Synchronoss completes cloud-only transformation, reaffirms 2023, 2024 projection

Synchronoss Technologies provided the following updates enabled by the completion of its cloud-only transformation. In November, the Company announced the divestiture of its Messaging and NetworkX operations in conjunction with its Cloud-only business transformation. Post-transaction, management shared its initial expectation to improve the Company cost profile by eliminating approximately $10 million to $15 million of stranded and other costs from the standalone Cloud operations. In line with its prior communications, management expects to achieve positive cash flow on an unadjusted basis for 2023, and it still expects 2023 adjusted EBITDA to range between $27 million and $30 million. This projection includes restructuring-related expenses and certain stranded costs, which the Company is actively removing from its standalone Cloud business. Looking to 2024, the Company is also reiterating its expectation to achieve between 5% and 8% revenue growth, gross margins of greater than 75%, and adjusted EBITDA margins surpassing 25%. These projections position Synchronoss within the recognized ‘Rule of 30’ and on the path to ‘Rule of 40’ in the coming years. Additionally, after factoring in anticipated revenue growth and the expiration of certain existing payment obligations and other general costs, management expects a significant improvement in cash flow generation for 2024, building upon its expectations of unadjusted positive free cash flow in 2023. This anticipated increase in free cash flow results from the combination of: the return to growth of the overall business.higher corporate gross margins following the divestiture of non-core assets. the removal of approximately $15 million of annualized operating expenses by year-end, enabled by that sale.