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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Synchronoss Technologies Inc | NASDAQ:SNCR | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 6.55 | 6.00 | 6.57 | 0 | 12:00:00 |
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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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06-1594540
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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|
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200 Crossing Boulevard, 8th Floor
Bridgewater, New Jersey
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08807
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock, par value $.0001 par value
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SNCR
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The Nasdaq Stock Market, LLC
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Large accelerated filer ¨
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Accelerated filer x
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Non‑accelerated filer ¨
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Smaller reporting company ¨
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Emerging growth company ¨
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Item
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Page No.
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•
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Cloud sync, backup, storage, device set up, content transfer and content engagement for user generated content
|
•
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Advanced, multi-channel messaging peer-to-peer (“P2P”) communications and application-to-person (“A2P”) commerce solutions
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•
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Digital experience management (“Platform as a Service” or “PaaS”) - including digital journey creation, journey design products and IoT systems management technology for Smart Buildings, Smart Cities, etc.
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•
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Communication service providers (“CSP”)
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•
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Cable operators/multi-services operators (“MSO”)
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•
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Media and Technology Companies with multi-customer-facing channels in global markets
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•
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OEMs with embedded connectivity (e.g. smartphones, laptops, tablets and mobile internet devices)
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•
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IoT ecosystem participants who use a variety of technologies (e.g. Blockchain) to enable a wide array of devices (e.g. smart buildings, automobiles, connected homes, etc.) sensors, networks and systems.
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–
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Freemium Cloud: Free Cloud Storage Tier Regardless of Service Plan, or lead with Free Trial then upsell to premium paid storage tiers
|
–
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Bundled Cloud: Value Add Services (i.e., Phone Insurance, Content Services), Include Cloud Storage as Part of Certain Service Plans. These bundles range from Hero Device, Security, Rate Plan and Low Storage Device Bundles
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–
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Premium Cloud: Offer Cloud Storage as a Standalone Product that can be Purchased as an Individual Service for a MRC enabling new revenue streams and opportunities to mine valuable data that will give subscribers accesses to new, beneficial services.
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•
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P2P Advanced Messaging Client: Advanced Messaging supports an advanced P2P client based on RCS and RTC technologies with compelling data (chat), voice, group and video communication features. Our RCS/RTC client creates new means of conversation providing richer communications, viral distribution via subscribers and provides new gateways for commerce that Short Message Service (“SMS”) cannot provide.
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•
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A2P Messaging Commerce: Our A2P solutions are an end-to-end set of capabilities to help Operators, TMT companies and third-party brands establish an AI-driven dialogue with subscribers and consumers. The Advanced Messaging platform aggregates chat bot engines, software development kits (“SDK’s”) and API’s exposing these tools to third-party brands. This functions as an onboarding environment for chat bots, merchandising and advertising to function within a messaging environment. The platform collects user engagement data and through analytics powered dashboards, optimizing bot performance via campaign monitoring that ties into downstream third-party customer relationship management (“CRM”) operations.
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•
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Messaging Marketplace: Our MMP is designed to help Operators effectively interface with A2P Providers in a dynamic and automated digital environment. The MMP platform automates and orchestrates the on-boarding of third-party brands and services who participate in an Operator’s A2P business. MMP provides easy to use tools to register a new A2P provider within an Operator’s marketplace, integrating with Operator systems (commerce, billing), business terms of use, revenue sharing, etc. MMP provides a dynamic, comprehensive dashboard to give A2P providers real-time visibility to audience engagement, commerce transactions and other transaction-based dynamics. MMP allows for A2P providers to upload new
|
•
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Descriptive Analytics: SIP provides comprehensive ability to review historical metrics and trendlines using time series analysis and KPI monitoring services.
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•
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Alert Management: SIP supports the ability to define and create alerts on any metric using a configurable rule builder. These alert rules can be threshold based, historical average based or learning models based. SIP also supports the distribution of these alerts via email, SMS, as well as published in the SIP web portal.
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•
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Predictive Analytics: SIP offers a comprehensive machine learning pipeline flow to process, train, build and select analytic models and deploy them to support specific use cases.
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•
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Analyze: Tabular, pivot and chart-based analysis in pre-defined or ad hoc execution. Ability for the user to create analysis and share through email, an export or within the portal. Several chart types are supported out-of-the-box including column, bar, pie, donut, area, line, dual axis, scatter, and bubble, etc.
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•
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Observe: This module offers interactive dashboards that supports KPIs, scorecards and analysis. Users can consume these dashboards in ad hoc fashion or create dashboards themselves by adding any existing analysis into the canvas.
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•
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Alert: This module support alert visualization, rules configuration, trend analysis and distribution.
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•
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Optimized and manage equipment settings and schedules with bi-directional integration and control within the Synchronoss Smart Buildings portal
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•
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Eliminated software license and maintenance costs associated with existing control point software
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•
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Reduced maintenance and operating costs by quickly integrating multiple sites and buildings across the globe into one portal by leveraging a virtualized cloud delivery model
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•
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Easy visibility across various stakeholders with access and capabilities configured at the user level (executive dashboards, technician features, KPI reports, etc.)
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•
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Increased energy efficiency with energy consumption analysis, energy trending and benchmarking, and identification of energy waste with recommendations for improvement
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•
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Equipment optimization with predictive maintenance, equipment failure prediction to prevent catastrophic damage and breakage, and reduced expense of manual inspections and monitoring
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•
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Observe metric values in real time and near-real time
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•
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Go deeper into information being displayed using easy drill downs and filters
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•
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Ability to quickly create new dashboards on the fly
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•
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Customize escalations for alerts based on type and severity
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•
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Schedule alert windows (snoozing, only portal during non-business hours, etc.)
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•
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Acknowledge alerts remotely within Email or directly in the portal
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•
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Convergence: TMT companies are moving into different spaces (Entertainment, Content, etc.) to pursue new growth.
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•
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Digital Transformation: Customer experience is the key to revenue growth. From Amazon to Alibaba, companies look to digital technology to enhance experiences and cut cost at the same time.
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•
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Regulation: Public distrust in Big Tech is increasing global oversight and government policies to enforce data privacy and identity protection.
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•
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Disintermediation: Opportunity to provide growth-oriented, value-add services has shifted to OTT models.
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•
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Just as Content Management Systems (“CMS”) forever changed web development, low code technology is changing the building and management of digital experiences. Low Code technology simplifies the creation and management of complex customers experiences with simple, easy to use, “drag and drop” interfaces that replace manual code and script writing. This enables more to be done with fewer resources and opens up customer experience creation and management to non-technical or “citizen” developers.
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•
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Starting with the advent of the Chinese OTT app, WeChat, messaging has evolved from email, to text, to chat, to a fully immersive interactive environment where consumers can interface with brands as easily as they do with each other. This has created a huge spike in developers for chat bots and other mini programs that exist within messaging apps. This trend has spread to Japan (Line) and the rest of the world (Facebook, WhatsApp, Snapchat). This all immersive messaging is consuming screen time at such a rate that each large messaging platform has the potential to become its own operating system.
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•
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Perhaps the biggest growth driver of the next five years will be the advent of the 5G Network and the epoch change in business that comes with it. 5G tops out at 10 gigabits per second (“Gbps”). That means 5G is a hundred times faster than the current 4G technology-at its theoretical maximum speed. Perhaps the real value in 5G isn’t the speed but the low latency. The 5G Network was designed around enabling use cases in the IoT marketplace and this network will set the IoT market on its way. Smart Cities are expected to be a major driver and customer of the 5G networks. The amount of data traffic will likely grow faster than the number of connections because of the increase of deployment of video applications on M2M connections and the increased use of applications, such as telemedicine and smart car navigation systems, which require greater bandwidth and lower latency. Moreover, more people are moving into urban environments where IoT and Smart Cities are growing. By 2050, there is expected to be 7.5 billion people living in urban environments, equivalent to the entire world population today. Simply put, cities will be forced to get more efficient causing a greater need for IoT device, ecosystem, network and administrative solutions.
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•
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Driving revenue and margin growth: Our platforms create new premium services for subscription, new monetization of existing channels and new experiences that overperform in sales and other revenue KPIs at lower costs and higher margins.
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•
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Creating new revenue streams: Our platforms and solutions help create entirely new revenue streams from existing or new channels and new forms of monetization that were not previously possible, driving recurring SaaS revenue growth.
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•
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Maximizing value for channel partners: Our platforms and solutions provide complementary and revenue enhancing technology and new distribution opportunities for channel partners in TMT and IoT markets creating high volume, low cost growth.
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•
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Maximizing and expanding our customer base: Our platforms and technologies provide multiple avenues to new growth for our existing customers and partners and give us entry into new customers in the TMT and IoT markets.
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•
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OTT Service & Platform Providers - Apple, Google, Dropbox, Box, Microsoft and Amazon all provide personal cloud services closely integrated to their respective technology or service platforms. Each cloud competitor pursues a similar formula towards different economic ends. In almost every case, the level of paid subscriber adoption is relatively low (less than 25%).
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◦
|
Apple (iCloud) uses cloud to create continuity in the device experience and creates an incentive for Apple customers to remain on iPhones.
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◦
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Google (Google Photos) uses cloud to create engagement opportunities with personal content and harvests meta-data to create new monetization opportunities within its global network.
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◦
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Drop Box is largely platform independent and does pursue premium revenue. However, they mostly focus on super users who use the cloud for business and pay a much higher average revenue per user (“ARPU”) than any other cloud provider.
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◦
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Microsoft (One Drive) uses cloud to help drive the adoption of Office Online across a variety of platforms and devices
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◦
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Amazon (Photos) bundles its cloud into a prime membership and focuses on integration with Alexa
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•
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White Label Platform Providers - The field of platform-independent, white label personal cloud providers has consolidated in recent years with Funambol, One Drive and others competing for Operator distribution deals. However, these providers generally target second and third tier regional operators with low-risk, revenue share business models and do not generally pose a real threat to Tier 1 world-wide Operators.
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•
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Operator Neutrality - Synchronoss has historically managed discrete confidential contracts between competitive Operators world-wide. This puts us in a unique position to play the role of “Switzerland” to Operators who are seeking to band together and create national messaging services to offset their collective loss to OTT Messaging Providers.
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•
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P2P Messaging: Synchronoss’ Advanced Messaging platform works with various Messaging as a Platform (MaaP) configurations across Operators and OEMs, providing key messaging management services for RCS capable handsets and clients.
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•
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A2P Commerce: Our Advanced Messaging platform supports native RCS, SMS and Client-driven RCS solutions providing maximum range across devices and operating systems, giving Operators maximum scale for commerce engagement.
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•
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Brand Ecosystem Management: Our Advanced Messaging platform provides an easy-to-use management portal for brands and Operators to connect commerce to subscribers.
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•
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Operator-Grade Scale and Security: Our track record with massive, secure Operator installations, meeting highly regulated SLA requirements put Synchronoss in a position to look after the interests of each individual Operator as well as collectives.
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•
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System Integrators - Accenture, Amdocs and others engage our customers in long term contracts for services focused on digital transformation.
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•
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CRM and BPM Providers - Major providers of CRM and other systems of record such as Salesforce, Pega Systems and Vlocity are engaging with our customers in engagements that emulate our Digital Experience Platform.
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•
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Internal IT- Our customers and IT developers and system administrators are engaged in products to upgrade existing systems that would conflict with our Digital Experience and IoT platforms.
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•
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Omni-Channel Innovation - Synchronoss DXP creates an environment where companies can centrally create and manage Omni-channel experiences - allowing total control of channel user experiences creating a continuous and intelligent pause and resume experience across channels.
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•
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Simple Systems Integration - Synchronoss DXP integrates into any back-office system APIs, extracting mission-critical data and work flows into its Journey Creator environment - using this data to fuel innovative customer experiences into existing channels. This eliminates the need for companies to “rip and replace” their existing systems in order to innovate, create new revenue and reduce costs.
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•
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Easy to Operate Tools - Synchronoss DXP is a low/no-code, object-oriented environment that centrally collects back office data and uses this data to create compelling, intelligent user experiences across various end channels. The drag-n-drop journey creation experience is a simple, intuitive way to allow IT developers to operate faster and create an environment easy enough for business analysts and channel owners to collaborate.
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•
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Cost Efficient creation of FAANG-like Experiences - Synchronoss DXP allows existing systems to support middleware that sits between the back office and channel user experiences to create a centralized command and control center to author user experiences across touch points. This allows companies to author and manage better, more innovative and more effective customer experiences with a fraction of the manpower necessary in a BAU environment. DXP is essential to check all the boxes of digital transformation: new revenue, innovative experiences and reduced costs.
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(i)
|
certain dividends, repayments and redemptions;
|
(ii)
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any amendment to our certificate of incorporation that adversely effects the rights, preferences, privileges or voting powers of the Series A Preferred Stock;
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(iii)
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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 us;
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(iv)
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changes in the size of our Board of Directors;
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(v)
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any amendment, alteration, modification or repeal of the charter of our Nominating and Corporate Governance Committee of the Board of Directors and related documents; and
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(vi)
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any change in our principal business or the entry into any line of business outside of our existing lines of businesses.
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•
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recruiting, training and retaining technical, finance, marketing and management personnel with the knowledge, skills and experience that our business model requires;
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•
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maintaining high levels of customer satisfaction;
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•
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developing and improving our internal administrative infrastructure, particularly our financial, operational, communications and other internal systems;
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•
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preserving our culture, values and entrepreneurial environment; and
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•
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effectively managing our personnel and operations and effectively communicating to our personnel worldwide our core values, strategies and goals.
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•
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Foreign currency exchange rates;
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•
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Political or social unrest;
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•
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Economic instability or weakness or natural disasters in a specific country or region, including the current economic or health challenges in China and global economic ramifications of Chinese economic difficulties; or instability as a result of Brexit;
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•
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Environmental and trade protection measures and other legal and regulatory requirements, some of which may affect our ability to import our products, to export our products from, or sell our products in various countries;
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•
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Political considerations that affect service provider and government spending patterns;
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•
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Health or similar issues, such as a pandemic or epidemic, including the recent outbreak of a novel strain of coronavirus;
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•
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Difficulties in staffing and managing international operations; or
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•
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Adverse tax consequences, including imposition of withholding or other taxes on our global operations.
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•
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damage to, or failure of, our computer software or hardware or our connections and outsourced service arrangements with third parties;
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•
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errors in the processing of data by our systems;
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•
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computer viruses or software defects;
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•
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physical or electronic break-ins, sabotage, intentional acts of vandalism and similar events;
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•
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fire, cybersecurity attack, terrorist attack or other catastrophic event;
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•
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increased capacity demands or changes in systems requirements of our customers; or
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•
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errors by our employees or third-party service providers.
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•
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loss of customers and market share;
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•
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difficulty attracting or the inability to attract new customers, including in new geographic regions; and
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•
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increased service and support costs and a diversion of resources.
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•
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damage to our reputation;
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•
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loss of or delayed revenue;
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•
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loss of customers;
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•
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warranty claims or litigation;
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•
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loss of or delayed market acceptance of our services; or
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•
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unexpected expenses and diversion of resources to remedy errors.
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•
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diversion of management’s attention from other operational matters;
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•
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inability to identify acquisition candidates on terms acceptable to us or at all, or inability to complete acquisitions as anticipated or at all;
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•
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inability to realize anticipated benefits or commercialize purchased technologies;
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•
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exposure to operational risks, rules and regulations to the extent such activities are located in countries where we have not historically done business;
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•
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unknown, underestimated and/or undisclosed commitments or liabilities;
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•
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incurrence of debt, contingent liabilities or future write-offs of intangible assets or goodwill;
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•
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dilution of ownership of our current stockholders if we issue shares of our common stock;
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•
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higher than expected transaction costs; and
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•
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ineffective integration of operations, technologies, products or employees of the acquired companies.
|
•
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develop or enhance our products and platforms;
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•
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acquire complementary technologies, products or businesses;
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•
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expand operations, in the United States or internationally; or
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•
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respond to competitive pressures or unanticipated working capital requirements.
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•
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authorize the issuance of “blank check” preferred stock that could be issued by our board of directors to thwart a takeover attempt;
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•
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prohibit cumulative voting in the election of directors, which would otherwise allow holders of less than a majority of the stock to elect some directors;
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•
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establish a classified board of directors, as a result of which the successors to the directors whose terms have expired will be elected to serve from the time of election and qualification until the third annual meeting following election;
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require that directors only be removed from office for cause;
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•
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provide that vacancies on the board of directors, including newly created directorships, may be filled only by a majority vote of directors then in office;
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•
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limit who may call special meetings of stockholders;
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•
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prohibit stockholder action by written consent, requiring all actions to be taken at a meeting of the stockholders; and
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•
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establish advance notice requirements for nominating candidates for election to the board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings.
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12/31/14
|
|
12/31/15
|
|
12/31/16
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|
12/31/17
|
|
12/31/18
|
|
12/31/19
|
Synchronoss Technologies, Inc.
|
$100
|
|
$84
|
|
$91
|
|
$21
|
|
$15
|
|
$11
|
Nasdaq Composite Index
|
$100
|
|
$106
|
|
$114
|
|
$146
|
|
$140
|
|
$189
|
Nasdaq Computer Index
|
$100
|
|
$106
|
|
$119
|
|
$166
|
|
$159
|
|
$240
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In thousands, except per share data)
|
||||||||||||||||||
Statements of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net revenues
|
$
|
308,749
|
|
|
$
|
325,839
|
|
|
$
|
402,361
|
|
|
$
|
426,294
|
|
|
$
|
372,561
|
|
Loss from continuing operations
|
(107,788
|
)
|
|
(164,276
|
)
|
|
(129,602
|
)
|
|
(122,604
|
)
|
|
(37,113
|
)
|
|||||
Net loss from continuing operations
|
(103,467
|
)
|
|
(245,280
|
)
|
|
(194,224
|
)
|
|
(93,869
|
)
|
|
(37,782
|
)
|
|||||
Net loss attributable to noncontrolling interests
|
1,126
|
|
|
(8,837
|
)
|
|
(9,291
|
)
|
|
(15,203
|
)
|
|
(628
|
)
|
|||||
Net loss from continuing operations attributable to Synchronoss
|
(136,727
|
)
|
|
(262,036
|
)
|
|
(184,933
|
)
|
|
(78,666
|
)
|
|
(37,154
|
)
|
|||||
Basic:
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations*
|
$
|
(3.36
|
)
|
|
$
|
(6.51
|
)
|
|
$
|
(4.14
|
)
|
|
$
|
(1.81
|
)
|
|
$
|
(0.88
|
)
|
Diluted:
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations*
|
$
|
(3.36
|
)
|
|
$
|
(6.51
|
)
|
|
$
|
(4.14
|
)
|
|
$
|
(1.81
|
)
|
|
$
|
(0.88
|
)
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
40,694
|
|
|
40,277
|
|
|
44,669
|
|
|
43,551
|
|
|
42,284
|
|
|||||
Diluted
|
40,694
|
|
|
40,277
|
|
|
44,669
|
|
|
43,551
|
|
|
42,284
|
|
*
|
Excludes Net loss attributable to redeemable noncontrolling interests and Preferred stock dividend
|
|
As of December 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash, cash equivalents, restricted cash and marketable securities
|
$
|
39,012
|
|
|
$
|
144,748
|
|
|
$
|
249,236
|
|
|
$
|
226,913
|
|
|
$
|
233,864
|
|
Working capital
|
(10,499
|
)
|
|
50,690
|
|
|
178,493
|
|
|
186,488
|
|
|
265,975
|
|
|||||
Total assets
|
532,023
|
|
|
703,255
|
|
|
965,411
|
|
|
1,054,351
|
|
|
931,562
|
|
|||||
Contingent consideration obligation - long term
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
930
|
|
|||||
Lease financing obligation - long-term
|
—
|
|
|
9,494
|
|
|
11,183
|
|
|
12,450
|
|
|
13,391
|
|
|||||
Long-term convertible debt, net of debt issuance costs
|
—
|
|
|
—
|
|
|
227,704
|
|
|
226,291
|
|
|
224,878
|
|
|||||
Redeemable noncontrolling interest
|
12,500
|
|
|
12,500
|
|
|
25,280
|
|
|
25,280
|
|
|
25,280
|
|
|||||
Total stockholders’ equity
|
76,077
|
|
|
188,909
|
|
|
463,587
|
|
|
529,797
|
|
|
505,323
|
|
|
Twelve Months Ended December 31,
|
|
2019 vs 2018
|
|
2018 vs 2017
|
||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
$ Change
|
|
$ Change
|
||||||||||
Net revenues
|
$
|
308,749
|
|
|
$
|
325,839
|
|
|
$
|
402,361
|
|
|
$
|
(17,090
|
)
|
|
$
|
(76,522
|
)
|
Cost of revenues*
|
150,407
|
|
|
158,802
|
|
|
181,453
|
|
|
(8,395
|
)
|
|
(22,651
|
)
|
|||||
Research and development
|
75,568
|
|
|
79,172
|
|
|
90,850
|
|
|
(3,604
|
)
|
|
(11,678
|
)
|
|||||
Selling, general and administrative
|
112,771
|
|
|
122,112
|
|
|
154,037
|
|
|
(9,341
|
)
|
|
(31,925
|
)
|
|||||
Restructuring charges
|
755
|
|
|
12,375
|
|
|
10,739
|
|
|
(11,620
|
)
|
|
1,636
|
|
|||||
Depreciation and amortization
|
77,036
|
|
|
117,654
|
|
|
94,884
|
|
|
(40,618
|
)
|
|
22,770
|
|
|||||
Total costs and expenses
|
416,537
|
|
|
490,115
|
|
|
531,963
|
|
|
(73,578
|
)
|
|
(41,848
|
)
|
|||||
Loss from continuing operations
|
$
|
(107,788
|
)
|
|
$
|
(164,276
|
)
|
|
$
|
(129,602
|
)
|
|
$
|
56,488
|
|
|
$
|
(34,674
|
)
|
*
|
Cost of revenues excludes depreciation and amortization which are shown separately.
|
•
|
a $0.1 million increase in Cloud revenues due to a decrease in transaction revenue of $3.4 million offset by an increase in subscription revenue of $2.8 million and an increase in professional services revenue of $0.7 million.
|
•
|
a $45.6 million decrease in Digital Transformation revenues is primarily driven by changes to the STIN business that led the Company to conclude that its collection of certain STIN receivables is no longer probable. In accordance with ASC 842, the portion of revenue that is no longer deemed collectible is reversed in the current period against revenue. Accordingly, the Company determined a contingency reserve is required, which was included as a reduction of revenue. The year over year change to STIN revenue was in excess of $34.6 million. The remaining change is primarily driven by a decline in business activity.
|
•
|
an increase in Messaging revenue of $28.4 million primarily due to a growth in advanced messaging in North America as well as the continued delivery of an advanced messaging solution to a customer in the Japanese market.
|
•
|
a $68.7 million decrease in Cloud revenues due to:
|
◦
|
a change in the business model from a freemium pricing model to an active premium pricing model, resulting in a $63.7 million decrease;
|
◦
|
a $11.0 million reduction from a decline in business volume related to decisions to sunset certain non-strategic cloud customers; and
|
◦
|
a $6.0 million increase as a result of the adoption of Topic 606.
|
•
|
a $17.7 million decrease in Digital Transformation revenues due to:
|
◦
|
a decrease in transaction revenue of $9.3 million resulting from a decline in business volume of $8.3 million and the divestiture of the SpeechCycle business of $1.0 million;
|
◦
|
a decrease in subscription revenue of $20.3 million resulting from a decline in business volume;
|
◦
|
a decrease in professional services revenue of $6.0 million;
|
◦
|
a decrease in license revenue of $3.0 million; and
|
◦
|
a $20.9 million increase as a result of the adoption of Topic 606.
|
•
|
an increase in Messaging revenue of $9.9 million primarily due to the delivery of an advanced messaging solution to a customer in the Japanese market, an uptick in business volume in our core messaging business and the adoption of Topic 606.
|
|
Twelve Months Ended December 31,
|
|
Change
|
|
Change
|
||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019 vs 2018
|
|
2018 vs 2017
|
||||||||||
Net cash provided by (used in):
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating activities
|
$
|
32,583
|
|
|
$
|
(31,369
|
)
|
|
$
|
(18,248
|
)
|
|
$
|
63,952
|
|
|
$
|
(13,121
|
)
|
Investing activities
|
19,377
|
|
|
(67,282
|
)
|
|
98,245
|
|
|
86,659
|
|
|
(165,527
|
)
|
|||||
Financing activities
|
(121,257
|
)
|
|
(35,885
|
)
|
|
(35,664
|
)
|
|
(85,372
|
)
|
|
(221
|
)
|
|
|
Payments Due by Period
|
||||||||||||||||||
|
|
Total
|
|
2020
|
|
2021-2023
|
|
2024-2025
|
|
Thereafter
|
||||||||||
Operating lease obligations
|
|
$
|
93,075
|
|
|
$
|
13,639
|
|
|
$
|
35,302
|
|
|
$
|
19,806
|
|
|
$
|
24,328
|
|
Purchase obligations*
|
|
30,977
|
|
|
25,275
|
|
|
5,702
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
$
|
124,052
|
|
|
$
|
38,914
|
|
|
$
|
41,004
|
|
|
$
|
19,806
|
|
|
$
|
24,328
|
|
*
|
Amount represents obligations associated with colocation agreements and other customer delivery related purchase obligations.
|
|
|
|
|
2019 Impairment Test
|
|||||||||
Reporting Unit
|
Discount Rate
|
Growth rate range
|
Terminal Growth Rate
|
Goodwill
|
|
Fair Value Exceeds Carrying Value by
|
|
Fair Value method
|
|||||
Core
|
14.0
|
%
|
2.0 - 18.0%
|
2.0
|
%
|
$
|
220,367
|
|
|
72.0
|
%
|
|
Income Approach, Market Approach
|
|
Page No.
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
38,990
|
|
|
$
|
103,771
|
|
Restricted cash
|
11
|
|
|
6,089
|
|
||
Marketable securities, current
|
11
|
|
|
28,230
|
|
||
Accounts receivable, net of allowances for bad debt of $1,864 and $4,599 at December 31, 2019 and December 31, 2018, respectively*
|
65,863
|
|
|
102,798
|
|
||
Prepaid expenses
|
33,230
|
|
|
45,058
|
|
||
Other current assets
|
4,792
|
|
|
8,508
|
|
||
Total current assets
|
142,897
|
|
|
294,454
|
|
||
Marketable securities, non-current
|
—
|
|
|
6,658
|
|
||
Property and equipment, net
|
26,525
|
|
|
67,937
|
|
||
Operating lease right-of-use assets
|
53,965
|
|
|
—
|
|
||
Goodwill
|
222,969
|
|
|
224,899
|
|
||
Intangible assets, net
|
77,613
|
|
|
98,706
|
|
||
Other assets
|
8,054
|
|
|
8,982
|
|
||
Equity method investment
|
—
|
|
|
1,619
|
|
||
Total assets
|
$
|
532,023
|
|
|
$
|
703,255
|
|
|
|||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
21,551
|
|
|
$
|
13,576
|
|
Accrued expenses
|
65,987
|
|
|
59,545
|
|
||
Deferred revenues, current
|
65,858
|
|
|
57,101
|
|
||
Short-term convertible debt, net of debt issuance costs
|
—
|
|
|
113,542
|
|
||
Total current liabilities
|
153,396
|
|
|
243,764
|
|
||
Lease financing obligation
|
—
|
|
|
9,494
|
|
||
Operating lease liabilities, non-current
|
60,976
|
|
|
—
|
|
||
Deferred tax liabilities
|
1,679
|
|
|
1,347
|
|
||
Deferred revenues, non-current
|
21,941
|
|
|
59,841
|
|
||
Other non-current liabilities
|
4,589
|
|
|
10,797
|
|
||
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; 217 shares issued and outstanding at December 31, 2019
|
200,865
|
|
|
176,603
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Common stock, $0.0001 par value; 100,000 shares authorized, 51,704 and 49,836 shares issued; 44,542 and 42,674 outstanding at December 31, 2019 and December 31, 2018, respectively
|
5
|
|
|
5
|
|
||
Treasury stock, at cost (7,162 and 7,162 shares at December 31, 2019 and December 31, 2018, respectively)
|
(82,087
|
)
|
|
(82,087
|
)
|
||
Additional paid-in capital
|
525,739
|
|
|
534,673
|
|
||
Accumulated other comprehensive loss
|
(33,261
|
)
|
|
(30,383
|
)
|
||
Accumulated deficit
|
(334,319
|
)
|
|
(233,299
|
)
|
||
Total stockholders’ equity
|
76,077
|
|
|
188,909
|
|
||
Total liabilities and stockholders’ equity
|
$
|
532,023
|
|
|
$
|
703,255
|
|
*
|
See Note 5. Investments in Affiliates and Related Transactions for related party transactions reflected in this account.
|
|
|
Twelve Months Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
|
||||||
Net revenues
|
|
$
|
308,749
|
|
|
$
|
325,839
|
|
|
$
|
402,361
|
|
Costs and expenses:
|
|
|
|
|
|
|
||||||
Cost of revenues*
|
|
150,407
|
|
|
158,802
|
|
|
181,453
|
|
|||
Research and development
|
|
75,568
|
|
|
79,172
|
|
|
90,850
|
|
|||
Selling, general and administrative
|
|
112,771
|
|
|
122,112
|
|
|
154,037
|
|
|||
Restructuring charges
|
|
755
|
|
|
12,375
|
|
|
10,739
|
|
|||
Depreciation and amortization
|
|
77,036
|
|
|
117,654
|
|
|
94,884
|
|
|||
Total costs and expenses
|
|
416,537
|
|
|
490,115
|
|
|
531,963
|
|
|||
Loss from continuing operations
|
|
(107,788
|
)
|
|
(164,276
|
)
|
|
(129,602
|
)
|
|||
Interest income
|
|
1,258
|
|
|
7,770
|
|
|
12,502
|
|
|||
Interest expense
|
|
(1,355
|
)
|
|
(4,911
|
)
|
|
(55,771
|
)
|
|||
Gain (loss) on extinguishment of debt
|
|
822
|
|
|
1,760
|
|
|
(29,413
|
)
|
|||
Other Income (expense), net
|
|
7,389
|
|
|
(74,917
|
)
|
|
(17,678
|
)
|
|||
Equity method investment loss
|
|
(1,619
|
)
|
|
(28,600
|
)
|
|
(9,125
|
)
|
|||
Loss from continuing operations, before taxes
|
|
(101,293
|
)
|
|
(263,174
|
)
|
|
(229,087
|
)
|
|||
Benefit (provision) for income taxes
|
|
(2,174
|
)
|
|
17,894
|
|
|
34,863
|
|
|||
Net loss from continuing operations
|
|
(103,467
|
)
|
|
(245,280
|
)
|
|
(194,224
|
)
|
|||
Net income from discontinued operations, net of tax**
|
|
—
|
|
|
18,288
|
|
|
75,495
|
|
|||
Net loss
|
|
(103,467
|
)
|
|
(226,992
|
)
|
|
(118,729
|
)
|
|||
Net (income) loss attributable to redeemable noncontrolling interests
|
|
(1,126
|
)
|
|
8,837
|
|
|
9,291
|
|
|||
Preferred stock dividend
|
|
(32,134
|
)
|
|
(25,593
|
)
|
|
—
|
|
|||
Net loss attributable to Synchronoss
|
|
$
|
(136,727
|
)
|
|
$
|
(243,748
|
)
|
|
$
|
(109,438
|
)
|
Earnings per share
|
|
|
|
|
|
|
||||||
Basic:
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
(3.36
|
)
|
|
$
|
(6.51
|
)
|
|
$
|
(4.14
|
)
|
Discontinued operations**
|
|
—
|
|
|
0.46
|
|
|
1.69
|
|
|||
|
|
$
|
(3.36
|
)
|
|
$
|
(6.05
|
)
|
|
$
|
(2.45
|
)
|
Diluted:
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
(3.36
|
)
|
|
$
|
(6.51
|
)
|
|
$
|
(4.14
|
)
|
Discontinued operations**
|
|
—
|
|
|
0.46
|
|
|
1.69
|
|
|||
|
|
$
|
(3.36
|
)
|
|
$
|
(6.05
|
)
|
|
$
|
(2.45
|
)
|
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
||||||
Basic
|
|
40,694
|
|
|
40,277
|
|
|
44,669
|
|
|||
Diluted
|
|
40,694
|
|
|
40,277
|
|
|
44,669
|
|
*
|
Cost of revenues excludes depreciation and amortization which are shown separately.
|
**
|
See Note 3. Acquisitions and Divestitures for transactions classified as discontinued operations
|
|
|
Twelve Months Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net loss
|
|
$
|
(103,467
|
)
|
|
$
|
(226,992
|
)
|
|
$
|
(118,729
|
)
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
|
(1,768
|
)
|
|
(6,152
|
)
|
|
17,027
|
|
|||
Unrealized loss on available for sale securities
|
|
(710
|
)
|
|
(37
|
)
|
|
18
|
|
|||
Net loss on intra-entity foreign currency transactions
|
|
(400
|
)
|
|
(821
|
)
|
|
1,932
|
|
|||
Total other comprehensive income (loss)
|
|
(2,878
|
)
|
|
(7,010
|
)
|
|
18,977
|
|
|||
Comprehensive loss
|
|
(106,345
|
)
|
|
(234,002
|
)
|
|
(99,752
|
)
|
|||
Comprehensive (income) loss attributable to redeemable noncontrolling interests
|
|
(1,126
|
)
|
|
8,837
|
|
|
9,291
|
|
|||
Comprehensive loss attributable to Synchronoss
|
|
$
|
(107,471
|
)
|
|
$
|
(225,165
|
)
|
|
$
|
(90,461
|
)
|
|
Common Stock
|
|
Treasury Stock
|
|
Additional
|
|
Accumulative Other
|
|
|
|
Total
|
||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Paid-In Capital
|
|
Comprehensive Income (Loss)
|
|
Accumulated deficit
|
|
Stockholders' Equity
|
||||||||||||||
Balance at December 31, 2016
|
50,388
|
|
|
$
|
5
|
|
|
(5,096
|
)
|
|
$
|
(106,631
|
)
|
|
$
|
571,153
|
|
|
$
|
(42,350
|
)
|
|
$
|
107,620
|
|
|
$
|
529,797
|
|
Cumulative effect of adjustment to retained earnings (ASU Adoption)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,196
|
)
|
|
(3,196
|
)
|
||||||
Stock based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28,446
|
|
|
—
|
|
|
—
|
|
|
28,446
|
|
||||||
Issuance of restricted stock
|
1,565
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Issuance of common stock on exercise of options
|
104
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,460
|
|
|
—
|
|
|
—
|
|
|
2,460
|
|
||||||
ESPP compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
495
|
|
|
—
|
|
|
—
|
|
|
495
|
|
||||||
Sale of treasury stock in connection with an employee stock purchase plan
|
—
|
|
|
—
|
|
|
36
|
|
|
1,047
|
|
|
|
|
—
|
|
|
—
|
|
|
1,047
|
|
|||||||
Shares withheld for taxes in connection with issuance of restricted stock
|
(29
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(442
|
)
|
|
—
|
|
|
—
|
|
|
(442
|
)
|
||||||
Fair value of awards assumed on acquisition
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,701
|
|
|
—
|
|
|
—
|
|
|
4,701
|
|
||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31
|
|
|
—
|
|
|
|
|
31
|
|
|||||||
Adjustments to redemption value of noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,291
|
)
|
|
—
|
|
|
—
|
|
|
(9,291
|
)
|
||||||
Net loss attributable to Synchronoss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(109,438
|
)
|
|
(109,438
|
)
|
||||||
Total other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
18,977
|
|
|
—
|
|
|
18,977
|
|
|||||||
Balance at December 31, 2017
|
52,028
|
|
|
$
|
5
|
|
|
(5,060
|
)
|
|
$
|
(105,584
|
)
|
|
$
|
597,553
|
|
|
$
|
(23,373
|
)
|
|
$
|
(5,014
|
)
|
|
$
|
463,587
|
|
|
Common Stock
|
|
Treasury Stock
|
|
Additional
|
|
Accumulative Other
|
|
|
|
Total
|
||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Paid-In Capital
|
|
Comprehensive Income (Loss)
|
|
Accumulated deficit
|
|
Stockholders' Equity
|
||||||||||||||
Balance at December 31, 2017
|
52,028
|
|
|
$
|
5
|
|
|
(5,060
|
)
|
|
$
|
(105,584
|
)
|
|
$
|
597,553
|
|
|
$
|
(23,373
|
)
|
|
$
|
(5,014
|
)
|
|
$
|
463,587
|
|
Stock based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27,201
|
|
|
—
|
|
|
—
|
|
|
27,201
|
|
||||||
Issuance of restricted stock
|
1,707
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Preferred stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,331
|
)
|
|
—
|
|
|
—
|
|
|
(24,331
|
)
|
||||||
Amortization of preferred stock issuance costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,262
|
)
|
|
—
|
|
|
—
|
|
|
(1,262
|
)
|
||||||
Retirement of treasury stock
|
(3,893
|
)
|
|
—
|
|
|
3,893
|
|
|
68,327
|
|
|
(68,327
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Shares withheld for taxes in connection with issuance of restricted stock
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(76
|
)
|
|
—
|
|
|
—
|
|
|
(76
|
)
|
||||||
Treasury shares received in connection with PIPE Purchase Agreement
|
—
|
|
|
—
|
|
|
(5,995
|
)
|
|
(44,830
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(44,830
|
)
|
||||||
Net loss attributable to Synchronoss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(218,155
|
)
|
|
(218,155
|
)
|
||||||
Non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,943
|
|
|
—
|
|
|
—
|
|
|
3,943
|
|
||||||
Total other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,059
|
)
|
|
—
|
|
|
(7,059
|
)
|
||||||
ASC 606 revenue recognition implementation impact
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
49
|
|
|
(10,130
|
)
|
|
(10,081
|
)
|
||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(28
|
)
|
|
—
|
|
|
—
|
|
|
(28
|
)
|
||||||
Balance at December 31, 2018
|
49,836
|
|
|
$
|
5
|
|
|
(7,162
|
)
|
|
$
|
(82,087
|
)
|
|
$
|
534,673
|
|
|
$
|
(30,383
|
)
|
|
$
|
(233,299
|
)
|
|
$
|
188,909
|
|
|
Common Stock
|
|
Treasury Stock
|
|
Additional
|
|
Accumulative Other
|
|
|
|
Total
|
||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Paid-In Capital
|
|
Comprehensive Income (Loss)
|
|
Accumulated deficit
|
|
Stockholders' Equity
|
||||||||||||||
Balance at December 31, 2018
|
49,836
|
|
|
$
|
5
|
|
|
(7,162
|
)
|
|
$
|
(82,087
|
)
|
|
$
|
534,673
|
|
|
$
|
(30,383
|
)
|
|
$
|
(233,299
|
)
|
|
$
|
188,909
|
|
Stock based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,050
|
|
|
—
|
|
|
—
|
|
|
22,050
|
|
||||||
Issuance of restricted stock
|
1,863
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Preferred stock dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(29,877
|
)
|
|
—
|
|
|
—
|
|
|
(29,877
|
)
|
||||||
Amortization of preferred stock issuance costs
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
(2,257
|
)
|
|
|
|
|
|
(2,257
|
)
|
|||||||||
Issuance of common stock on exercise of options
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39
|
|
|
—
|
|
|
—
|
|
|
39
|
|
||||||
Shares withheld for taxes in connection with issuance of restricted stock
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
||||||
ASC 842 Lease implementation Adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,574
|
|
|
3,574
|
|
||||||
Net loss attributable to Synchronoss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(104,593
|
)
|
|
(104,593
|
)
|
||||||
Non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,126
|
|
|
—
|
|
|
—
|
|
|
1,126
|
|
||||||
Total other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,878
|
)
|
|
—
|
|
|
(2,878
|
)
|
||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
||||||
Balance at December 31, 2019
|
51,704
|
|
|
$
|
5
|
|
|
(7,162
|
)
|
|
$
|
(82,087
|
)
|
|
$
|
525,739
|
|
|
$
|
(33,261
|
)
|
|
$
|
(334,319
|
)
|
|
$
|
76,077
|
|
|
Twelve Months Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Operating activities:
|
|
|
|
|
|
||||||
Net loss continuing operations
|
$
|
(103,467
|
)
|
|
$
|
(245,280
|
)
|
|
$
|
(194,224
|
)
|
Net loss from discontinued operations
|
—
|
|
|
—
|
|
|
75,495
|
|
|||
Gain (loss) on Sale of discontinued operations, net of tax
|
—
|
|
|
18,288
|
|
|
(122,842
|
)
|
|||
|
|
|
|
|
|
||||||
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
77,037
|
|
|
97,092
|
|
|
93,924
|
|
|||
Goodwill impairment
|
—
|
|
|
9,100
|
|
|
—
|
|
|||
Impairment of long-lived assets and capitalized software
|
—
|
|
|
11,462
|
|
|
960
|
|
|||
Change in fair value of financial instruments
|
(163
|
)
|
|
(3,849
|
)
|
|
4,367
|
|
|||
Amortization of debt issuance costs
|
285
|
|
|
1,294
|
|
|
12,771
|
|
|||
(Gain) loss on extinguishment of debt
|
(822
|
)
|
|
(1,760
|
)
|
|
29,413
|
|
|||
Accrued PIK interest
|
—
|
|
|
(7,037
|
)
|
|
(12,090
|
)
|
|||
Allowance for loan losses
|
—
|
|
|
84,314
|
|
|
14,562
|
|
|||
Loss (earnings) from Equity method investments
|
1,619
|
|
|
28,600
|
|
|
9,125
|
|
|||
(Gain) loss on Disposals of fixed assets
|
15
|
|
|
277
|
|
|
(4,947
|
)
|
|||
Discontinued operations non-cash and working capital adjustments*
|
—
|
|
|
—
|
|
|
48,647
|
|
|||
(Gain) loss on Disposals of intangible assets
|
(5,429
|
)
|
|
—
|
|
|
—
|
|
|||
Amortization of bond premium
|
(34
|
)
|
|
107
|
|
|
244
|
|
|||
Deferred income taxes
|
357
|
|
|
(12,350
|
)
|
|
19,243
|
|
|||
Non-cash interest on leased facility
|
—
|
|
|
|
|
1,203
|
|
||||
Stock-based compensation
|
22,287
|
|
|
27,604
|
|
|
22,495
|
|
|||
Contingent consideration obligation
|
—
|
|
|
—
|
|
|
(2,711
|
)
|
|||
Cumulative adjustment to STI receivable
|
26,044
|
|
|
—
|
|
|
|
||||
ROU Asset Impairment
|
6,268
|
|
|
—
|
|
|
|
||||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable, net of allowance for doubtful accounts
|
10,891
|
|
|
(21,521
|
)
|
|
29,283
|
|
|||
Prepaid expenses and other current assets
|
18,209
|
|
|
(5,315
|
)
|
|
(5,513
|
)
|
|||
Other assets
|
1,710
|
|
|
973
|
|
|
3,237
|
|
|||
Accounts payable
|
8,879
|
|
|
6,846
|
|
|
(9,098
|
)
|
|||
Accrued expenses
|
2,115
|
|
|
(18,068
|
)
|
|
(4,949
|
)
|
|||
Other liabilities
|
(4,362
|
)
|
|
(4,675
|
)
|
|
(3,337
|
)
|
|||
Deferred revenues
|
(28,856
|
)
|
|
2,529
|
|
|
(23,506
|
)
|
|||
Net cash provided by (used in) operating activities
|
32,583
|
|
|
(31,369
|
)
|
|
(18,248
|
)
|
|||
|
|
|
|
|
|
||||||
Investing activities:
|
|
|
|
|
|
||||||
Purchases of fixed assets
|
(8,183
|
)
|
|
(11,656
|
)
|
|
(12,151
|
)
|
|||
Purchases of intangible assets and capitalized software
|
(13,008
|
)
|
|
(14,372
|
)
|
|
(9,119
|
)
|
|||
Proceeds from the sale of intangibles
|
5,429
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from the sale of Speechcycle
|
—
|
|
|
—
|
|
|
13,500
|
|
|||
Purchases of marketable securities available for sale
|
(51,745
|
)
|
|
(36,789
|
)
|
|
(219
|
)
|
|||
Maturity of marketable securities available for sale
|
86,884
|
|
|
4,865
|
|
|
12,371
|
|
|||
Proceeds from the sale of discontinued operations
|
—
|
|
|
—
|
|
|
928,171
|
|
|||
Equity investment
|
—
|
|
|
404
|
|
|
608
|
|
|||
Investing activities in discontinued operations*
|
—
|
|
|
—
|
|
|
(13,721
|
)
|
|||
Investment in note receivable
|
—
|
|
|
—
|
|
|
(6,187
|
)
|
|||
Business acquired, net of cash
|
—
|
|
|
(9,734
|
)
|
|
(815,008
|
)
|
|||
Net cash provided by (used in) investing activities
|
19,377
|
|
|
(67,282
|
)
|
|
98,245
|
|
|||
|
|
|
|
|
|
Financing activities:
|
|
|
|
|
|
||||||
Share-based compensation-related proceeds, net of taxes paid on withholding shares
|
39
|
|
|
—
|
|
|
2,584
|
|
|||
Taxes paid on withholding shares
|
(15
|
)
|
|
—
|
|
|
(442
|
)
|
|||
Payments on contingent consideration
|
—
|
|
|
—
|
|
|
(122
|
)
|
|||
Debt issuance costs related to the Credit Facility
|
—
|
|
|
—
|
|
|
(3,692
|
)
|
|||
Debt issuance costs related to long-term debt
|
—
|
|
|
—
|
|
|
(19,887
|
)
|
|||
Debt amendment costs related to long-term debt
|
—
|
|
|
—
|
|
|
(16,776
|
)
|
|||
Proceeds from issuance of convertible notes
|
—
|
|
|
—
|
|
|
900,000
|
|
|||
Retirement of Convertible Senior Notes & related costs
|
(113,006
|
)
|
|
(113,696
|
)
|
|
—
|
|
|||
Repayment of long-term debt
|
—
|
|
|
—
|
|
|
(900,000
|
)
|
|||
Borrowings on revolving line of credit
|
2,000
|
|
|
—
|
|
|
|
||||
Repayment of revolving line of credit
|
(2,000
|
)
|
|
—
|
|
|
(29,000
|
)
|
|||
Excess tax benefits from stock option exercises
|
—
|
|
|
—
|
|
|
17
|
|
|||
Proceeds from the sale of treasury stock in connection with an employee stock purchase plan
|
—
|
|
|
—
|
|
|
1,047
|
|
|||
Proceeds from issuance of preferred stock
|
—
|
|
|
86,220
|
|
|
—
|
|
|||
Preferred dividend payment
|
(7,075
|
)
|
|
(7,075
|
)
|
|
—
|
|
|||
Proceeds from mandatorily redeemable financial instruments
|
—
|
|
|
—
|
|
|
33,592
|
|
|||
Payments on capital obligations
|
(1,200
|
)
|
|
(1,334
|
)
|
|
(2,985
|
)
|
|||
Net cash used in financing activities
|
(121,257
|
)
|
|
(35,885
|
)
|
|
(35,664
|
)
|
|||
Effect of exchange rate changes on cash
|
(1,562
|
)
|
|
(1,729
|
)
|
|
(9,641
|
)
|
|||
Net decrease in cash and cash equivalents
|
(70,859
|
)
|
|
(136,265
|
)
|
|
34,692
|
|
|||
Cash and cash equivalents, beginning of period
|
109,860
|
|
|
246,125
|
|
|
211,433
|
|
|||
Cash and cash equivalents, end of period
|
$
|
39,001
|
|
|
$
|
109,860
|
|
|
$
|
246,125
|
|
|
|
|
|
|
|
||||||
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
||||||
Cash paid for income taxes
|
$
|
3,598
|
|
|
$
|
22,549
|
|
|
$
|
7,612
|
|
Cash refund for income taxes
|
$
|
20,733
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cash paid for interest
|
$
|
666
|
|
|
$
|
3,258
|
|
|
$
|
55,957
|
|
|
|
|
|
|
|
||||||
Supplemental disclosures of non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Paid in kind dividends on Series A Convertible Participating Perpetual Preferred Stock
|
$
|
22,005
|
|
|
$
|
7,075
|
|
|
$
|
—
|
|
Issuance of common stock in connection with Intralinks acquisition
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,700
|
|
|
|
|
|
|
|
||||||
Cash and cash equivalents per Consolidated Balance Sheets
|
$
|
38,990
|
|
|
$
|
103,771
|
|
|
$
|
156,299
|
|
Restricted cash
|
$
|
11
|
|
|
$
|
6,089
|
|
|
$
|
89,826
|
|
Total cash, cash equivalents and restricted cash
|
$
|
39,001
|
|
|
$
|
109,860
|
|
|
$
|
246,125
|
|
*
|
See Note 5. Investments in Affiliates and Related Transactions for related party transactions reflected in this account.
|
•
|
Digital experience management (Platform as a Service) - including digital journey creation, and journey design products that use analytics that power digital advisor products for IT and Business Channel Owners
|
•
|
Cloud sync, backup, storage, device set up, content transfer and content engagement for user generated content
|
•
|
Advanced, multi-channel messaging peer-to-peer (“P2P”) communications and application-to-person (“A2P”) commerce solutions
|
•
|
IoT management technology for Smart Cities, Smart Buildings and more
|
|
|
Year ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Unamortized software development costs
|
|
$
|
22,240
|
|
|
$
|
17,490
|
|
|
$
|
11,695
|
|
Software development amortization expense
|
|
8,258
|
|
|
8,123
|
|
|
3,178
|
|
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 is still evaluating these changes and does not anticipate any material impact on the Company’s consolidated financial position or results of operations upon adoption.
|
Date of adoption: January 1, 2021.
|
|
|
|
|
|
|
Twelve Months Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net gain (loss) on foreign currency translations
|
|
$
|
31
|
|
|
$
|
(478
|
)
|
|
$
|
(4,952
|
)
|
Standard
|
|
Description
|
|
Effect on the financial statements
|
Update 2018-07—Compensation—Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting
|
|
In June 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-07, regarding ASC Topic 718 “Compensation - Stock Compensation,” which largely aligns the accounting for share-based compensation for non-employees with employees. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606.
|
|
The adoption of this standard did not have a material effect on the Company’s consolidated financial statements.
|
Date of adoption: January 1, 2019.
|
|
|
|
|
ASU 2018-15 Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40): Cloud Computing Arrangements
|
|
In August 2018, the FASB issued final guidance requiring a customer in a cloud computing arrangement that is a service contract to follow the internal use software guidance in Accounting Standards Codification (“ASC”) 350-402 Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40) to determine which implementation costs to capitalize as assets. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019. Early adoption of the amendments is permitted, including adoption in any interim period, for all entities and should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption.
|
|
The adoption of this standard did not have a material effect on the Company’s consolidated financial statements.
|
Date of adoption: January 1, 2019.
|
|
|
|
|
Performance Obligation
|
|
When Performance Obligation is Typically Satisfied
|
|
When Payment is Typically Due
|
|
How Standalone Selling Price is Typically Estimated
|
Software License
|
|
|
|
|
|
|
Software License
|
|
Upon shipment or made available for download (point in time)
|
|
Within 90 days of delivery
|
|
Observable transactions or residual approach when prices are highly variable or uncertain
|
Software License with significant customization
|
|
Over the performance of the customization and installation of the software (over time)
|
|
Within 90 days of services
being performed
|
|
Residual approach
|
Hosting Services
|
|
As hosting services are provided (over time)
|
|
Within 90 days of services
being provided
|
|
Estimated using a cost-plus margin approach
|
Professional Services
|
|
|
|
|
|
|
Consulting
|
|
As work is performed (over time)
|
|
Within 90 days of services
being performed
|
|
Observable transactions
|
Customization
|
|
SaaS: Over the remaining term of the SaaS agreement
License: Over the performance of the customization and installation of the software (over time)
|
|
Within 90 days of services
being performed
|
|
Observable transactions
|
Transaction Services
|
|
As transaction is processed (over time)
|
|
Within 90 days of transaction
|
|
Observable transactions
|
Subscription Services
|
|
|
|
|
|
|
Customer Support
|
|
Ratably over the course of the support contract
(over time)
|
|
Within 90 days of the start of the contract period
|
|
Observable transactions
|
SaaS
|
|
Over the course of the SaaS service once the system is available for use
(over time)
|
|
Within 90 days of services
being performed
|
|
Estimated using a cost-plus margin approach
|
|
Twelve Months Ended December 31, 2019
|
|
Twelve Months Ended December 31, 2018
|
||||||||||||||||||||||||||||
|
Cloud
|
|
Digital
|
|
Messaging
|
|
Total
|
|
Cloud
|
|
Digital
|
|
Messaging
|
|
Total
|
||||||||||||||||
Geography
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Americas
|
$
|
155,076
|
|
|
$
|
46,765
|
|
|
$
|
30,342
|
|
|
$
|
232,183
|
|
|
$
|
153,649
|
|
|
$
|
86,422
|
|
|
$
|
9,603
|
|
|
$
|
249,674
|
|
APAC
|
—
|
|
|
3,658
|
|
|
45,403
|
|
|
49,061
|
|
|
—
|
|
|
5,954
|
|
|
35,397
|
|
|
41,351
|
|
||||||||
EMEA
|
7,620
|
|
|
3,379
|
|
|
16,506
|
|
|
27,505
|
|
|
8,921
|
|
|
7,018
|
|
|
18,875
|
|
|
34,814
|
|
||||||||
Total
|
$
|
162,696
|
|
|
$
|
53,802
|
|
|
$
|
92,251
|
|
|
$
|
308,749
|
|
|
$
|
162,570
|
|
|
$
|
99,394
|
|
|
$
|
63,875
|
|
|
$
|
325,839
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Service Line
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Professional Services
|
$
|
14,939
|
|
|
$
|
16,576
|
|
|
$
|
30,923
|
|
|
$
|
62,438
|
|
|
$
|
14,232
|
|
|
$
|
18,383
|
|
|
$
|
11,539
|
|
|
$
|
44,154
|
|
Transaction Services
|
5,606
|
|
|
6,690
|
|
|
—
|
|
|
12,296
|
|
|
9,025
|
|
|
9,706
|
|
|
—
|
|
|
18,731
|
|
||||||||
Subscription Services
|
141,941
|
|
|
27,577
|
|
|
37,785
|
|
|
207,303
|
|
|
139,100
|
|
|
67,623
|
|
|
33,071
|
|
|
239,794
|
|
||||||||
License
|
210
|
|
|
2,959
|
|
|
23,543
|
|
|
26,712
|
|
|
213
|
|
|
3,682
|
|
|
19,265
|
|
|
23,160
|
|
||||||||
Total
|
$
|
162,696
|
|
|
$
|
53,802
|
|
|
$
|
92,251
|
|
|
$
|
308,749
|
|
|
$
|
162,570
|
|
|
$
|
99,394
|
|
|
$
|
63,875
|
|
|
$
|
325,839
|
|
*
|
During the period, changes to the STIN business led the Company to conclude that its collection of certain STIN receivables is no longer probable. The Company has updated its collectability assessment in accordance with ASC 842 and concluded that a contingency reserve is required, which included a reduction of digital revenue in America in the amount $26.0 million. For further details, see Note 5. Investments in Affiliates and Related Transactions of the Notes to Consolidated Financial Statements of this Form 10-K.
|
|
Contract Liabilities*
|
||
Balance - January 1, 2019
|
$
|
116,942
|
|
Revenue recognized in the period
|
(295,817
|
)
|
|
Amounts billed but not recognized as revenue
|
266,674
|
|
|
Balance - December 31, 2019
|
$
|
87,799
|
|
*
|
Comprised of Deferred Revenue
|
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.
|
Standard
|
|
Description
|
|
Effect on the financial statements
|
Update 2018-17-Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities
|
|
The update is intended to improve general purpose financial reporting by considering indirect interests held through related parties in common control arrangements on a proportional basis for determining whether fees paid to decision makers and service providers are variable interests. The amendments in ASU 2018-17 will be effective for fiscal years beginning after December 15, 2019, with early adoption permitted.
|
|
The Company is currently evaluating the impact of the adoption of this ASU but does not expect that the pending adoption of this ASU will have a material effect on its consolidated financial statements.
|
Date of adoption: January 1, 2020.
|
|
|
|
|
ASU 2016-13, ASU 2019-4 Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments
|
|
In June 2016, the FASB issued ASU 2016-13 which replaces the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The ASU is effective for public companies in annual periods beginning after December 15, 2019, and interim periods within those years. Early adoption is permitted beginning after December 15, 2018 and interim periods within those years.
|
|
The Company is currently evaluating the impact of the adoption of this ASU but does not expect that the pending adoption of this ASU will have a material effect on its consolidated financial statements.
|
Date of adoption: January 1, 2020.
|
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Revenues:
|
|
|
|
|
|
|
||||||
Domestic
|
|
$
|
232,183
|
|
|
$
|
249,674
|
|
|
$
|
334,970
|
|
Foreign
|
|
76,566
|
|
|
76,165
|
|
|
67,391
|
|
|||
Total
|
|
$
|
308,749
|
|
|
$
|
325,839
|
|
|
$
|
402,361
|
|
|
|
Year Ended December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Property and equipment, net:
|
|
|
|
|
||||
Domestic
|
|
$
|
19,278
|
|
|
$
|
59,054
|
|
Foreign
|
|
7,247
|
|
|
8,883
|
|
||
Total
|
|
$
|
26,525
|
|
|
$
|
67,937
|
|
|
|
2017
|
||
Net revenues
|
|
$
|
213,178
|
|
Costs and expenses:
|
|
|
||
Cost of services
|
|
35,393
|
|
|
Research and development
|
|
19,148
|
|
|
Selling, general and administrative
|
|
114,737
|
|
|
Restructuring
|
|
15,995
|
|
|
Depreciation and amortization
|
|
41,780
|
|
|
Total costs and expenses
|
|
227,053
|
|
|
Other income, net
|
|
1,448
|
|
|
Loss from discontinued operations
|
|
(12,427
|
)
|
|
Gain on sale of discontinued operations
|
|
122,842
|
|
|
Income from discontinued operations before taxes
|
|
110,415
|
|
|
Provision for income taxes
|
|
(34,920
|
)
|
|
Discontinued operations, net of taxes
|
|
$
|
75,495
|
|
•
|
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.
|
|
December 31, 2019
|
||||||||||||||
|
Total
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash, cash equivalents and restricted cash (1)
|
$
|
39,001
|
|
|
$
|
39,001
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Marketable securities-short term (2)
|
11
|
|
|
—
|
|
|
11
|
|
|
—
|
|
||||
Marketable securities-long term (2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total assets
|
$
|
39,012
|
|
|
$
|
39,001
|
|
|
$
|
11
|
|
|
$
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Total liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Temporary equity
|
|
|
|
|
|
|
|
||||||||
Redeemable noncontrolling interests (3)
|
$
|
12,500
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,500
|
|
Total temporary equity
|
$
|
12,500
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,500
|
|
|
December 31, 2018
|
||||||||||||||
|
Total
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash, cash equivalents and restricted cash (1)
|
$
|
109,860
|
|
|
$
|
109,860
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Marketable securities-short term (2)
|
28,230
|
|
|
—
|
|
|
28,230
|
|
|
—
|
|
||||
Marketable securities-long term (2)
|
6,658
|
|
|
—
|
|
|
6,658
|
|
|
—
|
|
||||
Total assets
|
$
|
144,748
|
|
|
$
|
109,860
|
|
|
$
|
34,888
|
|
|
$
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Total liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Temporary Equity
|
|
|
|
|
|
|
|
||||||||
Redeemable noncontrolling interests (3)
|
$
|
12,500
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,500
|
|
Total temporary equity
|
$
|
12,500
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,500
|
|
(1)
|
Cash equivalents primarily included money market funds.
|
(2)
|
Marketable securities are comprised of municipal bonds, certificates of deposit. corporate bonds, treasury bonds, and mutual funds.
|
(3)
|
Put arrangements held by the noncontrolling interests in certain of the Company’s joint ventures.
|
|
|
December 31, 2018
|
||||||||||||||
|
|
Amortized
Cost |
|
Gross
Unrealized Gains |
|
Gross
Unrealized Losses |
|
Fair
Value |
||||||||
Marketable securities - debt:
|
|
|
|
|
|
|
|
|
||||||||
Certificates of deposit
|
|
$
|
3,776
|
|
|
$
|
—
|
|
|
$
|
(16
|
)
|
|
$
|
3,760
|
|
Corporate bonds
|
|
402
|
|
|
—
|
|
|
(1
|
)
|
|
401
|
|
||||
Municipal bonds
|
|
10,913
|
|
|
—
|
|
|
(32
|
)
|
|
10,881
|
|
||||
Treasury bonds
|
|
15,685
|
|
|
—
|
|
|
—
|
|
|
15,685
|
|
||||
Total
|
|
$
|
30,776
|
|
|
$
|
—
|
|
|
$
|
(49
|
)
|
|
$
|
30,727
|
|
Balance at December 31, 2018
|
|
$
|
4,161
|
|
Mutual funds purchases
|
|
51,744
|
|
|
Mutual funds sales
|
|
(55,895
|
)
|
|
Realized gains (losses)
|
|
1
|
|
|
Balance at December 31, 2019
|
|
$
|
11
|
|
Balance at December 31, 2018
|
$
|
12,500
|
|
Fair value adjustment
|
(1,126
|
)
|
|
Net income attributable to redeemable noncontrolling interests
|
1,126
|
|
|
Balance at December 31, 2019
|
$
|
12,500
|
|
|
|
December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Computer hardware
|
|
$
|
214,880
|
|
|
$
|
246,373
|
|
Computer software
|
|
64,509
|
|
|
64,530
|
|
||
Construction in-progress
|
|
—
|
|
|
651
|
|
||
Furniture and fixtures
|
|
9,546
|
|
|
9,408
|
|
||
Building
|
|
—
|
|
|
8,808
|
|
||
Leasehold improvements
|
|
25,768
|
|
|
23,602
|
|
||
|
|
314,703
|
|
|
353,372
|
|
||
Less: Accumulated depreciation
|
|
(288,178
|
)
|
|
(285,435
|
)
|
||
|
|
$
|
26,525
|
|
|
$
|
67,937
|
|
Balance at December 31, 2017
|
|
$
|
237,303
|
|
Acquisitions
|
|
2,156
|
|
|
Impairment
|
|
(9,100
|
)
|
|
Translation adjustments
|
|
(5,460
|
)
|
|
Balance at December 31, 2018
|
|
$
|
224,899
|
|
Acquisitions
|
|
—
|
|
|
Impairment
|
|
—
|
|
|
Translation adjustments
|
|
(1,930
|
)
|
|
Balance at December 31, 2019
|
|
$
|
222,969
|
|
|
|
December 31, 2019
|
||||||||||
|
|
Cost
|
|
Accumulated Amortization
|
|
Net
|
||||||
Technology
|
|
$
|
99,832
|
|
|
$
|
(83,608
|
)
|
|
$
|
16,224
|
|
Customer lists and relationships
|
|
125,308
|
|
|
(86,555
|
)
|
|
38,753
|
|
|||
Capitalized software and patents
|
|
46,222
|
|
|
(23,586
|
)
|
|
22,636
|
|
|||
Trade name
|
|
2,450
|
|
|
(2,450
|
)
|
|
—
|
|
|||
|
|
$
|
273,812
|
|
|
$
|
(196,199
|
)
|
|
$
|
77,613
|
|
|
|
December 31, 2018
|
||||||||||
|
|
Cost
|
|
Accumulated Amortization
|
|
Net
|
||||||
Technology
|
|
$
|
100,896
|
|
|
$
|
(73,271
|
)
|
|
$
|
27,625
|
|
Customer lists and relationships
|
|
127,755
|
|
|
(75,123
|
)
|
|
52,632
|
|
|||
Capitalized software and patents
|
|
33,710
|
|
|
(15,261
|
)
|
|
18,449
|
|
|||
Trade name
|
|
2,546
|
|
|
(2,546
|
)
|
|
—
|
|
|||
|
|
$
|
264,907
|
|
|
$
|
(166,201
|
)
|
|
$
|
98,706
|
|
|
|
December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Accrued compensation and benefits
|
|
$
|
26,507
|
|
|
$
|
26,840
|
|
Accrued professional service fees
|
|
7,248
|
|
|
8,177
|
|
||
Accrued telecommunications
|
|
2,493
|
|
|
1,758
|
|
||
Accrued income taxes payable
|
|
4,063
|
|
|
1,394
|
|
||
Accrued preferred dividend
|
|
7,873
|
|
|
7,075
|
|
||
Accrued other
|
|
17,803
|
|
|
14,301
|
|
||
Total
|
|
$
|
65,987
|
|
|
$
|
59,545
|
|
ROU assets:
|
|
||
Non-current operating lease ROU assets
|
$
|
53,965
|
|
|
|
||
Operating lease liabilities:
|
|
||
Current operating lease liabilities*
|
$
|
8,473
|
|
Non-current operating lease liabilities
|
60,976
|
|
|
Total operating lease liabilities
|
$
|
69,449
|
|
*
|
Amounts are included in Accrued Expenses on Consolidated Balance Sheets.
|
|
|
Twelve Months Ended
|
||
Operating lease cost*
|
|
$
|
13,034
|
|
Other lease costs and income:
|
|
|
||
Variable lease costs* (1)
|
|
7,374
|
|
|
Sublease income*
|
|
(1,297
|
)
|
|
Total net lease cost
|
|
$
|
19,111
|
|
*
|
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 Consolidated Statements of Operations.
|
(1)
|
During the third quarter, the Company executed an agreement enabling the Company to achieve data center consolidation moving forward. The Company recorded a $6.2 million ROU asset impairment based on forecasted future cash flows for those data centers impacted by the agreement.
|
|
Operating Leases
|
||
2020
|
$
|
13,639
|
|
2021
|
12,932
|
|
|
2022
|
12,330
|
|
|
2023
|
10,040
|
|
|
2024
|
10,139
|
|
|
Thereafter
|
33,995
|
|
|
Total future lease payments
|
93,075
|
|
|
Less: amount representing interest
|
(23,626
|
)
|
|
Present value of future lease payments (lease liability)
|
$
|
69,449
|
|
Operating Leases:
|
|
|
Weighted-average remaining lease term (years), weighted based on lease liability balances
|
7.63
|
|
Weighted-average discount rate (percentages), weighted based on the remaining balance of lease payments
|
8.0
|
%
|
Operating Leases:
|
|
||
Cash paid for amounts included in the measurement of lease liabilities
|
$
|
12,427
|
|
Lease liabilities arising from obtaining right-of-use assets
|
895
|
|
|
|
December 31, 2018
|
||
Convertible Senior Notes
|
|
$
|
113,980
|
|
Amended Credit Agreement
|
|
—
|
|
|
Total debt, principal amount
|
|
113,980
|
|
|
Unamortized debt issuance cost (1)
|
|
(438
|
)
|
|
Total debt, carrying value
|
|
$
|
113,542
|
|
Total short-term debt, carrying value
|
|
$
|
113,542
|
|
Total long-term debt, carrying value
|
|
$
|
—
|
|
(1)
|
Unamortized debt issuance cost is related to Convertible Senior Notes.
|
|
|
Twelve Months Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Amended Credit Facility
|
|
|
|
|
|
|
||||||
Amortization of debt issuance costs
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
748
|
|
Commitment fee
|
|
—
|
|
|
—
|
|
|
25
|
|
|||
Interest on borrowings
|
|
—
|
|
|
—
|
|
|
24
|
|
|||
2017 Term Facility
|
|
|
|
|
|
|
||||||
Amortization of debt issuance costs
|
|
—
|
|
|
—
|
|
|
2,915
|
|
|||
Interest on borrowings
|
|
—
|
|
|
—
|
|
|
35,327
|
|
|||
Contingent Interest Derivative
|
|
—
|
|
|
—
|
|
|
2,489
|
|
|||
Amendment fees paid to third parties
|
|
—
|
|
|
—
|
|
|
5,716
|
|
|||
Revolving Facility
|
|
|
|
|
|
|
||||||
Amortization of debt issuance costs
|
|
—
|
|
|
—
|
|
|
646
|
|
|||
Commitment fee
|
|
—
|
|
|
—
|
|
|
494
|
|
|||
Amendment fees paid to third parties
|
|
—
|
|
|
—
|
|
|
1,662
|
|
|||
Convertible Senior Notes
|
|
|
|
|
|
|
||||||
Amortization of debt issuance costs
|
|
$
|
285
|
|
|
$
|
1,294
|
|
|
1,413
|
|
|
Interest on borrowings
|
|
363
|
|
|
1,578
|
|
|
1,725
|
|
|||
Additional interest on default
|
|
—
|
|
|
191
|
|
|
193
|
|
|||
2019 Revolving Credit Facility
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Amortization of debt issuance costs
|
|
8
|
|
|
—
|
|
|
—
|
|
|||
Commitment fee
|
|
5
|
|
|
—
|
|
|
—
|
|
|||
Interest on borrowings
|
|
3
|
|
|
—
|
|
|
—
|
|
|||
Capital leases
|
|
—
|
|
|
964
|
|
|
971
|
|
|||
Other
|
|
691
|
|
|
884
|
|
|
1,423
|
|
|||
Total
|
|
$
|
1,355
|
|
|
$
|
4,911
|
|
|
$
|
55,771
|
|
|
Balance at December 31, 2018
|
|
Other comprehensive loss
|
|
Tax effect
|
|
Balance at December 31, 2019
|
||||||||
Foreign currency
|
$
|
(26,436
|
)
|
|
$
|
(1,768
|
)
|
|
$
|
—
|
|
|
$
|
(28,204
|
)
|
Unrealized loss on intra-entity foreign currency transactions
|
(3,906
|
)
|
|
(579
|
)
|
|
179
|
|
|
(4,306
|
)
|
||||
Unrealized holding losses on marketable debt securities
|
(41
|
)
|
|
(710
|
)
|
|
—
|
|
|
(751
|
)
|
||||
Total
|
$
|
(30,383
|
)
|
|
$
|
(3,057
|
)
|
|
$
|
179
|
|
|
$
|
(33,261
|
)
|
|
Balance at December 31, 2017
|
|
Other comprehensive loss
|
|
Tax effect
|
|
Balance at December 31, 2018
|
||||||||
Foreign currency
|
$
|
(20,284
|
)
|
|
$
|
(6,152
|
)
|
|
$
|
—
|
|
|
$
|
(26,436
|
)
|
Unrealized loss on intra-entity foreign currency transactions
|
(3,085
|
)
|
|
(1,263
|
)
|
|
442
|
|
|
(3,906
|
)
|
||||
Unrealized holding losses on marketable debt securities
|
(4
|
)
|
|
(37
|
)
|
|
—
|
|
|
(41
|
)
|
||||
Total
|
$
|
(23,373
|
)
|
|
$
|
(7,452
|
)
|
|
$
|
442
|
|
|
$
|
(30,383
|
)
|
|
Balance at December 31, 2016
|
|
Other comprehensive income
|
|
Tax effect
|
|
Balance at December 31, 2017
|
||||||||
Foreign currency
|
$
|
(37,311
|
)
|
|
$
|
17,027
|
|
|
$
|
—
|
|
|
$
|
(20,284
|
)
|
Unrealized income (loss) on intra-entity foreign currency transactions
|
(5,017
|
)
|
|
3,322
|
|
|
(1,390
|
)
|
|
(3,085
|
)
|
||||
Unrealized holding gains (losses) on marketable debt securities
|
(22
|
)
|
|
28
|
|
|
(10
|
)
|
|
(4
|
)
|
||||
Total
|
$
|
(42,350
|
)
|
|
$
|
20,377
|
|
|
$
|
(1,400
|
)
|
|
$
|
(23,373
|
)
|
|
Preferred Stock
|
|||||
|
Shares
|
|
Amount
|
|||
Balance at December 31, 2018
|
195
|
|
|
$
|
176,603
|
|
Issuance of preferred stock
|
22
|
|
|
—
|
|
|
Initial discount and issuance costs related to preferred stock
|
—
|
|
|
—
|
|
|
Amortization of preferred stock issuance costs
|
—
|
|
|
2,257
|
|
|
Issuance of preferred PIK dividend
|
—
|
|
|
22,005
|
|
|
Balance at December 31, 2019
|
217
|
|
|
$
|
200,865
|
|
|
Twelve Months Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Cost of revenues
|
$
|
2,929
|
|
|
$
|
4,370
|
|
|
$
|
4,602
|
|
Research and development
|
4,227
|
|
|
6,055
|
|
|
6,030
|
|
|||
Selling, general and administrative
|
15,094
|
|
|
17,179
|
|
|
11,863
|
|
|||
Total stock-based compensation expense
|
$
|
22,250
|
|
|
$
|
27,604
|
|
|
$
|
22,495
|
|
|
Twelve Months Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Stock options
|
$
|
7,348
|
|
|
$
|
7,368
|
|
|
$
|
6,311
|
|
Restricted stock awards
|
14,775
|
|
|
20,216
|
|
|
15,802
|
|
|||
Employee Stock Purchase Plan
|
—
|
|
|
—
|
|
|
382
|
|
|||
Performance Based Cash Units
|
127
|
|
|
20
|
|
|
—
|
|
|||
Total stock-based compensation before taxes
|
22,250
|
|
|
27,604
|
|
|
22,495
|
|
|||
Tax benefit
|
$
|
3,455
|
|
|
$
|
5,387
|
|
|
$
|
3,921
|
|
|
|
Twelve Months Ended December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Expected stock price volatility
|
|
69.6
|
%
|
|
65.5
|
%
|
|
57.0
|
%
|
|||
Risk-free interest rate
|
|
1.9
|
%
|
|
2.6
|
%
|
|
1.8
|
%
|
|||
Expected life of options (in years)
|
|
4.34
|
|
|
4.13
|
|
|
4.08
|
|
|||
Expected dividend yield
|
|
0.0
|
%
|
|
0.0
|
%
|
|
0.0
|
%
|
|||
Weighted-average fair value (grant date) of the options
|
|
$
|
3.82
|
|
|
$
|
4.91
|
|
|
$
|
6.30
|
|
Options
|
|
Number of
Options
|
|
Weighted-Average
Exercise Price
|
|
Weighted-Average
Remaining
Contractual
Term (Years)
|
|
Aggregate
Intrinsic
Value
|
|||||
Outstanding at December 31, 2018
|
|
4,254
|
|
|
$
|
17.93
|
|
|
|
|
|
||
Options Granted
|
|
1,249
|
|
|
7.05
|
|
|
|
|
|
|||
Options Exercised
|
|
(7
|
)
|
|
5.48
|
|
|
|
|
|
|||
Options Cancelled
|
|
(574
|
)
|
|
23.51
|
|
|
|
|
|
|||
Outstanding at December 31, 2019
|
|
4,922
|
|
|
$
|
14.54
|
|
|
4.78
|
|
$
|
5.56
|
|
Vested at December 31, 2019
|
|
1,792
|
|
|
$
|
23.54
|
|
|
3.59
|
|
$
|
1.23
|
|
Exercisable at December 31, 2019
|
|
1,792
|
|
|
$
|
23.54
|
|
|
3.59
|
|
$
|
1.23
|
|
Unvested Restricted Stock
|
|
Number of
Awards |
|
Weighted- Average
Grant Date Fair Value |
|||
Unvested at December 31, 2018
|
|
2,630
|
|
|
$
|
12.71
|
|
Granted
|
|
2,204
|
|
|
7.02
|
|
|
Vested
|
|
(1,188
|
)
|
|
17.70
|
|
|
Forfeited
|
|
(271
|
)
|
|
10.90
|
|
|
Unvested at December 31, 2019
|
|
3,375
|
|
|
$
|
8.68
|
|
Unvested Cash Units
|
|
Number of
Awards |
|
Weighted- Average
Grant Date Fair Value |
|||
Unvested at December 31, 2018
|
|
70
|
|
|
$
|
6.14
|
|
Granted
|
|
976
|
|
|
—
|
|
|
Vested
|
|
—
|
|
|
—
|
|
|
Forfeited
|
|
—
|
|
|
—
|
|
|
Unvested at December 31, 2019
|
|
1,046
|
|
|
$
|
4.75
|
|
|
Balance at December 31, 2018
|
|
Charges
|
|
Payments
|
|
Other Adjustments1
|
|
Balance at December 31, 2019
|
||||||||||
Employment termination costs
|
$
|
1,276
|
|
|
$
|
755
|
|
|
$
|
(2,082
|
)
|
|
$
|
141
|
|
|
$
|
90
|
|
(1)
|
Includes non-cash adjustments and reclassifications.
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
(208
|
)
|
|
$
|
3,163
|
|
|
$
|
600
|
|
State
|
46
|
|
|
116
|
|
|
—
|
|
|||
Foreign
|
(2,048
|
)
|
|
(2,612
|
)
|
|
(4,817
|
)
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
(28
|
)
|
|
6,729
|
|
|
40,634
|
|
|||
State
|
(17
|
)
|
|
2,214
|
|
|
1,340
|
|
|||
Foreign
|
81
|
|
|
8,284
|
|
|
(2,894
|
)
|
|||
Income tax (provision) benefit
|
$
|
(2,174
|
)
|
|
$
|
17,894
|
|
|
$
|
34,863
|
|
|
Year Ended December 31,
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
Statutory rate
|
21.0
|
%
|
|
21.0
|
%
|
|
35.0
|
%
|
State taxes, net of federal benefit
|
(0.8
|
)%
|
|
3.0
|
%
|
|
1.0
|
%
|
Effect of rates different than statutory
|
(4.3
|
)%
|
|
(2.0
|
)%
|
|
(2.0
|
)%
|
Minority interest
|
0.2
|
%
|
|
(1.0
|
)%
|
|
(1.0
|
)%
|
Non-deductible stock-based compensation
|
(2.5
|
)%
|
|
(2.0
|
)%
|
|
(2.0
|
)%
|
Other permanent adjustments
|
(0.3
|
)%
|
|
—
|
%
|
|
(2.0
|
)%
|
Research and development credit
|
0.5
|
%
|
|
—
|
%
|
|
—
|
%
|
Change in valuation allowance
|
6.7
|
%
|
|
(17.0
|
)%
|
|
(7.0
|
)%
|
Statute release of uncertain tax position
|
0.6
|
%
|
|
1.0
|
%
|
|
—
|
%
|
Other
|
(1.4
|
)%
|
|
1.0
|
%
|
|
(2.0
|
)%
|
Acquisitions and foreign tax residency changes
|
—
|
%
|
|
3.0
|
%
|
|
(2.0
|
)%
|
Investment in JV
|
(1.7
|
)%
|
|
—
|
%
|
|
—
|
%
|
Global Intangible Low-Taxed Income
|
(3.3
|
)%
|
|
—
|
%
|
|
—
|
%
|
Waived deductions for purposes of Base Erosion Anti-Abuse Tax
|
(17.0
|
)%
|
|
—
|
%
|
|
—
|
%
|
Tax Reform Rate Reduction
|
—
|
%
|
|
—
|
%
|
|
(3.0
|
)%
|
Net
|
(2.1
|
)%
|
|
7.0
|
%
|
|
15.0
|
%
|
|
As of December 31,
|
||||||
|
2019
|
|
2018
|
||||
Deferred tax assets:
|
|
|
|
||||
Accrued liabilities
|
$
|
78
|
|
|
$
|
88
|
|
Deferred revenue
|
12,943
|
|
|
13,120
|
|
||
Bad debts reserve
|
9,291
|
|
|
1,108
|
|
||
Deferred compensation
|
5,262
|
|
|
4,680
|
|
||
Federal net operating loss carry forwards
|
7,969
|
|
|
28,193
|
|
||
State net operating loss carry forwards
|
4,236
|
|
|
7,085
|
|
||
Foreign net operating loss carry forwards
|
9,401
|
|
|
10,880
|
|
||
Deferred rent
|
—
|
|
|
776
|
|
||
Lease Obligations
|
13,791
|
|
|
—
|
|
||
Capital loss carry forward
|
1,563
|
|
|
1,689
|
|
||
Intangible assets
|
2,716
|
|
|
1,318
|
|
||
Basis difference
|
8,041
|
|
|
7,632
|
|
||
Installment sale
|
8,726
|
|
|
8,819
|
|
||
Other
|
3,208
|
|
|
3,508
|
|
||
Total deferred tax assets
|
$
|
87,225
|
|
|
$
|
88,896
|
|
|
|
|
|
||||
Deferred tax liabilities:
|
|
|
|
||||
Depreciation and amortization
|
(5,965
|
)
|
|
(9,179
|
)
|
||
Lease Assets
|
(9,593
|
)
|
|
—
|
|
||
Total deferred tax liabilities
|
(15,558
|
)
|
|
(9,179
|
)
|
||
Less: valuation allowance
|
(73,346
|
)
|
|
(81,064
|
)
|
||
Net deferred income tax (liabilities) assets
|
$
|
(1,679
|
)
|
|
$
|
(1,347
|
)
|
2023 - 2027
|
846
|
|
|
2028 - 2038
|
74,911
|
|
|
Indefinite
|
128,071
|
|
|
|
$
|
203,828
|
|
Unrecognized tax benefit at December 31, 2016
|
4,585
|
|
|
Increase for tax positions taken during prior year
|
1,823
|
|
|
Increases related to acquired entities
|
13,278
|
|
|
Reduction due to lapse of applicable statute of limitations
|
(1,512
|
)
|
|
Decreases related to divested entities
|
(13,645
|
)
|
|
Increases for tax positions of current period
|
1,946
|
|
|
Unrecognized tax benefit at December 31, 2017
|
6,475
|
|
|
Decrease for tax positions taken during prior year
|
(567
|
)
|
|
Increases related to acquired entities
|
—
|
|
|
Reduction due to lapse of applicable statute of limitations
|
(2,657
|
)
|
|
Decreases related to divested entities
|
—
|
|
|
Increases for tax positions of current period
|
721
|
|
|
Unrecognized tax benefit at December 31, 2018
|
3,972
|
|
|
Increase for tax positions taken during prior year
|
—
|
|
|
Increases related to acquired entities
|
—
|
|
|
Increases and (decreases) related to Lapse of Statute of Limitations
|
(703
|
)
|
|
Decreases related to divested entities
|
—
|
|
|
Increases for tax positions of current period
|
—
|
|
|
Unrecognized tax benefit at December 31, 2019
|
$
|
3,269
|
|
|
Twelve Months Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Numerator - Basic:
|
|
|
|
|
|
||||||
Net loss from continuing operations
|
$
|
(103,467
|
)
|
|
$
|
(245,280
|
)
|
|
$
|
(194,224
|
)
|
Net (income) loss attributable to redeemable noncontrolling interests
|
(1,126
|
)
|
|
8,837
|
|
|
9,291
|
|
|||
Preferred stock dividend
|
(32,134
|
)
|
|
(25,593
|
)
|
|
—
|
|
|||
Net (loss) income from continuing operations attributable to Synchronoss
|
(136,727
|
)
|
|
(262,036
|
)
|
|
(184,933
|
)
|
|||
|
|
|
|
|
|
||||||
Income from discontinued operations, net of taxes**
|
—
|
|
|
18,288
|
|
|
75,495
|
|
|||
Net (loss) income attributable to Synchronoss
|
$
|
(136,727
|
)
|
|
$
|
(243,748
|
)
|
|
$
|
(109,438
|
)
|
|
|
|
|
|
|
||||||
Numerator - Diluted:
|
|
|
|
|
|
||||||
Net (loss) income from continuing operations attributable to Synchronoss
|
$
|
(136,727
|
)
|
|
$
|
(262,036
|
)
|
|
$
|
(184,933
|
)
|
Income effect for interest on convertible debt, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net loss from continuing operations adjusted for the convertible debt
|
(136,727
|
)
|
|
(262,036
|
)
|
|
(184,933
|
)
|
|||
|
|
|
|
|
|
||||||
Income from discontinued operations, net of taxes**
|
—
|
|
|
18,288
|
|
|
75,495
|
|
|||
Net loss attributable to Synchronoss
|
$
|
(136,727
|
)
|
|
$
|
(243,748
|
)
|
|
$
|
(109,438
|
)
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
||||||
Weighted average common shares outstanding — basic
|
40,694
|
|
|
40,277
|
|
|
44,669
|
|
|||
Dilutive effect of:
|
|
|
|
|
|
||||||
Shares from assumed conversion of convertible debt 1
|
—
|
|
|
—
|
|
|
—
|
|
|||
Shares from assumed conversion of preferred stock 2
|
—
|
|
|
—
|
|
|
—
|
|
|||
Options and unvested restricted shares
|
—
|
|
|
—
|
|
|
—
|
|
|||
Weighted average common shares outstanding — diluted
|
40,694
|
|
|
40,277
|
|
|
44,669
|
|
|||
|
|
|
|
|
|
||||||
Basic EPS
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
(3.36
|
)
|
|
$
|
(6.51
|
)
|
|
$
|
(4.14
|
)
|
Discontinued operations**
|
$
|
—
|
|
|
$
|
0.46
|
|
|
$
|
1.69
|
|
|
$
|
(3.36
|
)
|
|
$
|
(6.05
|
)
|
|
$
|
(2.45
|
)
|
Diluted EPS
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
(3.36
|
)
|
|
$
|
(6.51
|
)
|
|
$
|
(4.14
|
)
|
Discontinued operations**
|
$
|
—
|
|
|
$
|
0.46
|
|
|
$
|
1.69
|
|
|
$
|
(3.36
|
)
|
|
$
|
(6.05
|
)
|
|
$
|
(2.45
|
)
|
|
|
|
|
|
|
||||||
Anti-dilutive stock options excluded
|
—
|
|
|
—
|
|
|
—
|
|
|||
Unvested shares of restricted stock awards
|
3,375
|
|
|
2,700
|
|
|
2,648
|
|
(1)
|
The calculation does not include the effect of assumed conversion of convertible debt of 1,288,292, 3,972,939, and 4,325,646 shares for the year ended December 31, 2019, 2018 and 2017, respectively; which is based on 18.8072 shares per $1,000 principal amount of the Senior Convertible Notes.
|
(2)
|
The calculation does not include the effect of assumed conversion of preferred stock of 11,383,105 and 9,312,528 shares for the year ended December 31, 2019 and 2018, 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.
|
As of December 31, 2019
|
|
Non-cancelable agreements
|
||
2020
|
|
$
|
25,275
|
|
2021
|
|
2,575
|
|
|
2022
|
|
2,207
|
|
|
2023 and thereafter
|
|
920
|
|
|
|
|
$
|
30,977
|
|
|
Twelve Months Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
FX gains (losses) (1)
|
$
|
31
|
|
|
$
|
(478
|
)
|
|
$
|
(4,952
|
)
|
PIK Note impairment (2)
|
—
|
|
|
(84,314
|
)
|
|
(14,562
|
)
|
|||
Litigation settlement (3)
|
—
|
|
|
4,495
|
|
|
—
|
|
|||
Remeasurement gain (loss) on financial instrument (4)
|
—
|
|
|
3,849
|
|
|
(4,367
|
)
|
|||
Divestiture: SpeechCycle (5)
|
—
|
|
|
—
|
|
|
4,947
|
|
|||
Income from Investment (6)
|
—
|
|
|
519
|
|
|
—
|
|
|||
Income from sale of intangible assets (7)
|
5,518
|
|
|
—
|
|
|
—
|
|
|||
Income from Tax credit (8)
|
1,039
|
|
|
—
|
|
|
—
|
|
|||
Others (9)
|
801
|
|
|
1,012
|
|
|
1,256
|
|
|||
|
$
|
7,389
|
|
|
$
|
(74,917
|
)
|
|
$
|
(17,678
|
)
|
(1)
|
Fair value of foreign exchange gains and losses
|
(2)
|
PIK Note impairment on the troubled debt restructuring
|
(3)
|
Represents Legal settlement of $4.2 million and $0.3 million IP settlement from third parties
|
(4)
|
Remeasurement of gain/loss on Mandatorily Redeemable Put option for common shares held by Siris.
|
(5)
|
Represents gain on divestiture of SpeechCycle.
|
(6)
|
Represents gain on sale on the Company’s cost investment in Clarity, Money Inc.
|
(7)
|
Represents gain on sale on the Company’s IP addresses
|
(8)
|
Represents VOX Acquisition R&D Tax Credit
|
(9)
|
Represents an aggregate of individually immaterial transactions
|
|
Quarter Ended
|
||||||||||||||
|
March 31,
|
|
June 30,
|
|
September 30,
|
|
December 31,
|
||||||||
2019
|
(In thousands, except per share data)
|
||||||||||||||
Net revenues
|
$
|
88,105
|
|
|
$
|
77,846
|
|
|
$
|
52,210
|
|
|
$
|
90,588
|
|
|
|
|
|
|
|
|
|
||||||||
Loss from continuing operations
|
(20,339
|
)
|
|
(18,288
|
)
|
|
(50,972
|
)
|
|
(18,189
|
)
|
||||
Net (loss) income
|
(19,737
|
)
|
|
(16,577
|
)
|
|
(61,213
|
)
|
|
(5,940
|
)
|
||||
Net (loss) income attributable to Synchronoss
|
(27,587
|
)
|
|
(25,030
|
)
|
|
(69,432
|
)
|
|
(14,678
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic:
|
|
|
|
|
|
|
|
||||||||
Continuing operations (1)
|
$
|
(0.68
|
)
|
|
$
|
(0.61
|
)
|
|
$
|
(1.70
|
)
|
|
$
|
(0.36
|
)
|
Discontinued operations (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
(0.68
|
)
|
|
$
|
(0.61
|
)
|
|
$
|
(1.70
|
)
|
|
$
|
(0.36
|
)
|
Diluted:
|
|
|
|
|
|
|
|
||||||||
Continuing operations (1)
|
$
|
(0.68
|
)
|
|
$
|
(0.61
|
)
|
|
$
|
(1.70
|
)
|
|
$
|
(0.36
|
)
|
Discontinued operations (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
(0.68
|
)
|
|
$
|
(0.61
|
)
|
|
$
|
(1.70
|
)
|
|
$
|
(0.36
|
)
|
|
Quarter Ended
|
||||||||||||||
|
March 31,
|
|
June 30,
|
|
September 30,
|
|
December 31,
|
||||||||
2018
|
(In thousands, except per share data)
|
||||||||||||||
Net revenues
|
$
|
83,709
|
|
|
$
|
76,742
|
|
|
$
|
83,286
|
|
|
$
|
82,102
|
|
|
|
|
|
|
|
|
|
||||||||
Loss from continuing operations
|
(44,234
|
)
|
|
(43,100
|
)
|
|
(34,629
|
)
|
|
(42,313
|
)
|
||||
Net (loss) income
|
(37,977
|
)
|
|
(41,264
|
)
|
|
(46,644
|
)
|
|
(101,107
|
)
|
||||
Net (loss) income attributable to Synchronoss
|
(40,045
|
)
|
|
(47,265
|
)
|
|
(54,529
|
)
|
|
(101,909
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic:
|
|
|
|
|
|
|
|
||||||||
Continuing operations (1)
|
$
|
(0.95
|
)
|
|
$
|
(1.20
|
)
|
|
$
|
(1.38
|
)
|
|
$
|
(3.01
|
)
|
Discontinued operations (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
0.45
|
|
||||
|
$
|
(0.95
|
)
|
|
$
|
(1.20
|
)
|
|
$
|
(1.38
|
)
|
|
$
|
(2.56
|
)
|
Diluted:
|
|
|
|
|
|
|
|
||||||||
Continuing operations (1)
|
$
|
(0.95
|
)
|
|
$
|
(1.20
|
)
|
|
$
|
(1.38
|
)
|
|
$
|
(3.01
|
)
|
Discontinued operations (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
0.45
|
|
||||
|
$
|
(0.95
|
)
|
|
$
|
(1.20
|
)
|
|
$
|
(1.38
|
)
|
|
$
|
(2.56
|
)
|
(1)
|
Per common share amounts for the quarters and full year have been calculated separately. Accordingly, quarterly amounts do not add to the annual amount because of differences in the number of weighted-average common shares outstanding during each period which results principally from the effect of issuing shares of the Company’s common stock and options throughout the year.
|
•
|
Hired a Director of Revenue Recognition, a Director of Technical Accounting, and other resources to augment our staff to support further enhancement on the controls and procedures surrounding revenue recognition, technical matters and financial reporting.
|
•
|
Increased standardization of contract documentation and revenue analysis for individual transactions, including increased oversight of revenue opportunities and contract review by personnel with the requisite accounting knowledge to identify revenue-impacting terms and consider potential downstream effects.
|
•
|
Developed a more comprehensive review process and monitoring controls over contracts with customers to ensure accurate accounting for multiple-element arrangements.
|
•
|
Implemented and effectively executed a quarterly non-recurring transaction review meeting with key stakeholders within the Company to identify and discuss potentially significant transactions. Meetings are attended by process owners across various functions or departments, both domestic and international, to promote regular and effective communication between finance and non-finance personnel, and to ensure that information related to significant transactions is communicated timely.
|
•
|
Performed a review of key business process controls related to high-risk financial statement accounts, such as revenue, significant transactions, capitalized software, fixed assets, accounts receivable, treasury and financial close, which resulted in the redesign of existing controls and the addition of newly developed / documented control activities, in order to mitigate known risks and strengthen the overall control environment. The redesigned control environment was tested by the Company’s internal auditors and management.
|
•
|
Management reinforces compliance through consistent communication.
|
•
|
Performed a detailed review of key IT process controls and enhanced the control design. The IT control environment was tested by the Company’s internal auditors and management for design and operating effectiveness.
|
•
|
Engaged external resources to assist management in our control design assessment and execution.
|
•
|
Established a Disclosure Committee that includes key members of management that have responsibility for disclosure information necessary for periodic filings with the SEC. The committee met formally for purposes of the Fiscal 2019 filings to discuss all significant events and relevant disclosure matters for the filing.
|
•
|
Formally established an Internal Audit function and our Audit Committee approved their charter in January 2019.
|
•
|
Hired external resources to support and improve our Internal Audit Function. The internal audit function performed detailed internal control testing for all key controls and processes.
|
•
|
Enhanced and completed our risk assessment processes to identify relevant accounts and assertions and design control procedures that relate to relevant risks.
|
•
|
Reevaluated and completed our entity level control design and testing. The Company’s internal auditor and management tested the entity level controls design and operating effectiveness.
|
•
|
Judgments in decision-making can be faulty, and control and process breakdowns can occur because of simple errors or mistakes.
|
•
|
Controls can be circumvented by individuals, acting alone or in collusion with each other, or by management override.
|
•
|
The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
|
•
|
Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies and procedures.
|
a.
|
Identification of Directors. Information concerning the directors of Synchronoss is set forth under the heading “Election of Directors” in the Synchronoss Proxy Statement for the 2020 Annual Meeting of Stockholders and is incorporated herein by reference.
|
b.
|
Audit Committee Financial Expert. Information concerning Synchronoss’ audit committee financial expert is set forth under the heading “Audit Committee” in the Synchronoss Proxy Statement for the 2020 Annual Meeting of Stockholders and is incorporated herein by reference.
|
c.
|
Identification of the Audit Committee. Information concerning the audit committee of Synchronoss is set forth under the heading “Audit Committee” in the Synchronoss Proxy Statement for the 2020 Annual Meeting of Stockholders and is incorporated herein by reference.
|
d.
|
Delinquent Section 16(a) Reports. Information concerning non-compliance, if any, with beneficial ownership reporting requirements is set forth under the caption “Delinquent Section 16(a) Reports” in the Synchronoss Proxy Statement for the 2020 Annual Meeting of Stockholders and is incorporated herein by reference.
|
e.
|
Information about our Executive Officers. Information concerning the executive officers of Synchronoss is set forth under the heading “Information about our Executive Officers” in the Synchronoss Proxy Statement for the 2020 Annual Meeting of Stockholders and is incorporated herein by reference.
|
|
Page No.
|
Exhibit No.
|
|
Description
|
|
3.1
|
|
|
|
3.2
|
|
|
|
3.3
|
|
|
|
3.4
|
|
|
|
4.1
|
|
|
|
4.2
|
|
|
|
4.3
|
|
|
|
4.4
|
|
|
|
4.5
|
|
|
|
4.6
|
|
|
|
4.7
|
|
|
|
4.8
|
|
|
|
4.9
|
|
|
|
10.1
|
|
|
|
10.2
|
|
|
|
10.3
|
|
|
|
10.4
|
|
|
|
10.4.1
|
|
|
Exhibit No.
|
|
Description
|
|
10.4.2
|
|
|
|
10.5
|
|
|
|
10.6
|
|
|
|
10.7‡
|
|
|
|
10.8‡
|
|
|
|
10.9‡
|
|
|
|
10.10‡
|
|
|
|
10.11‡
|
|
|
|
10.12‡
|
|
|
|
10.13‡
|
|
|
|
10.14‡
|
|
|
|
10.15‡
|
|
|
|
10.16†
|
|
|
|
10.17†
|
|
|
|
10.18†
|
|
|
|
10.19†
|
|
|
|
10.20
|
|
|
|
10.21
|
|
|
|
10.22
|
|
|
|
10.23
|
|
|
|
21.1
|
|
|
|
23.1
|
|
|
|
31.1
|
|
|
|
31.2
|
|
|
|
32.1**
|
|
|
|
32.2**
|
|
|
|
101.INS
|
|
|
XBRL Instance Document
|
101.SCH
|
|
|
XBRL Schema Document
|
101.CAL
|
|
|
XBRL Calculation Linkbase Document
|
101.DEF
|
|
|
XBRL Taxonomy Extension Definition Linkbase
|
101.LAB
|
|
|
XBRL Labels Linkbase Document
|
Exhibit No.
|
|
Description
|
|
101.PRE
|
|
|
XBRL Presentation Linkbase Document
|
‡
|
Confidential treatment has been granted with respect to certain provisions of this exhibit.
|
**
|
This certification is being furnished solely to accompany this Annual Report pursuant to 18 U.S.C. Section 1350, and are not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and are not to be incorporated by reference into any filing of the registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
|
(b)
|
Exhibits.
|
(c)
|
Financial Statement Schedule.
|
|
|
Beginning Balance
|
|
Additions
|
|
Reductions
|
|
Ending Balance
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Allowance for doubtful receivables:
|
|
|
|
|
|
|
|
|
||||||||
2019
|
|
$
|
4,599
|
|
|
$
|
6,045
|
|
|
$
|
(8,780
|
)
|
|
$
|
1,864
|
|
2018
|
|
$
|
3,107
|
|
|
$
|
13,982
|
|
|
$
|
(12,490
|
)
|
|
$
|
4,599
|
|
2017
|
|
$
|
1,459
|
|
|
$
|
7,590
|
|
|
$
|
(5,942
|
)
|
|
$
|
3,107
|
|
|
|
Beginning Balance
|
|
Additions
|
|
Reductions
|
|
Ending Balance
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Allowance for loan loss:
|
|
|
|
|
|
|
|
|
||||||||
2019
|
|
$
|
98,876
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
98,876
|
|
2018
|
|
$
|
14,562
|
|
|
$
|
84,314
|
|
|
$
|
—
|
|
|
$
|
98,876
|
|
|
|
Beginning Balance
|
|
Additions
|
|
Reductions
|
|
Ending Balance
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Valuation allowance for deferred tax assets:
|
|
|
|
|
|
|
|
|
||||||||
2019
|
|
$
|
81,064
|
|
|
$
|
3,843
|
|
|
$
|
(11,561
|
)
|
|
$
|
73,346
|
|
2018
|
|
$
|
32,523
|
|
|
$
|
49,610
|
|
|
$
|
(1,069
|
)
|
|
$
|
81,064
|
|
2017
|
|
$
|
14,180
|
|
|
$
|
23,370
|
|
|
$
|
(5,027
|
)
|
|
$
|
32,523
|
|
|
|
SYNCHRONOSS TECHNOLOGIES, INC.
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Glenn Lurie
|
|
|
|
Glenn Lurie
|
|
|
|
Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
Signature
|
Title
|
Date
|
|
|
|
/s/ Glenn Lurie
|
Chief Executive Officer
|
March 16, 2020
|
Glenn Lurie
|
(Principal Executive Officer)
|
|
|
|
|
/s/ David Clark
|
Chief Financial Officer
|
March 16, 2020
|
David Clark
|
(Principal Financial Officer)
(Principal Accounting Officer) |
|
|
|
|
/s/ Stephen Waldis
|
Director
|
March 16, 2020
|
Stephen Waldis
|
Executive Chairman
|
|
|
|
|
/s/ Laurie L. Harris
|
Director
|
March 16, 2020
|
Laurie L. Harris
|
|
|
|
|
|
/s/ Kristin S. Rinne
|
Director
|
March 16, 2020
|
Kristin S. Rinne
|
|
|
|
|
|
/s/ Mohan Gyani
|
Director
|
March 16, 2020
|
Mohan Gyani
|
|
|
|
|
|
/s/ Robert Aqualina
|
Director
|
March 16, 2020
|
Robert Aqualina
|
|
|
|
|
|
/s/ Frank Baker
|
Director
|
March 16, 2020
|
Frank Baker
|
|
|
|
|
|
/s/ Peter Berger
|
Director
|
March 16, 2020
|
Peter Berger
|
|
|
|
|
|
/s/ William J. Cadogan
|
Director
|
March 16, 2020
|
William J. Cadogan
|
|
|
|
|
|
/s/ Thomas J. Hopkins
|
Director
|
March 16, 2020
|
Thomas J. Hopkins
|
|
|
1 Year Synchronoss Technologies Chart |
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