·

GAAP total revenue for the second quarter was $157.6 million, increasing 14% year-over-year

·

Non-GAAP total revenue for the second quarter was $161.5 million,  increasing 17% year-over-year

·

GAAP EPS for the second quarter was ($0.10); Non-GAAP EPS was $0.57

·

Total Revenue: $157.6 million GAAP compared to $137.8 million in the second quarter of 2015.  $161.5 million non-GAAP compared to $137.9 million in the second quarter of 2015.

·

Gross profit: $86.1 million GAAP compared to $82.9 million in the second quarter of 2015.  $96.9 million non-GAAP compared to $85.4 million in the second quarter of 2015.

·

Operating (Loss) Income: ($3.5 million) GAAP compared to $23.6 million in the second quarter of 2015.  $37.3 million non-GAAP compared to $40.2 million in the second quarter of 2015.

·

Net (Loss) Income attributable to Synchronoss: ($4.4 million) GAAP compared to $15.2 million in the second quarter of 2015. $26.9 million non-GAAP compared to $26.0 million in the second quarter of 2015.

·

Earnings (Loss) per Diluted Share: $(0.10) GAAP compared to $0.33 in the second quarter of 2015. $0.57 non-GAAP compared to $0.56 in the second quarter of 2015.

·

Operating Cash Flow: $33.7 million GAAP compared to $62.6 million in the second quarter of 2015.  $33.7 million non-GAAP compared to $60.6 million in the second quarter of 2015.

·

Cloud Services revenue accounted for $95.2 million of non-GAAP revenue, representing approximately 59% of total non-GAAP revenue and growing 33% on a year-over-year basis. 

·

Launched the general availability of our Enterprise Secure Mobility Platform (SMP) in June.

·

Free cash flow of $20 million delivered in the quarter generating free cash flow continues to be a major focal point of the Company.

·

Share repurchases of $23.4 million completed in the quarter.

·

Held our annual analyst day in NYC, outlining the Company’s core strategic and growth initiatives.

·

Oppenheimer Annual Technology, Internet & Communication Conference August 9, 2016-Boston, MA

·

Drexel Hamilton TMT Conference September 8, 2016-New York, NY

·

Deutsche Bank Technology Conference September 14, 2016-Las Vegas, NV

·

Credit Suisse US Small & Mid Cap Conference September 15, 2016-New York, NY

Investor and Media:

Daniel Ives, +1 908-524-1047

daniel.ives@synchronoss.com 

June 30, 2016

December 31, 2015

ASSETS

Current assets:

Cash and cash equivalents

$

$

Marketable securities

Accounts receivable, net of allowance for doubtful accounts of $1,508 and $3,029 at June 30, 2016 and December 31, 2015, respectively

Prepaid expenses and other assets

Total current assets

Marketable securities

Property and equipment, net

Goodwill

Intangible assets, net

Deferred tax assets

Other assets

Total assets

$

$

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

$

Accrued expenses

Deferred revenues

Contingent consideration obligation

 —

Short term debt

 —

Total current liabilities

Lease financing obligation - long term

Contingent consideration obligation - long-term

 —

Convertible debt

Deferred tax liability

Other liabilities

Redeemable noncontrolling interest

Stockholders’ equity:

Preferred stock, $0.0001 par value; 10,000 shares authorized, 0 shares issued and outstanding at June 30, 2016 and December 31, 2015

 —

 —

Common stock, $0.0001 par value; 100,000 shares authorized, 49,132 and 48,084 shares issued; 45,079 and 44,405 outstanding at June 30, 2016 and December 31, 2015, respectively

Treasury stock, at cost (4,053 and 3,679 shares at June 30, 2016 and December 31, 2015, respectively)

Additional paid-in capital

Accumulated other comprehensive loss

Retained earnings

Total stockholders’ equity

Total liabilities and stockholders’ equity

$

$

Three Months Ended June 30, 

Six Months Ended June 30, 

2016

2015

2016

2015

Net revenues

$

$

$

$

Costs and expenses:

Cost of services (1)(2)*

Research and development (1)(2)

Selling, general and administrative (1)(2)

Net change in contingent consideration obligation

 —

 —

Restructuring charges

Depreciation and amortization

Total costs and expenses

(Loss) income from operations

Interest income

Interest expense

Other income

(Loss) income before income tax expense

Income tax expense

Net (loss) income

Net loss attributable to noncontrolling interests

 —

 —

Net (loss) income attributable to Synchronoss

$

$

$

$

Net income attributable to Synchronoss

Add: After-tax interest on convertible debt

 —

 —

Net (loss) income for diluted EPS calculation **

$

$

$

$

Net (loss) income per common share attributable to Synchronoss:

Basic

$

$

$

$

Diluted

$

$

$

$

Weighted-average common shares outstanding:

Basic

Diluted

* Cost of services excludes depreciation and amortization which is shown separately.

** Includes an add back for the convertible debt interest

(1) Amounts include fair value stock-based compensation as follows:

Cost of services

$

$

$

$

Research and development

Selling, general and administrative

Total fair value stock-based compensation expense

$

$

$

$

(2) Amounts include acquisition costs as follows:

Cost of services

$

$

$

$

Research and development

Selling, general and administrative

Total acquisition costs

$

$

$

$

Three Months Ended June 30, 

Six Months Ended June 30, 

2016

2015

2016

2015

Non-GAAP financial measures and reconciliation:

GAAP Revenue

$

$

$

$

Add:  Deferred revenue write-down

Non-GAAP Revenue

$

$

$

$

GAAP Revenue

$

$

$

$

Less: Cost of services

GAAP Gross Margin

Add: Deferred revenue write-down

Add: Fair value stock-based compensation

Add: Acquisition and restructuring costs

Non-GAAP Gross Margin

$

$

$

$

Non-GAAP Gross Margin %

GAAP income from operations

$

$

$

$

Add: Deferred revenue write-down

Add: Fair value stock-based compensation

Add: Acquisition and restructuring costs

Add: Net change in contingent consideration obligation

 —

 —

Add: Amortization expense

Non-GAAP income from operations

$

$

$

$

GAAP net (loss) income attributable to Synchronoss

$

$

$

$

Add: Deferred revenue write-down, net of tax

Add: Fair value stock-based compensation, net of tax

Add: Acquisition and restructuring costs, net of taxes

Add: Net change in contingent consideration obligation, net of Fx change

 —

 —

Add: Amortization expense, net of tax

Non-GAAP net income attributable to Synchronoss

$

$

Add: After-tax interest on convertible debt

Net income for diluted EPS calculation

$

$

$

$

Diluted non-GAAP net income per share

$

$

$

$

Weighted shares outstanding - Diluted

Six Months Ended June 30, 

2016

2015

Operating activities:

Net (loss) income

$

$

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Depreciation and amortization expense

Loss on disposals

 —

Amortization of debt issuance costs

Amortization of bond premium

Deferred income taxes

Non-cash interest on leased facility

Stock-based compensation

Contingent consideration obligation

Changes in operating assets and liabilities:

Accounts receivable, net of allowance for doubtful accounts

Prepaid expenses and other current assets

Other assets

Accounts payable

Accrued expenses

Other liabilities

Deferred revenues

Net cash provided by operating activities

Investing activities:

Purchases of fixed assets

Purchases of marketable securities available-for-sale

Maturities of marketable securities available-for-sale

Businesses acquired, net of cash

Net cash used in investing activities

Financing activities:

Proceeds from the exercise of stock options

Taxes paid on withholding shares

Payments on contingent consideration obligation

 —

Borrowings on revolving line of credit

 —

Repayment of revolving line of credit

 —

Repurchases of common stock

 —

Proceeds from the sale of treasury stock in connection with an employee stock purchase plan

Repayments of capital lease obligations

Net cash provided by (used in) financing activities

Effect of exchange rate changes on cash

Net decrease in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

$

$

Six Months Ended June 30, 

2016

2015

Non-GAAP cash provided by operating activities and reconciliation:

Net cash provided by operating activities (GAAP)

$

$

Add: Cash payments on settlement of earn-out

 —

Adjusted cash flow provided by operating activities (Non-GAAP)

$

$