Synchronoss Technologies, Inc. Debt decreased on 7.3% and Revenue decreased on 5.5%
03/08/2021 • About Synchronoss Technologies, Inc. (
$SNCR) • By InTwits
Synchronoss Technologies, Inc. reported 2020 financial results today. Here are the key drivers of the company's long term financial model:
- Synchronoss Technologies, Inc. is a company in decline: 2020 revenue growth was -5.5%, 5 years revenue CAGR was -7.4%
- Synchronoss Technologies, Inc. spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for 2016-2020 is 0.0%. Average EBITDA Margin for the same period was -8.4%
- Synchronoss Technologies, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.9%. At the same time it's in pair with industry average of 3.7%
- CAPEX is quite volatile: $1m in 2020, $8m in 2019, $12m in 2018, $12m in 2017, $43m in 2016
- The company has unprofitable business model: ROIC is -12.0%
- It operates with high leverage: Net Debt/EBITDA is 11.6x while industry average is 18.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Synchronoss Technologies, Inc.'s Revenue decreased on 5.5%. Revenue decline showed acceleration in 20Q4 - it was 23.4% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 7.1 pp from -6.2% to 0.91% in 2020. During the last 5 years EBITDA Margin bottomed in 2018 at -20.6% and was growing since that time.
Gross Margin increased on 6.9 pp from 51.3% to 58.2% in 2020. SG&A as a % of Revenue decreased on 5.9 pp from 36.5% to 30.6% in 2020. During 2016-2020 SG&A as a % of Revenue topped in 2017 at 38.3% and was declining since that time.
Net Income margin jumped on 29.7 pp from -33.1% to -3.4% in 2020. During the last 5 years Net Income margin bottomed in 2018 at -67.0% and was growing since that time.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 0.44% in 2020. The company showed decline in CAPEX/Revenue of 2.6 pp from 3.0% in 2017 to 0.44% in 2020. It's average CAPEX/Revenue for the last three years was 2.2%.
Return on investment
The company operates at negative ROIC (-12.0%) and ROE (-93.0%). ROIC surged on 11.5 pp from -23.5% to -12.0% in 2020. ROE surged on 23.7 pp from -117% to -93.0% in 2020. During 2016-2020 ROIC bottomed in 2018 at -26.3% and was growing since that time. ROE followed a declining trend at -28.5 pp per annum in the last 5 years.
Leverage (Debt)
Company's Net Debt / EBITDA is 11.6x and Debt / EBITDA is 24.2x. Net Debt / EBITDA jumped11.6x from to 11.6x in 2020. Debt decreased on 7.3% while cash dropped on 13.6%.
Synchronoss Technologies, Inc. has no short term refinancing risk: cash is higher than short term debt (167.7%).
Management team
The company's CEO is Jeffrey G Miller "Jeff". Jeffrey G Miller "Jeff" has 17 days tenure with the company. David D Clark IV is a Synchronoss Technologies, Inc.'s CFO. David D Clark IV has spent 2 years at the company.
Financial and operational results
FY ended 12/31/2020
Synchronoss Technologies, Inc. ($SNCR) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 426.3 | 402.4 | 325.8 | 308.7 | 291.7 | -5.5% |
| Gross Profit | 231.6 | 220.9 | 167.0 | 158.3 | 169.9 | 7.3% |
| SG&A | 126.2 | 154.0 | 122.1 | 112.8 | 89.3 | -20.8% |
| EBITDA | -27.7 | -35.7 | -67.2 | -19.0 | 2.7 | |
| Net Income | 11.9 | -109.4 | -218.2 | -102.3 | -10.0 | |
Balance Sheet
|
|---|
| Cash | 169.8 | 156.3 | 103.8 | 39.0 | 33.7 | -13.6% |
| Short Term Debt | 29.0 | 0.0 | 113.5 | 8.5 | 20.1 | 137.0% |
| Long Term Debt | 238.7 | 238.9 | 9.5 | 61.0 | 44.3 | -27.4% |
Cash flow
|
|---|
| Capex | 42.6 | 12.2 | 11.7 | 8.2 | 1.3 | -84.3% |
Ratios
|
|---|
| Revenue growth | -0.4% | -5.6% | -19.0% | -5.2% | -5.5% | |
| EBITDA growth | -131.7% | 28.8% | 88.3% | -71.7% | -114.0% | |
|
|---|
| Gross Margin | 54.3% | 54.9% | 51.3% | 51.3% | 58.2% | 6.9% |
| EBITDA Margin | -6.5% | -8.9% | -20.6% | -6.2% | 0.9% | 7.1% |
| SG&A, % of revenue | 29.6% | 38.3% | 37.5% | 36.5% | 30.6% | -5.9% |
| Net Income Margin | 2.8% | -27.2% | -67.0% | -33.1% | -3.4% | 29.7% |
| CAPEX, % of revenue | 10.0% | 3.0% | 3.6% | 2.7% | 0.4% | -2.2% |
|
|---|
| ROIC | -14.6% | -16.6% | -26.3% | -23.5% | -12.0% | 11.5% |
| ROE | 2.1% | -22.0% | -76.9% | -116.7% | -93.0% | 23.7% |
| Net Debt/EBITDA | | | | | 11.6x |
Synchronoss Technologies, Inc. ($SNCR) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 77 | 77 | 69 | 69 | | -12.5% | -1.7% | 31.5% | -23.4% |
| EBITDA | -4 | 1 | -3 | 8 | | -251.2% | -75.3% | - | 89.8% |
| Net Income | -3 | -1 | -6 | -1 | | - | - | - | - |
Balance Sheet
|
|---|
| Cash | 31 | 43 | 46 | 34 | | -65.2% | 25.0% | 141.5% | -13.6% |
| Short Term Debt | 19 | 20 | 9 | 20 | | -82.2% | -64.3% | 15.0% | 137.0% |
| Long Term Debt | 59 | 53 | 49 | 44 | | -11.2% | -17.9% | -22.4% | -27.4% |
Ratios
|
|---|
| Gross Margin | 54.0% | 61.5% | 58.5% | 59.0% | | -1.8% | 4.4% | 26.7% | 5.9% |
| EBITDA Margin | -5.0% | 1.3% | -4.0% | 11.9% | | -7.9% | -4.0% | 53.5% | 7.1% |
| Net Income Margin | -4.3% | -1.1% | -8.1% | -0.9% | | 17.7% | 20.9% | 109.2% | 5.9% |
Peers in Application Software
Below you can find Synchronoss Technologies, Inc. benchmarking vs. other companies in Application Software industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VirnetX Holding Corp ($VHC) | - | -0.2% | -95.9% | 34.9% | 355,942.4% |
| AudioEye, Inc. ($AEYE) | - | 175.5% | 106.6% | 90.2% | 90.2% |
| Cloudera, Inc. ($CLDR) | - | 57.2% | 42.6% | 28.9% | 65.5% |
| Integrated Ventures Inc ($INTV) | - | - | - | -8.9% | 62.7% |
| Smartsheet Inc. ($SMAR) | - | 64.3% | 66.1% | 59.7% | 52.4% |
| |
|---|
| Median (92 companies) | 12.0% | 15.7% | 15.2% | 19.5% | 14.7% |
|---|
| Synchronoss Technologies, Inc. ($SNCR) | - | -5.6% | -19.0% | -5.2% | -5.5% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Aware, Inc. ($AWRE) | 90.3% | 94.6% | 92.3% | 89.7% | 92.8% |
| Alteryx, Inc. ($AYX) | 81.3% | 83.4% | 91.0% | 90.6% | 91.1% |
| Autodesk, Inc. ($ADSK) | 85.2% | 83.2% | 85.2% | 88.9% | 90.1% |
| Smith Micro Software, Inc. ($SMSI) | 73.2% | 77.9% | 83.5% | 90.9% | 89.9% |
| Cadence Design Systems, Inc. ($CDNS) | 85.9% | 87.8% | 87.9% | 88.6% | 88.6% |
| |
|---|
| Median (89 companies) | 64.2% | 64.6% | 66.0% | 68.4% | 70.6% |
|---|
| Synchronoss Technologies, Inc. ($SNCR) | 54.3% | 54.9% | 51.3% | 51.3% | 58.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VirnetX Holding Corp ($VHC) | -1,837.2% | -1,118.0% | -40,379.4% | -23,127.1% | 52.2% |
| j2 Global, Inc. ($JCOM) | 41.7% | 36.5% | 35.7% | 38.6% | 40.5% |
| Intelligent Systems Corporation ($INS) | -5.4% | -12.8% | 33.6% | 43.6% | 40.4% |
| Adobe Inc. ($ADBE) | 31.2% | 34.2% | 35.3% | 35.8% | 39.7% |
| SS&C Technologies Holdings, Inc. ($SSNC) | 34.9% | 37.9% | 27.7% | 38.2% | 38.3% |
| |
|---|
| Median (89 companies) | -4.7% | -3.3% | -3.3% | 4.5% | 7.7% |
|---|
| Synchronoss Technologies, Inc. ($SNCR) | -6.5% | -8.9% | -20.6% | -6.2% | 0.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| MicroStrategy Incorporated ($MSTR) | 0.5% | 0.8% | 1.4% | 2.1% | 234.8% |
| Integrated Ventures Inc ($INTV) | - | - | 199.9% | 15.2% | 27.2% |
| Intelligent Systems Corporation ($INS) | 3.8% | 9.7% | 4.3% | 4.9% | 19.2% |
| LivePerson, Inc. ($LPSN) | 5.5% | 7.9% | 8.8% | 16.3% | 11.4% |
| PROS Holdings, Inc. ($PRO) | 4.7% | 0.8% | 0.7% | 2.1% | 11.3% |
| |
|---|
| Median (87 companies) | 2.9% | 2.3% | 2.4% | 3.0% | 2.6% |
|---|
| Synchronoss Technologies, Inc. ($SNCR) | 10.0% | 3.0% | 3.6% | 2.7% | 0.4% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VirnetX Holding Corp ($VHC) | -210.9% | -256.8% | -416.3% | -247.2% | 137.3% |
| Manhattan Associates, Inc. ($MANH) | 99.3% | 102.5% | 80.9% | 71.7% | 53.4% |
| Citrix Systems, Inc. ($CTXS) | 16.1% | 16.7% | 25.2% | 29.8% | 33.5% |
| Sonic Foundry, Inc. ($SOFO) | -18.1% | -50.6% | -786.4% | - | 31.3% |
| Paycom Software, Inc. ($PAYC) | 75.4% | 51.1% | 47.5% | 47.5% | 28.7% |
| |
|---|
| Median (92 companies) | -9.2% | -10.2% | -9.8% | -4.2% | -1.8% |
|---|
| Synchronoss Technologies, Inc. ($SNCR) | -14.6% | -16.6% | -26.3% | -23.5% | -12.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Dropbox, Inc. ($DBX) | - | -3.8x | - | 2.4x | 1,341.0x |
| Avaya Holdings Corp. ($AVYA) | - | - | 7.4x | - | 77.9x |
| Alteryx, Inc. ($AYX) | - | - | 2.5x | 6.1x | 32.2x |
| Five9, Inc. ($FIVN) | -6.7x | -8.6x | 7.3x | 5.3x | 17.6x |
| Cornerstone OnDemand, Inc. ($CSOD) | - | - | 5.5x | 2.3x | 10.9x |
| |
|---|
| Median (53 companies) | -0.9x | -0.8x | -0.7x | 0.4x | 0.0x |
|---|
| Synchronoss Technologies, Inc. ($SNCR) | - | - | - | - | 11.6x |
