SYNCHRONOSS TECHNOLOGIES INC Q4 FY2023 earnings call

• 2023 was a transformative year with strategic shifts, including divestiture of noncore businesses to achieve focus on personal cloud solutions.
• Implemented cost control measures, resulting in positive net cash flow of $2.7 million in fiscal 2023 and further cost reductions of $15 million for fiscal 2024.
• Q4 financial results showed strong foundation, with 127% y-o-y increase in adjusted EBITDA to $10 million. Full year adjusted EBITDA was $31.4 million, surpassing guidance.
• Strategic priorities for 2024: protect/grow cloud subscriber base, expand global customer base, deliver new anchor features.
• In Q4, introduced enhanced plans in Personal Cloud Platform for tiered service models, showcased Genius feature with AI capabilities, streamlined onboarding process.
• Welcomed Kevin Rendino to Board of Directors in December 2023.

In Q4 2023, cloud revenue was $41 million, which was 99% of total revenue. Adjusted EBITDA in Q4 increased 127% to $10 million, 24.1% of total revenue. For the full year, total revenue was $164.2 million, with cloud revenue being a significant portion. Full year adjusted EBITDA was $31.4 million, 19.1% of total revenue. Gross profit in Q4 increased to $26.5 million, 63.9% of total revenue, while full year gross profit decreased to $105.8 million, 64.4% of total revenue.

• Anticipate net cash flow of at least $10 million in 2024.
• Cloud subscriber growth expected in high single-digit to low double-digit range in 2024.
• Fiscal 2024 GAAP revenue expected to range between $170 million and $175 million.
• Adjusted EBITDA expected to range between $42 million and $45 million in 2024.

• Ongoing IRS audit of $28 million federal tax refund claims, with refunds still being audited and no additional refunds received during the period.

Q: Can you put more color on SoftBank's launch, attachment rate relative to other new launches?

A: SoftBank's launch is different with a retail-first strategy leveraging 3,000 points of presence. Impact on subscriber growth will be seen in Q1 numbers as it launched in November and is in trial periods.

Q: What about pipeline for new customers?

A: Modest revenue contribution from new customers in 2024, but expect to secure contracts during 2024 with contributions likely larger in 2025.

Q: Talk about average ARPU on enhanced service plans?

A: Enhanced plans offer flexibility for clients to tier service offerings, allowing monetization, subscriber engagement, and retention by tailoring to subscriber needs.

Q: When comparing quarters in 2024, will it reflect elimination of NetworkX and other revenues?

A: On a go-forward basis, will reflect cloud for cloud performance quarter-by-quarter and sequentially, with next quarter providing cloud-only to cloud-only comparisons.