QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | ☐ | x | ||||||||||||
Non-accelerated filer | ☐ | Smaller Reporting Company | ||||||||||||
Emerging growth company |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Page No. | ||||||||
March 31, 2023 | December 31, 2022 | |||||||||||||
ASSETS | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Accounts receivable, net | ||||||||||||||
Prepaid & other current assets | ||||||||||||||
Total current assets | ||||||||||||||
Non-current assets: | ||||||||||||||
Property and equipment, net | ||||||||||||||
Operating lease right-of-use assets | ||||||||||||||
Goodwill | ||||||||||||||
Intangible assets, net | ||||||||||||||
Loan receivable | ||||||||||||||
Other assets, non-current | ||||||||||||||
Total non-current assets | ||||||||||||||
Total assets | $ | $ | ||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable | $ | $ | ||||||||||||
Accrued expenses | ||||||||||||||
Deferred revenues, current | ||||||||||||||
Total current liabilities | ||||||||||||||
Long-term debt, net of debt issuance costs | ||||||||||||||
Deferred tax liabilities | ||||||||||||||
Deferred revenues, non-current | ||||||||||||||
Leases, non-current | ||||||||||||||
Other non-current liabilities | ||||||||||||||
Total liabilities | ||||||||||||||
Commitments and contingencies: | ||||||||||||||
Series B Non-Convertible Perpetual Preferred Stock, $ | ||||||||||||||
Redeemable noncontrolling interest | ||||||||||||||
Stockholders’ equity: | ||||||||||||||
Common stock, $ | ||||||||||||||
Additional paid-in capital | ||||||||||||||
Accumulated other comprehensive loss | ( | ( | ||||||||||||
Accumulated deficit | ( | ( | ||||||||||||
Total stockholders’ equity | ||||||||||||||
Total liabilities and stockholders’ equity | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Net revenues | $ | $ | ||||||||||||
Costs and expenses: | ||||||||||||||
Cost of revenues1 | ||||||||||||||
Research and development | ||||||||||||||
Selling, general and administrative | ||||||||||||||
Restructuring charges | ||||||||||||||
Depreciation and amortization | ||||||||||||||
Total costs and expenses | ||||||||||||||
Loss from operations | ( | ( | ||||||||||||
Interest income | ||||||||||||||
Interest expense | ( | ( | ||||||||||||
Other (expense) income, net | ( | |||||||||||||
Loss from operations, before taxes | ( | ( | ||||||||||||
Provision for income taxes | ( | ( | ||||||||||||
Net loss | ( | ( | ||||||||||||
Net income (loss) attributable to redeemable noncontrolling interests | ( | |||||||||||||
Preferred stock dividend | ( | ( | ||||||||||||
Net loss attributable to Synchronoss | $ | ( | $ | ( | ||||||||||
Earnings (loss) per share: | ||||||||||||||
Basic | $ | ( | $ | ( | ||||||||||
Diluted | $ | ( | $ | ( | ||||||||||
Weighted-average common shares outstanding: | ||||||||||||||
Basic | ||||||||||||||
Diluted |
Three Months Ended March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Net loss | $ | ( | $ | ( | ||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||
Foreign currency translation adjustments | ( | |||||||||||||
Net income on inter-company foreign currency transactions | ||||||||||||||
Total other comprehensive income (loss) | ( | |||||||||||||
Comprehensive loss | ( | ( | ||||||||||||
Comprehensive income (loss) attributable to redeemable noncontrolling interests | ( | |||||||||||||
Comprehensive loss attributable to Synchronoss | $ | ( | $ | ( |
Three Months Ended March 31, 2023 | |||||||||||||||||||||||||||||||||||
Common Stock | |||||||||||||||||||||||||||||||||||
Shares | Par Value | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated deficit | Total Stockholders' Equity | ||||||||||||||||||||||||||||||
Balance at December 31, 2022 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
Stock based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of restricted stock | — | — | — | — | |||||||||||||||||||||||||||||||
Preferred stock dividend | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Shares withheld for taxes in connection with issuance of restricted stock | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Net income (loss) attributable to Synchronoss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Non-controlling interest | — | — | ( | — | |||||||||||||||||||||||||||||||
Total other comprehensive income (loss) | — | — | — | — | |||||||||||||||||||||||||||||||
Balance at March 31, 2023 | $ | $ | $ | ( | $ | ( | $ |
Three Months Ended March 31, 2022 | |||||||||||||||||||||||||||||||||||
Common Stock | |||||||||||||||||||||||||||||||||||
Shares | Par Value | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated deficit | Total Stockholders' Equity | ||||||||||||||||||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
Stock based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Issuance of restricted stock | ( | — | — | — | — | ||||||||||||||||||||||||||||||
Preferred stock dividend | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Net income (loss) attributable to Synchronoss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Non-controlling interest | — | — | — | ( | |||||||||||||||||||||||||||||||
Total other comprehensive income (loss) | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Balance at March 31, 2022 | $ | $ | $ | ( | $ | ( | $ |
Three Months Ended March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Operating activities: | ||||||||||||||
Net loss from continuing operations | $ | ( | $ | ( | ||||||||||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||||||||
Depreciation and amortization | ||||||||||||||
Amortization of debt issuance costs | ||||||||||||||
Loss on disposals of fixed assets | ||||||||||||||
Amortization of bond discount | ||||||||||||||
Deferred income taxes | ( | |||||||||||||
Stock-based compensation | ||||||||||||||
Operating lease impairment, net | ( | |||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||
Accounts receivable, net | ( | ( | ||||||||||||
Prepaid expenses and other current assets | ( | |||||||||||||
Accounts payable | ( | |||||||||||||
Accrued expenses | ( | |||||||||||||
Deferred revenues | ( | |||||||||||||
Other liabilities | ( | |||||||||||||
Net cash provided by (used in) operating activities | ( | |||||||||||||
Investing activities: | ||||||||||||||
Purchases of fixed assets | ( | ( | ||||||||||||
Additions to capitalized software | ( | ( | ||||||||||||
Net cash used in investing activities | ( | ( | ||||||||||||
Financing activities: | ||||||||||||||
Taxes paid on withholding shares | ( | |||||||||||||
Series B Preferred dividend paid in cash | ( | ( | ||||||||||||
Net cash used in financing activities | ( | ( | ||||||||||||
Effect of exchange rate changes on cash | ||||||||||||||
Net decrease in cash and cash equivalents | ( | ( | ||||||||||||
Cash and cash equivalents, beginning of period | ||||||||||||||
Cash and cash equivalents, end of period | $ | $ | ||||||||||||
Standard | Description | Effect on the financial statements | ||||||||||||
Update 2022-04 - Liabilities—Supplier Finance Programs (Subtopic 405-50). Disclosure of Supplier Finance Program Obligations | The amendments in this Update apply to all entities that use supplier finance programs in connection with the purchase of goods and services (herein described as buyer parties). Supplier finance programs, which also may be referred to as reverse factoring, payables finance, or structured payables arrangements, allow a buyer to offer its suppliers the option for access to payment in advance of an invoice due date, which is paid by a third-party finance provider or intermediary on the basis of invoices that the buyer has confirmed as valid. The amendments in this Update require that a buyer in a supplier finance program disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. To achieve that objective, the buyer should disclose qualitative and quantitative information about its supplier finance programs. | The Company evaluated these changes and determined that they have no material impact on the Company’s consolidated financial position or results of operations upon adoption. | ||||||||||||
Date of adoption: January 1, 2023 |
Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||
Cloud | NetworkX | Messaging | Total | Cloud | NetworkX | Messaging | Total | ||||||||||||||||||||||||||||||||||||||||
Geography: | |||||||||||||||||||||||||||||||||||||||||||||||
Americas | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
APAC | |||||||||||||||||||||||||||||||||||||||||||||||
EMEA | |||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Service Line: | |||||||||||||||||||||||||||||||||||||||||||||||
Professional Services | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Transaction Services | |||||||||||||||||||||||||||||||||||||||||||||||
Subscription Services | |||||||||||||||||||||||||||||||||||||||||||||||
License | |||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ |
Contract Liabilities1 | |||||
Balance - January 1, 2023 | $ | ||||
Revenue recognized in the period | ( | ||||
Amounts billed but not recognized as revenue | |||||
Balance - March 31, 2023 | $ |
March 31, 2023 | |||||||||||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||||
Assets | |||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
Total assets | $ | $ | $ | $ | |||||||||||||||||||
Temporary equity | |||||||||||||||||||||||
Redeemable noncontrolling interests1 | $ | $ | $ | $ | |||||||||||||||||||
Total temporary equity | $ | $ | $ | $ |
December 31, 2022 | |||||||||||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||||
Assets | |||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
Total assets | $ | $ | $ | $ | |||||||||||||||||||
Temporary Equity | |||||||||||||||||||||||
Redeemable noncontrolling interests1 | $ | $ | $ | $ | |||||||||||||||||||
Total temporary equity | $ | $ | $ | $ |
March 31, 2023 | December 31, 2022 | |||||||||||||
ROU assets: | ||||||||||||||
Non-current operating lease ROU assets | $ | $ | ||||||||||||
Operating lease liabilities: | ||||||||||||||
$ | $ | |||||||||||||
Non-current operating lease liabilities | ||||||||||||||
Total operating lease liabilities | $ | $ | ||||||||||||
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Operating lease cost1 | $ | $ | |||||||||
Other lease costs and income: | |||||||||||
Variable lease costs1 | |||||||||||
Operating lease impairments, net1 | ( | ||||||||||
Sublease income1 | ( | ( | |||||||||
Total net lease cost | $ | $ | |||||||||
Year | Operating Leases | |||||||
2023 | $ | |||||||
2024 | ||||||||
2025 | ||||||||
2026 | ||||||||
2027 | ||||||||
Thereafter | ||||||||
Total future lease payments | ||||||||
Less: amount representing interest | ( | |||||||
Present value of future lease payments (lease liability) | $ |
March 31, 2023 | December 31, 2022 | ||||||||||
Operating Leases: | |||||||||||
Weighted-average remaining lease term (years), weighted based on lease liability balances | |||||||||||
Weighted-average discount rate (percentages), weighted based on the remaining balance of lease payments |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Operating Leases: | |||||||||||
Cash paid for amounts included in the measurement of lease liabilities | $ | $ | |||||||||
Senior Notes | March 31, 2023 | December 31, 2022 | ||||||||||||
$ | $ | |||||||||||||
Unamortized discount and debt issuance cost1 | ( | ( | ||||||||||||
Carrying value of Senior Notes | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
2021 Non-Convertible Senior Notes due 2026: | ||||||||||||||
Amortization of debt issuance costs | $ | $ | ||||||||||||
Interest on borrowings | ||||||||||||||
Amortization of debt discount | ||||||||||||||
Tax - ASC 740/FIN 48 Interest | ||||||||||||||
Other | ||||||||||||||
Total | $ | $ |
Balance at December 31, 2022 | Other comprehensive income | Tax effect | Balance at March 31, 2023 | ||||||||||||||||||||
Foreign currency | $ | ( | $ | $ | $ | ( | |||||||||||||||||
Unrealized loss on intercompany foreign currency transactions | ( | ( | |||||||||||||||||||||
Total | $ | ( | $ | $ | $ | ( |
Series B Preferred Stock | |||||||||||
Shares | Amount | ||||||||||
Balance at December 31, 2022 | $ | ||||||||||
Amortization of preferred stock issuance costs | |||||||||||
Issuance of preferred PIK dividend | |||||||||||
Redemption of Series B preferred shares | |||||||||||
Balance at March 31, 20231 | $ |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Cost of revenues | $ | $ | |||||||||
Research and development | |||||||||||
Selling, general and administrative | |||||||||||
Total stock-based compensation expense | $ | $ |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Stock options | $ | $ | |||||||||
Restricted stock awards | |||||||||||
Performance Based Cash Units | |||||||||||
Total stock-based compensation before taxes | $ | $ | |||||||||
Tax benefit | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Expected stock price volatility | % | % | ||||||||||||
Risk-free interest rate | % | % | ||||||||||||
Expected life of options (in years) | ||||||||||||||
Expected dividend yield | % | % | ||||||||||||
Weighted-average fair value (PSV) of the options | $ | $ |
Options | Number of Options | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value | ||||||||||||||||||||||
Outstanding at December 31, 2022 | $ | |||||||||||||||||||||||||
Options Granted | ||||||||||||||||||||||||||
Options Exercised | ||||||||||||||||||||||||||
Options Cancelled | ( | |||||||||||||||||||||||||
Outstanding at March 31, 2023 | $ | $ | ||||||||||||||||||||||||
Vested and exercisable at March 31, 2023 | $ | $ | ||||||||||||||||||||||||
Unvested Restricted Stock | Number of Awards | Weighted- Average Grant Date Fair Value | ||||||||||||
Unvested at December 31, 2022 | $ | |||||||||||||
Granted | ||||||||||||||
Granted adjustment1 | ( | |||||||||||||
Vested | ( | |||||||||||||
Forfeited | ( | |||||||||||||
Unvested at March 31, 2023 | $ |
Outstanding Cash Units | Number of Units | Period End Fair Value | ||||||||||||
Outstanding at December 31, 2022 | $ | |||||||||||||
Granted | ||||||||||||||
Granted adjustment1 | ||||||||||||||
Vested and distributed2 | ||||||||||||||
Forfeited | ( | |||||||||||||
Outstanding at March 31, 2023 | $ |
Balance at December 31, 2022 | Charges | Payments | Other Adjustments | Balance at March 31, 2023 | |||||||||||||||||||||||||
Employment termination costs | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Numerator - Basic: | |||||||||||
Net loss from operations | $ | ( | $ | ( | |||||||
Net income (loss) attributable to redeemable noncontrolling interests | ( | ||||||||||
Preferred stock dividend | ( | ( | |||||||||
Net loss attributable to Synchronoss | $ | ( | $ | ( | |||||||
Numerator - Diluted: | |||||||||||
Net loss attributable to Synchronoss | $ | ( | $ | ( | |||||||
Net loss attributable to Synchronoss | $ | ( | $ | ( | |||||||
Denominator: | |||||||||||
Weighted average common shares outstanding — basic | |||||||||||
Weighted average common shares outstanding — diluted | |||||||||||
Earnings (loss) per share: | |||||||||||
Basic | $ | ( | $ | ( | |||||||
Diluted | $ | ( | $ | ( | |||||||
Anti-dilutive stock options excluded | |||||||||||
Unvested shares of restricted stock awards |
Year | Non-cancelable agreements | |||||||
2023 | $ | |||||||
2024 | ||||||||
2025 | ||||||||
Total | $ |
Three Months Ended March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
FX (losses) gains1 | $ | ( | $ | |||||||||||
Other2 | ( | ( | ||||||||||||
Total | $ | ( | $ |
Three Months Ended March 31, | $ Change | ||||||||||||||||
2023 | 2022 | 2023 vs 2022 | |||||||||||||||
Net revenues | $ | 57,708 | $ | 65,866 | $ | (8,158) | |||||||||||
Cost of revenues1 | 20,381 | 24,839 | (4,458) | ||||||||||||||
Research and development | 14,735 | 15,791 | (1,056) | ||||||||||||||
Selling, general and administrative | 18,309 | 17,897 | 412 | ||||||||||||||
Restructuring charges | 345 | 685 | (340) | ||||||||||||||
Depreciation and amortization | 7,520 | 8,034 | (514) | ||||||||||||||
Total costs and expenses | 61,290 | 67,246 | (5,956) | ||||||||||||||
Loss from operations | $ | (3,582) | $ | (1,380) | $ | (2,202) | |||||||||||
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Net cash provided by (used in): | |||||||||||
Operating activities | $ | 1,295 | $ | (2,693) | |||||||
Investing activities | (5,470) | (5,399) | |||||||||
Financing activities | $ | (2,299) | $ | (1,781) |
Payments Due by Period | ||||||||||||||||||||||||||
Total | 2023 | 2024-2026 | 2027-2028 | |||||||||||||||||||||||
Finance lease obligations | $ | 1,145 | $ | 440 | $ | 705 | $ | — | ||||||||||||||||||
Interest | 41,353 | 8,861 | 32,492 | — | ||||||||||||||||||||||
Operating lease obligations | 40,627 | 6,032 | 24,115 | 10,480 | ||||||||||||||||||||||
Purchase obligations1 | 41,672 | 13,471 | 28,201 | — | ||||||||||||||||||||||
Senior Note Payable | 141,077 | — | 141,077 | — | ||||||||||||||||||||||
Total | $ | 265,874 | $ | 28,804 | $ | 226,590 | $ | 10,480 |
Incorporated by Reference | ||||||||||||||||||||||||||||||||||||||
Exhibit No. | Description | Form | File No. | Exhibit | Filing Date | Filed Herewith | ||||||||||||||||||||||||||||||||
3.1 | 10-K | 001-40574 | 3.1 | March 15, 2023 | ||||||||||||||||||||||||||||||||||
3.2 | 8-K | 001-40574 | 3.1 | June 23, 2022 | ||||||||||||||||||||||||||||||||||
3.3 | S-1 | 333-132080 | 3.4 | May 9, 2006 | ||||||||||||||||||||||||||||||||||
3.4 | 8-K | 000-52049 | 3.2 | February 20, 2018 | ||||||||||||||||||||||||||||||||||
3.5 | 8-K | 000-52049 | 3.3 | June 30, 2021 | ||||||||||||||||||||||||||||||||||
3.6 | 8-K | 000-52049 | 3.1 | June 30, 2021 | ||||||||||||||||||||||||||||||||||
31.1 | X | |||||||||||||||||||||||||||||||||||||
31.2 | X | |||||||||||||||||||||||||||||||||||||
32.1 | X | |||||||||||||||||||||||||||||||||||||
32.2 | X | |||||||||||||||||||||||||||||||||||||
101.INS | XBRL Instance Document | X | ||||||||||||||||||||||||||||||||||||
101.SCH | XBRL Schema Document | X | ||||||||||||||||||||||||||||||||||||
101.CAL | XBRL Calculation Linkbase Document | X | ||||||||||||||||||||||||||||||||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase | X | ||||||||||||||||||||||||||||||||||||
101.LAB | XBRL Labels Linkbase Document | X | ||||||||||||||||||||||||||||||||||||
101.PRE | XBRL Presentation Linkbase Document | X | ||||||||||||||||||||||||||||||||||||
Synchronoss Technologies, Inc. | |||||||||||
/s/ Jeff Miller | |||||||||||
Jeff Miller | |||||||||||
Chief Executive Officer | |||||||||||
(Principal Executive Officer) | |||||||||||
/s/ Louis Ferraro | |||||||||||
Louis Ferraro | |||||||||||
Chief Financial Officer |
/s/ Jeff Miller | ||||||||
Jeff Miller | ||||||||
Chief Executive Officer | ||||||||
(Principal Executive Officer) |
/s/ Louis Ferraro | |||||||||||
Louis Ferraro | |||||||||||
Chief Financial Officer |
/s/ Jeff Miller | |||||||||||
Jeff Miller | |||||||||||
Chief Executive Officer | |||||||||||
(Principal Executive Officer) |
/s/ Louis Ferraro | |||||||||||
Louis Ferraro | |||||||||||
Chief Financial Officer |
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares issued (in shares) | 93,547,000 | 90,853,000 |
Common stock, shares outstanding (in shares) | 93,547,000 | 90,853,000 |
Series B Preferred Stock | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 150,000 | 150,000 |
Preferred stock, shares issued (in shares) | 71,000 | 71,000 |
Preferred stock, shares outstanding (in shares) | 71,000 | 71,000 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (10,931) | $ (3,037) |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation adjustments | 4,570 | (3,159) |
Net income on inter-company foreign currency transactions | 0 | 18 |
Total other comprehensive income (loss) | 4,570 | (3,141) |
Comprehensive loss | (6,361) | (6,178) |
Comprehensive income (loss) attributable to redeemable noncontrolling interests | 14 | (115) |
Comprehensive loss attributable to Synchronoss | $ (6,347) | $ (6,293) |
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited) - USD ($) shares in Thousands, $ in Thousands |
Total |
Common Stock |
Additional Paid-In Capital |
Accumulated Other Comprehensive Income (Loss) |
Accumulated deficit |
---|---|---|---|---|---|
Beginning balance (in shares) at Dec. 31, 2021 | 88,305 | ||||
Beginning balance at Dec. 31, 2021 | $ 90,823 | $ 9 | $ 492,512 | $ (32,985) | $ (368,713) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock based compensation | 1,777 | 1,777 | |||
Issuance of restricted stock (in shares) | (61) | ||||
Issuance of restricted stock | 0 | ||||
Preferred stock dividend | (2,438) | (2,438) | |||
Net income (loss) attributable to Synchronoss | (3,037) | (3,037) | |||
Non-controlling interest | 0 | 115 | (115) | ||
Total other comprehensive income (loss) | (3,141) | (3,141) | |||
Ending balance (in shares) at Mar. 31, 2022 | 88,244 | ||||
Ending balance at Mar. 31, 2022 | $ 83,984 | $ 9 | 491,966 | (36,126) | (371,865) |
Beginning balance (in shares) at Dec. 31, 2022 | 90,853 | 90,853 | |||
Beginning balance at Dec. 31, 2022 | $ 68,097 | $ 9 | 488,848 | (44,131) | (376,629) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock based compensation | 1,314 | 1,314 | |||
Issuance of restricted stock (in shares) | 2,695 | ||||
Issuance of restricted stock | 0 | ||||
Preferred stock dividend | (2,474) | (2,474) | |||
Shares withheld for taxes in connection with issuance of restricted stock (in shares) | (1) | ||||
Shares withheld for taxes in connection with issuance of restricted stock | (1) | (1) | |||
Net income (loss) attributable to Synchronoss | (10,931) | (10,931) | |||
Non-controlling interest | 0 | (14) | 14 | ||
Total other comprehensive income (loss) | $ 4,570 | 4,570 | |||
Ending balance (in shares) at Mar. 31, 2023 | 93,547 | 93,547 | |||
Ending balance at Mar. 31, 2023 | $ 60,575 | $ 9 | $ 487,673 | $ (39,561) | $ (387,546) |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2023 |
Mar. 31, 2022 |
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Operating activities: | ||
Net loss from continuing operations | $ (10,931) | $ (3,037) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Depreciation and amortization | 7,520 | 8,034 |
Amortization of debt issuance costs | 370 | 335 |
Loss on disposals of fixed assets | 24 | 0 |
Amortization of bond discount | 23 | 22 |
Deferred income taxes | 0 | (11) |
Stock-based compensation | 1,739 | 1,927 |
Operating lease impairment, net | (3) | 443 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (845) | (703) |
Prepaid expenses and other current assets | 13 | (3,969) |
Accounts payable | (2,348) | 1,019 |
Accrued expenses | 3,457 | (2,356) |
Deferred revenues | 1,365 | (2,617) |
Other liabilities | 911 | (1,780) |
Net cash provided by (used in) operating activities | 1,295 | (2,693) |
Investing activities: | ||
Purchases of fixed assets | (876) | (154) |
Additions to capitalized software | (4,594) | (5,245) |
Net cash used in investing activities | (5,470) | (5,399) |
Financing activities: | ||
Taxes paid on withholding shares | (1) | 0 |
Net cash used in financing activities | (2,299) | (1,781) |
Effect of exchange rate changes on cash | 113 | 96 |
Net decrease in cash and cash equivalents | (6,361) | (9,777) |
Cash and cash equivalents, beginning of period | 21,921 | 31,504 |
Cash and cash equivalents, end of period | 15,560 | 21,727 |
Series B Preferred Stock | ||
Financing activities: | ||
Preferred dividend paid in the form of cash | $ (2,298) | $ (1,781) |
Description of Business |
3 Months Ended |
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Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business General Synchronoss Technologies, Inc. (“Synchronoss” or the “Company”) is a leading provider of white label cloud, messaging, digital and network management solutions that enable our customers to keep subscribers, systems, networks and content in sync. The Synchronoss Personal CloudTM solution is designed to create an engaging and trusted customer experience through ongoing content management and engagement. The Synchronoss Personal CloudTM platform is a secure and highly scalable, white label platform that allows our customers’ subscribers to backup and protect, engage with, and manage their personal content and gives our operator customers the ability to increase average revenue per user (“ARPU”) and reduce churn. Our Synchronoss Personal CloudTM platform is specifically designed to support smartphones, tablets, desktops computers, laptops, wearables for health and wellness, cameras, TVs, security cameras, routers, as well as connected automobiles and homes. Synchronoss’ Messaging platform powers mobile messaging and mailboxes for hundreds of millions of telecommunication subscribers. Our Advanced Messaging platform is a powerful, secure, intelligent, white label messaging platform that expands capabilities for communications service provider and multi-service providers to offer P2P messaging via Rich Communications Services (“RCS”). Our Mobile Messaging Platform (“MMP”) is poised to provide a single standard ecosystem for onboarding and management to brands, advertisers and message wholesalers. The Synchronoss NetworkX (formerly Digital) products provide operators with the tools and software to design their physical network, streamline their infrastructure purchases, and manage and optimize comprehensive network expenses for leading top tier carriers around the globe.
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Basis of Presentation and Consolidation |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation Basis of Presentation and Consolidation The accompanying interim unaudited condensed consolidated financial statements have been prepared by Synchronoss and in the opinion of management, include all adjustments necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the interim periods. They do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements and should be read in conjunction with the Company’s audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023. The condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and variable interest entities (“VIE”) in which the Company is the primary beneficiary and entities in which the Company has a controlling interest. Investments in less than majority-owned companies in which the Company does not have a controlling interest, but does have significant influence, are accounted for as equity method investments. Investments in less than majority-owned companies in which the Company does not have the ability to exert significant influence over the operating and financial policies of the investee are accounted for using the cost method. All material intercompany transactions and accounts are eliminated in consolidation. For further information about the Company’s basis of presentation and consolidation or its significant accounting policies, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Recently Issued Accounting Standards Recent accounting pronouncements adopted
Digital Experience Platform and Activation Solutions Sale On March 7, 2022, Synchronoss Technologies, Inc. and iQmetrix Global Ltd. (“iQmetrix ”), entered into an Asset Purchase Agreement, pursuant to which Synchronoss has agreed to sell its Digital Experience Platform and activation solutions (the “DXP Business”) to iQmetrix for up to a total purchase price of $14 million. The purchase price is payable as follows: (i) $7.5 million on the closing date of the Transaction, (ii) $0.5 million deposited into an escrow account on the Closing Date, (iii) $1 million paid twelve (12) months from the Closing Date, and (iv) $5 million that may be payable as an earn-out. This transaction closed on May 11, 2022. The Company received the $7.5 million cash payment on the transaction close date. The Company received the $0.5 million payment in escrow during the third quarter of 2022 in accordance with the terms of the Asset Purchase Agreement. The remaining $1 million escrow payment was recorded into other current assets. This consideration is not contingent on any further actions. The Company determined the fair value of the earn-out provision was $3.6 million of which $3.0 million was recorded as an other current asset and the remaining portion was recorded as non-current other asset. In the fourth quarter of fiscal 2022, iQmetrix and the Company agreed that the required performance conditions were not met. This resulted in a write-off of the asset recorded within the Selling, general and administrative expenses line item on the income statement. The book value of the divested intangible assets associated with the DXP Business was $2.3 million. For the goodwill allocation, the fair value of the core reporting unit was estimated using a combination of the income approach, which incorporates the use of the discounted cash flow method, and the market approach, which incorporates the use of earnings and revenue multiples based on market data. Based on the fair value of the core reporting unit and the aggregate consideration received in the transaction, the Company determined the attributable fair value of goodwill to the DXP Business was $7.6 million. The transaction resulted in a $2.5 million gain for the year ended December 31, 2022. Accounts Receivable Securitization Facility On June 23, 2022 (the “Closing Date”), the Company and certain of its subsidiaries (together with the Company, the “Company Group”) entered into a $15 million accounts receivable securitization facility (the “A/R Facility”) with Norddeutsche Landesbank Girozentrale. The A/R Facility transaction includes (i) Receivables Purchase Agreements (the “Receivables Purchase Agreements”) dated as of the Closing Date, among the Company, as initial servicer, SN Technologies, LLC, a wholly owned special purpose subsidiary of the Company (“SN Technologies”), as seller, Norddeutsche Landesbank Girozentrale, as administrative agent (the “Administrative Agent”), and the purchasers party thereto, the group agents party thereto and the originators party thereto; (ii) Purchase and Sale Agreements (the “Purchase and Sale Agreements”) dated as of the Closing Date, between the Company Group, as originators (the “Originators”), and SN Technologies, as purchaser; (iii) the Administration Agreement (the “Administration Agreement”) dated as of the Closing Date, between the Company, as servicer, and Finacity Corporation, as administrator; and (iv) the Performance Guaranty (the “Performance Guaranty”) dated as of the Closing Date made by the Company in favor of the Administrative Agent. Pursuant to the Purchase and Sale Agreements, the Originators will sell existing and future accounts receivable [and related assets] (the “Receivables”) to SN Technologies in exchange for cash and/or subordinated notes. The Originators and SN Technologies intend the transactions contemplated by the Purchase and Sale Agreements to be true sales to SN Technologies by the respective Originators. Pursuant to the Receivables Purchase Agreement, SN Technologies will in turn grant an undivided security interest to the Administrative Agent in the Receivables in exchange for a credit facility permitting borrowings of up to $15 million outstanding from time to time. Yield is payable to the Administrative Agent under the Receivables Purchase Agreements at a variable rate based on the Norddeutsche Landesbank Girozentrale’s Hanover funding rate plus a 2.35% margin. The Company pays a commitment fee that shall equal 0.85% per annum on the average daily unused outstanding capital. Pursuant to the Performance Guaranty, the Company guarantees the performance of the Originators of their obligations under the Purchase and Sale Agreements. The Company has not agreed to guarantee any obligations of SN Technologies or the collection of any of the receivables and will not be responsible for any obligations to the extent the failure to perform such obligations by the Company or any Originators results from receivables being uncollectible on account of the insolvency, bankruptcy or lack of creditworthiness or other financial inability to pay of the related obligor. Unless earlier terminated or subsequently extended pursuant to the terms of the Receivables Purchase Agreement, the A/R Facility will expire on June 23, 2025. The foregoing description of the A/R Facility and the respective transactions contemplated thereby does not purport to be complete and is qualified in its entirety by reference to the full text of the Receivables Purchase Agreements, Purchase and Sale Agreements, Administration Agreement and Performance Guaranty, copies of which are filed as Exhibits 10.1, 10.2, 10.3 and 10.4, respectively, on Form 8-K filed with Securities and Exchange Commission on June 23, 2022. The Company has not drawn on the A/R Facility as of March 31, 2023.
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Revenue |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue | Revenue Disaggregation of revenue The Company disaggregates revenue from contracts with customers into the nature of the products and services and geographical regions. The Company’s geographic regions are the Americas, Europe, the Middle East and Africa (“EMEA”), and Asia Pacific (“APAC”). The majority of the Company’s revenue is from the TMT sector.
Trade Accounts Receivable and Contract balances The Company classifies its right to consideration in exchange for deliverables as either a receivable or a contract asset. A receivable is a right to consideration that is unconditional (i.e. only the passage of time is required before payment is due). For example, the Company recognizes a receivable for revenues related to its time and materials and transaction or volume-based contracts. The Company presents such receivables in Trade accounts receivable, net in its Condensed Consolidated Statements of Financial Position at their net estimated realizable value. The Company maintains an allowance for credit losses to provide for the estimated amount of receivables that may not be collected. The allowance is based upon an assessment of customer creditworthiness, historical payment experience, the age of outstanding receivables and other economic indicators. A contract asset is a right to consideration that is conditional upon factors other than the passage of time. For example, the Company would record a contract asset if it records revenue on a professional services engagement but are not entitled to bill until the Company achieves specified milestones. Contract assets balance at March 31, 2023 is $13.8 million. Amounts collected in advance of services being provided are accounted for as contract liabilities, which are presented as deferred revenue on the accompanying Condensed Consolidated Balance Sheets and are realized with the associated revenue recognized under the contract. Nearly all of the Company's contract liabilities balance is related to services revenue, primarily subscription services contracts. The Company’s contract assets and liabilities are reported in a net position on a customer basis at the end of each reporting period. Significant changes in the contract liabilities balance (current and non-current) during the period are as follows:
________________________________ 1 Comprised of Deferred Revenue. $10.8 million of revenue recognized in the period was included in the contract liability balance at the beginning of the period. Transaction price allocated to the remaining performance obligations Topic 606 requires that the Company disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied as of March 31, 2023. The Company has elected not to disclose transaction price allocated to remaining performance obligations for: 1.Contracts with an original duration of one year or less, including contracts that can be terminated for convenience without a substantive penalty; 2.Contracts for which the Company recognizes revenues based on the right to invoice for services performed; 3.Variable consideration allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation in accordance with Topic 606 Section 10-25-14(b), for which the criteria in Topic 606 Section 10-32-40 have been met. This applies to a limited number of situations where the Company is dependent upon data from a third party or where fees are highly variable. Many of the Company’s performance obligations meet one or more of these exemptions. Specifically, the Company has excluded the following from the Company’s remaining performance obligations, all of which will be resolved in the period in which amounts are known: •consideration for future transactions, above any contractual minimums •consideration for success-based transactions contingent on third party data •credits for failure to meet future service level requirements As of March 31, 2023, the aggregate amount of transaction price allocated to remaining performance obligations, other than those meeting the exclusion criteria above, was $104.5 million, of which approximately 95.0 percent is expected to be recognized as revenues within 2 years, and the remainder thereafter. Estimates of revenue expected to be recognized in future periods also exclude unexercised customer options to purchase services that do not represent material rights to the customer. Customer options that do not represent a material right are only accounted for in accordance with Topic 606 when the customer exercises its option to purchase additional goods or services.
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements In accordance with accounting principles generally accepted in the United States, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level hierarchy prioritizes the inputs used to measure fair value as follows: •Level 1 - Observable inputs - quoted prices in active markets for identical assets and liabilities; •Level 2 - Observable inputs other than the quoted prices in active markets for identical assets and liabilities includes quoted prices for similar instruments, quoted prices for identical or similar instruments in inactive markets, and amounts derived from valuation models where all significant inputs are observable in active markets; and •Level 3 - Unobservable inputs - includes amounts derived from valuation models where one or more significant inputs are unobservable and require the Company to develop relevant assumptions. The following is a summary of assets, liabilities and redeemable noncontrolling interests and their related classifications under the fair value hierarchy:
________________________________ 1 Put arrangements held by the noncontrolling interests in certain of the Company’s joint venture. Redeemable Noncontrolling Interests The redeemable noncontrolling interests recorded at fair value are put arrangements held by the noncontrolling interests in certain of the Company’s joint ventures. The Company recognizes changes in the redemption value immediately as they occur and adjusts the carrying value of the noncontrolling interest to the greater of the estimated redemption value, which approximates fair value, at the end of each reporting period or the initial carrying amount. The fair value of the redeemable noncontrolling interests was estimated by applying an income approach using a discounted cash flow analysis. This fair value measurement is based on significant inputs that are not observable in the market and thus represents a Level 3 measurement. Significant changes in the underlying assumptions used to value the redeemable noncontrolling interests could significantly increase or decrease the fair value estimates recorded in the Condensed Consolidated Balance Sheets.
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases The Company has entered into contracts with third parties to lease a variety of assets, including certain real estate, equipment, automobiles and other assets. The Company’s leases frequently allow for lease payments that could vary based on factors such as inflation or the degree of utilization of the underlying asset. For example, certain of the Company’s real estate leases could require us to make payments that vary based on common area maintenance charges, insurance and other charges. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company is party to certain sublease arrangements, primarily related to the Company’s real estate leases, where it acts as the lessee and intermediate lessor. The Company reflects finance leases as a component of Leases, non-current on the Condensed Consolidated Balance Sheet. The finance leases were not material for the period ended March 31, 2023. The following table presents information about the Company's Right of Use (ROU) assets and lease liabilities:
________________________________ 1 Amounts are included in Accrued Expenses on the . The following table presents information about lease expense and sublease income:
________________________________ 1 Amounts are included in Cost of revenues, Selling, general and administrative and/or Research and development based on the function that the underlying leased asset supports which are reflected in the Condensed Consolidated Statements of Operations. The following table provides the undiscounted amount of future cash flows included in our lease liabilities at March 31, 2023 for each of the five years subsequent to December 31, 2022 and thereafter, as well as a reconciliation of such undiscounted cash flows to our lease liabilities at March 31, 2023:
The following table provides the weighted-average remaining lease term and weighted-average discount rates for our leases:
The following table provides certain cash flow and supplemental noncash information related to our lease liabilities:
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Loan Receivable |
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Equity Method Investments and Joint Ventures [Abstract] | |
Loan Receivable | Loan Receivable Sequential Technology International, LLC During the second quarter of 2020, the Company entered into an agreement with Sequential Technology International, LLC (“STIN”) and AP Capital Holdings II, LLC (“APC”) to divest its remaining equity interest in STIN as well as settle its paid-in-kind purchase money note (“PIK note”) and certain amounts due as of December 31, 2019 in consideration for a $9.0 million secured promissory note (the “Note”), which includes contingent consideration of up to $16.0 million. The Note has an 8% interest rate and the maturity date is April 27, 2025. As of March 31, 2023 and December 31, 2022, the carrying value of the Note after the consideration of the allowance for credit loss was approximately $4.8 million. The Company determined the allowance on the Note using a discounted cash flow analysis, which discounts the expected future cash flows of the asset to determine the collectible amount. In accordance with the terms of the agreement, STIN has made the required payments to the Company as of March 31, 2023.
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Debt |
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Debt | Debt Offering of Senior Notes On June 30, 2021, the Company closed its underwritten public offering of $120.0 million aggregate principal amount of 8.375% senior notes due 2026 at a par value of $25.00 per senior note (the “Senior Notes”). The offering was conducted pursuant to an underwriting agreement (the “Notes Underwriting Agreement”) dated June 25, 2021, by and among the Company and B. Riley Securities, Inc., as representative of the several underwriters (the “Notes Underwriters”). At the closing, the Company issued $125.0 million aggregate principal amount of Senior Notes, inclusive of $5.0 million aggregate principal amount of Senior Notes issued pursuant to the full exercise of the Notes Underwriters’ option to purchase additional Senior Notes. The Notes Underwriting Agreement contains customary representations, warranties and covenants of the Company, customary conditions to closing, indemnification obligations of the Company and the Notes Underwriters, including for liabilities under the Securities Act, other obligations of the parties and termination provisions. On June 30, 2021, the Company entered into an indenture (the “Base Indenture”) and a supplemental indenture (the “First Supplemental Indenture” and, together with the Base Indenture, the “Indenture”) with The Bank of New York Mellon Trust Company National Association, as trustee (the “Trustee”), between the Company and the Trustee. The Indenture establishes the form and provides for the issuance of the Senior Notes. The Senior Notes are senior unsecured obligations of the Company and rank equally in right of payment with all of the Company’s existing and future senior unsecured and unsubordinated indebtedness. The Senior Notes are effectively subordinated in right of payment to all of the Company’s existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness and structurally subordinated to all existing and future indebtedness of the Company’s subsidiaries, including trade payables. The Senior Notes bear interest at the rate of 8.375% per annum. Interest on the Senior Notes is payable quarterly in arrears on January 31, April 30, July 31 and October 31 of each year, commencing on July 31, 2021. The Senior Notes will mature on June 30, 2026, unless redeemed prior to maturity. The Company may, at its option, at any time and from time to time, redeem the Senior Notes for cash in whole or in part (i) on or after June 30, 2022 and prior to June 30, 2023, at a price equal to $25.75 per Senior Note, plus accrued and unpaid interest to, but excluding, the date of redemption, (ii) on or after June 30, 2023 and prior to June 30, 2024, at a price equal to $25.50 per Senior Note, plus accrued and unpaid interest to, but excluding, the date of redemption, (iii) on or after June 30, 2024 and prior to June 30, 2025, at a price equal to $25.25 per Senior Note, plus accrued and unpaid interest to, but excluding, the date of redemption, and (iv) on or after June 30, 2025 and prior to maturity, at a price equal to 100% of their principal amount, plus accrued and unpaid interest to, but excluding, the date of redemption. On and after any redemption date, interest will cease to accrue on the redeemed Senior Notes. The Company has not redeemed any of the Senior Notes as of March 31, 2023. The Indenture contains customary events of default and cure provisions. If an uncured default occurs and is continuing, the Trustee or the holders of at least 25% of the principal amount of the Senior Notes may declare the entire amount of the Senior Notes, together with accrued and unpaid interest, if any, to be immediately due and payable. In the case of an event of default involving the Company’s bankruptcy, insolvency or reorganization, the principal of, and accrued and unpaid interest on, the principal amount of the Senior Notes, together with accrued and unpaid interest, if any, will automatically, and without any declaration or other action on the part of the Trustee or the holders of the Senior Notes, become due and payable. On October 25, 2021, the Company entered into an At Market Issuance Sales Agreement (the “Sales Agreement”) between the Company and B. Riley Securities, Inc. (the “Agent”), a related party, pursuant to which the Company may offer and sell, from time to time, up to $18.0 million of the Company’s 8.375% Senior Notes due 2026. Sales of the additional Senior Notes pursuant to the Sales Agreement, if any, may be made in transactions that are deemed to be “at the market offerings” as defined in Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”). Under the Sales Agreement, the Agent will be entitled to compensation of 2.0% of the gross proceeds of all notes sold through it as the Company’s agent. During the fourth quarter of 2021, the Company sold an additional $16.1 million aggregate principal amount of Senior Notes pursuant to the Sales Agreement. The additional Senior Notes sold have terms identical to the initial Senior Notes and are fungible and vote together with, the initial Senior Notes. The Senior Notes are listed and trade on The Nasdaq Global Market under the symbol “SNCRL.” The carrying amounts of the Company’s borrowings were as follows:
________________________________ 1 Debt issuance costs are deferred and amortized into interest expense using the effective interest method. The total fair value of the outstanding Senior Notes was $97.8 million as of March 31, 2023. The Company is in compliance with its debt covenants as of March 31, 2023. Interest expense The following table summarizes the Company’s interest expense:
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Accumulated Other Comprehensive (Loss) / Income |
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Accumulated Other Comprehensive (Loss) / Income | Accumulated Other Comprehensive (Loss) / Income The changes in accumulated other comprehensive (loss) income during the three months ended March 31, 2023 were as follows:
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Capital Structure |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital Structure | Capital Structure Common Stock Each holder of common stock is entitled to vote on all matters and is entitled to one vote for each share held. Dividends on common stock will be paid when, and if, declared by the Company’s Board of Directors. No dividends have ever been declared or paid by the Company. Shelf Registration Statement On August 19, 2020, the Company filed a universal shelf registration statement with the SEC for the issuance of common stock, preferred stock, debt securities, guarantees of debt securities, warrants and units up to an aggregate amount of $250.0 million (“the 2020 Shelf Registration Statement”). On August 28, 2020, the 2020 Shelf Registration Statement was declared effective by the SEC. As of March 31, 2023, except for the Common Stock offering and the issuance of Senior Notes, the Company has not raised additional capital using the 2020 Shelf Registration Statement. Preferred Stock The Company’s Board of Directors (the “Board”) is authorized to issue preferred shares and has the discretion to determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences of preferred stock. Series B Non-Convertible Preferred Stock On June 30, 2021, the Company closed a private placement of 75,000 shares of its Series B Perpetual Non-Convertible Preferred Stock, par value $0.0001 per share, with an initial liquidation preference of $1,000 per share (the “Series B Preferred Stock”), for net proceeds of $72.5 million (the “Series B Transaction”). The sale of the Series B Preferred Stock was pursuant to the Series B Preferred Stock Purchase Agreement, dated as of June 24, 2021 (the “Series B Purchase Agreement”), between the Company and B. Riley Principal Investments, LLC (“BRPI”). In connection with the closing of the Series B Transaction, the Company (i) filed a Certificate of Designation with the State of Delaware setting forth the rights, preferences, privileges, qualifications, restrictions and limitations on the Series B Preferred Stock (the “Series B Certificate”) and (ii) entered into an Investor Rights Agreement with B. Riley Financial, Inc. (“B. Riley Financial”) and BRPI setting forth certain governance and registration rights of B. Riley Financial with respect to the Company. Certificate of Designation of the Series B Preferred Stock The rights, preferences, privileges, qualifications, restrictions and limitations of the shares of Series B Preferred Stock are set forth in the Series B Certificate. Under the Series B Certificate, the holders of the Series B Preferred Stock are entitled to receive, on each share of Series B Preferred Stock on a quarterly basis, an amount equal to the dividend rate, as described in the following sentence, divided by four and multiplied by the then-applicable Liquidation Preference per share of Series B Preferred Stock (collectively, the “Preferred Dividends”). The dividend rate is (1) 9.5% per annum for the period commencing on June 30, 2021 and ending on and including December 31, 2021, (2) 13% per annum for the year commencing on January 1, 2022 and ending on and including December 31, 2022; and (3) 14% per annum for the year commencing on January 1, 2023 and thereafter. The Preferred Dividends will be due in cash on January 1, April 1, July 1 and October 1 of each year (each, a “Series B Dividend Payment Date”). The Company may choose to pay the Series B Preferred Dividends in cash or in additional shares of Series B Preferred Stock. In the event the Company does not declare and pay a dividend in cash on any Series B Dividend Payment Date, the unpaid amount of the Preferred Dividend will be added to the Liquidation Preference. As of March 31, 2023, the Liquidation Value and Redemption Value of the Series B Preferred Shares was $73.2 million. On and after the fifth anniversary of the date of issuance, holders of shares of Series B Preferred Stock will have the right to cause the Company to redeem each share of Series B Preferred Stock for cash in an amount equal to the sum of the current liquidation preference and any accrued dividends. Each share of Series B Preferred Stock will also be redeemable at the option of the holder upon the occurrence of a “Fundamental Change” at (i) par in the case of a payment in cash or (ii) 1.5 times par in the case of payment in shares of Common Stock (such shares being, “Registrable Securities”), subject to certain limitations on the amount of stock that could be issued to the holders of Series B Stock. In addition, the Company will be permitted to redeem outstanding shares of the Series B Preferred Stock at any time for the sum of the then-applicable Liquidation Preference and the accrued but unpaid dividends. Pursuant to the Series B Certificate, the Company will be required to use (i) the first $50.0 million of proceeds from certain transactions (i.e., disposition, sale of assets, tax refunds) received by the Company to redeem for cash, shares of the Series B Preferred Stock, on a pro rata basis among each holder of Series B Preferred Stock and (ii) the next $25.0 million of proceeds from certain transactions received by the Company may be used by the Company to buy back shares of Common Stock and to the extent, not used for such purpose by the Company, to redeem, for cash, shares of the Series B Preferred Stock, on a pro rata basis among each holder of the Series B Preferred Stock. The Company shall be required to obtain the prior written consent of the holders holding at least a majority of the outstanding shares of the Series B Preferred Stock before taking certain actions, including: (i) certain dividends, repayments and redemptions; (ii) any amendment to the Company’s certificate of incorporation that adversely affects the rights, preferences, privileges or voting powers of the Series B Preferred Stock; and (iii) issuances of stock ranking senior or equivalent to shares of the Series B Preferred Stock (including additional shares of the Series B Preferred Stock) in the priority of payment of dividends or in the distribution of assets upon any liquidation, dissolution or winding up of the Company. Other than with respect to the foregoing consent rights, the Series B Preferred Stock is non-voting stock. Investor Rights Agreement On June 30, 2021, the Company, B. Riley Financial and BRPI entered into an Investor Rights Agreement (the “Investor Rights Agreement”). Pursuant to the Investor Rights Agreement, for so long as affiliates of B. Riley Financial beneficially own at least 10% of the outstanding shares of common stock (unless such equity threshold percentage is not met due to dilution from equity issuances), B. Riley Financial is entitled to nominate one Class II director (the “B. Riley Nominee”) to the Company’s board of directors (the “Board”), who shall be an employee of B. Riley Financial or its affiliates and is approved by the Board, such approval not to be unreasonably withheld. For so long as affiliates of B. Riley Financial beneficially own 5% or more but less than 10% of the outstanding shares of common stock (unless such equity threshold percentage is not met due to dilution from equity issuances), B. Riley Financial is entitled to certain board observer rights. A summary of the Company’s Series B Perpetual Non-Convertible Preferred Stock balance at March 31, 2023 and changes during the three months ended March 31, 2023, are presented below:
________________________________ 1 Series B preferred stock net principal balance of $68.3 million is presented as gross principal balance of $70.7 million net of $2.35 million unamortized issuance costs. On January 3, 2023 the Company paid the accrued Series B Perpetual Non-Convertible Preferred Stock dividend of $2.30 million in form of cash. On April 3, 2023 the Company paid the accrued Series B Perpetual Non-Convertible Preferred Stock dividend of $2.47 million in form of cash. Stock Plans At the annual meeting of stockholders the Company held on June 16, 2022, the stockholders of the Company approved and adopted the Certificate of Amendment of the Company’s restated certificate of incorporation to increase the total number of shares of authorized common stock from 100 million shares to 150 million shares. As of March 31, 2023, there were 4.1 million shares available for the grant or award under the Company’s 2015 Equity Incentive Plan and 1.1 million shares available for the grant or award under the Company’s 2017 New Hire Equity Incentive Plan. The Company’s performance cash awards granted to executives under the Long Term Incentive (“LTI”) Plans have been accounted for as liability awards, due to the Company’s intent and the ability to settle such awards in cash upon vesting and the Company has reflected such awards in accrued expenses. As of March 31, 2023, the liability for such awards is approximately $0.8 million. Stock-Based Compensation The following table summarizes stock-based compensation expense related to all of the Company’s stock awards included by operating expense categories, as follows:
The following table summarizes stock-based compensation expense related to all of the Company’s stock awards included by award type, as follows:
The total stock-based compensation cost related to unvested equity awards as of March 31, 2023 was approximately $9.2 million. The expense is expected to be recognized over a weighted-average period of approximately 2.1 years. The total stock-based compensation cost related to unvested performance based cash units as of March 31, 2023 was approximately $1.1 million. The expense is expected to be recognized over a weighted-average period of approximately 2.2 years. Stock Options The Company uses the Black-Scholes option pricing model for determining the estimated fair value for stock options. The weighted-average assumptions used in the Black-Scholes option pricing model are as follows:
The following table summarizes information about stock options outstanding as of March 31, 2023:
The total intrinsic value of stock options exercisable was nil at March 31, 2023 and 2022, respectively. The total intrinsic value of stock options exercised was nil and nil during the three months ended March 31, 2023 and 2022, respectively. Awards of Restricted Stock and Performance Stock A summary of the Company’s unvested restricted stock at March 31, 2023, and changes during the three months ended March 31, 2023, is presented below:
___________________________ 1 Represents performance based cash units grants that vested and were paid out in form of shares of stock during the period and changes in unvested performance based restricted stock awards due to performance adjustments. Restricted stock awards are granted subject to service conditions or service and performance conditions. Restricted stock awards (“RSA”) and performance based restricted stock awards (“PRSA”) are measured at the closing stock price at the date of grant and the expense is recognized straight line over the requisite service period. Performance Based Cash Units Performance based cash units (“PBCU”) generally vest at the end of a three-year period based on service and achievement of certain performance objectives determined by the Company’s Board of Directors. A summary of the Company’s outstanding performance based cash units at March 31, 2023 and changes during the three months ended March 31, 2023, is presented below:
___________________________ 1 Includes changes in the outstanding performance based cash units due to performance adjustments. 2 Includes earned PBCU that vested and were distributed to participants during the period. Performance based cash units are measured at the closing stock price at the reporting period end date and the expense is recognized straight line over the requisite service period. The expense for the period will increase or decrease based on updated fair values of these units at each reporting date. Unvested units’ fluctuations are shown as adjustments to units granted in the table above. These fluctuations are based on the percentage achievement of the performance metrics at the end of each reporting period.
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Income Taxes |
3 Months Ended |
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Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company recognized an income tax expense of approximately $1.1 million and $0.1 million during the three months ended March 31, 2023 and 2022, respectively. The effective tax rate was approximately (10.7)% for the three months ended March 31, 2023, which was lower than the U.S. federal statutory rate primarily due to pre-tax losses in jurisdictions where full valuation allowances have been recorded and certain jurisdictions projecting current income tax expense. The Company’s income tax expense for the period is mainly driven by the enacted Section 174 rules that require the Company to amortize qualifying research and development expenses over five years in the U.S. and fifteen years in foreign jurisdictions. The Company’s effective tax rate was approximately (4.4)% for the three months ended March 31, 2022, which was lower than the U.S. federal statutory rate primarily due to pre-tax losses in jurisdictions where full valuation allowances have been recorded and certain foreign jurisdictions projecting current income tax expense. This decrease was partially offset by a discrete income tax benefit recorded in the period associated with the release of certain reserves for uncertain tax benefits. The Company continues to consider all available evidence, including historical profitability and projections of future taxable income together with new evidence, both positive and negative, that could affect the view of the future realization of deferred tax assets. As a result of the assessment, no change was recorded by the Company to the valuation allowance during the three months ended March 31, 2023. On August 16, 2022, the Inflation Reduction Act of 2022 ("IRA") was signed into law. This legislation includes significant changes relating to tax, climate change, energy and health care. Among other provisions, the IRA introduces a corporate alternative minimum tax assessed on financial statement income of certain large corporations and an excise tax on share repurchases. The IRA does not have a material impact on the Company’s financial statements in the period ending March 31, 2023. During 2021 the Internal Revenue Service commenced an audit of certain of the Company’s prior year U.S. federal income tax filings, including the 2013 through 2020 tax years. The audit is currently ongoing and the while receipt of the associated refunds would materially improve its financial position, the Company does not believe that the results of this audit will have a material effect on its results of operations. The Company received $4.3 million in federal tax refunds in the second quarter of 2022. There is no change to the Company’s position on the remaining tax refunds.
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Restructuring |
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring | Restructuring The Company continues to execute certain restructurings to identify workforce optimization opportunities to better align the Company’s resources with its key strategic priorities. A summary of the Company’s restructuring accrual at March 31, 2023 and changes during the three months ended March 31, 2023, are presented below:
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Earnings per Common Share (EPS) |
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per Common Share (EPS) | Earnings per Common Share (“EPS”) Basic EPS is computed based upon the weighted average number of common shares outstanding for the year. Diluted EPS is computed based upon the weighted average number of common shares outstanding for the year plus the dilutive effect of common stock equivalents using the treasury stock method and the average market price of the Company’s common stock for the year. The Company includes participating securities (Redeemable Convertible Preferred Stock - Participation with Dividends on Common Stock that contain preferred dividend) in the computation of EPS pursuant to the two-class method. The two-class method of computing earnings per share is an allocation method that calculates earnings per share for common stock and participating securities. During periods of net loss, no effect is given to the participating securities because they do not share in the losses of the Company. The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net income attributable to common stockholders per common share from operations.
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Commitments, Contingencies and Other |
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments, Contingencies and Other | Commitments, Contingencies and Other Non-cancelable agreements The Company has various non-cancelable arrangements such as services for hosting, support, and software that expire at various dates, with the latest expiration in 2025. Aggregate annual future minimum payments under non-cancelable agreements as of March 31, 2023 are as follows:
Legal Matters In the ordinary course of business, the Company is regularly subject to various claims, suits, regulatory inquiries and investigations. The Company records a liability for specific legal matters when it determines that the likelihood of an unfavorable outcome is probable, and the loss can be reasonably estimated. Management has also identified certain other legal matters where they believe an unfavorable outcome is not probable and, therefore, no reserve is established. Although management currently believes that resolving claims against the Company, including claims where an unfavorable outcome is reasonably possible, will not have a material impact on the Company’s business, financial position, results of operations, or cash flows, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future. The Company also evaluates other contingent matters, including income and non-income tax contingencies, to assess the likelihood of an unfavorable outcome and estimated extent of potential loss. It is possible that an unfavorable outcome of one or more of these lawsuits or other contingencies could have a material impact on the liquidity, results of operations, or financial condition of the Company. In the third quarter of 2017, the SEC and Department of Justice (the “DoJ”) initiated investigations in connection with certain financial transactions that the Company effected in 2015 and 2016 and its disclosure of and accounting for such transactions, which the Company restated in the third quarter of 2018 in its restated annual and quarterly financial statements for 2015 and 2016. On June 7, 2022 the SEC approved the Offer of Settlement and filed an Order Instituting Cease-And-Desist Proceedings pursuant to Section 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing a Cease-And-Desist Order (the “SEC Order”). Pursuant to the terms of the SEC Order, the Company consented to pay a civil penalty in the amount of $12.5 million in equal quarterly installments over two years and to cease and desist from committing or causing any violations of Sections 10(b), 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and the associated rules thereunder. The expense associated with this settlement of the SEC Order has previously been accrued in the Company’s financial statements. Also on June 7, 2022, the SEC filed a civil action against two former members of the Company’s management team, alleging misconduct arising out of the restated transactions that took place in 2015 and 2016 investigated by the SEC as set forth above. The Company may be required to indemnify the former members of management in that action. Due to the inherent uncertainty of litigation, the Company cannot predict the outcome of the litigation and can give no assurance that the asserted claims will not have a material adverse effect on its financial position, prospects, or results of operations. In addition, failure to comply with the provisions of the SEC Order could result in further actions by one or both governmental agencies which could have a material adverse effect on the Company’s results of operations. Except as set forth above, the Company is not currently subject to any other legal proceedings that could have a material adverse effect on its operations; however, the Company may from time to time become a party to various legal proceedings arising in the ordinary course of our business.
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Additional Financial Information |
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Additional Financial Information | Additional Financial Information Other Income (expense), net The following table sets forth the components of Other Income (expense), net included in the Condensed Consolidated Statements of Operations:
1 Represents foreign exchange gains and losses 2 Represents an aggregate of individually immaterial transactions
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Basis of Presentation and Consolidation (Policies) |
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The accompanying interim unaudited condensed consolidated financial statements have been prepared by Synchronoss and in the opinion of management, include all adjustments necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the interim periods. They do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements and should be read in conjunction with the Company’s audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023. The condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and variable interest entities (“VIE”) in which the Company is the primary beneficiary and entities in which the Company has a controlling interest. Investments in less than majority-owned companies in which the Company does not have a controlling interest, but does have significant influence, are accounted for as equity method investments. Investments in less than majority-owned companies in which the Company does not have the ability to exert significant influence over the operating and financial policies of the investee are accounted for using the cost method. All material intercompany transactions and accounts are eliminated in consolidation.
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Recently Issued Accounting Standards | Recently Issued Accounting Standards Recent accounting pronouncements adopted
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Fair Value Measurements | In accordance with accounting principles generally accepted in the United States, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level hierarchy prioritizes the inputs used to measure fair value as follows: •Level 1 - Observable inputs - quoted prices in active markets for identical assets and liabilities; •Level 2 - Observable inputs other than the quoted prices in active markets for identical assets and liabilities includes quoted prices for similar instruments, quoted prices for identical or similar instruments in inactive markets, and amounts derived from valuation models where all significant inputs are observable in active markets; and •Level 3 - Unobservable inputs - includes amounts derived from valuation models where one or more significant inputs are unobservable and require the Company to develop relevant assumptions.
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Basis of Presentation and Consolidation (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Recently Issued Accounting Standards | Recent accounting pronouncements adopted
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Revenue (Tables) |
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Schedule of Disaggregation of Revenue |
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Schedule of Significant Changes in the Contract Liabilities Balance | Significant changes in the contract liabilities balance (current and non-current) during the period are as follows:
________________________________ 1 Comprised of Deferred Revenue. $10.8 million of revenue recognized in the period was included in the contract liability balance at the beginning of the period.
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Fair Value Measurements (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets and Liabilities Held and their Related Classifications Under the Fair Value Hierarchy | The following is a summary of assets, liabilities and redeemable noncontrolling interests and their related classifications under the fair value hierarchy:
________________________________ 1 Put arrangements held by the noncontrolling interests in certain of the Company’s joint venture.
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Leases (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Operating Assets and Liabilities | The following table presents information about the Company's Right of Use (ROU) assets and lease liabilities:
________________________________ 1 Amounts are included in Accrued Expenses on the .
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Schedule of Components of Lease Expense and Weighted Average Lease Term and Rates | The following table presents information about lease expense and sublease income:
________________________________ 1 Amounts are included in Cost of revenues, Selling, general and administrative and/or Research and development based on the function that the underlying leased asset supports which are reflected in the Condensed Consolidated Statements of Operations. The following table provides the weighted-average remaining lease term and weighted-average discount rates for our leases:
The following table provides certain cash flow and supplemental noncash information related to our lease liabilities:
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Schedule of Maturities of Operating Lease Liabilities | The following table provides the undiscounted amount of future cash flows included in our lease liabilities at March 31, 2023 for each of the five years subsequent to December 31, 2022 and thereafter, as well as a reconciliation of such undiscounted cash flows to our lease liabilities at March 31, 2023:
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Debt (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Carrying Amounts | The carrying amounts of the Company’s borrowings were as follows:
________________________________ 1 Debt issuance costs are deferred and amortized into interest expense using the effective interest method.
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Schedule of Interest Expense | The following table summarizes the Company’s interest expense:
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Accumulated Other Comprehensive (Loss) / Income (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Accumulated Other Comprehensive Income (Loss) | The changes in accumulated other comprehensive (loss) income during the three months ended March 31, 2023 were as follows:
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Capital Structure (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholder's Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Series A Preferred Stock | A summary of the Company’s Series B Perpetual Non-Convertible Preferred Stock balance at March 31, 2023 and changes during the three months ended March 31, 2023, are presented below:
________________________________ 1 Series B preferred stock net principal balance of $68.3 million is presented as gross principal balance of $70.7 million net of $2.35 million unamortized issuance costs.
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Schedule of Stock-based Compensation | The following table summarizes stock-based compensation expense related to all of the Company’s stock awards included by operating expense categories, as follows:
The following table summarizes stock-based compensation expense related to all of the Company’s stock awards included by award type, as follows:
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Schedule of Fair Value Assumptions | The weighted-average assumptions used in the Black-Scholes option pricing model are as follows:
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Schedule of Information About Stock Options Outstanding | The following table summarizes information about stock options outstanding as of March 31, 2023:
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Restricted stock awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholder's Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Unvested Restricted Stock and Performance Shares Activity | A summary of the Company’s unvested restricted stock at March 31, 2023, and changes during the three months ended March 31, 2023, is presented below:
___________________________ 1 Represents performance based cash units grants that vested and were paid out in form of shares of stock during the period and changes in unvested performance based restricted stock awards due to performance adjustments.
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Performance based cash units | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholder's Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Unvested Restricted Stock and Performance Shares Activity | A summary of the Company’s outstanding performance based cash units at March 31, 2023 and changes during the three months ended March 31, 2023, is presented below:
___________________________ 1 Includes changes in the outstanding performance based cash units due to performance adjustments. 2 Includes earned PBCU that vested and were distributed to participants during the period.
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Restructuring (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of the Restructuring Accrual and Changes | A summary of the Company’s restructuring accrual at March 31, 2023 and changes during the three months ended March 31, 2023, are presented below:
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Earnings per Common Share (EPS) (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Reconciliation of the Numerator and Denominator Used in Computing Basic and Diluted Net Income Attributable to Common Stockholders Per Common Share | The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net income attributable to common stockholders per common share from operations.
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Commitments, Contingencies and Other (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contractual Obligation, Fiscal Year Maturity | Aggregate annual future minimum payments under non-cancelable agreements as of March 31, 2023 are as follows:
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Additional Financial Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Other Income (expense), Net | The following table sets forth the components of Other Income (expense), net included in the Condensed Consolidated Statements of Operations:
1 Represents foreign exchange gains and losses 2 Represents an aggregate of individually immaterial transactions
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Basis of Presentation and Consolidation (Details) - USD ($) |
12 Months Ended | |||
---|---|---|---|---|
Jun. 23, 2022 |
May 11, 2022 |
Mar. 07, 2022 |
Dec. 31, 2022 |
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Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Accounts receivable securitization facility | $ 15,000,000 | |||
Borrowing capacity | $ 15,000,000 | |||
Commitment fee percentage | 0.85% | |||
Hanover Rate | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Basis spread on variable rate | 2.35% | |||
DXP Business | Held-for-sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Total purchase price | $ 14,000,000 | |||
Amount to be received on the closing date | $ 7,500,000 | |||
Escrow deposit | 500,000 | |||
Disbursement to be received 12 months from closing date | 1,000,000 | |||
Earn-out | $ 5,000,000 | |||
DXP Business | Disposed of by sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Escrow deposit | 500,000 | |||
Proceeds from the sale of DXP Business | 7,500,000 | |||
Additional escrow deposit | 1,000,000 | |||
Fair value of earn-out provision | 3,600,000 | |||
Divested intangible assets book value | 2,300,000 | |||
Fair value of goodwill | 7,600,000 | |||
Gain on divestiture | $ 2,500,000 | |||
DXP Business | Disposed of by sale | Other Current Assets | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Fair value of earn-out provision | $ 3,000,000 |
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Disaggregation of Revenue [Line Items] | ||
Net revenues | $ 57,708 | $ 65,866 |
Professional Services | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 6,698 | 8,131 |
Transaction Services | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 980 | 1,387 |
Subscription Services | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 49,004 | 54,536 |
License | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 1,026 | 1,812 |
Americas | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 45,761 | 52,862 |
APAC | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 7,354 | 7,631 |
EMEA | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 4,593 | 5,373 |
Cloud | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 41,078 | 41,501 |
Cloud | Professional Services | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 4,661 | 3,354 |
Cloud | Transaction Services | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 127 | 336 |
Cloud | Subscription Services | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 35,886 | 37,811 |
Cloud | License | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 404 | 0 |
Cloud | Americas | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 37,414 | 39,715 |
Cloud | APAC | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 1,647 | 56 |
Cloud | EMEA | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 2,017 | 1,730 |
NetworkX | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 7,145 | 12,164 |
NetworkX | Professional Services | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 346 | 1,636 |
NetworkX | Transaction Services | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 853 | 1,028 |
NetworkX | Subscription Services | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 5,350 | 8,210 |
NetworkX | License | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 596 | 1,290 |
NetworkX | Americas | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 6,353 | 10,455 |
NetworkX | APAC | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 792 | 759 |
NetworkX | EMEA | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 0 | 950 |
Messaging | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 9,485 | 12,201 |
Messaging | Professional Services | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 1,691 | 3,141 |
Messaging | Transaction Services | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 0 | 23 |
Messaging | Subscription Services | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 7,768 | 8,515 |
Messaging | License | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 26 | 522 |
Messaging | Americas | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 1,994 | 2,692 |
Messaging | APAC | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 4,915 | 6,816 |
Messaging | EMEA | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | $ 2,576 | $ 2,693 |
Revenue - Contract Assets and Liabilities (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2023
USD ($)
| |
Revenue from Contract with Customer [Abstract] | |
Contract asset, balance | $ 13,800 |
Changes In Contract Liabilities [Roll Forward] | |
Balance - January 1, 2023 | 14,183 |
Revenue recognized in the period | (57,628) |
Amounts billed but not recognized as revenue | 59,105 |
Balance - March 31, 2023 | 15,660 |
Revenue recognized | $ 10,800 |
Revenue - Remaining Performance Obligations (Details) $ in Millions |
Mar. 31, 2023
USD ($)
|
---|---|
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 104.5 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, percent | 95.00% |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 2 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period |
Fair Value Measurements - Assets and Liabilities Held and their Related Classifications Under the Fair Value Hierarchy (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Assets | ||
Cash and cash equivalents | $ 15,560 | $ 21,921 |
Total assets | 15,560 | 21,921 |
Temporary Equity | ||
Redeemable noncontrolling interests | 12,500 | 12,500 |
Total temporary equity | 12,500 | 12,500 |
(Level 1) | ||
Assets | ||
Cash and cash equivalents | 15,560 | 21,921 |
Total assets | 15,560 | 21,921 |
Temporary Equity | ||
Redeemable noncontrolling interests | 0 | 0 |
Total temporary equity | 0 | 0 |
(Level 2) | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
Total assets | 0 | 0 |
Temporary Equity | ||
Redeemable noncontrolling interests | 0 | 0 |
Total temporary equity | 0 | 0 |
(Level 3) | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
Total assets | 0 | 0 |
Temporary Equity | ||
Redeemable noncontrolling interests | 12,500 | 12,500 |
Total temporary equity | $ 12,500 | $ 12,500 |
Leases - ROU Assets and Lease Liabilities - Operating Assets and Liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
ROU assets: | ||
Non-current operating lease ROU assets | $ 20,033 | $ 20,863 |
Operating lease liabilities: | ||
Current operating lease liabilities | 5,673 | 5,497 |
Non-current operating lease liabilities | 27,857 | 29,222 |
Total operating lease liabilities | $ 33,530 | $ 34,719 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued expenses | Accrued expenses |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Leases, non-current | Leases, non-current |
Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Leases [Abstract] | ||
Operating lease cost | $ 1,617 | $ 2,042 |
Other lease costs and income: | ||
Variable lease costs | 349 | 435 |
Operating lease impairments, net | (3) | 443 |
Sublease income | (716) | (646) |
Total net lease cost | $ 1,247 | $ 2,274 |
Leases - Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Leases [Abstract] | ||
2023 | $ 6,032 | |
2024 | 8,192 | |
2025 | 8,042 | |
2026 | 7,881 | |
2027 | 6,205 | |
Thereafter | 4,275 | |
Total future lease payments | 40,627 | |
Less: amount representing interest | (7,097) | |
Present value of future lease payments (lease liability) | $ 33,530 | $ 34,719 |
Leases - Weighted Average Lease Term and Rates (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Dec. 31, 2022 |
|
Leases [Abstract] | |||
Weighted-average remaining lease term (years), weighted based on lease liability balances | 5 years 25 days | 5 years 3 months 21 days | |
Weighted-average discount rate (percentages), weighted based on the remaining balance of lease payments | 8.00% | 8.00% | |
Cash paid for amounts included in the measurement of lease liabilities | $ 1,997 | $ 2,603 |
Loan Receivable (Details) - Sequential Technology International, LLC and AP Capital Holdings II, LLC - Loans Payable $ in Millions |
Jun. 30, 2020
USD ($)
|
---|---|
Schedule of Equity Method Investments [Line Items] | |
Principal amount | $ 9.0 |
Contingent consideration, liability | $ 16.0 |
Interest rate, as a percent | 8.00% |
Other assets fair value disclosure | $ 4.8 |
Debt - Offering of Senior Notes (Details) - Senior Notes - 2021 Non-Convertible Senior Notes due 2026: - USD ($) |
Oct. 25, 2021 |
Jun. 30, 2021 |
Mar. 31, 2023 |
Dec. 31, 2021 |
---|---|---|---|---|
Debt Instrument [Line Items] | ||||
Principal amount | $ 18,000,000 | $ 120,000,000 | $ 16,100,000 | |
Interest rate, as a percent | 8.375% | |||
Par value (in dollars per share) | $ 25.00 | |||
Amount issued inclusive of underwriters' option to purchase | 125,000,000 | |||
Amount issued to underwriters | $ 5,000,000 | |||
Principal amount redeemed | 100.00% | |||
Percentage of debt holders demand full repayment on debt default amount | 25.00% | |||
Sales agent compensation, percentage | 2.00% | |||
Long-term debt fair value | $ 97,800,000 | |||
On or after June 30, 2022 and prior to June 30, 2023 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, redemption price (in dollars per share) | $ 25.75 | |||
On or after June 30, 2023 and prior to June 30, 2024 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, redemption price (in dollars per share) | 25.50 | |||
On or after June 30, 2024 and prior to June 30, 2025 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, redemption price (in dollars per share) | $ 25.25 |
Debt - Carrying Amounts (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
Jun. 30, 2021 |
---|---|---|---|
Debt Instrument [Line Items] | |||
Unamortized discount and debt issuance cost | $ (6,100) | $ (6,493) | |
Carrying value of Senior Notes | 134,977 | 134,584 | |
2021 Non-Convertible Senior Notes due 2026: | Senior Notes | |||
Debt Instrument [Line Items] | |||
Interest rate, as a percent | 8.375% | ||
8.375% Senior Notes due 2026 | $ 141,077 | $ 141,077 |
Debt - Interest Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Debt Instrument [Line Items] | ||
Amortization of debt issuance costs | $ 370 | $ 335 |
Amortization of debt discount | 23 | 22 |
Tax - ASC 740/FIN 48 Interest | 73 | 0 |
Other | 34 | 14 |
Total | 3,454 | 3,325 |
Senior Notes | 2021 Non-Convertible Senior Notes due 2026: | ||
Debt Instrument [Line Items] | ||
Amortization of debt issuance costs | 370 | 335 |
Interest on borrowings | 2,954 | 2,954 |
Amortization of debt discount | $ 23 | $ 22 |
Accumulated Other Comprehensive (Loss) / Income - Changes in Accumulated Other Comprehensive Income (Loss) (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2023
USD ($)
| |
Changes in accumulated other comprehensive income (loss) | |
Beginning balance | $ 68,097 |
Other comprehensive income | 4,570 |
Tax effect | 0 |
Ending balance | 60,575 |
Accumulated Other Comprehensive Income (Loss) | |
Changes in accumulated other comprehensive income (loss) | |
Beginning balance | (44,131) |
Ending balance | (39,561) |
Foreign currency | |
Changes in accumulated other comprehensive income (loss) | |
Beginning balance | (40,611) |
Other comprehensive income | 4,570 |
Tax effect | 0 |
Ending balance | (36,041) |
Unrealized loss on intercompany foreign currency transactions | |
Changes in accumulated other comprehensive income (loss) | |
Beginning balance | (3,520) |
Other comprehensive income | 0 |
Tax effect | 0 |
Ending balance | $ (3,520) |
Capital Structure - Additional Information (Details) |
3 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Apr. 03, 2023
USD ($)
|
Jan. 03, 2023
USD ($)
|
Jun. 30, 2021
USD ($)
$ / shares
shares
|
Aug. 19, 2020
USD ($)
|
Mar. 31, 2023
USD ($)
vote
$ / shares
shares
|
Mar. 31, 2022
USD ($)
|
Dec. 31, 2022
$ / shares
shares
|
Jun. 16, 2022
shares
|
Jun. 15, 2022
shares
|
|
Class of Stock [Line Items] | |||||||||
Dividends | $ 0 | ||||||||
Common stock, shares authorized (in shares) | shares | 150,000,000 | 150,000,000 | 150,000,000 | 100,000,000 | |||||
Minimum | |||||||||
Class of Stock [Line Items] | |||||||||
Preferred stock, ownership percentage | 5.00% | ||||||||
Maximum | |||||||||
Class of Stock [Line Items] | |||||||||
Preferred stock, ownership percentage | 10.00% | ||||||||
2020 Shelf Registration Statement | |||||||||
Class of Stock [Line Items] | |||||||||
Consideration received on transaction | $ 250,000,000 | ||||||||
2015 Plan | |||||||||
Class of Stock [Line Items] | |||||||||
Number of shares available for grant (in shares) | shares | 4,100,000 | ||||||||
Liability, accrued expenses, non-vested | $ 800,000 | ||||||||
2017 New Hire Plan | |||||||||
Class of Stock [Line Items] | |||||||||
Number of shares available for grant (in shares) | shares | 1,100,000 | ||||||||
Common Stock | |||||||||
Class of Stock [Line Items] | |||||||||
Number of votes per share (vote) | vote | 1 | ||||||||
Series B Preferred Stock | |||||||||
Class of Stock [Line Items] | |||||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||
Preferred stock, liquidation preference (in dollars per share) | $ / shares | $ 1,000 | ||||||||
Preferred stock, dividend rate, percentage one | 9.50% | ||||||||
Preferred stock, dividend rate, percentage two | 13.00% | ||||||||
Preferred stock, dividend rate, percentage three | 14.00% | ||||||||
Liquidation and redemption value | $ 73,200,000 | ||||||||
Multiplier of par | 1.5 | ||||||||
Proceeds from sale of stock transactions used for redemption of shares | $ 50,000,000 | ||||||||
Proceeds from sale of stock transactions, used for redemption of shares and buy back of shares | 25,000,000 | ||||||||
Series B Preferred dividend paid in cash | $ 2,300,000 | $ 2,298,000 | $ 1,781,000 | ||||||
Series B Preferred Stock | Subsequent Event | |||||||||
Class of Stock [Line Items] | |||||||||
Series B Preferred dividend paid in cash | $ 2,470,000 | ||||||||
Series B Preferred Stock | Private Placement | |||||||||
Class of Stock [Line Items] | |||||||||
Consideration received on transaction | $ 72,500,000 | ||||||||
Number of shares issued in transaction (in shares) | shares | 75,000 |
Capital Structure - Preferred Stock (Details) - Series B Preferred Stock shares in Thousands, $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2023
USD ($)
shares
| |
Increase (Decrease) in Temporary Equity [Roll Forward] | |
Beginning balance (in shares) | shares | 71 |
Amortization of preferred stock issuance costs (in shares) | shares | 0 |
Issuance of preferred PIK dividend (in shares) | shares | 0 |
Redemption of Series B preferred shares (in shares) | shares | 0 |
Ending balance (in shares) | shares | 71 |
Beginning balance | $ 68,348 |
Amortization of preferred stock issuance costs | 0 |
Issuance of preferred PIK dividend | 0 |
Redemption of Series B preferred shares | 0 |
Ending balance | 68,348 |
Principal balance | 68,300 |
Temporary equity, gross amount | 70,700 |
Unamortized issuance costs | $ (2,350) |
Capital Structure - Stock-based Compensation (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | ||
Total stock-based compensation expense | $ 1,739 | $ 1,927 |
Tax benefit | 345 | 377 |
Stock-based compensation cost related to non-vested equity awards not yet recognized as an expense | $ 9,200 | |
Weighted-average period over which stock-based compensation cost related to non-vested equity awards is expected to be recognized | 2 years 1 month 6 days | |
Stock options | ||
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | ||
Total stock-based compensation expense | $ 528 | 794 |
Restricted stock awards | ||
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | ||
Total stock-based compensation expense | 785 | 878 |
Performance Based Cash Units | ||
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | ||
Total stock-based compensation expense | 426 | 255 |
Stock-based compensation cost related to non-vested equity awards not yet recognized as an expense | $ 1,100 | |
Weighted-average period over which stock-based compensation cost related to non-vested equity awards is expected to be recognized | 2 years 2 months 12 days | |
Cost of revenues | ||
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | ||
Total stock-based compensation expense | $ 224 | 221 |
Research and development | ||
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | ||
Total stock-based compensation expense | 542 | 556 |
Selling, general and administrative | ||
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | ||
Total stock-based compensation expense | $ 973 | $ 1,150 |
Capital Structure - Black-Scholes Assumptions (Details) - Stock options - $ / shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Weighted-average assumptions | ||
Expected stock price volatility | 72.50% | 71.90% |
Risk-free interest rate | 4.30% | 1.50% |
Expected life of options (in years) | 4 years 3 months 10 days | 4 years 1 month 24 days |
Expected dividend yield | 0.00% | 0.00% |
Weighted-average fair value (PSV) of the options (usd per share) | $ 0.60 | $ 1.13 |
Capital Structure - Stock Options (Details) - USD ($) $ / shares in Units, shares in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Number of Options | ||
Options outstanding at the beginning of the period (in shares) | 6,641 | |
Options Granted (in shares) | 19 | |
Options Exercised (in shares) | 0 | |
Options Cancelled (in shares) | (160) | |
Options outstanding at the end of the period (in shares) | 6,500 | |
Vested and exercisable (in shares) | 2,635 | |
Weighted-Average Exercise Price | ||
Balance at the beginning of the period (in dollars per share) | $ 3.80 | |
Options Granted (in dollars per share) | 1.02 | |
Options Exercised (in dollars per share) | 0 | |
Options Cancelled (in dollars per share) | 8.04 | |
Balance at the end of the period (in dollars per share) | 3.69 | |
Vested and exercisable (in dollars per share) | $ 6.67 | |
Weighted-Average Remaining Contractual Term (Years) | ||
Outstanding | 5 years 25 days | |
Vested and exercisable | 3 years 8 months 15 days | |
Aggregate Intrinsic Value | ||
Outstanding | $ 1,000 | |
Vested and exercisable | 0 | |
Additional disclosures related to stock options | ||
Total intrinsic value for stock options exercisable | 0 | $ 0 |
Total intrinsic value for stock options exercised | $ 0 | $ 0 |
Capital Structure - Restricted Stock (Details) - Restricted stock awards shares in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2023
$ / shares
shares
| |
Number of Awards | |
Non-vested at the beginning of the period (in shares) | shares | 4,385 |
Granted (in shares) | shares | 3,161 |
Granted adjustment (in shares) | shares | (395) |
Vested (in shares) | shares | (94) |
Forfeited (in shares) | shares | (71) |
Non-vested at the end of the period (in shares) | shares | 6,986 |
Weighted- Average Grant Date Fair Value | |
Non-vested at the beginning of the period (in dollars per share) | $ / shares | $ 1.82 |
Granted (in dollars per share) | $ / shares | 0.95 |
Granted adjustment (in dollars per share) | $ / shares | 3.25 |
Vested (in dollars per share) | $ / shares | 4.47 |
Forfeited (in dollars per share) | $ / shares | 2.32 |
Non-vested at the end of the period (in dollars per share) | $ / shares | $ 1.31 |
Capital Structure - Performance Stock (Details) - Performance based cash units shares in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2023
$ / shares
shares
| |
Number of Awards | |
Outstanding at the beginning of the period (in shares) | shares | 5,872 |
Granted (in shares) | shares | 1,206 |
Granted adjustment (in shares) | shares | 0 |
Vested and distributed (in shares) | shares | 0 |
Forfeited (in shares) | shares | (56) |
Outstanding at the end of the period (in shares) | shares | 7,022 |
Weighted- Average Grant Date Fair Value | |
Non-vested at the beginning of the period (in dollars per share) | $ / shares | $ 0.62 |
Granted (in dollars per share) | $ / shares | 0 |
Granted adjustment (in dollars per share) | $ / shares | 0 |
Vested and distributed (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 0 |
Non-vested at the end of the period (in dollars per share) | $ / shares | $ 0.94 |
2015 Plan | |
Stockholder's Equity | |
Vesting period (in years) | 3 years |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Jun. 30, 2022 |
Mar. 31, 2022 |
|
Income Tax Disclosure [Abstract] | |||
Provision for income taxes | $ 1,059 | $ 128 | |
Effective tax rate | (10.70%) | (4.40%) | |
Proceeds from income tax refunds | $ 4,300 |
Restructuring - Restructuring Accrual and Changes (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Restructuring accrual and changes | ||
Charges | $ 345 | $ 685 |
Employment termination costs | ||
Restructuring accrual and changes | ||
Balance at December 31, 2022 | 832 | |
Charges | 345 | |
Payments | (698) | |
Other Adjustments | 0 | |
Balance at March 31, 2023 | $ 479 |
Earnings per Common Share (EPS) - Reconciliation of the Numerator and Denominator Used in Computing Basic and Diluted Net Income Attributable to Common Stockholders Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Earnings Per Share Reconciliation [Abstract] | ||
Net loss from operations | $ (10,931) | $ (3,037) |
Net income (loss) attributable to redeemable noncontrolling interests | 14 | (115) |
Preferred stock dividend | (2,474) | (2,438) |
Net loss attributable to Synchronoss | (13,391) | (5,590) |
Net loss attributable to Synchronoss | $ (13,391) | $ (5,590) |
Denominator: | ||
Weighted average common shares outstanding - basic (in shares) | 86,501 | 85,866 |
Weighted average common shares outstanding - diluted (in shares) | 86,501 | 85,866 |
Earnings (loss) per share: | ||
Basic (in dollars per share) | $ (0.15) | $ (0.07) |
Diluted (in dollars per share) | $ (0.15) | $ (0.07) |
Stock Options | ||
Earnings (loss) per share: | ||
Anti-dilutive stock options excluded (in shares) | 0 | 0 |
Restricted Stock Awards | ||
Earnings (loss) per share: | ||
Anti-dilutive stock options excluded (in shares) | 6,986 | 2,162 |
Commitments, Contingencies and Other - Aggregate Annual Future Minimum Lease Payments Under Non-Cancelable Leases (Details) $ in Thousands |
Mar. 31, 2023
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
2023 | $ 13,471 |
2024 | 17,511 |
2025 | 10,690 |
Total | $ 41,672 |
Commitments, Contingencies and Other - Legal Matters (Details) $ in Millions |
Jun. 07, 2022
USD ($)
defendant
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
Loss contingency, damages awarded | $ | $ 12.5 |
Loss contingency, payment term | 2 years |
Loss contingency, number of defendants | defendant | 2 |
Additional Financial Information - Components of Other Income (Expense), Net (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Other Income and Expenses [Abstract] | ||
FX (losses) gains | $ (2,908) | $ 1,718 |
Other | (23) | (14) |
Total | $ (2,931) | $ 1,704 |
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