Synchronoss to Report Q2 Earnings: What's in Store?

Synchronoss Technologies SNCR is set to release its second-quarter 2024 results on Aug 6.

The Zacks Consensus Estimate for the top line is currently pegged at $43.09 million, indicating a 27.84% decline from the year-ago quarter's reported figure.

The consensus mark for earnings is pegged at 7 cents per share, unchanged in the past 30 days.

Quarterly earnings beat the Zacks Consensus Estimate in three of the trailing four quarters while missing the same on one occasion, the average surprise being 28.82%.

Factors to Note

SNCR is expected to have benefited from its expanding cloud subscriber base, with expectations in the high single-digit to low double-digit range throughout 2024. Cloud subscriber growth was nearly 7% year over year in first-quarter 2024.

Synchronoss' transition to a cloud-only business model streamlined operations and enhanced its financial profile. This focus on high-margin personal cloud services is expected to have continued driving top-line growth and profitability in the to-be-reported quarter.

The introduction of auto-scaling capabilities and enhanced plans within the Synchronoss Personal Cloud Platform in first-quarter 2024 is expected to have driven operational and financial efficiency in the second quarter.

Auto-scaling, which optimizes resource usage and reduces costs, and enhanced plans that offer flexibility to telecom operators, are expected to have driven subscriber growth and retention in the quarter under review.

Strengthening international footprint is expected to have boosted SNCR's performance in the to-be-reported quarter.

The launch of Anshin Data Box in partnership with SoftBank to expand its global footprint into the Japanese market and showcase the adaptability and appeal of its Personal Cloud offerings in the global marketplace is noteworthy. The benefits of this partnership are expected to have been reflected in the to-be-reported quarter.

Partnerships with AT&T T and Verizon Communications VZ to enhance its cloud solutions are expected to have continued aiding Synchronoss' prospects. Cloud revenues, which contributed 99% to the company's total revenues, rose 3% year over year in fourth-quarter 2023.

SNCR's cloud solutions enable AT&T Personal Cloud, enhancing subscriber experiences and facilitating seamless content transfer and backup for AT&T Mobility wireless customers. This is expected to have boosted SNCR's clientele.

Its ongoing partnership with Verizon, focusing on continued innovation in cloud services, leveraging AI and machine learning for enhanced user experience and content management, is likely to have acted as growth driver in the quarter under review.

However, SNCR might face challenges in the next quarter due to the anticipated impact of the remaining $28 million federal tax refund process and the continued burden of debt repayment.

What Our Model Says

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that's not the case here.

Synchronoss Technologies has an Earnings ESP of +0.00% and a Zacks Rank #2 (Buy) currently.

Stocks to Consider

Here are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:

Shopify SHOP has an Earnings ESP of +7.78% and a Zacks Rank #2.

Shopify's shares have declined 23.2% year to date. SHOP is set to report its second-quarter 2024 results on Aug 7.

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