Synchronoss Technologies Inc. (SNCR, Financial) filed Quarterly Report for the period ended 2010-06-30.
Synchronoss Technologies Inc. has a market cap of $586.4 million; its shares were traded at around $18.74 with a P/E ratio of 45.7 and P/S ratio of 4.6. SNCR is in the portfolios of George Soros of Soros Fund Management LLC, Bruce Kovner of Caxton Associates, Jim Simons of Renaissance Technologies LLC.
Cost of Services. Cost of services increased $3.8 million to $19.0 million for the three months ended June 30, 2010, compared to the same period in 2009, due primarily to an increase of $1.5 million in personnel and related costs and an increase of $341 thousand in stock-based compensation. The increase in personnel and related costs and stock-based compensation was due primarily to an increase in headcount. There was an increase of $1.2 million for outside consultants related to growth in programs with existing customers. There was an increase of $703 thousand in telecommunication and facility costs related to the increased capacity associated with our data facilities that included increases related to the global deployment of our ConvergenceNow® Plus+ platform. Additionally there was an increase in travel costs of $89 thousand related to our global and domestic expansion. Cost of services as a percentage of revenues increased to 51.1% for the three months ended June 30, 2010, as compared to 49.7% for the three months ended June 30, 2009.
Selling, General and Administrative. Selling, general and administrative expense increased $780 thousand to $6.4 million for the three months ended June 30, 2010, compared to the same period in 2009 due to an increase in personnel and related costs of $316 thousand and stock-based compensation expense of $251 thousand, consulting costs of $333 thousand and marketing costs of $132 thousand offset by a decrease in professional services of $187 thousand and a decrease in telecommunication and facility costs of $91 thousand. The increase in personnel and related and stock-based compensation costs was primarily due to an increase in headcount. The consulting and marketing costs increases relate to our expanded business development and marketing activities. Included in the increase of consulting costs were acquisition-related costs of $314 thousand related to the activities prior to the July 19, 2010 acquisition of FusionOne. The decrease in professional services was primarily due to a reduction in legal fees and the decrease in telecommunication and facility costs was primarily due to a reduction in services. In addition there was an increase in our bad debt expense of $43 thousand. Selling, general and administrative expense as a percentage of revenues decreased to 17.1% for the three months ended June 30, 2010, compared to 18.3% for the three months ended June 30, 2009. The decrease in percentage was a result of a higher revenue base as compared to the same period 2009.
Net Revenue. Net revenues increased $12.2 million to $72.3 million for the six months ended June 30, 2010, compared to the six months ended June 30, 2009. This increase was due primarily to increased transaction volumes and expansion into new programs from our AT&T relationship. Net revenues related to AT&T increased $9.2 million to $47.8 million for the six months ended June 30, 2010 compared to the same period in 2009. AT&T represented 66% and 64% of our revenues for the six months ended June 30, 2010 and 2009, respectively. Net revenues outside of AT&T generated $24.5 million of our revenues during the six months ended June 30, 2010 as compared to $21.5 million during the six months ended June 30, 2009. Net revenues outside of AT&T represented 34% and 36% of our revenues during the six months ended June 30, 2010 and 2009, respectively. Transaction revenues recognized for the six months ended June 30, 2010 and 2009 represented 80% or $57.7 million and 84% or $50.3 million of net revenues, respectively. Professional service revenues increased as a percentage of sales to 19% or $13.6 million for the six months ended June 30, 2010, compared to 15% or $9.3 million for the previous six months ended June 30, 2009. Professional services contributed to the increased sales volume as new programs begin to ramp and will continue to fluctuate until they are replaced with transactional volume.
Selling, General and Administrative. Selling, general and administrative expense increased $1.2 million to $12.8 million for the six months ended June 30, 2010, compared to the same period in 2009 due to an increase in personnel and related costs of $490 thousand and stock-based compensation expense of $499 thousand, consulting costs of $523 thousand and marketing costs of $293 thousand offset by a decrease in professional services of $529 thousand and a decrease in telecommunication and facility costs of $130 thousand. The increase in personnel and related and stock-based compensation costs was primarily due to an increase in headcount. The consulting and marketing costs increases relate to our expanded business development and marketing activities. Included in the increase of consulting costs were acquisition-related costs of $314 thousand related to the activities prior to the July 19, 2010 acquisition of FusionOne. The decrease in professional services relates to a reduction in legal fees and the decrease in telecommunication and facility costs was primarily due to a reduction in services. In addition there was an increase in our bad debt expense of $93 thousand and a decrease of $17 thousand in other costs. Selling, general and administrative expense as a percentage of revenues decreased to 17.8% for the six months ended June 30, 2010, compared to 19.4% for the six months ended June 30 2009. The decrease in percentage was a result of a higher revenue base as compared to the same period 2009.
Cash flows from operations. Net cash provided by operating activities for the six months ended June 30, 2010 was $7.2 million, as compared to $9.0 million for the six months ended June 30, 2009. Our primary uses of cash from operating activities are for personnel related expenditures and outside consultants. We also make cash payments related to taxes and leased facilities. The decrease of $1.8 million is primarily due to the increase in working capital and net income as compared to 2009. The cash provided by working capital included a $1.7 million increase in our accounts payable and accrued expenses offset by a $4.4 million increase in our accounts receivable balance as our collection of customer accounts only partially offset the increase of $12.2 million in customer sales. Additionally net income increased to $5.7 million, as compared to 2009.
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Synchronoss Technologies Inc. has a market cap of $586.4 million; its shares were traded at around $18.74 with a P/E ratio of 45.7 and P/S ratio of 4.6. SNCR is in the portfolios of George Soros of Soros Fund Management LLC, Bruce Kovner of Caxton Associates, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
Net Revenue. Net revenues increased $6.7 million to $37.2 million for the three months ended June 30, 2010, compared to the three months ended June 30, 2009. This increase was due primarily to increased transaction volumes and expansion into new programs from our AT&T relationship. Net revenues related to AT&T increased $4.4 million to $24.5 million for the three months ended June 30, 2010 compared to the same period in 2009. AT&T represented 66% of our revenues for the three months ended June 30, 2010 and 2009. Net revenues outside of AT&T generated $12.7 million of our revenues during the three months ended June 30, 2010 as compared to $10.4 million during the three months ended June 30, 2009. Net revenues outside of AT&T represented 34% of our revenues during the three months ended June 30, 2010 and 2009. Transaction revenues recognized for the three months ended June 30, 2010 and 2009 represented 79% or $29.4 million and 81% or $24.6 million of net revenues, respectively. Professional service revenues increased as a percentage of sales to 19% or $7.2 million for the three months ended June 30, 2010, compared to 18% or $5.6 million for the previous three months ended June 30, 2009.Cost of Services. Cost of services increased $3.8 million to $19.0 million for the three months ended June 30, 2010, compared to the same period in 2009, due primarily to an increase of $1.5 million in personnel and related costs and an increase of $341 thousand in stock-based compensation. The increase in personnel and related costs and stock-based compensation was due primarily to an increase in headcount. There was an increase of $1.2 million for outside consultants related to growth in programs with existing customers. There was an increase of $703 thousand in telecommunication and facility costs related to the increased capacity associated with our data facilities that included increases related to the global deployment of our ConvergenceNow® Plus+ platform. Additionally there was an increase in travel costs of $89 thousand related to our global and domestic expansion. Cost of services as a percentage of revenues increased to 51.1% for the three months ended June 30, 2010, as compared to 49.7% for the three months ended June 30, 2009.
Selling, General and Administrative. Selling, general and administrative expense increased $780 thousand to $6.4 million for the three months ended June 30, 2010, compared to the same period in 2009 due to an increase in personnel and related costs of $316 thousand and stock-based compensation expense of $251 thousand, consulting costs of $333 thousand and marketing costs of $132 thousand offset by a decrease in professional services of $187 thousand and a decrease in telecommunication and facility costs of $91 thousand. The increase in personnel and related and stock-based compensation costs was primarily due to an increase in headcount. The consulting and marketing costs increases relate to our expanded business development and marketing activities. Included in the increase of consulting costs were acquisition-related costs of $314 thousand related to the activities prior to the July 19, 2010 acquisition of FusionOne. The decrease in professional services was primarily due to a reduction in legal fees and the decrease in telecommunication and facility costs was primarily due to a reduction in services. In addition there was an increase in our bad debt expense of $43 thousand. Selling, general and administrative expense as a percentage of revenues decreased to 17.1% for the three months ended June 30, 2010, compared to 18.3% for the three months ended June 30, 2009. The decrease in percentage was a result of a higher revenue base as compared to the same period 2009.
Net Revenue. Net revenues increased $12.2 million to $72.3 million for the six months ended June 30, 2010, compared to the six months ended June 30, 2009. This increase was due primarily to increased transaction volumes and expansion into new programs from our AT&T relationship. Net revenues related to AT&T increased $9.2 million to $47.8 million for the six months ended June 30, 2010 compared to the same period in 2009. AT&T represented 66% and 64% of our revenues for the six months ended June 30, 2010 and 2009, respectively. Net revenues outside of AT&T generated $24.5 million of our revenues during the six months ended June 30, 2010 as compared to $21.5 million during the six months ended June 30, 2009. Net revenues outside of AT&T represented 34% and 36% of our revenues during the six months ended June 30, 2010 and 2009, respectively. Transaction revenues recognized for the six months ended June 30, 2010 and 2009 represented 80% or $57.7 million and 84% or $50.3 million of net revenues, respectively. Professional service revenues increased as a percentage of sales to 19% or $13.6 million for the six months ended June 30, 2010, compared to 15% or $9.3 million for the previous six months ended June 30, 2009. Professional services contributed to the increased sales volume as new programs begin to ramp and will continue to fluctuate until they are replaced with transactional volume.
Selling, General and Administrative. Selling, general and administrative expense increased $1.2 million to $12.8 million for the six months ended June 30, 2010, compared to the same period in 2009 due to an increase in personnel and related costs of $490 thousand and stock-based compensation expense of $499 thousand, consulting costs of $523 thousand and marketing costs of $293 thousand offset by a decrease in professional services of $529 thousand and a decrease in telecommunication and facility costs of $130 thousand. The increase in personnel and related and stock-based compensation costs was primarily due to an increase in headcount. The consulting and marketing costs increases relate to our expanded business development and marketing activities. Included in the increase of consulting costs were acquisition-related costs of $314 thousand related to the activities prior to the July 19, 2010 acquisition of FusionOne. The decrease in professional services relates to a reduction in legal fees and the decrease in telecommunication and facility costs was primarily due to a reduction in services. In addition there was an increase in our bad debt expense of $93 thousand and a decrease of $17 thousand in other costs. Selling, general and administrative expense as a percentage of revenues decreased to 17.8% for the six months ended June 30, 2010, compared to 19.4% for the six months ended June 30 2009. The decrease in percentage was a result of a higher revenue base as compared to the same period 2009.
Cash flows from operations. Net cash provided by operating activities for the six months ended June 30, 2010 was $7.2 million, as compared to $9.0 million for the six months ended June 30, 2009. Our primary uses of cash from operating activities are for personnel related expenditures and outside consultants. We also make cash payments related to taxes and leased facilities. The decrease of $1.8 million is primarily due to the increase in working capital and net income as compared to 2009. The cash provided by working capital included a $1.7 million increase in our accounts payable and accrued expenses offset by a $4.4 million increase in our accounts receivable balance as our collection of customer accounts only partially offset the increase of $12.2 million in customer sales. Additionally net income increased to $5.7 million, as compared to 2009.
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