | -9.2% | -10.2% | -9.3% |
|---|
| Synchronoss Technologies, Inc. ($SNCR) | 12.5% | 2.1% | -14.6% | -16.6% | -26.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Upland Software, Inc. ($UPLD) | | | 16.4x | 115.6x | 16.7x |
| Nuance Communications, Inc. ($NUAN) | 7.9x | 5.7x | 5.3x | 7.1x | 15.2x |
| Asure Software Inc ($ASUR) | 3.4x | 4.5x | 3.6x | 9.5x | 14.5x |
| SS&C Technologies Holdings, Inc. ($SSNC) | 1.7x | 7.3x | 4.6x | 3.1x | 8.5x |
| Avaya Holdings Corp. ($AVYA) | | | | | 7.4x |
| |
|---|
| Median (70 companies) | -1.2x | -1.0x | -0.9x | -0.8x | -0.7x |
|---|
