Company Roundup: Synchronoss, Cognizant, Wayside Technology Group Announce Earnings

Synchronoss Technologies: Synchronoss (Bridgewater) reported strong Q2 2015 results that met or exceeded the high end of its expectations, Stephen Waldis, founder, chairman and CEO, said in a release on Wednesday, July 29.

“Each of our businesses performed well in the quarter and we were pleased to see some of our new wins began to scale and drive volumes, particularly on the cloud side. We are gaining strong traction among international mobile operators who are increasingly realizing the significant value Synchronoss’ white-label cloud solution can deliver to their subscribers.”

On the basis of generally accepted accounting practices (GAAP) basis, Synchronoss reported net revenues of $137.8 million, representing an increase of 33 percent compared with Q2 2014. Gross profit was $82.9 million and income from operations was $23.6 million in Q2 2015. Net income was $15.2 million, resulting in diluted earnings per share (EPS) of $0.33, compared with $0.20 for Q2 2014.

On a non-GAAP basis, Synchronoss also reported net revenues of $137.9 million, again a growth of 33 percent compared with Q2 2014. From a profitability perspective, the company generated a 29 percent non-GAAP operating margin and non-GAAP diluted earnings per share of $0.56, Waldis said in a conference call transcribed by Seeking Alpha.

He added that this “was well above the high-end of our guidance range as we realize leverage from our business model. The combination of R&D investments, the strong growth in our cloud revenues, which have a higher margin profile, and the evolution of our cloud business to a lower CapEx intensive model are beginning to contribute to increased margin expansion and profitability. And based on our second quarter results and the ongoing momentum of our business, including the continued strength in both our cloud and activation offerings, we are increasing our revenue and materially increasing our profitability outlook for fiscal 2015.”

Synchronoss has recently been mentioned as a possible buyout candidate. According to an article by O’Neill Trader on Seeking Alpha, however, “Management [said during its] Q2 call that they ‘don’t speculate on false rumors.’ The ‘false’ part of the statement is telling and I see no real reason to consider such an option at the moment.”

Cognizant: Teaneck-based Cognizant’s Q2 2015 sequential revenue increase in dollar terms “was the strongest in our history,” said CEO Francisco D’Souza in a release.

“These results validate that our business strategy and our investments position us well to capture the emerging opportunities as clients look to transform into digital businesses. We increasingly work with our clients to help them re-imagine their businesses and build new capabilities to succeed in the digital era.”

Some highlights from the Cognizant announcement:

• Second quarter revenues of $3.09 billion were up 22.6 percent from Q2 2014, and up 6.0 percent sequentially.
• GAAP diluted EPS was $0.68, up from $0.61 in Q2 2014.
• Non-GAAP diluted EPS was $0.79, up from $0.66 in Q2 2014.

The revenues of $3.09 billion in Q2 2015 represented a rise from $2.52 billion in Q2 2014. GAAP net income was $420.1 million in Q2 2015 (or $0.68 per diluted share), compared with $371.9 million (or $0.61 per diluted share) in Q2 2014.

The GAAP operating margin for Q2 2015 was 17.7 percent. The non-GAAP operating margin was 20.2 percent, slightly higher than the company’s target range of 19-20 percent.

Cognizant increased its guidance for Q3 2015 and for fiscal 2015 overall.

Wayside Technology: Wayside Technology Group (Shrewsbury) reported very good Q2 2015 earnings results, according to information released on July 30. “I am pleased to report solid financial results for Q2 2015. Overall, revenue increased 9 percent and Gross Profit increased 5 percent over the same period last year, due to continued strong performance from our Lifeboat Distribution team,” Simon F. Nynens, chairman, president  and CEO, said in a release. The company opened a Lifeboat Distribution sales office in Mesa, Arizona, to enhance customer service for their Midwest and West Coast customers.

Net sales for Q2 2015 ended June 30, 2015, increased 9 percent, or by $7.6 million to $92.0 million, compared with $84.4 million for the same period in 2014. Total sales for Q2 2015 for the Lifeboat Distribution segment were $81.3 million, compared with $70.0 million in Q2 2014, representing an increase of $11.3 million, or 16 percent.

Wayside’s TechXtend business has declined, however. Total sales for Q2 2015 for the TechXtend segment were $10.7 million, compared with $14.4 million in Q2 2014, representing a decrease of $3.7 million, or 26 percent.

On July 29, 2015, the Board of Directors declared a quarterly dividend of $.17 per share of its common stock, payable August 17, 2015, to shareholders of record on August 10, 2015.