Synchronoss Technologies (NASDAQ: SNCR) reported Q3 EPS of ($0.84), $0.31 worse than the analyst estimate of ($0.53). Revenue for the quarter came in at $83.3 million versus the consensus estimate of $83 million.

• Synchronoss delivers $83.3 million of revenue compared to $76.7 million in the second quarter, up 8.5% sequentially.
• Synchronoss drives $4.5 million of adjusted EBITDA, which includes a one-time expense of $4.9 million from a prior quarter. Normalized adjusted EBITDA for the third quarter was $9.4 million with an EBITDA margin of 11.2%.
• Synchronoss cash flow provided by operations during the quarter was $10.7 million.
• Synchronoss is on track to achieve $20 million of annualized cost savings in 2018 and another $25 million in 2019.
• Synchronoss retires over 50% of its convertible debt, resulting in the dismissal of the litigation brought by those debt holders.
• Synchronoss decides to pay in cash and not issue additional shares for the payment of a third-quarter dividend on its convertible preferred stock.
• Synchronoss’ digital platform, DXP, has received exceptional market reception with the integration of the honeybee acquisition, as evident by more than 10 customer proofs of concept currently up and running.

“Synchronoss delivered on its promise to return to growth and profitability in the third quarter,” said Glenn Lurie, President and CEO of Synchronoss. “Our sequential quarterly revenue growth and positive adjusted EBITDA of $4.5 million were driven by improving trends across all parts of our business. Our adjusted EBITDA includes a one-time expense of $4.9 million. Excluding that one-time expense from a prior quarter, normalized adjusted EBITDA was $9.4 million with an EBITDA margin of 11.2% for the third quarter. We also continue to take actions to strengthen our balance sheet, including retiring over 50% of our convertible debt, which resulted in the dismissal of the litigation brought by those debt holders, and staying on track to deliver the targeted cost savings initiatives.”

David Clark, CFO of Synchronoss, said: “Our improved business performance, highlighted by positive EBITDA, strengthens our confidence in our business and has led us to take actions to de-lever our balance sheet by purchasing just over half of our outstanding convertible notes. Even with those actions, we still expect to end the year with a healthy cash balance of between $170 and $180 million.”

Lurie added, “We are pleased that Synchronoss delivered on its commitments and we reaffirm our financial guidance for the year. Our digital, cloud, messaging and IoT platforms are solving some of the most important challenges that TMT companies are facing as they compete in an increasingly digital and consumer-centric world. We have made significant progress and are confident that as we execute on opportunities we are targeting, we will continue to drive growth and profitability in the fourth quarter this year and beyond.”

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