Synchronoss Technologies, Inc. (NASDAQ:SNCR) Q2 2022 Earnings Conference Call August 9, 2022 4:30 PM ET

Company Participants

Jeff Miller - President & Chief Executive Officer

Taylor Greenwald - Chief Financial Officer

Conference Call Participants

Josh Nichols - B. Riley

Jon Hickman - Ladenburg Thalmann

Aditya Dagaonkar - Northland Capital

Operator

Good afternoon. Welcome to Synchronoss Technologies Second Quarter 2022 Earnings Conference Call.

Joining us today are Synchronoss Technologies' President and Chief Executive Officer, Jeff Miller; and Chief Financial Officer, Taylor Greenwald.

Following their remarks, we will open the call for your questions. Then before we conclude, I’ll provide the necessary cautions regarding the forward-looking statements made by management during this call.

I would like to remind everyone that this call will be recorded and made available for replay via a link in the Investor Relations section of the company’s website at synchronoss.com.

Now, I would like to turn the call over to Synchronoss' CEO, Jeff Miller. Sir, please proceed.

Jeff Miller

Thank you, operator. Welcome everyone, and thank you for joining us today. After the market closed, we issued a press release announcing our results for the second quarter ended June 30, 2022. A copy of the press release is available in our Investor Relations section of our website, and I encourage all visitors and listeners to view our release for the additional information on what we'll be discussing today.

I'll start today's call with a review of our recent updates and highlights, before turning it over to Taylor to discuss the financial results for the quarter. After that, we'll open it up for questions.

From a high level, our performance in the second quarter marked another positive step forward as we continue to drive our cloud-first strategy, and demonstrate improvements in gross margins, profits and cash flow.

During the period, we grew cloud revenue year-over-year by 12%, which now represents 66% or 67%, or two-thirds of our total revenue. Our double-digit cloud revenue increase in the second quarter marked the fourth consecutive period of year-over-year cloud revenue. Underpinning this solid revenue growth is increasing subscriber adoption of our cloud product at existing customers and from successful launches of new operators, which led to 18% year-over-year subscriber growth for the second quarter in a row.

The subscription-based nature of our cloud revenue product drove recurring revenue up to 87% in the quarter. Financially, this quarter demonstrated our ability to deliver strong profitability metrics as we achieved unadjusted free cash flow of positive $3.6 million, adjusted free cash flow of positive $6.7 million, and recorded a $5.3 million in net income, which was a vast improvement from our $23.9 million loss in the prior year period.