Synchronoss Technologies Inc. (SNCR, Financial) filed Quarterly Report for the period ended 2010-03-31.
Synchronoss Technologies Inc. has a market cap of $621.7 million; its shares were traded at around $19.98 with a P/E ratio of 51.2 and P/S ratio of 4.8. SNCR is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Cost of Services. Cost of services increased $2.4 million to $17.6 million for the three months ended March 31, 2010, compared to the same period in 2009, due primarily to an increase of $974 thousand in personnel and related costs and an increase of $381 thousand in stock-based compensation. The increase in personnel and related costs and stock-based compensation was due primarily to an increase in headcount. In addition, there was an increase of $375 thousand in telecommunication and facility costs related to the increased capacity associated with our data facilities. There was an increase of $638 thousand for outside consultants related to growth in programs with existing customers. Cost of services as a percentage of revenues decreased to 50.3% for the three months ended March 31, 2010, as compared to 51.4% for the three months ended March 31, 2009.
Research and Development. Research and development expense increased $1.2 million to $4.3 million for the three months ended March 31, 2010, compared to the same period in 2009, due primarily to an increase of $402 thousand in personnel and related costs and an increase of $213 thousand in stock-based compensation. The increase in personnel and related costs and stock-based compensation was due to increased head count. In addition there was an increase of $345 thousand in consulting costs related to new projects with existing customers needed to facilitate the growth in our programs with existing customers. Research and development expense as a percentage of revenues increased to 12.2% for the three months ended March 31, 2010 as compared to 10.5% for the three months ended March 31, 2009.
Selling, General and Administrative. Selling, general and administrative expense increased $408 thousand to $6.5 million for the three months ended March 31, 2010, compared to the same period in 2009 due to an increase in personnel and related costs of $174 thousand and stock-based compensation expense of $248 thousand, consulting costs of $191 thousand and marketing costs of $161 thousand offset by a decrease in professional services of $342 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. The decrease in professional services relates to a reduction in accounting and legal fees. Selling, general and administrative expense as a percentage of revenues decreased to 18.5% for the three months ended March 31, 2010, compared to 20.6% for the three months ended March 31, 2009. The decrease in percentage was a result of a higher revenue base as compared to the same period in 2009.
Cash flows from operations. Net cash provided by operating activities for the three months ended March 31, 2010 was $4.3 million, as compared to $1.4 million for the three months ended March 31, 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 increase of $3.0 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 $1.6 million increase in our deferred revenue balance primarily related to the timing of recognition of maintenance and configuration revenues over the applicable term of these agreements, a $2.7 million decrease in our accounts receivable balance as our collection of customer accounts more than offset the increase in customer sales and partially offset a $2.4 million decrease in our accounts payable and accrued expenses. Additionally net income increased to $2.7 million, as compared to 2009, which included non-cash charges of $2.0 million for depreciation and amortization, and $2.8 million related to stock-based compensation.
Cash flows from investing. Net cash used in investing activities for the three months ended March 31, 2010 was $3.3 million, as compared to $5.6 million for the three months March 31, 2009. The primary use of cash was $3.1 million used to purchase marketable securities and $531 thousand used to purchase property and equipment primarily related to our continued investments in our global information technology and business system infrastructure. The decrease in cash used in investing of $2.2 million was primarily due to the completion of our data facilities in 2009 offset by an increase in our outflows for the purchase of marketable securities in the three months ended March 31, 2010.
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Synchronoss Technologies Inc. has a market cap of $621.7 million; its shares were traded at around $19.98 with a P/E ratio of 51.2 and P/S ratio of 4.8. SNCR is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
Net Revenue. Net revenues increased $5.5 million to $35.1 million for the three months ended March 31, 2010, compared to the three months ended March 31, 2009. This increase was due primarily to increased revenues from our AT&T relationship. Net revenues related to AT&T increased $4.7 million to $23.3 million for the three months ended March 31, 2010 compared to the same period in 2009. AT&T represented 66% and 63% of our revenues for the three months ended March 31, 2010 and 2009, respectively. Net revenues outside of AT&T generated $11.8 million of our revenues during the three months ended March 31, 2010 as compared to $11.0 million during the three months ended March 31, 2009. Net revenues outside of AT&T represented 34% and 37% of our revenues during the three months ended March 31, 2010 and 2009, respectively. Transaction revenues recognized for the three months ended March 31, 2010 and 2009 represented 81% or $28.3 million and 85% or $25.0 million of net revenues, respectively. Professional service revenues increased as a percentage of sales to 18% or $6.4 million for the three months ended March 31, 2010, compared to 14% or $4.3 million for the previous three months ended March 31, 2009.Cost of Services. Cost of services increased $2.4 million to $17.6 million for the three months ended March 31, 2010, compared to the same period in 2009, due primarily to an increase of $974 thousand in personnel and related costs and an increase of $381 thousand in stock-based compensation. The increase in personnel and related costs and stock-based compensation was due primarily to an increase in headcount. In addition, there was an increase of $375 thousand in telecommunication and facility costs related to the increased capacity associated with our data facilities. There was an increase of $638 thousand for outside consultants related to growth in programs with existing customers. Cost of services as a percentage of revenues decreased to 50.3% for the three months ended March 31, 2010, as compared to 51.4% for the three months ended March 31, 2009.
Research and Development. Research and development expense increased $1.2 million to $4.3 million for the three months ended March 31, 2010, compared to the same period in 2009, due primarily to an increase of $402 thousand in personnel and related costs and an increase of $213 thousand in stock-based compensation. The increase in personnel and related costs and stock-based compensation was due to increased head count. In addition there was an increase of $345 thousand in consulting costs related to new projects with existing customers needed to facilitate the growth in our programs with existing customers. Research and development expense as a percentage of revenues increased to 12.2% for the three months ended March 31, 2010 as compared to 10.5% for the three months ended March 31, 2009.
Selling, General and Administrative. Selling, general and administrative expense increased $408 thousand to $6.5 million for the three months ended March 31, 2010, compared to the same period in 2009 due to an increase in personnel and related costs of $174 thousand and stock-based compensation expense of $248 thousand, consulting costs of $191 thousand and marketing costs of $161 thousand offset by a decrease in professional services of $342 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. The decrease in professional services relates to a reduction in accounting and legal fees. Selling, general and administrative expense as a percentage of revenues decreased to 18.5% for the three months ended March 31, 2010, compared to 20.6% for the three months ended March 31, 2009. The decrease in percentage was a result of a higher revenue base as compared to the same period in 2009.
Cash flows from operations. Net cash provided by operating activities for the three months ended March 31, 2010 was $4.3 million, as compared to $1.4 million for the three months ended March 31, 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 increase of $3.0 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 $1.6 million increase in our deferred revenue balance primarily related to the timing of recognition of maintenance and configuration revenues over the applicable term of these agreements, a $2.7 million decrease in our accounts receivable balance as our collection of customer accounts more than offset the increase in customer sales and partially offset a $2.4 million decrease in our accounts payable and accrued expenses. Additionally net income increased to $2.7 million, as compared to 2009, which included non-cash charges of $2.0 million for depreciation and amortization, and $2.8 million related to stock-based compensation.
Cash flows from investing. Net cash used in investing activities for the three months ended March 31, 2010 was $3.3 million, as compared to $5.6 million for the three months March 31, 2009. The primary use of cash was $3.1 million used to purchase marketable securities and $531 thousand used to purchase property and equipment primarily related to our continued investments in our global information technology and business system infrastructure. The decrease in cash used in investing of $2.2 million was primarily due to the completion of our data facilities in 2009 offset by an increase in our outflows for the purchase of marketable securities in the three months ended March 31, 2010.
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