Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2021 | May 06, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 000-52049 | |
Entity Registrant Name | SYNCHRONOSS TECHNOLOGIES, INC | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 06-1594540 | |
Entity Address, Address Line One | 200 Crossing Boulevard | |
Entity Address, Address Line Two | 8th Floor | |
Entity Address, City or Town | Bridgewater | |
Entity Address, State or Province | NJ | |
Entity Address, Postal Zip Code | 08807 | |
City Area Code | 866 | |
Local Phone Number | 620-3940 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Title of 12(b) Security | Common Stock, par value $.0001 par value | |
Trading Symbol | SNCR | |
Security Exchange Name | NASDAQ | |
Entity Common Stock, Shares Outstanding | 44,150,959 | |
Entity Central Index Key | 0001131554 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash, restricted cash and cash equivalents | $ 29,818 | $ 33,671 |
Accounts receivable, net | 46,236 | 47,849 |
Prepaid & Other Current Assets | 40,861 | 39,847 |
Total Current assets | 116,915 | 121,367 |
Non-Current Assets: | ||
Property and equipment, net | 10,799 | 11,732 |
Operating lease right-of-use assets | 31,960 | 34,538 |
Goodwill | 228,537 | 232,771 |
Intangible assets, net | 65,292 | 69,593 |
Loan Receivable | 4,834 | 4,834 |
Other Assets, non-current | 6,793 | 7,420 |
Total Non-Current Assets | 348,215 | 360,888 |
Total assets | 465,130 | 482,255 |
Current liabilities: | ||
Accounts payable | 16,907 | 12,749 |
Accrued expenses | 67,685 | 69,326 |
Deferred revenues, current | 32,358 | 33,045 |
Debt, current | 10,000 | 10,000 |
Total Current liabilities | 126,950 | 125,120 |
Deferred tax liabilities | 1,295 | 1,875 |
Deferred revenues, non-current | 7,495 | 12,569 |
Leases, non-current | 42,088 | 44,273 |
Other non-current liabilities | 4,897 | 4,995 |
Redeemable noncontrolling interest | 12,500 | 12,500 |
Commitments and contingencies | ||
Series A Convertible Participating Perpetual Preferred Stock, $0.0001 par value; 10,000 shares authorized, 260 and 250 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively | 247,842 | 237,641 |
Stockholders’ equity: | ||
Common stock, $0.0001 par value; 100,000 shares authorized, 51,331 and 51,177 shares issued; 44,169 and 44,015 outstanding at March 31, 2021 and December 31, 2020, respectively | 5 | 5 |
Treasury stock, at cost (7,162 and 7,162 shares at March 31, 2021 and December 31, 2020, respectively) | (82,087) | (82,087) |
Additional paid-in capital | 491,295 | 499,348 |
Accumulated other comprehensive loss | (29,349) | (28,213) |
Accumulated deficit | (357,801) | (345,771) |
Total stockholders’ equity | 22,063 | 43,282 |
Total liabilities and stockholders’ equity | $ 465,130 | $ 482,255 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 260,000 | 250,000 |
Preferred stock, shares outstanding (in shares) | 260,000 | 250,000 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 51,331,000 | 51,177,000 |
Common stock, shares outstanding (in shares) | 44,169,000 | 44,015,000 |
Treasury stock, shares (in shares) | 7,162,000 | 7,162,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | ||
Income Statement [Abstract] | |||
Net revenues | $ 65,499 | $ 77,122 | |
Costs and expenses: | |||
Cost of revenues | [1] | 28,637 | 35,471 |
Research and development | 17,397 | 19,788 | |
Selling, general and administrative | 17,928 | 26,344 | |
Restructuring charges | 713 | 1,450 | |
Depreciation and amortization | 9,867 | 11,356 | |
Total costs and expenses | 74,542 | 94,409 | |
Loss from continuing operations | (9,043) | (17,287) | |
Interest income | 5 | 58 | |
Interest expense | (95) | (245) | |
Other Income (expense) | (3,396) | 1,692 | |
Loss from continuing operations, before taxes | (12,529) | (15,782) | |
Benefit for income taxes | 163 | 12,432 | |
Net loss | (12,366) | (3,350) | |
Net income (loss) attributable to redeemable noncontrolling interests | 336 | (17) | |
Preferred stock dividend | (10,530) | (8,909) | |
Net loss attributable to Synchronoss | $ (22,560) | $ (12,276) | |
Earnings per share: | |||
Basic (in dollars per share) | $ (0.53) | $ (0.30) | |
Diluted (in dollars per share) | $ (0.53) | $ (0.30) | |
Weighted-average common shares outstanding: | |||
Basic (in shares) | 42,737 | 41,483 | |
Diluted (in shares) | 42,737 | 41,483 | |
[1] | Cost of revenues excludes depreciation and amortization which are shown separately. |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (12,366) | $ (3,350) |
Other comprehensive loss, net of tax: | ||
Foreign currency translation adjustments | (1,888) | (3,941) |
Unrealized gain on available for sale securities | 0 | 751 |
Net income (loss) on inter-company foreign currency transactions | 752 | (372) |
Total other comprehensive loss | (1,136) | (3,562) |
Comprehensive loss | (13,502) | (6,912) |
Comprehensive loss attributable to redeemable noncontrolling interests | 336 | (17) |
Comprehensive loss attributable to Synchronoss | $ (13,166) | $ (6,929) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated deficit | Accumulated deficitCumulative Effect, Period of Adoption, Adjustment |
Beginning balance (in shares) at Dec. 31, 2019 | 51,704 | (7,162) | ||||||
Beginning balance at Dec. 31, 2019 | $ 76,077 | $ (768) | $ 5 | $ (82,087) | $ 525,739 | $ (33,261) | $ (334,319) | $ (768) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Stock based compensation | 5,316 | 5,316 | ||||||
Issuance of restricted stock (in shares) | 55 | |||||||
Issuance of restricted stock | 0 | |||||||
Preferred stock dividends accrued | (8,158) | (8,158) | ||||||
Amortization of preferred stock issuance costs | (750) | (750) | ||||||
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 | 0 | |||||||
Net income (loss) attributable to Synchronoss | (3,350) | (3,350) | ||||||
Non-controlling interest | 0 | 17 | (17) | |||||
Total other comprehensive income (loss) | (3,562) | (3,562) | ||||||
Ending balance (in shares) at Mar. 31, 2020 | 51,758 | (7,162) | ||||||
Ending balance at Mar. 31, 2020 | $ 64,805 | $ 5 | $ (82,087) | 522,164 | (36,823) | (338,454) | ||
Beginning balance (in shares) at Dec. 31, 2020 | 51,177 | 51,177 | (7,162) | |||||
Beginning balance at Dec. 31, 2020 | $ 43,282 | $ 5 | $ (82,087) | 499,348 | (28,213) | (345,771) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Stock based compensation | 2,813 | 2,813 | ||||||
Issuance of restricted stock (in shares) | 154 | |||||||
Issuance of restricted stock | 0 | |||||||
Preferred stock dividends accrued | (9,407) | (9,407) | ||||||
Amortization of preferred stock issuance costs | (1,123) | (1,123) | ||||||
Net income (loss) attributable to Synchronoss | (12,366) | (12,366) | ||||||
Non-controlling interest | 0 | (336) | 336 | |||||
Total other comprehensive income (loss) | $ (1,136) | (1,136) | ||||||
Ending balance (in shares) at Mar. 31, 2021 | 51,331 | 51,331 | (7,162) | |||||
Ending balance at Mar. 31, 2021 | $ 22,063 | $ 5 | $ (82,087) | $ 491,295 | $ (29,349) | $ (357,801) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Operating activities: | ||
Net loss continuing operations | $ (12,366) | $ (3,350) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 9,867 | 11,357 |
(Gain) loss on Disposals of fixed assets | (9) | 0 |
(Gain) loss on Disposals of intangible assets | 0 | (1,843) |
Deferred income taxes | (1,037) | (10) |
Stock-based compensation | 2,721 | 5,186 |
Operating lease impairment | 555 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 3,214 | (6,961) |
Prepaid expenses and other current assets | (445) | (6,240) |
Accounts payable | 3,752 | 7,515 |
Accrued expenses | (3,762) | 1 |
Other assets | 0 | 198 |
Deferred revenues | (6,648) | (20,454) |
Other liabilities | 6,419 | (415) |
Net cash provided by (used in) operating activities | 2,261 | (15,016) |
Investing activities: | ||
Purchases of fixed assets | (721) | (249) |
Additions to capitalized software | (5,042) | (4,428) |
Proceeds from the sale of intangibles | 0 | 1,843 |
Maturity of marketable securities available for sale | 0 | 11 |
Net cash used in investing activities | (5,763) | (2,823) |
Financing activities: | ||
Taxes paid on withholding shares | 0 | (4) |
Borrowings on revolving line of credit | 0 | 10,000 |
Net cash provided by financing activities | 0 | 9,996 |
Effect of exchange rate changes on cash | (351) | (252) |
Net decrease in cash and cash equivalents | (3,853) | (8,095) |
Cash and cash equivalents, beginning of period | 33,671 | 39,001 |
Cash and cash equivalents, end of period | 29,818 | 30,906 |
Supplemental disclosures of non-cash investing and financing activities: | ||
Preferred dividends, paid-in-kind | $ 10,201 | $ 8,623 |
Description of Business
Description of Business | 3 Months Ended |
Mar. 31, 2021 | |
Description of Business | |
Description of Business | Description of Business General Synchronoss Technologies, Inc. (“Synchronoss” or the “Company”) Digital, Cloud, Messaging and Total Network Management platforms help the world’s leading companies, including operators, original equipment manufacturers (“OEMs”), and Media and Technology providers to deliver continuously transformative customer experiences that create high value engagement and new monetization opportunities. The Company currently operates in and markets solutions and services directly through the Company’s sales organizations in North America, Europe and Asia-Pacific. The Company’s platforms give customers new opportunities in the Telecommunications, Media and Technology (“TMT”) space, taking advantage of the rapidly converging services, connected devices, networks and applications. The Company delivers platforms, products and solutions including: • White Label Personal Cloud: Cloud sync, backup, storage, device set up, content transfer and content engagement for user generated content. • Messaging: White label consumer email solutions. A dvanced, multi-channel messaging peer-to-peer (“P2P”) communications and application-to-person (“A2P”) commerce solutions. • Digital: Customer journey and workflow design, development, orchestration and experience management. • Total Network Management (“TNM”) : integrated application suite that designs, procures, manage s and optimizes telecom network infrastructure. The Synchronoss Personal Cloud™ platform is a secure and highly scalable white label platform designed to store and sync subscriber’s personally created content seamlessly to and from current and new devices. This allows a carrier’s customers to protect, engage with and manage their personal content and gives the Company’s Operator customers the ability to increase average revenue per user (“ARPU”) through a new monthly recurring charge (“MRC”) and opportunities to mine valuable data that will give subscribers access to new, beneficial services. Additionally, the Company’s Personal Cloud Platform performs an expanding set of value-add services including facilitating an Operator’s initial device setup and enhancing visibility and control across disparate devices within subscribers’ smart homes. The Synchronoss Messaging Platform powers hundreds of millions of subscribers’ mail boxes worldwide. The Company’s Advanced Messaging Product is a powerful, secure and intelligent white label messaging platform that expands capabilities for Operators and TMT companies to offer P2P messaging via Rich Communications Services (“RCS”). Additionally, the Company’s Advanced Messaging Product powers commerce and a robust ecosystem for Operators, brands and advertisers to execute Application to Person (“A2P”) commerce and data-rich dialogue with subscribers. The Synchronoss Digital Platform is a suite of technology, tools and solutions that includes digital experience creation and management, automated provisioning, artificial intelligence and financial analytics that service a broad array of TMT markets. The products equip customers with a toolkit of capabilities where they can design, deploy and manage end user customer journeys and workflows easily and quickly from one central platform that also integrates across front end customer engagement channels as well as enterprise business systems (e.g. CRM, POS) allowing non-citizen developers to configure rather than code experiences. The platform sits between customer-facing touch points and a customer’s existing back-office systems to orchestrate data, workflows and processes into digital customer journeys that interface with end user channels creating user experiences that can be centrally managed and coordinated with less resources than is typical in a traditional IT environment. |
Basis of Presentation and Conso
Basis of Presentation and Consolidation | 3 Months Ended |
Mar. 31, 2021 | |
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, 2020. The results of operations for the three months ended March 31, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021. 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. Certain prior year amounts have been reclassified to conform to the current year's presentation. 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, 2020. Risks and Uncertainties There continue to be uncertainties regarding the current coronavirus ("COVID-19") pandemic, and the Company is closely monitoring the impact of the pandemic on all aspects of its business, including how it will impact its customers, employees, suppliers, vendors, business partners and distribution channels. While the pandemic did not materially affect the Company’s financial results and business operations for the three months ended March 31, 2021, the Company is unable to predict the impact that COVID-19 will have on its financial position and operating results due to numerous uncertainties. The Company will continue to assess the evolving impact of the COVID-19 pandemic and will make adjustments to its operations as necessary. Recently Issued Accounting Standards Recent accounting pronouncements adopted Standard Description Effect on the financial statements Update 2019-12 - Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes The ASU removes the exception to the general principles in ASC 740, Income Taxes, associated with the incremental approach for intra-period tax allocation, accounting for basis differences when there are ownership changes in foreign investments and interim-period income tax accounting for year-to-date losses that exceed anticipated losses. In addition, the ASU improves the application of income tax related guidance and simplifies U.S. GAAP when accounting for franchise taxes that are partially based on income, transactions with government resulting in a step-up in tax basis goodwill, separate financial statements of legal entities not subject to tax, and enacted changes in tax laws in interim periods. Different transition approaches, retrospective, modified retrospective, or prospective, will apply to each income tax simplification provision. The Company adopted the new standard as of January 1, 2021. The standard did not have a material impact on the Company’s consolidated financial position or results of operations upon adoption. Date of adoption: January 1, 2021. Standards issued not yet adopted Standard Description Effect on the financial statements Update 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity (ASU 2020-06) The ASU simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments. This guidance also eliminates the treasury stock method to calculate diluted earnings per share for convertible instruments and requires the use of the if-converted method. This guidance will be effective for us in the first quarter of 2022 on a full or modified retrospective basis, with early adoption permitted. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. The Company does not expect the adoption of this guidance to have a material impact on our consolidated financial statements. Date of adoption: January 1, 2022. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2021 | |
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 Technology, Media and Telecom (collectively, “TMT”) sector. Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 Cloud Digital Messaging Total Cloud Digital Messaging Total Geography Americas $ 37,031 $ 11,240 $ 3,516 $ 51,787 $ 39,322 $ 10,937 $ 10,903 $ 61,162 APAC — 1,128 6,700 7,828 — 558 9,175 9,733 EMEA 1,865 609 3,410 5,884 1,722 1,257 3,248 6,227 Total $ 38,896 $ 12,977 $ 13,626 $ 65,499 $ 41,044 $ 12,752 $ 23,326 $ 77,122 Service Line Professional Services $ 3,925 $ 2,111 $ 2,611 $ 8,647 $ 4,161 $ 4,536 $ 5,230 $ 13,927 Transaction Services 1,975 2,268 1 4,244 1,307 1,074 — 2,381 Subscription Services 32,996 8,433 10,614 52,043 35,576 7,002 10,617 53,195 License — 165 400 565 — 140 7,479 7,619 Total $ 38,896 $ 12,977 $ 13,626 $ 65,499 $ 41,044 $ 12,752 $ 23,326 $ 77,122 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, 2021 is $6.6 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: Contract Liabilities* Balance - January 1, 2021 $ 45,614 Revenue recognized in the period (66,055) Amounts billed but not recognized as revenue 60,294 Balance - March 31, 2021 $ 39,853 ________________________________ * Comprised of Deferred Revenue 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, 2021. 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, 2021, the aggregate amount of transaction price allocated to remaining performance obligations, other than those meeting the exclusion criteria above, was $264.2 million, of which approximately 73.8 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. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2021 | |
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: March 31, 2021 Total (Level 1) (Level 2) (Level 3) Assets Cash and cash equivalents (1) $ 29,818 $ 29,818 $ — $ — Total assets $ 29,818 $ 29,818 $ — $ — Temporary equity Redeemable noncontrolling interests (2) $ 12,500 $ — $ — $ 12,500 Total temporary equity $ 12,500 $ — $ — $ 12,500 December 31, 2020 Total (Level 1) (Level 2) (Level 3) Assets Cash and cash equivalents (1) $ 33,671 $ 33,671 $ — $ — Total assets $ 33,671 $ 33,671 $ — $ — Temporary Equity Redeemable noncontrolling interests (2) $ 12,500 $ — $ — $ 12,500 Total temporary equity $ 12,500 $ — $ — $ 12,500 ________________________________ (1) Cash equivalents primarily included money market funds. (2) Put arrangements held by the noncontrolling interests in certain of the Company’s joint ventures. 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. The changes in fair value of the Company’s Level 3 redeemable noncontrolling interests during the three months ended March 31, 2021 were as follows: Balance at December 31, 2020 $ 12,500 Fair value adjustment 336 Net loss attributable to redeemable noncontrolling interests (336) Balance at March 31, 2021 $ 12,500 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2021 | |
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, 2021. The following table presents information about the Company's Right of Use (ROU) assets and lease liabilities at March 31, 2021 (in thousands): ROU assets: Non-current operating lease ROU assets $ 31,960 Operating lease liabilities: Current operating lease liabilities* $ 9,342 Non-current operating lease liabilities 41,803 Total operating lease liabilities $ 51,145 ________________________________ * Amounts are included in Accrued Expenses on the Condensed Consolidated Balance Sheet. The following table presents information about lease expense and sublease income for the three months ended March 31, 2021 (in thousands): Three Months Ended March 31, 2021 Operating lease cost* $ 2,600 Other lease costs and income: Variable lease costs* (1) 775 Sublease income* (945) Total net lease cost $ 2,430 ________________________________ * 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. (1) As part of the Company’s continued cost savings initiatives, the Company closed certain office spaces and terminated various lease agreements. These actions resulted in a $0.6 million ROU asset impairment charge, which was determined by the present value of the forecasted future cash flows for the remaining lease term. The following table provides the undiscounted amount of future cash flows included in our lease liabilities at March 31, 2021 for each of the five years subsequent to December 31, 2020 and thereafter, as well as a reconciliation of such undiscounted cash flows to our lease liabilities at March 31, 2021 (in thousands): Operating Leases Remaining 2021 $ 9,552 2022 11,021 2023 8,595 2024 8,346 2025 8,223 Thereafter 18,590 Total future lease payments 64,327 Less: amount representing interest (13,182) Present value of future lease payments (lease liability) $ 51,145 The following table provides the weighted-average remaining lease term and weighted-average discount rates for our leases as of March 31, 2021: Operating Leases: Weighted-average remaining lease term (years), weighted based on lease liability balances 6.52 Weighted-average discount rate (percentages), weighted based on the remaining balance of lease payments 7.6% The following table provides certain cash flow and supplemental noncash information related to our lease liabilities for the three months ended March 31, 2021 (in thousands): Operating Leases: Cash paid for amounts included in the measurement of lease liabilities $ 3,449 Lease liabilities arising from obtaining right-of-use assets — |
Investments in Affiliates and R
Investments in Affiliates and Related Transactions | 3 Months Ended |
Mar. 31, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments in Affiliates and Related Transactions | Investments in Affiliates and Related Transactions Sequential Technology International, LLC In connection with the divestiture of the exception handling business of the Company in 2017, Synchronoss entered into a three-year Cloud Telephony and Support services agreement (“CTS Agreement”) to grant Sequential Technology International, LLC (“STIN”) access to certain Synchronoss software and private branch exchange systems to facilitate exception handling operations required to support STIN customers. The CTS agreement expired in the first quarter of 2020. At the time of the expiration, the Company entered into an Asset Purchase Agreement with STIN. As part of the agreement, the Company received $1.6 million in exchange for certain hardware and system assets for the cloud telephony and remaining support service business. During the second quarter of 2020, the Company entered into an agreement with 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 a 3-year stated term. As part of the arrangement, APC acquired a majority stake of STIN. Additionally, in the event of a Sale of STIN by APC and STIN at a future date, the Company shall receive 5% of such sale proceeds, after reducing the sale proceeds by any outstanding amounts of the above Note, including any earned contingent consideration. The Company determined the fair value of the Note as of the transaction date to be approximately $4.8 million. The Company determined the fair value of the Note using a discounted cash flow analysis, which discounts the expected future cash flows of the asset to determine its fair value. The fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement. The Note has been reflected in Other assets on the Condensed Consolidated balance sheet. No gain or loss was recognized as a result of the transaction. As of March 31, 2021 , |
Debt
Debt | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Debt 2019 Revolving Credit Facility On October 4, 2019, the Company entered into a Credit Agreement with Citizens Bank, N.A., for a $10.0 million Revolving Credit Facility. Borrowings under the Revolving Credit Facility bear interest at a rate equal to, at the Company’s option, either (1) the arithmetic average of the LIBOR rate determined by reference to the costs of funds for U.S. dollar deposits for the interest period (one, three or six months (or 12 months if agreed to by all applicable Lenders)) as selected by the Company relevant to such borrowing plus the applicable margin, or (2) a base rate determined by reference to the greatest of the federal funds rate plus 0.5%, the prime commercial lending rate as determined by the Agent, and the daily LIBOR rate plus 1.0%, in each case plus an applicable margin and subject to a floor of 0.5%. In addition, on a quarterly basis, the Company is required to pay each lender under the Revolving Credit Facility a 0.2% commitment fee in respect of commitments under the Revolving Credit Facility, which may be subject to adjustment based on the Company’s total leverage ratio. On November 9, 2020, the Company entered into an amended credit agreement which changes the terms of the Company’s debt covenants. The Company is in compliance with its debt covenants. The outstanding balance under the Revolving Credit Facility as of March 31, 2021 is $10.0 million. Interest expense The following table summarizes the Company’s interest expense: Three Months Ended March 31, 2021 2020 2019 Revolving Credit Facility Amortization of debt issuance costs $ 12 $ 16 Commitment fee — 4 Interest on borrowings 63 14 Other* 20 211 Total $ 95 $ 245 ________________________________ * Mainly finance leases’ related interest expense |
Accumulated Other Comprehensive
Accumulated Other Comprehensive (Loss) / Income | 3 Months Ended |
Mar. 31, 2021 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
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, 2021 were as follows: Balance at December 31, 2020 Other comprehensive (loss) income Tax effect Balance at March 31, 2021 Foreign currency $ (26,076) $ (1,888) $ — $ (27,964) Unrealized income (loss) on intra-entity foreign currency transactions (2,137) 1,144 (392) (1,385) Total $ (28,213) $ (744) $ (392) $ (29,349) |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity There were no significant changes to Company’s authorized capital stock and preferred stock during the three months ended March 31, 2021. 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. Preferred Stock The Board of Directors 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. In accordance with the terms of the Share Purchase Agreement dated as of October 17, 2017 (the “PIPE Purchase Agreement”), with Silver Private Holdings I, LLC, an affiliate of Siris (“Silver”), on February 15, 2018, the Company issued to Silver 185,000 shares of its newly issued Series A Convertible Participating Perpetual Preferred Stock (the “Series A Preferred Stock”), par value $0.0001 per share, with an initial liquidation preference of $1,000 per share, in exchange for $97.7 million in cash and the transfer from Silver to the Company of the 5,994,667 shares of the Company’s common stock held by Silver (the “Preferred Transaction”). As of March 31, 2021, there were 259,510 shares of Series A Preferred Stock outstanding, including the initial issuance of 185,000 shares of Series A Preferred Stock and the issuance of 74,510 shares of Series A Preferred Stock as dividends. Certificate of Designation of the Series A Preferred Stock The rights, preferences, privileges, qualifications, restrictions and limitations of the shares of Series A Preferred Stock are set forth in the Series A Certificate. Under the Series A Certificate, the holders of the Series A Preferred Stock are entitled to receive, on each share of Series A Preferred Stock on a quarterly basis, an amount equal to the dividend rate of 14.5% divided by four and multiplied by the then-applicable Liquidation Preference (as defined in the Series A Certificate) per share of Series A Preferred Stock (collectively, the “Preferred Dividends”). The Preferred Dividends are due on January 1, April 1, July 1 and October 1 of each year (each, a “Series A Dividend Payment Date”). The Company may choose to pay the Preferred Dividends in cash or in additional shares of Series A Preferred Stock. In the event the Company does not declare and pay a dividend in-kind or in cash on any Series A Dividend Payment Date, the unpaid amount of the Preferred Dividend will be added to the Liquidation Preference. In addition, the Series A Preferred Stock participates in dividends declared and paid on shares of the Company’s common stock. Each share of Series A Preferred Stock is convertible, at the option of the holder, into the number of shares of common stock equal to the “Conversion Price” (as that term is defined in the Series A Certificate) multiplied by the then applicable “Conversion Rate” (as that term is defined in the Series A Certificate). Each share of Series A Preferred Stock is initially convertible into 55.5556 shares of common stock, representing an initial “conversion price” of approximately $18.00 per share of common stock. The Conversion Rate is subject to equitable proportionate adjustment in the event of stock splits, recapitalizations and other events set forth in the Series A Certificate. On and after February 15, 2023, holders of shares of Series A Preferred Stock have the right to cause the Company to redeem each share of Series A Preferred Stock for cash in an amount equal to the sum of the current liquidation preference and any accrued dividends. Each share of Series A Preferred Stock is also redeemable at the option of the holder upon the occurrence of a “Fundamental Change” (as that term is defined in the Series A Certificate) at a specified premium (“Liquidation Value”). In addition, the Company is also permitted to redeem all outstanding shares of the Series A Preferred Stock at any time (i) within the first 30 months of the date of issuance for the sum of the then-applicable Liquidation Preference, accrued but unpaid dividends and a make whole amount (known as “Redemption Value”) and (ii) following the 30-month anniversary of the date of issuance for the sum of the then-applicable Liquidation Preference and the accrued but unpaid dividends. As of March 31, 2021, the Liquidation Value and Redemption Value of the Preferred Shares was $243.1 million. The holders of a majority of the Series A Preferred Stock, voting separately as a class, are entitled at each of the Company’s annual meetings of stockholders or at any special meeting called for the purpose of electing directors (or by written consent signed by the holders of a majority of the then-outstanding shares of Series A Preferred Stock in lieu of such a meeting): (i) to nominate and elect two members of the Company’s Board of Directors for so long as the Preferred Percentage (as defined in the Series A Certificate) is equal to or greater than 10%; and (ii) to nominate and elect one member of the Company’s Board of Directors for so long as the Preferred Percentage is equal to or greater than 5% but less than 10%. For so long as the holders of shares of Series A Preferred Stock have the right to nominate at least one director, the Company is required to obtain the prior approval of Silver prior to taking certain actions, including: (i) certain dividends, repayments and redemptions; (ii) any amendment to the Company’s certificate of incorporation that adversely effects the rights, preferences, privileges or voting powers of the Series A Preferred Stock; (iii) issuances of stock ranking senior or equivalent to shares of Series A Preferred Stock (including additional shares of Series A 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; (iv) changes in the size of the Company’s Board of Directors; (v) any amendment, alteration, modification or repeal of the charter of the Company’s Nominating and Corporate Governance Committee of the Board of Directors and related documents; and (vi) any change in the Company’s principal business or the entry into any line of business outside of the Company’s existing lines of businesses. In addition, in the event that the Company is in EBITDA Non-Compliance (as defined in the Series A Certificate) or the undertaking of certain actions would result in the Company exceeding a specified pro forma leverage ratio, then the prior approval of Silver would be required to incur indebtedness (or alter any debt document) in excess of $10.0 million, enter or consummate any transaction where the fair market value exceeds $5.0 million individually or $10.0 million in the aggregate in a fiscal year or authorize or commit to capital expenditures in excess of $25.0 million in a fiscal year. Each holder of Series A Preferred Stock has one vote per share on any matter on which holders of Series A Preferred Stock are entitled to vote separately as a class, whether at a meeting or by written consent. The holders of Series A Preferred Stock are permitted to take any action or consent to any action with respect to such rights without a meeting by delivering a consent in writing or electronic transmission of the holders of the Series A Preferred Stock entitled to cast not less than the minimum number of votes that would be necessary to authorize, take or consent to such action at a meeting of stockholders. In addition to any vote (or action taken by written consent) of the holders of the shares of Series A Preferred Stock as a separate class provided for in the Series A Certificate or by the General Corporation Law of the State of Delaware, the holders of shares of the Series A Preferred Stock are entitled to vote with the holders of shares of common stock (and any other class or series that may similarly be entitled to vote on an as-converted basis with the holders of common stock) on all matters submitted to a vote or to the consent of the stockholders of the Company (including the election of directors) as one class. Under the Series A Certificate, if Silver and certain of its affiliates have elected to effect a conversion of some or all of their shares of Series A Preferred Stock and if the sum, without duplication, of (i) the aggregate number of shares of the Company’s common stock issued to such holders upon such conversion and any shares of the Company’s common stock previously issued to such holders upon conversion of Series A Preferred Stock and then held by such holders, plus (ii) the number of shares of the Company’s common stock underlying shares of Series A Preferred Stock that would be held at such time by such holders (after giving effect to such conversion), would exceed the 19.9% of the issued and outstanding shares of the Company’s voting stock on an as converted basis (the “Conversion Cap”), then such holders would only be entitled to convert such number of shares as would result in the sum of clauses (i) and (ii) (after giving effect to such conversion) being equal to the Conversion Cap (after giving effect to any such limitation on conversion). Any shares of Series A Preferred Stock which a holder has elected to convert but which, by reason of the previous sentence, are not so converted, will be treated as if the holder had not made such election to convert and such shares of Series A Preferred Stock will remain outstanding. Also, under the Series A Certificate, if the sum, without duplication, of (i) the aggregate voting power of the shares previously issued to Silver and certain of its affiliates held by such holders at the record date, plus (ii) the aggregate voting power of the shares of Series A Preferred Stock held by such holders as of such record date, would exceed 19.99% of the total voting power of the Company’s outstanding voting stock at such record date, then, with respect to such shares, Silver and certain of its affiliates are only entitled to cast a number of votes equal to 19.99% of such total voting power. The limitation on conversion and voting ceases to apply upon receipt of the requisite approval of holders of the Company’s common stock under the applicable listing standards. Investor Rights Agreement Concurrently with the closing of the Preferred Transaction, Synchronoss and Silver entered into an Investor Rights Agreement. Under the terms of the Investor Rights Agreement, Silver and Synchronoss have agreed that, effective as of the closing of the Preferred Transaction, the Board of Directors of Synchronoss will consist of ten members. From and after the closing of the Preferred Transaction, so long as the holders of Series A Preferred Stock have the right to nominate a member to the Board of Directors pursuant to the Series A Certificate, the Board of Directors of Synchronoss will consist of (i) two directors nominated and elected by the holders of shares of Series A Preferred Stock; (ii) four directors who meet the independence criteria set forth in the applicable listing standards (each of whom will be initially agreed upon by Synchronoss and Silver); and (iii) four other directors, two of whom shall satisfy the independence criteria of the applicable listing standards and, as of the closing of the Preferred Transaction, one of whom shall be the individual then serving as chief executive officer of Synchronoss and one of whom shall be the current chairman of the Board of Directors of Synchronoss as of the date of execution of the Investors Rights Agreement. Following the closing of the Preferred Transaction, so long as the holders of Series A Preferred Stock have the right to nominate at least one director to the Board of Directors of Synchronoss pursuant to the Series A Certificate, Silver will have the right to designate two members of the Nominating and Corporate Governance Committee of the Board of Directors. Pursuant to the terms of the Investor Rights Agreement, neither Silver nor its affiliates may transfer any shares of Series A Preferred Stock subject to certain exceptions (including transfers to affiliates that agree to be bound by the terms of the Investor Rights Agreement). For so long as Silver has the right to appoint a director to the Board of Directors of Synchronoss, without the prior approval by a majority of directors voting who are not appointed by the holders of shares of Series A Preferred Stock, neither Silver nor its affiliates will directly or indirectly purchase or acquire any debt or equity securities of Synchronoss (including equity-linked derivative securities) if such purchase or acquisition would result in Silver’s Standstill Percentage (as defined in the Investor Rights Agreement) being in excess of 30%. However, the foregoing standstill restrictions would not prohibit the purchase of shares pursuant to the PIPE Purchase Agreement or the receipt of shares of Series A Preferred Stock issued as Preferred Dividends pursuant to the Series A Certificate, shares of Common Stock received upon conversion of shares of Series A Preferred Stock or receipt of any shares of Series A Preferred Stock, Common Stock or other securities of the Company otherwise paid as dividends or as an increase of the Liquidation Preference (as defined in the Series A Certificate) or distributions thereon. Silver will also have preemptive rights with respect to issuances of securities of Synchronoss to maintain its ownership percentage. Under the terms of the Investor Rights Agreement, Silver will be entitled to (i) three demand registrations, with no more than two demand registrations in any single calendar year and provided that each demand registration must include at least 10% of the shares of Common Stock held by Silver, including shares of Common Stock issuable upon conversion of shares of Series A Preferred Stock and (ii) unlimited piggyback registration rights with respect to primary issuances and all other issuances. A summary of the Company’s Series A Convertible Participating Perpetual Preferred Stock balance at March 31, 2021 and changes during the three months ended March 31, 2021, are presented below: Preferred Stock Shares Amount Balance at December 31, 2020 250 $ 237,641 Issuance of preferred stock — — Amortization of preferred stock issuance costs — 1,122 Issuance of preferred PIK dividend 10 9,079 Balance at March 31, 2021 260 $ 247,842 The Company and Siris Capital Group, LLC (“Siris”) entered into an Advisory Services Agreement dated as of May 18, 2020 under which Siris may provide consulting and advisory services to the Company on operational, business, financial and strategic matters. Under the agreement, the Company agreed to pay Siris a fee of $110,000 per month for calendar year 2021, which fee increases by $10,000 a month in each successive calendar year during the term of the agreement. No payment of the fee is required until February 1, 2022 and the Company does not currently intend to pay any portion of the fee until this date. On February 1 of each calendar year commencing on February 1, 2022, the Company shall pay Siris 20% of the aggregate annual amount of the fees with respect to the prior calendar year that were not previously paid. In addition, no later than 30 days following the date on which Silver and its affiliates, including Siris, collectively hold no shares of Series A Preferred Stock, the Company shall pay all fees with respect to the period from January 1, 2021 through the termination date of the agreement not previously paid. The Company shall also reimburse Siris for any pre-approved out-of-pocket expenses in connection with providing services under the agreement. Registration Rights There were no significant changes to the Company’s registration rights during the three months ended March 31, 2021. Stock Plans There w ere no significant changes to the Company’s Stock Plans during the three months ended March 31, 2021. As of March 31, 2021, there were 1.4 million shares available for the grant or award under the Company’s 2015 Plan and 0.4 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”) Pla ns 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, 2021, the liability for such awards is approximately $0.2 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: Three Months Ended March 31, 2021 2020 Cost of revenues $ 478 $ 752 Research and development 855 1,431 Selling, general and administrative 1,388 2,986 Total stock-based compensation expense $ 2,721 $ 5,169 The following table summarizes stock-based compensation expense related to all of the Company’s stock awards included by award type, as follows: Three Months Ended March 31, 2021 2020 Stock options $ 955 $ 1,783 Restricted stock awards 1,710 3,334 Performance Based Cash Units 56 52 Total stock-based compensation before taxes $ 2,721 $ 5,169 Tax benefit $ 497 $ 924 The total stock-based compensation cost related to unvested equity awards as of March 31, 2021 was approximately $10.9 million. The expense is expected to be recognized over a weighted-average period of approximately 1.1 years. The total stock-based compensation cost related to unvested performance based cash units as of March 31, 2021 was approximately $0.2 million. The expense is expected to be recognized over a weighted-average period of approximately 1.6 years. Stock Options There were no significant changes to the Company’s Stock Option Plans during the three months ended March 31, 2021. 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: Three Months Ended March 31, 2021 2020 Expected stock price volatility 83.0 % 72.5 % Risk-free interest rate 0.6 % 1.4 % Expected life of options (in years) 4.18 4.45 Expected dividend yield 0.0 % 0.0 % Weighted-average fair value (PSV) of the options $ 2.42 $ 3.09 The following table summarizes information about stock options outstanding as of March 31, 2021: Options Number of Weighted-Average Weighted-Average Aggregate Outstanding at December 31, 2020 4,423 $ 9.60 Options Granted 255 3.97 Options Exercised — — Options Cancelled (620) 9.66 Outstanding at March 31, 2021 4,058 $ 9.23 5.00 $ 22 Vested at March 31, 2021 1,876 $ 13.88 3.93 $ — Exercisable at March 31, 2021 1,876 $ 13.88 3.93 $ — The total intrinsic value of stock options exercisable at March 31, 2021 and 2020 was nil and nil, respectively. The total intrinsic value of stock options exercised during the three months ended March 31, 2021 and 2020 was nil and nil, respectively. Awards of Restricted Stock and Performance Stock There were no significant changes to the Company’s restricted stock award (“Restricted Stock”) and performance stock plan during the three months ended March 31, 2021. A summary of the Company’s unvested restricted stock at March 31, 2021, and changes during the three months ended March 31, 2021, is presented below: Unvested Restricted Stock Number of Weighted- Average Unvested at December 31, 2020 1,510 $ 7.05 Granted 167 4.02 Vested (574) 7.27 Forfeited (43) 7.09 Unvested at March 31, 2021 1,060 $ 6.36 Restricted stock awards are granted subject to other service conditions or service and performance conditions (“Performance-Based Awards”). Restricted stock and Performance-Based Awards are measured at the closing stock price at the date of grant and are recognized straight line over the requisite service period. Performance Based Cash Units Performance based cash units 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 unvested performance-based cash units at March 31, 2021 and changes during the three months ended March 31, 2021, is presented below: Unvested Cash Units Number of Period End Fair Value Unvested at December 31, 2020 907 $ 4.70 Granted — — Granted adjustment (307) Vested (30) — Forfeited — — Unvested at March 31, 2021 570 $ 3.57 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company recognized approximately $0.2 million and $12.4 million in related income tax benefit during the three months ended March 31, 2021 and 2020, respectively. The effective tax rate was approximately 1.3% for the three months ended March 31, 2021 , 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 in zero rate jurisdictions. The Company’s effective tax rate was approximately 78.8% for the three months ended March 31, 2020, which was higher than the U.S. federal statutory rate primarily due to the Company’s ability to recognize certain loss carrybacks as a result of the enactment of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) in Q1 2020 and valuation allowances recorded in domestic and foreign jurisdictions, partially offset by the impact of permanent book-tax differences. 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, 2021 . |
Restructuring
Restructuring | 3 Months Ended |
Mar. 31, 2021 | |
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, 2021 and changes during the three months ended March 31, 2021, are presented below: Balance at December 31, 2020 Charges Payments Other Adjustments Balance at March 31, 2021 Employment termination costs $ 1,580 $ 713 $ (1,010) $ (2) $ 1,281 |
Earnings per Common Share (EPS)
Earnings per Common Share (EPS) | 3 Months Ended |
Mar. 31, 2021 | |
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 continued and discontinued operations. Three Months Ended March 31, 2021 2020 Numerator - Basic: Net loss from continuing operations $ (12,366) $ (3,350) Net income (loss) attributable to redeemable noncontrolling interests 336 (17) Preferred stock dividend (10,530) (8,909) Net loss attributable to Synchronoss $ (22,560) $ (12,276) Numerator - Diluted: Net loss from continuing operations attributable to Synchronoss $ (22,560) $ (12,276) Income effect for interest on convertible debt, net of tax — — Net loss from continuing operations adjusted for the convertible debt (22,560) (12,276) Denominator: Weighted average common shares outstanding — basic 42,737 41,483 Dilutive effect of: Shares from assumed conversion of preferred stock 1 — — Shares from assumed conversion of Performance Based Cash Units 2 — — Weighted average common shares outstanding — diluted 42,737 41,483 Basic EPS Earnings per share: Basic $ (0.53) $ (0.30) Diluted $ (0.53) $ (0.30) Anti-dilutive stock options excluded — — Unvested shares of restricted stock awards 1,060 3,222 ________________________________ (1) The calculation does not include the effect of assumed conversion of preferred stock of 14,417,234 and 12,503,264 shares for the three months ended March 31, 2021 and 2020, respectively; which is based on 55.5556 shares per $1,000 principal amount of the preferred stock, because the effect would have been anti–dilutive. (2) The calculation does not include the effect of assumed conversion of Performance Based Cash Units of 586,976 and nil shares for the three months ended March 31, 2021 and 2020, respectively; which is based on 1 share per 1 Performance Based Cash Unit, because the effect would have been anti–dilutive. |
Commitments, Contingencies and
Commitments, Contingencies and Other | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments, Contingencies and Other | Commitments, Contingencies and Other Purchase Obligations Aggregate annual future minimum payments under non-cancelable agreements are as follows: Year Non-cancelable agreements 2021 $ 9,909 2022 16,317 2023 13,749 2024 and thereafter 21,994 Total $ 61,969 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. On May 1, 2017, May 2, 2017, June 8, 2017 and June 14, 2017, four putative class actions were filed against the Company and certain of its current and former officers and directors in the United States District Court for the District of New Jersey (the “Securities Law Action”). After these cases were consolidated, the court appointed as lead plaintiff Employees’ Retirement System of the State of Hawaii, which filed, on November 20, 2017, a consolidated complaint purportedly on behalf of purchasers of the Company’s common stock between February 3, 2016 and June 13, 2017. On February 2, 2018, the defendants moved to dismiss the consolidated complaint in its entirety, with prejudice. Before that motion was decided, on August 24, 2018, lead plaintiff filed a consolidated amended complaint purportedly on behalf of purchasers of the Company’s common stock between October 28, 2014 and June 13, 2017. On June 28, 2019, the Court granted defendants’ motion to dismiss the consolidated amended complaint in its entirety, without prejudice, allowing lead plaintiff to leave to amend its complaint. On August 14, 2019, lead plaintiff filed a second amended complaint. The second amended complaint asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and it alleges, among other things, that the defendants made false and misleading statements of material information concerning the Company’s financial results, business operations, and prospects. The plaintiff seeks unspecified damages, fees, interest, and costs. On October 4, 2019, the defendants moved to dismiss the second amended complaint in its entirety. On May 29, 2020, the court granted in part and denied in part defendants’ motion to dismiss the second amended complaint, without prejudice. Plaintiff filed its motion for class certification on October 30, 2020, which motion remains pending. The Company believes that the asserted claims lack merit and intends to defend against all of the claims vigorously. Due to the inherent uncertainties of litigation, the Company cannot predict the outcome of the action at this time and can give no assurance that the asserted claims will not have a material adverse effect on its financial position or results of operations. On September 15, 2017, October 24, 2017, October 27, 2017 and October 30, 2017, Company shareholders filed derivative lawsuits against certain of the Company’s current and former officers and directors and the Company (as nominal defendant) in the United States District Court for the District of New Jersey (the “Derivative Suits”). On May 24, 2018, the Court consolidated the Derivative Suits and appointed Lisa LeBoeuf as lead plaintiff. The lead plaintiff designated as the Operative Complaint the complaint she previously had filed on October 27, 2017. On March 11, 2019, the defendants filed a motion to dismiss the Operative Complaint, which the Court granted in substantial part on November 26, 2019. On December 10, 2019, the defendants filed a motion for reconsideration respecting the only claim to survive the motion to dismiss. On June 12, 2020, the Court granted the defendants’ motion for reconsideration and dismissed the remaining claim without prejudice, allowing lead plaintiff leave to amend her complaint. On July 13, 2020, lead plaintiff filed an amended complaint. The amended complaint alleges claims related to breaches of fiduciary duties and unjust enrichment. The amended complaint’s allegations relate to substantially the same facts as those underlying the Securities Law Action described above. On April 30, 2021, the Court dismissed Plaintiff’s amended complaint in its entirety. Due to the inherent uncertainties of litigation, including a potential appeal, the Company cannot predict the outcome of the action at this time and can give no assurance that the asserted claims will not have a material adverse effect on our financial position or results of operations. On March 7, 2019, Synchronoss shareholders, Beth Daniel and Juan Solis, filed a separate derivative lawsuit against certain of the Company’s current and former officers and directors and the Company (as nominal defendant) in the Court of Chancery of the State of Delaware, asserting substantially the same allegations as those underlying the Derivative Suits and the Securities Law Action described above. Plaintiffs seek unspecified damages and for the Company to take steps to improve its corporate governance and internal procedures. On May 20, 2019, the parties stipulated to a stay of the action pending a ruling on the pending motion to dismiss in the Derivative Suits. The Company believes that the asserted claims lack merit and intends to defend against all of the claims vigorously. Due to the inherent uncertainties of litigation, the Company cannot predict the outcome of the action at this time and can give no assurance that the asserted claims will not have a material adverse effect on our financial position or results of operations. On June 11, 2020 and June 12, 2020, Company shareholders filed derivative lawsuits against certain of the Company’s current and former officers and directors and the Company (as nominal defendant) in the United States District Court for the District of New Jersey (the “Demand Refused Derivative Complaints”). The Demand Refused Derivative Complaints allege claims related to breaches of fiduciary duty, unjust enrichment, and alleged violations of securities laws. The complaints’ allegations relate substantially to the same facts as those underlying the Securities Law Action described above. The Demand Refused Derivative Complaints further allege that each plaintiff made a demand upon the Company’s Board of Directors to investigate the alleged misconduct and that such demand was wrongfully refused. Plaintiffs seek unspecified damages and for the Company to take steps to improve its corporate governance and internal procedures. On October 20, 2020, the Court consolidated the actions and appointed co-lead plaintiffs. On December 4, 2020, co-lead plaintiffs filed a consolidated amended complaint. On February 3, 2021, the defendants filed motions to dismiss the amended complaint, which remain pending before the Court. Due to the inherent uncertainties of litigation, the Company cannot predict the outcome of the action at this time and can give no assurance that the asserted claims will not have a material adverse effect on its financial position or results of operations. Except as set forth above, the Company is not currently subject to any legal proceedings that could have a material adverse effect on its operations; however, it may from time to time become a party to various legal proceedings arising in the ordinary course of its business. The Company is currently the plaintiff in several patent infringement cases. The defendants in several of these cases have filed counterclaims. Although the Company cannot predict the outcome of the cases at this time due to the inherent uncertainties of litigation, the Company continues to pursue its claims and believes that the counterclaims are without merit, and the Company intends to defend against all of such counterclaims. |
Additional Financial Informatio
Additional Financial Information | 3 Months Ended |
Mar. 31, 2021 | |
Other Income and Expenses [Abstract] | |
Additional Financial Information | Additional Financial Information Other Income, net The following table sets forth the components of included in the Other Income, net included in the Condensed Consolidated Statements of Operations: Three Months Ended March 31, 2021 2020 FX gains (losses) (1) $ (3,274) $ (212) Income from sale of intangible assets (2) — 1,843 Other (3) (122) 61 Total $ (3,396) $ 1,692 ________________________________ (1) Fair value of foreign exchange gains and losses (2) Represents gain on sale of certain of the Company’s IP addresses (3) Represents an aggregate of individually immaterial transactions |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Preferred Dividends Subsequent to March 31, 2021, the Company paid in-kind the accrued Preferred Dividends of $9.4 million. |
Basis of Presentation and Con_2
Basis of Presentation and Consolidation (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
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, 2020. The results of operations for the three months ended March 31, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021. 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. Certain prior year amounts have been reclassified to conform to the current year's presentation. |
Risks and Uncertainties | Risks and UncertaintiesThere continue to be uncertainties regarding the current coronavirus ("COVID-19") pandemic, and the Company is closely monitoring the impact of the pandemic on all aspects of its business, including how it will impact its customers, employees, suppliers, vendors, business partners and distribution channels. While the pandemic did not materially affect the Company’s financial results and business operations for the three months ended March 31, 2021, the Company is unable to predict the impact that COVID-19 will have on its financial position and operating results due to numerous uncertainties. The Company will continue to assess the evolving impact of the COVID-19 pandemic and will make adjustments to its operations as necessary |
Recently Issued Accounting Standards | Recently Issued Accounting Standards Recent accounting pronouncements adopted Standard Description Effect on the financial statements Update 2019-12 - Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes The ASU removes the exception to the general principles in ASC 740, Income Taxes, associated with the incremental approach for intra-period tax allocation, accounting for basis differences when there are ownership changes in foreign investments and interim-period income tax accounting for year-to-date losses that exceed anticipated losses. In addition, the ASU improves the application of income tax related guidance and simplifies U.S. GAAP when accounting for franchise taxes that are partially based on income, transactions with government resulting in a step-up in tax basis goodwill, separate financial statements of legal entities not subject to tax, and enacted changes in tax laws in interim periods. Different transition approaches, retrospective, modified retrospective, or prospective, will apply to each income tax simplification provision. The Company adopted the new standard as of January 1, 2021. The standard did not have a material impact on the Company’s consolidated financial position or results of operations upon adoption. Date of adoption: January 1, 2021. Standards issued not yet adopted Standard Description Effect on the financial statements Update 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity (ASU 2020-06) The ASU simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments. This guidance also eliminates the treasury stock method to calculate diluted earnings per share for convertible instruments and requires the use of the if-converted method. This guidance will be effective for us in the first quarter of 2022 on a full or modified retrospective basis, with early adoption permitted. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. The Company does not expect the adoption of this guidance to have a material impact on our consolidated financial statements. Date of adoption: January 1, 2022. |
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. |
Basis of Presentation and Con_3
Basis of Presentation and Consolidation (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Impact of New Accounting Standard | Recent accounting pronouncements adopted Standard Description Effect on the financial statements Update 2019-12 - Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes The ASU removes the exception to the general principles in ASC 740, Income Taxes, associated with the incremental approach for intra-period tax allocation, accounting for basis differences when there are ownership changes in foreign investments and interim-period income tax accounting for year-to-date losses that exceed anticipated losses. In addition, the ASU improves the application of income tax related guidance and simplifies U.S. GAAP when accounting for franchise taxes that are partially based on income, transactions with government resulting in a step-up in tax basis goodwill, separate financial statements of legal entities not subject to tax, and enacted changes in tax laws in interim periods. Different transition approaches, retrospective, modified retrospective, or prospective, will apply to each income tax simplification provision. The Company adopted the new standard as of January 1, 2021. The standard did not have a material impact on the Company’s consolidated financial position or results of operations upon adoption. Date of adoption: January 1, 2021. Standards issued not yet adopted Standard Description Effect on the financial statements Update 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity (ASU 2020-06) The ASU simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments. This guidance also eliminates the treasury stock method to calculate diluted earnings per share for convertible instruments and requires the use of the if-converted method. This guidance will be effective for us in the first quarter of 2022 on a full or modified retrospective basis, with early adoption permitted. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. The Company does not expect the adoption of this guidance to have a material impact on our consolidated financial statements. Date of adoption: January 1, 2022. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 Cloud Digital Messaging Total Cloud Digital Messaging Total Geography Americas $ 37,031 $ 11,240 $ 3,516 $ 51,787 $ 39,322 $ 10,937 $ 10,903 $ 61,162 APAC — 1,128 6,700 7,828 — 558 9,175 9,733 EMEA 1,865 609 3,410 5,884 1,722 1,257 3,248 6,227 Total $ 38,896 $ 12,977 $ 13,626 $ 65,499 $ 41,044 $ 12,752 $ 23,326 $ 77,122 Service Line Professional Services $ 3,925 $ 2,111 $ 2,611 $ 8,647 $ 4,161 $ 4,536 $ 5,230 $ 13,927 Transaction Services 1,975 2,268 1 4,244 1,307 1,074 — 2,381 Subscription Services 32,996 8,433 10,614 52,043 35,576 7,002 10,617 53,195 License — 165 400 565 — 140 7,479 7,619 Total $ 38,896 $ 12,977 $ 13,626 $ 65,499 $ 41,044 $ 12,752 $ 23,326 $ 77,122 |
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: Contract Liabilities* Balance - January 1, 2021 $ 45,614 Revenue recognized in the period (66,055) Amounts billed but not recognized as revenue 60,294 Balance - March 31, 2021 $ 39,853 ________________________________ * Comprised of Deferred Revenue |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
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: March 31, 2021 Total (Level 1) (Level 2) (Level 3) Assets Cash and cash equivalents (1) $ 29,818 $ 29,818 $ — $ — Total assets $ 29,818 $ 29,818 $ — $ — Temporary equity Redeemable noncontrolling interests (2) $ 12,500 $ — $ — $ 12,500 Total temporary equity $ 12,500 $ — $ — $ 12,500 December 31, 2020 Total (Level 1) (Level 2) (Level 3) Assets Cash and cash equivalents (1) $ 33,671 $ 33,671 $ — $ — Total assets $ 33,671 $ 33,671 $ — $ — Temporary Equity Redeemable noncontrolling interests (2) $ 12,500 $ — $ — $ 12,500 Total temporary equity $ 12,500 $ — $ — $ 12,500 ________________________________ (1) Cash equivalents primarily included money market funds. (2) Put arrangements held by the noncontrolling interests in certain of the Company’s joint ventures. |
Schedule of Changes in Fair Value of Level 3 | The changes in fair value of the Company’s Level 3 redeemable noncontrolling interests during the three months ended March 31, 2021 were as follows: Balance at December 31, 2020 $ 12,500 Fair value adjustment 336 Net loss attributable to redeemable noncontrolling interests (336) Balance at March 31, 2021 $ 12,500 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
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 at March 31, 2021 (in thousands): ROU assets: Non-current operating lease ROU assets $ 31,960 Operating lease liabilities: Current operating lease liabilities* $ 9,342 Non-current operating lease liabilities 41,803 Total operating lease liabilities $ 51,145 ________________________________ * Amounts are included in Accrued Expenses on the Condensed Consolidated Balance Sheet. |
Schedule of Components of Lease Expense and Weighted Average Lease Term and Rates | The following table presents information about lease expense and sublease income for the three months ended March 31, 2021 (in thousands): Three Months Ended March 31, 2021 Operating lease cost* $ 2,600 Other lease costs and income: Variable lease costs* (1) 775 Sublease income* (945) Total net lease cost $ 2,430 ________________________________ * 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. (1) As part of the Company’s continued cost savings initiatives, the Company closed certain office spaces and terminated various lease agreements. These actions resulted in a $0.6 million ROU asset impairment charge, which was determined by the present value of the forecasted future cash flows for the remaining lease term. The following table provides the weighted-average remaining lease term and weighted-average discount rates for our leases as of March 31, 2021: Operating Leases: Weighted-average remaining lease term (years), weighted based on lease liability balances 6.52 Weighted-average discount rate (percentages), weighted based on the remaining balance of lease payments 7.6% The following table provides certain cash flow and supplemental noncash information related to our lease liabilities for the three months ended March 31, 2021 (in thousands): Operating Leases: Cash paid for amounts included in the measurement of lease liabilities $ 3,449 Lease liabilities arising from obtaining right-of-use assets — |
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, 2021 for each of the five years subsequent to December 31, 2020 and thereafter, as well as a reconciliation of such undiscounted cash flows to our lease liabilities at March 31, 2021 (in thousands): Operating Leases Remaining 2021 $ 9,552 2022 11,021 2023 8,595 2024 8,346 2025 8,223 Thereafter 18,590 Total future lease payments 64,327 Less: amount representing interest (13,182) Present value of future lease payments (lease liability) $ 51,145 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of interest expense | The following table summarizes the Company’s interest expense: Three Months Ended March 31, 2021 2020 2019 Revolving Credit Facility Amortization of debt issuance costs $ 12 $ 16 Commitment fee — 4 Interest on borrowings 63 14 Other* 20 211 Total $ 95 $ 245 ________________________________ * Mainly finance leases’ related interest expense |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive (Loss) / Income (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
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, 2021 were as follows: Balance at December 31, 2020 Other comprehensive (loss) income Tax effect Balance at March 31, 2021 Foreign currency $ (26,076) $ (1,888) $ — $ (27,964) Unrealized income (loss) on intra-entity foreign currency transactions (2,137) 1,144 (392) (1,385) Total $ (28,213) $ (744) $ (392) $ (29,349) |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Stockholder's Equity | |
Schedule of Series A Preferred Stock | A summary of the Company’s Series A Convertible Participating Perpetual Preferred Stock balance at March 31, 2021 and changes during the three months ended March 31, 2021, are presented below: Preferred Stock Shares Amount Balance at December 31, 2020 250 $ 237,641 Issuance of preferred stock — — Amortization of preferred stock issuance costs — 1,122 Issuance of preferred PIK dividend 10 9,079 Balance at March 31, 2021 260 $ 247,842 |
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: Three Months Ended March 31, 2021 2020 Cost of revenues $ 478 $ 752 Research and development 855 1,431 Selling, general and administrative 1,388 2,986 Total stock-based compensation expense $ 2,721 $ 5,169 The following table summarizes stock-based compensation expense related to all of the Company’s stock awards included by award type, as follows: Three Months Ended March 31, 2021 2020 Stock options $ 955 $ 1,783 Restricted stock awards 1,710 3,334 Performance Based Cash Units 56 52 Total stock-based compensation before taxes $ 2,721 $ 5,169 Tax benefit $ 497 $ 924 |
Schedule of Fair Value Assumptions | The weighted-average assumptions used in the Black-Scholes option pricing model are as follows: Three Months Ended March 31, 2021 2020 Expected stock price volatility 83.0 % 72.5 % Risk-free interest rate 0.6 % 1.4 % Expected life of options (in years) 4.18 4.45 Expected dividend yield 0.0 % 0.0 % Weighted-average fair value (PSV) of the options $ 2.42 $ 3.09 |
Schedule of Information About Stock Options Outstanding | The following table summarizes information about stock options outstanding as of March 31, 2021: Options Number of Weighted-Average Weighted-Average Aggregate Outstanding at December 31, 2020 4,423 $ 9.60 Options Granted 255 3.97 Options Exercised — — Options Cancelled (620) 9.66 Outstanding at March 31, 2021 4,058 $ 9.23 5.00 $ 22 Vested at March 31, 2021 1,876 $ 13.88 3.93 $ — Exercisable at March 31, 2021 1,876 $ 13.88 3.93 $ — |
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, 2021, and changes during the three months ended March 31, 2021, is presented below: Unvested Restricted Stock Number of Weighted- Average Unvested at December 31, 2020 1,510 $ 7.05 Granted 167 4.02 Vested (574) 7.27 Forfeited (43) 7.09 Unvested at March 31, 2021 1,060 $ 6.36 |
Performance based cash units | |
Stockholder's Equity | |
Summary of Unvested Restricted Stock and Performance Shares Activity | A summary of the Company’s unvested performance-based cash units at March 31, 2021 and changes during the three months ended March 31, 2021, is presented below: Unvested Cash Units Number of Period End Fair Value Unvested at December 31, 2020 907 $ 4.70 Granted — — Granted adjustment (307) Vested (30) — Forfeited — — Unvested at March 31, 2021 570 $ 3.57 |
Restructuring (Tables)
Restructuring (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |
Schedule of the Restructuring Accrual and Changes | A summary of the Company’s restructuring accrual at March 31, 2021 and changes during the three months ended March 31, 2021, are presented below: Balance at December 31, 2020 Charges Payments Other Adjustments Balance at March 31, 2021 Employment termination costs $ 1,580 $ 713 $ (1,010) $ (2) $ 1,281 |
Earnings per Common Share (EP_2
Earnings per Common Share (EPS) (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
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 continued and discontinued operations. Three Months Ended March 31, 2021 2020 Numerator - Basic: Net loss from continuing operations $ (12,366) $ (3,350) Net income (loss) attributable to redeemable noncontrolling interests 336 (17) Preferred stock dividend (10,530) (8,909) Net loss attributable to Synchronoss $ (22,560) $ (12,276) Numerator - Diluted: Net loss from continuing operations attributable to Synchronoss $ (22,560) $ (12,276) Income effect for interest on convertible debt, net of tax — — Net loss from continuing operations adjusted for the convertible debt (22,560) (12,276) Denominator: Weighted average common shares outstanding — basic 42,737 41,483 Dilutive effect of: Shares from assumed conversion of preferred stock 1 — — Shares from assumed conversion of Performance Based Cash Units 2 — — Weighted average common shares outstanding — diluted 42,737 41,483 Basic EPS Earnings per share: Basic $ (0.53) $ (0.30) Diluted $ (0.53) $ (0.30) Anti-dilutive stock options excluded — — Unvested shares of restricted stock awards 1,060 3,222 ________________________________ (1) The calculation does not include the effect of assumed conversion of preferred stock of 14,417,234 and 12,503,264 shares for the three months ended March 31, 2021 and 2020, respectively; which is based on 55.5556 shares per $1,000 principal amount of the preferred stock, because the effect would have been anti–dilutive. (2) The calculation does not include the effect of assumed conversion of Performance Based Cash Units of 586,976 and nil shares for the three months ended March 31, 2021 and 2020, respectively; which is based on 1 share per 1 Performance Based Cash Unit, because the effect would have been anti–dilutive. |
Commitments, Contingencies an_2
Commitments, Contingencies and Other (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Aggregate Annual Future Minimum Lease Payments Under Non-Cancelable Leases | Aggregate annual future minimum payments under non-cancelable agreements are as follows: Year Non-cancelable agreements 2021 $ 9,909 2022 16,317 2023 13,749 2024 and thereafter 21,994 Total $ 61,969 |
Additional Financial Informat_2
Additional Financial Information (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Other Income and Expenses [Abstract] | |
Schedule of Components of Other (Expense) Income, Net | The following table sets forth the components of included in the Other Income, net included in the Condensed Consolidated Statements of Operations: Three Months Ended March 31, 2021 2020 FX gains (losses) (1) $ (3,274) $ (212) Income from sale of intangible assets (2) — 1,843 Other (3) (122) 61 Total $ (3,396) $ 1,692 ________________________________ (1) Fair value of foreign exchange gains and losses (2) Represents gain on sale of certain of the Company’s IP addresses (3) Represents an aggregate of individually immaterial transactions |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Net revenues | $ 65,499 | $ 77,122 |
Professional Services | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 8,647 | 13,927 |
Transaction Services | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 4,244 | 2,381 |
Subscription Services | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 52,043 | 53,195 |
License | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 565 | 7,619 |
Americas | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 51,787 | 61,162 |
APAC | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 7,828 | 9,733 |
EMEA | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 5,884 | 6,227 |
Cloud | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 38,896 | 41,044 |
Cloud | Professional Services | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 3,925 | 4,161 |
Cloud | Transaction Services | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 1,975 | 1,307 |
Cloud | Subscription Services | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 32,996 | 35,576 |
Cloud | License | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 0 | 0 |
Cloud | Americas | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 37,031 | 39,322 |
Cloud | APAC | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 0 | 0 |
Cloud | EMEA | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 1,865 | 1,722 |
Digital | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 12,977 | 12,752 |
Digital | Professional Services | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 2,111 | 4,536 |
Digital | Transaction Services | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 2,268 | 1,074 |
Digital | Subscription Services | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 8,433 | 7,002 |
Digital | License | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 165 | 140 |
Digital | Americas | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 11,240 | 10,937 |
Digital | APAC | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 1,128 | 558 |
Digital | EMEA | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 609 | 1,257 |
Messaging | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 13,626 | 23,326 |
Messaging | Professional Services | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 2,611 | 5,230 |
Messaging | Transaction Services | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 1 | 0 |
Messaging | Subscription Services | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 10,614 | 10,617 |
Messaging | License | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 400 | 7,479 |
Messaging | Americas | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 3,516 | 10,903 |
Messaging | APAC | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | 6,700 | 9,175 |
Messaging | EMEA | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | $ 3,410 | $ 3,248 |
Revenue - Contract Assets and L
Revenue - Contract Assets and Liabilities (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Contract asset, balance | $ 6,600 |
Changes In Contract Liabilities [Roll Forward] | |
Balance - January 1, 2021 | 45,614 |
Revenue recognized in the period | (66,055) |
Amounts billed but not recognized as revenue | 60,294 |
Balance - March 31, 2021 | $ 39,853 |
Revenue - Remaining Performance
Revenue - Remaining Performance Obligations (Details) $ in Millions | Mar. 31, 2021USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 264.2 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, percent | 73.80% |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 2 years |
Fair Value Measurements - Hiera
Fair Value Measurements - Hierarchy (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Assets | ||
Cash and cash equivalents | $ 29,818 | $ 33,671 |
Total assets | 29,818 | 33,671 |
Temporary Equity | ||
Redeemable noncontrolling interests | 12,500 | 12,500 |
Total temporary equity | 12,500 | 12,500 |
(Level 1) | ||
Assets | ||
Cash and cash equivalents | 29,818 | 33,671 |
Total assets | 29,818 | 33,671 |
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 |
Fair Value Measurements - Level
Fair Value Measurements - Level 3 Redeemable Noncontrolling Interests (Details) - Redeemable Noncontrolling Interests $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Changes in fair value of the Company’s Level 3 redeemable noncontrolling interests | |
Balance at December 31, 2020 | $ 12,500 |
Fair value adjustment | 336 |
Net loss attributable to redeemable noncontrolling interests | (336) |
Balance at March 31, 2021 | $ 12,500 |
Leases - ROU Assets and Lease L
Leases - ROU Assets and Lease Liabilities (Details) $ in Thousands | Mar. 31, 2021USD ($) |
ROU assets: | |
Non-current operating lease ROU assets | $ 31,960 |
Operating lease liabilities: | |
Current operating lease liabilities | 9,342 |
Non-current operating lease liabilities | 41,803 |
Total operating lease liabilities | $ 51,145 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued expenses |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Leases [Abstract] | ||
Operating lease cost | $ 2,600 | |
Other lease costs and income: | ||
Variable lease costs | 775 | |
Sublease income | (945) | |
Total net lease cost | 2,430 | |
ROU asset impairment | $ 555 | $ 0 |
Leases - Maturities of Operatin
Leases - Maturities of Operating Lease Liabilities (Details) $ in Thousands | Mar. 31, 2021USD ($) |
Leases [Abstract] | |
Remaining 2021 | $ 9,552 |
2022 | 11,021 |
2023 | 8,595 |
2024 | 8,346 |
2025 | 8,223 |
Thereafter | 18,590 |
Total future lease payments | 64,327 |
Less: amount representing interest | (13,182) |
Present value of future lease payments (lease liability) | $ 51,145 |
Leases - Weighted Average Lease
Leases - Weighted Average Lease Term and Rates (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Leases [Abstract] | |
Weighted-average remaining lease term (years), weighted based on lease liability balances | 6 years 6 months 7 days |
Weighted-average discount rate (percentages), weighted based on the remaining balance of lease payments | 7.60% |
Cash paid for amounts included in the measurement of lease liabilities | $ 3,449 |
Lease liabilities arising from obtaining right-of-use assets | $ 0 |
Investments in Affiliates and_2
Investments in Affiliates and Related Transactions (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2017 | |
Sequential Technology International, LLC and AP Capital Holdings II, LLC | Loans Payable | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Face amount | $ 9,000,000 | |||
Contingent consideration, liability | $ 16,000,000 | |||
Interest rate, as a percent | 8.00% | |||
Term | 3 years | 3 years | ||
Proceeds from sale, percentage | 5.00% | |||
Other assets fair value disclosure | $ 4,800,000 | |||
Sequential Technology International, LLC | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Duration of services agreement | 3 years | |||
Consideration received | $ 1,600,000 |
Debt - 2019 Revolving Credit Fa
Debt - 2019 Revolving Credit Facility (Details) - USD ($) | Oct. 04, 2019 | Mar. 31, 2021 | Dec. 31, 2020 |
Line of Credit Facility [Line Items] | |||
Debt, current | $ 10,000,000 | $ 10,000,000 | |
Revolving Facility | |||
Line of Credit Facility [Line Items] | |||
Borrowing capacity | $ 10,000,000 | ||
Commitment fee percentage | 0.20% | ||
Debt, current | $ 10,000,000 |
Debt - Interest Expense (Detail
Debt - Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Debt Instrument [Line Items] | ||
Other* | $ 20 | $ 211 |
Total | 95 | 245 |
Line of Credit | Revolving Facility | ||
Debt Instrument [Line Items] | ||
Amortization of debt issuance costs | 12 | 16 |
Commitment fee | 0 | 4 |
Interest on borrowings | $ 63 | $ 14 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive (Loss) / Income (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Changes in accumulated other comprehensive income (loss) | |
Beginning balance | $ 43,282 |
Other comprehensive (loss) income | (744) |
Tax effect | (392) |
Ending balance | 22,063 |
AOCI Attributable to Parent | |
Changes in accumulated other comprehensive income (loss) | |
Beginning balance | (28,213) |
Ending balance | (29,349) |
Foreign currency | |
Changes in accumulated other comprehensive income (loss) | |
Beginning balance | (26,076) |
Other comprehensive (loss) income | (1,888) |
Tax effect | 0 |
Ending balance | (27,964) |
Unrealized income (loss) on intra-entity foreign currency transactions | |
Changes in accumulated other comprehensive income (loss) | |
Beginning balance | (2,137) |
Other comprehensive (loss) income | 1,144 |
Tax effect | (392) |
Ending balance | $ (1,385) |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) | May 18, 2020USD ($) | Feb. 15, 2018USD ($)directorregistrationmembervote$ / sharesshares | Mar. 31, 2021USD ($)vote$ / sharesshares | Dec. 31, 2020$ / sharesshares |
Class of Stock [Line Items] | ||||
Dividends | $ 0 | |||
Preferred stock, shares issued (in shares) | shares | 260,000 | 250,000 | ||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||
Preferred stock, shares outstanding (in shares) | shares | 260,000 | 250,000 | ||
Preferred stock, dividends (in shares) | shares | 74,510 | |||
Dividend rate, percentage | 14.50% | |||
Convertible preferred stock, shares to be issued upon conversion (in shares) | shares | 55.5556 | |||
Convertible preferred stock, conversion price per share (in dollars per share) | $ / shares | $ 18 | |||
Number of elected directors | director | 4 | |||
Number of board of director members | director | 10 | |||
Number of board of director members elected by preferred stock holders | director | 2 | |||
Number of board of directors agreed upon to be elected meeting independence criteria | director | 4 | |||
Number of board of directors elected meeting independence criteria | director | 2 | |||
Minimum number of board of director members that preferred stock holders can appoint pursuant to certification | director | 1 | |||
Maximum ownership threshold allowed for director election rights, percent | 30.00% | |||
Demand registrations allowed under agreement | registration | 3 | |||
Demand registrations allowed under agreement annually | registration | 2 | |||
Demand registration, minimum percentage of shares | 10.00% | |||
2015 Plan | ||||
Class of Stock [Line Items] | ||||
Number of shares available for grant (in shares) | shares | 1,400,000 | |||
Liability, accrued expenses, non-vested | $ 200,000 | |||
2017 New Hire Plan | ||||
Class of Stock [Line Items] | ||||
Number of shares available for grant (in shares) | shares | 400,000 | |||
Chief Executive Officer | ||||
Class of Stock [Line Items] | ||||
Number of elected directors | director | 1 | |||
Board of Directors Chairman | ||||
Class of Stock [Line Items] | ||||
Number of elected directors | director | 1 | |||
Ten Percent or Greater Ownership | ||||
Class of Stock [Line Items] | ||||
Number of elected directors | member | 2 | |||
Preferred stock, ownership percentage | 10.00% | |||
Greater than Five and Less than Ten Percent Ownership | ||||
Class of Stock [Line Items] | ||||
Number of elected directors | member | 1 | |||
Greater than Five and Less than Ten Percent Ownership | Minimum | ||||
Class of Stock [Line Items] | ||||
Preferred stock, ownership percentage | 5.00% | |||
Greater than Five and Less than Ten Percent Ownership | Maximum | ||||
Class of Stock [Line Items] | ||||
Preferred stock, ownership percentage | 10.00% | |||
Silver Private Holdings I, LLC | ||||
Class of Stock [Line Items] | ||||
Preferred stock, shares issued (in shares) | shares | 185,000 | |||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | |||
Preferred stock, liquidation preference (in dollars per share) | $ / shares | $ 1,000 | |||
Consideration received on transaction | $ 97,700,000 | |||
Number of shares repurchased under program (in shares) | shares | 5,994,667 | |||
Fair value, approval threshold | $ 10,000,000 | |||
Fair market value of transaction, individual | 5,000,000 | |||
Fair market value of transaction, aggregate | 10,000,000 | |||
Capital expenditure threshold | $ 25,000,000 | |||
Percentage ownership after conversion | 19.90% | |||
Voting percentage threshold of ownership | 19.99% | |||
Minimum number of board of director members that preferred stock holders can appoint pursuant to certification | director | 2 | |||
Siris LLC | ||||
Class of Stock [Line Items] | ||||
Advisory services, fee payable | $ 110,000 | |||
Increase in advisory services, fee payable | $ 10,000 | |||
Advisory services fee payable, percentage | 20.00% | |||
Common Stock | ||||
Class of Stock [Line Items] | ||||
Number of votes per share (vote) | vote | 1 | |||
Series A Preferred Stock | ||||
Class of Stock [Line Items] | ||||
Number of votes per share (vote) | vote | 1 | |||
Preferred stock, shares issued (in shares) | shares | 185,000 | |||
Preferred stock, shares outstanding (in shares) | shares | 259,510 | |||
Preferred stock, redemption period | 30 months | |||
Preferred stock, redemption amount | $ 243,100,000 | |||
Preferred stock, liquidation preference | $ 243,100,000 |
Stockholders' Equity - Preferre
Stockholders' Equity - Preferred Stock (Details) shares in Thousands, $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($)shares | |
Increase (Decrease) in Temporary Equity [Roll Forward] | |
Beginning balance (in shares) | 250 |
Ending balance (in shares) | 260 |
Preferred Stock | |
Increase (Decrease) in Temporary Equity [Roll Forward] | |
Beginning balance (in shares) | 250 |
Issuance of preferred stock (in shares) | 0 |
Amortization of preferred stock issuance costs (in shares) | 0 |
Issuance of preferred PIK dividend (in shares) | 10 |
Ending balance (in shares) | 260 |
Beginning balance | $ | $ 237,641 |
Issuance of preferred stock | $ | 0 |
Amortization of preferred stock issuance costs | $ | 1,122 |
Issuance of preferred PIK dividend | $ | 9,079 |
Ending balance | $ | $ 247,842 |
Stockholders' Equity - Stock-ba
Stockholders' Equity - Stock-based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | ||
Total stock-based compensation expense | $ 2,721 | $ 5,169 |
Tax benefit | 497 | 924 |
Stock-based compensation cost related to non-vested equity awards not yet recognized as an expense | $ 10,900 | |
Weighted-average period over which stock-based compensation cost related to non-vested equity awards is expected to be recognized | 1 year 1 month 6 days | |
Stock options | ||
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | ||
Total stock-based compensation expense | $ 955 | 1,783 |
Restricted stock awards | ||
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | ||
Total stock-based compensation expense | 1,710 | 3,334 |
Performance Based Cash Units | ||
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | ||
Total stock-based compensation expense | 56 | 52 |
Stock-based compensation cost related to non-vested equity awards not yet recognized as an expense | $ 200 | |
Weighted-average period over which stock-based compensation cost related to non-vested equity awards is expected to be recognized | 1 year 7 months 6 days | |
Cost of revenues | ||
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | ||
Total stock-based compensation expense | $ 478 | 752 |
Research and development | ||
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | ||
Total stock-based compensation expense | 855 | 1,431 |
Selling, general and administrative | ||
Employee Service Share-based Compensation, Aggregate Disclosures [Abstract] | ||
Total stock-based compensation expense | $ 1,388 | $ 2,986 |
Stockholders' Equity - Black-Sc
Stockholders' Equity - Black-Scholes Assumptions (Details) - Stock options - $ / shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Weighted-average assumptions | ||
Expected stock price volatility | 83.00% | 72.50% |
Risk-free interest rate | 0.60% | 1.40% |
Expected life of options (in years) | 4 years 2 months 4 days | 4 years 5 months 12 days |
Expected dividend yield | 0.00% | 0.00% |
Weighted-average fair value (PSV) of the options (usd per share) | $ 2.42 | $ 3.09 |
Stockholders' Equity - Stock Op
Stockholders' Equity - Stock Options (Details) - USD ($) $ / shares in Units, shares in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Number of Options | ||
Options outstanding at the beginning of the period (in shares) | 4,423 | |
Options Granted (in shares) | 255 | |
Options Exercised (in shares) | 0 | |
Options Cancelled (in shares) | (620) | |
Options outstanding at the end of the period (in shares) | 4,058 | |
Vested (in shares) | 1,876 | |
Exercisable (in shares) | 1,876 | |
Weighted-Average Exercise Price | ||
Balance at the beginning of the period (in dollars per share) | $ 9.60 | |
Options Granted (in dollars per share) | 3.97 | |
Options Exercised (in dollars per share) | 0 | |
Options Cancelled (in dollars per share) | 9.66 | |
Balance at the end of the period (in dollars per share) | 9.23 | |
Vested (in dollars per share) | 13.88 | |
Exercisable (in dollars per share) | $ 13.88 | |
Weighted-Average Remaining Contractual Term (Years) | ||
Outstanding | 5 years | |
Vested | 3 years 11 months 4 days | |
Exercisable | 3 years 11 months 4 days | |
Aggregate Intrinsic Value | ||
Outstanding | $ 22,000 | |
Vested | 0 | |
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 |
Stockholders' Equity - Restrict
Stockholders' Equity - Restricted Stock and Performance Stock (Details) shares in Thousands | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Restricted stock awards | |
Number of Awards | |
Non-vested at the beginning of the period (in shares) | shares | 1,510 |
Granted (in shares) | shares | 167 |
Vested (in shares) | shares | (574) |
Forfeited (in shares) | shares | (43) |
Non-vested at the end of the period (in shares) | shares | 1,060 |
Weighted- Average Grant Date Fair Value | |
Non-vested at the beginning of the period (in dollars per share) | $ / shares | $ 7.05 |
Granted (in dollars per share) | $ / shares | 4.02 |
Vested (in dollars per share) | $ / shares | 7.27 |
Forfeited (in dollars per share) | $ / shares | 7.09 |
Non-vested at the end of the period (in dollars per share) | $ / shares | $ 6.36 |
Performance based cash units | |
Number of Awards | |
Non-vested at the beginning of the period (in shares) | shares | 907 |
Granted (in shares) | shares | 0 |
Granted adjustment (in shares) | shares | (307) |
Vested (in shares) | shares | (30) |
Forfeited (in shares) | shares | 0 |
Non-vested at the end of the period (in shares) | shares | 570 |
Weighted- Average Grant Date Fair Value | |
Non-vested at the beginning of the period (in dollars per share) | $ / shares | $ 4.70 |
Granted (in dollars per share) | $ / shares | 0 |
Granted adjustment (in dollars per share) | $ / shares | |
Vested (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 | $ 3.57 |
Performance based cash units | 2015 Plan | |
Weighted- Average Grant Date Fair Value | |
Vesting period (in years) | 3 years |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Benefit for income taxes | $ 163 | $ 12,432 |
Effective tax rate | 1.30% | 78.80% |
Restructuring (Details)
Restructuring (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Restructuring accrual and changes | ||
Charges | $ 713 | $ 1,450 |
Employment termination costs | ||
Restructuring accrual and changes | ||
Balance at December 31, 2020 | 1,580 | |
Charges | 713 | |
Payments | (1,010) | |
Other Adjustments | (2) | |
Balance at March 31, 2021 | $ 1,281 |
Earnings per Common Share (EP_3
Earnings per Common Share (EPS) (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021USD ($)$ / sharesshares | Mar. 31, 2020USD ($)$ / sharesshares | |
Earnings Per Share Reconciliation [Abstract] | ||
Net loss from continuing operations | $ | $ (12,366) | $ (3,350) |
Net income (loss) attributable to redeemable noncontrolling interests | $ | 336 | (17) |
Preferred stock dividend | $ | (10,530) | (8,909) |
Net loss attributable to Synchronoss | $ | (22,560) | (12,276) |
Net loss from continuing operations attributable to Synchronoss | $ | (22,560) | (12,276) |
Income effect for interest on convertible debt, net of tax | $ | 0 | 0 |
Net loss from continuing operations adjusted for the convertible debt | $ | $ (22,560) | $ (12,276) |
Denominator: | ||
Weighted average common shares outstanding - basic (in shares) | 42,737,000 | 41,483,000 |
Dilutive effect of: | ||
Shares from assumed conversion of preferred stock (in shares) | 0 | 0 |
Shares from assumed conversion of Performance Based Cash Units (in shares) | 0 | 0 |
Weighted average common shares outstanding - diluted (in shares) | 42,737,000 | 41,483,000 |
Earnings per share: | ||
Basic (in dollars per share) | $ / shares | $ (0.53) | $ (0.30) |
Diluted (in dollars per share) | $ / shares | $ (0.53) | $ (0.30) |
Stock Options | ||
Earnings per share: | ||
Anti-dilutive stock options excluded (in shares) | 0 | 0 |
Restricted Stock Awards | ||
Earnings per share: | ||
Anti-dilutive stock options excluded (in shares) | 1,060,000 | 3,222,000 |
Preferred Stock | ||
Earnings per share: | ||
Anti-dilutive stock options excluded (in shares) | 14,417,234 | 12,503,264 |
Preferred stock, conversion ratio | 0.0555556 | |
Performance Based Cash Units | ||
Earnings per share: | ||
Anti-dilutive stock options excluded (in shares) | 586,976 | 0 |
Performance based cash units, conversion ratio | 1 |
Commitments, Contingencies an_3
Commitments, Contingencies and Other (Details) $ in Thousands | Mar. 31, 2021USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2021 | $ 9,909 |
2022 | 16,317 |
2023 | 13,749 |
2024 and thereafter | 21,994 |
Total | $ 61,969 |
Commitment and Contingencies -
Commitment and Contingencies - Additional Information (Details) | 1 Months Ended |
Jun. 14, 2017complaint | |
The Securities Law Actions | Pending Litigation | |
Loss Contingencies [Line Items] | |
Number of complaints filed | 4 |
Additional Financial Informat_3
Additional Financial Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Other Income and Expenses [Abstract] | ||
FX gains (losses) | $ (3,274) | $ (212) |
Income from sale of intangible assets | 0 | 1,843 |
Other | (122) | 61 |
Total | $ (3,396) | $ 1,692 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |
May 10, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | |
Subsequent Event [Line Items] | |||
Preferred dividends, paid-in-kind | $ 10,201 | $ 8,623 | |
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Preferred dividends, paid-in-kind | $ 9,400 |
Uncategorized Items - sncr-2021
Label | Element | Value |
Accounting Standards Update [Extensible List] | us-gaap_AccountingStandardsUpdateExtensibleList | us-gaap:AccountingStandardsUpdate201613Member |