Synchronoss Technologies Inc. (SNCR, Financial) filed Quarterly Report for the period ended 2010-09-30.
Synchronoss Technologies Inc. has a market cap of $817.8 million; its shares were traded at around $26.24 with a P/E ratio of 62.1 and P/S ratio of 6.3. SNCR is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Cost of Services. Cost of services increased $6.2 million to $23.0 million for the three months ended September 30, 2010, compared to the same period in 2009, due primarily to an increase of $3.1 million for outside consultants related to growth in existing and new programs with our customers. There was an increase of $1.6 million in our personnel and related costs and an increase of $557 thousand in stock-based compensation. The increase in personnel and related costs and stock-based compensation was due primarily to the continued expansion of programs which have led to an increase in headcount. Also contributing to the increase in cost of services was $1.2 million in telecommunication and facility costs related to the increased call volume and capacity associated with our data facilities and our expansions related to the FusionOne acquisition offset by a decrease of $390 thousand in license fees related to our 2009 ATG license purchase. Additionally there was an increase in travel costs of $74 thousand related to our global and domestic expansion. Cost of services as a percentage of revenues increased to 51.7% for the three months ended September 30, 2010, as compared to 50.7% for the three months ended September 30, 2009.
Research and Development. Research and development expense increased $4.3 million to $7.6 million for the three months ended September 30, 2010, compared to the same period in 2009, due primarily to the acquisition of FusionOne. We had an increase of $2.1 million in our 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 to an increase in headcount primarily as a result of the FusionOne acquisition. Also included in the increase in personnel and related costs and in stock-based compensation costs were costs of $29 thousand related to the employee Earn-out achieved in the three months ended September 30, 2010. In addition there was an increase of $1.3 million in professional services augmenting our staff related to the development of new technologies and an increase of $358 thousand in telecommunication and facility costs related to the increase in headcount and the utilization of our expanded resources. In the three months ended September 30, 2010 there were restructuring and exit activity costs of $133 thousand related to the exit activities of the Estonia operations. Research and development expense as a percentage of revenues increased to 17.0% for the three months ended September 30, 2010 as compared to 9.8% for the three months ended September 30, 2009.
Selling, General and Administrative. Selling, general and administrative expense increased $4.9 million to $10.5 million for the three months ended September 30, 2010, compared to the same period in 2009 primarily due to the acquisition of FusionOne including acquisition related fees of $2.4 million for investment banking and professional services. We had increases in our personnel and related costs of $1.6 million, stock-based compensation expense of $244 thousand, consulting costs of $148 thousand, franchise taxes and other taxes of $158 thousand, an increase in professional services of $48 thousand, an increase in telecommunication and facility costs of $73 thousand, and an increase in our bad debt expense of $34 thousand. The increase in personnel and related and stock-based compensation costs was primarily due to an increase in headcount from the FusionOne acquisition. Also included in the increase in personnel and related costs and in stock-based compensation costs were costs of $22 thousand related to the employee Earn-out achieved in the three months ended September 30, 2010. In the three months ended September 30, 2010 there were restructure and exit activity costs of $202 thousand related to the consolidation of FusionOne into Synchronoss. Selling, general and administrative expense as a percentage of revenues increased to 23.5% for the three months ended September 30, 2010, compared to 16.8% for the three months ended September 30, 2009.
Net Revenue. Net revenues increased $23.5 million to $116.7 million for the nine months ended September 30, 2010, compared to the nine months ended September 30, 2009. This increase was due primarily to increased transaction volumes and expansion into new programs from our customers as well as the acquisition of FusionOne. Net revenues related to AT&T increased $14.3 million to $75.1 million for the nine months ended September 30, 2010 compared to the same period in 2009. AT&T represented 64% and 65% of our revenues for the nine months ended September 30, 2010 and 2009, respectively. Net revenues outside of AT&T increased $9.2 million to $41.6 million for the nine months ended September 30, 2010, as compared to $32.4 million during the nine months ended September 30, 2009. Net revenues outside of AT&T represented 36% and 35% of our revenues during the nine months ended September 30, 2010 and 2009, respectively. Transaction revenues recognized for the nine months ended September 30, 2010 and 2009 represented 79% or $91.6 million and 84% or $77.8 million of net revenues, respectively. Professional service revenues increased as a percentage of sales to 18% or $20.5 million for the nine months ended September 30, 2010, compared to 16% or $14.7 million for the previous nine months ended September 30, 2009. License and Subscription revenues increased $3.9 million to 4% or $4.6 million for the nine months ended September 30, 2010 as compared to the same period in 2009 due to our FusionOne acquisition.
Cost of Services. Cost of services increased $12.5 million to $59.6 million for the nine months ended September 30, 2010, compared to the same period in 2009, due primarily to an increase of $3.8 million in personnel and related costs and an increase of $1.3 million in stock-based compensation. The increase in personnel and related costs and stock-based compensation was due primarily to an increase in headcount to support the growth of existing and new programs. There was an increase of $5.0 million for outside consultants related to growth in programs with existing customers. There was an increase of $2.4 million in telecommunication and facility costs related to the increased call volume and capacity associated with our data facilities and our expansions related to the FusionOne acquisition offset by a decrease of $390 thousand in license fees related to our 2009 ATG license purchase. Additionally there was an increase in travel costs of $281 thousand related to our global and domestic expansion. Cost of services as a percentage of revenues increased to 51.1% for the nine months ended September 30, 2010, as compared to 50.6% for the nine months ended September 30 2009.
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Synchronoss Technologies Inc. has a market cap of $817.8 million; its shares were traded at around $26.24 with a P/E ratio of 62.1 and P/S ratio of 6.3. SNCR is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
Net Revenue. Net revenues increased $11.4 million to $44.5 million for the three months ended September 30, 2010, compared to the same period in 2009. This increase was due primarily to increased transaction volumes and expansion into new programs from our AT&T and Time Warner Cable relationships and due to our FusionOne acquisition which contributed additional revenues this quarter. Net revenues related to AT&T increased $5.2 million to $27.4 million for the three months ended September 30, 2010 compared to the same period in 2009. AT&T represented 62% of our revenues for the three months ended September 30, 2010, compared to 67% for the three months ended September 30, 2009. Net revenues outside of AT&T generated $17.1 million of our revenues during the three months ended September 30, 2010 as compared to $10.9 million during the three months ended September 30, 2009. Net revenues outside of AT&T represented 38% and 33% of our revenues during the three months ended September 30, 2010 and 2009, respectively. Transaction revenues recognized for the three months ended September 30, 2010 and 2009 represented 76% or $33.8 million and 83% or $27.5 million of net revenues, respectively. Professional service revenues as a percentage of sales were 16% or $6.9 million for the three months ended September 30, 2010, compared to 16% or $5.4 million for the previous three months ended September 30, 2009. As a result of the FusionOne acquisition, license and Subscription revenue increased $3.5 million to 8% or 3.7 million for the three months ended September 30, 2010 as compared to the same period in 2009.Cost of Services. Cost of services increased $6.2 million to $23.0 million for the three months ended September 30, 2010, compared to the same period in 2009, due primarily to an increase of $3.1 million for outside consultants related to growth in existing and new programs with our customers. There was an increase of $1.6 million in our personnel and related costs and an increase of $557 thousand in stock-based compensation. The increase in personnel and related costs and stock-based compensation was due primarily to the continued expansion of programs which have led to an increase in headcount. Also contributing to the increase in cost of services was $1.2 million in telecommunication and facility costs related to the increased call volume and capacity associated with our data facilities and our expansions related to the FusionOne acquisition offset by a decrease of $390 thousand in license fees related to our 2009 ATG license purchase. Additionally there was an increase in travel costs of $74 thousand related to our global and domestic expansion. Cost of services as a percentage of revenues increased to 51.7% for the three months ended September 30, 2010, as compared to 50.7% for the three months ended September 30, 2009.
Research and Development. Research and development expense increased $4.3 million to $7.6 million for the three months ended September 30, 2010, compared to the same period in 2009, due primarily to the acquisition of FusionOne. We had an increase of $2.1 million in our 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 to an increase in headcount primarily as a result of the FusionOne acquisition. Also included in the increase in personnel and related costs and in stock-based compensation costs were costs of $29 thousand related to the employee Earn-out achieved in the three months ended September 30, 2010. In addition there was an increase of $1.3 million in professional services augmenting our staff related to the development of new technologies and an increase of $358 thousand in telecommunication and facility costs related to the increase in headcount and the utilization of our expanded resources. In the three months ended September 30, 2010 there were restructuring and exit activity costs of $133 thousand related to the exit activities of the Estonia operations. Research and development expense as a percentage of revenues increased to 17.0% for the three months ended September 30, 2010 as compared to 9.8% for the three months ended September 30, 2009.
Selling, General and Administrative. Selling, general and administrative expense increased $4.9 million to $10.5 million for the three months ended September 30, 2010, compared to the same period in 2009 primarily due to the acquisition of FusionOne including acquisition related fees of $2.4 million for investment banking and professional services. We had increases in our personnel and related costs of $1.6 million, stock-based compensation expense of $244 thousand, consulting costs of $148 thousand, franchise taxes and other taxes of $158 thousand, an increase in professional services of $48 thousand, an increase in telecommunication and facility costs of $73 thousand, and an increase in our bad debt expense of $34 thousand. The increase in personnel and related and stock-based compensation costs was primarily due to an increase in headcount from the FusionOne acquisition. Also included in the increase in personnel and related costs and in stock-based compensation costs were costs of $22 thousand related to the employee Earn-out achieved in the three months ended September 30, 2010. In the three months ended September 30, 2010 there were restructure and exit activity costs of $202 thousand related to the consolidation of FusionOne into Synchronoss. Selling, general and administrative expense as a percentage of revenues increased to 23.5% for the three months ended September 30, 2010, compared to 16.8% for the three months ended September 30, 2009.
Net Revenue. Net revenues increased $23.5 million to $116.7 million for the nine months ended September 30, 2010, compared to the nine months ended September 30, 2009. This increase was due primarily to increased transaction volumes and expansion into new programs from our customers as well as the acquisition of FusionOne. Net revenues related to AT&T increased $14.3 million to $75.1 million for the nine months ended September 30, 2010 compared to the same period in 2009. AT&T represented 64% and 65% of our revenues for the nine months ended September 30, 2010 and 2009, respectively. Net revenues outside of AT&T increased $9.2 million to $41.6 million for the nine months ended September 30, 2010, as compared to $32.4 million during the nine months ended September 30, 2009. Net revenues outside of AT&T represented 36% and 35% of our revenues during the nine months ended September 30, 2010 and 2009, respectively. Transaction revenues recognized for the nine months ended September 30, 2010 and 2009 represented 79% or $91.6 million and 84% or $77.8 million of net revenues, respectively. Professional service revenues increased as a percentage of sales to 18% or $20.5 million for the nine months ended September 30, 2010, compared to 16% or $14.7 million for the previous nine months ended September 30, 2009. License and Subscription revenues increased $3.9 million to 4% or $4.6 million for the nine months ended September 30, 2010 as compared to the same period in 2009 due to our FusionOne acquisition.
Cost of Services. Cost of services increased $12.5 million to $59.6 million for the nine months ended September 30, 2010, compared to the same period in 2009, due primarily to an increase of $3.8 million in personnel and related costs and an increase of $1.3 million in stock-based compensation. The increase in personnel and related costs and stock-based compensation was due primarily to an increase in headcount to support the growth of existing and new programs. There was an increase of $5.0 million for outside consultants related to growth in programs with existing customers. There was an increase of $2.4 million in telecommunication and facility costs related to the increased call volume and capacity associated with our data facilities and our expansions related to the FusionOne acquisition offset by a decrease of $390 thousand in license fees related to our 2009 ATG license purchase. Additionally there was an increase in travel costs of $281 thousand related to our global and domestic expansion. Cost of services as a percentage of revenues increased to 51.1% for the nine months ended September 30, 2010, as compared to 50.6% for the nine months ended September 30 2009.
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