Synchronoss Technologies Inc (SNCR) 2007 Q1 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the first quarter 2007 Synchronoss Technologies Incorporated earnings conference call.

[OPERATOR INSTRUCTIONS]

I would now like to turn the call over to Mr. Larry Irving, Chief Financial Officer. Please proceed, sir.

Thank you, Shaquilla. Good afternoon and welcome to the Synchronoss first quarter 2007 earnings conference call. We will be discussing the results announced in the press release issued after the market closed today.

I'm Larry Irving, Chief Financial Officer of Synchronoss Technologies. With me on the call is Steve Waldis, President and CEO.

During this call we will make statements related to our business that may be considered forward-looking statements under federal security laws. These statements reflect our views only as of today and should not be relied upon as representing our views as of any subsequent date.

These statements reflect our current views regarding the future and are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For a discussion of the material risks and other important factors that could affect our actual results, please refer to our SEC filings.

With that, I'll turn the call over to Steve so he can provide some color on the first quarter results and an update on our strategic initiatives. I'll come back a bit later to provide some further details regarding our financials and forward outlook. Steve?

Thank you, Larry, and good afternoon and thank you for joining us on our call today to review our first quarter financial results, which were highlighted by than better than expected revenue and profitability.

The upside to our revenue was driven primarily by our AT&T Mobility related business and our work on converged service transactions as it related to the post AT&T and Bell South merger.

Also, our voice over IP related business also made solid contributions that increased the overall growth rate of the company.

From a long-term perspective, our focus and excitement is on the opportunities being created by the shift towards converged services.

Synchronoss is uniquely positioned to benefit from this shift based on the recent introduction of our ConvergenceNow platform combined with our industry leading domain expertise, proven efficiency, and scale of our on-demand services and our blue-chip customer base.

We are particularly excited about the progress and outlook related to the new transaction types, which we believe will ramp more quickly than originally expected. And as Larry will discuss shortly, we are optimistic about our outlook for 2007 and we will be materially increasing our 2007 guidance as a result.

Taking a look at the results for the quarter, our total revenues came in at $21.3 million, an increase of 36% on a year-over-year basis and above the high end of our $20.7 million to $21.0 million guidance that we gave.

From a profitability perspective, our gross margin for the quarter was 55%, slightly higher than what we had guided during our last call, but down from 58% in the most recent fourth quarter due to investments to support new transaction types combined with our efforts in supporting post-merger activities.

That being said, our gross margin's 55% was up significantly on a year-over-year basis and slightly better than our expectation of the low 50% range.

Combined with our revenue upside, this led to a non-GAAP operating margin of 28% and a non-GAAP diluted EPS of $0.12, which is an increase of 100% on a year-over-year basis and above the high end of our guidance of $0.10 to $0.11.

From an overall perspective, our results were very strong in the first quarter and we expect our business momentum to continue to accelerate throughout 2007.

Now, turning to the details of our performance, I'd like to begin with our business related to AT&T, which generated $14.6 million during the first quarter. This represented a very strong 20% on a sequential basis and a year-over-year growth rate of 30%, which is the highest level it's been in over a year.

Since the mergers closed in late 2006, we have been working on configuring new transaction types and supporting more converged services to ensure we are well positioned to handle future transactional growth.

We have also been spending time ensuring that our platform is ready to deliver the best possible customer experience for AT&T.

And as we look forward, we expect our existing AT&T business, our longstanding relationship with AT&T Mobility, formerly known as Cingular, to further accelerate, leading to a year-over-year AT&T revenue growth that will be north of 50% during 2007.

Simply put, there is more activity occurring between Synchronoss and AT&T combined to any other time in our seven-year working relationship.

AT&T Mobility is, and for the foreseeable future will remain, the largest contributor to our AT&T related revenue.

However, we are in the process of employing several new programs and transactions and although we cannot discuss details regarding specific transaction types due to our NDA with AT&T, we can share that we are working on supporting many transactions outside of wireless.

And in addition we are configuring our platform services across channels outside of e-commerce to automate transactions originating from both telesales, retail and business sales channels. We expect to move outside our traditional e-commerce channel throughout 2007 and beyond.

We are also working on more converged offers with the new AT&T, such as the Unity Plan that was launched in the first quarter. And as you can tell, we have seen very strong traction since the merger was completed. I can safely say that I have never been more optimistic about our opportunities with the new AT&T.

I believe the reason our relationship continues to expand and deepen is that we have a differentiated value proposition and we have consistently proven our ability to deliver the highest level of service and quality while minimizing the cost of doing business and delivering an outstanding customer experience.

Now, turning to our converged services and voice over IP related customers, which delivered $6.7 million of revenue in the first quarter. This represented a strong year-over-year growth rate of over 55%.

From a high level perspective, our voice over IP related business was in line with our expectations and represented a key contributor to our better than expected total revenue per romance in the quarter.

And while we do not plan on providing specific growth targets for AT&T and other components of our business as a regular practice and it is not our current intention to update the targets we are providing on this call, we thought it was worthwhile to provide some added detail, given the significant amount of noise surrounding the voice over IP market over the past few months.

As we discussed on our last all, we do not have any other 10% customers outside of AT&T. The first quarter of 2007 was the second consecutive quarter that Vonage has been under that level.

And as we've continued to diversify our overall customer base and new transaction types across -- as we continue to migrate our customers and transaction types across the voice over IP marketplace.

That being said, Vonage continues to drive to our platform significant transactions and we did not see a material impact in our work with Vonage during the first quarter.

From a forecasting perspective, we believe that it's prudent for Synchronoss to take a conservative perspective as to how the uncertainty related to Vonage's lawsuit with Verizon may impact our business with Vonage in the future.

In speaking with our customers and other public information, we continue to believe that our customers will move forward with their plans related to voice over IP related service rollouts and we believe our revenue from both voice over IP and converged transactions will grow in the 40% range in 2007.

And that is what is factored into the overall guidance for 2007, which I mentioned at the outset will be increasing by a material amount.

From a long term perspective, we still believe we're well positioned in the voice over IP market given the fact that our customers service 80% of the marketplace. Among the highest growth components of our VoIP related revenue are the cable MSO customers that were added during the beginning of 2006.

We continue to work closely with both Time Warner Cable and Comcast to further deploy capabilities of our platform and handle additional transactions.

On recent calls, we have also highlighted our growing relationship with Level 3 Communications. Our run rate with Level 3 doubled during 2006 and this strong growth continued in Q1 of 2007, driven by their aggressive consolidation activity and a growing client base that includes significant voice over IP service providers such as leading MSOs, such as Charter Communications.

And as we continue to drive value for Level 3, we believe there are additional ways for us to take on more transactions in the future and we look forward to continuing to expand this important relationship.

In summary, our overall voice over IP business remains strong, our customer base includes the industry leaders and our pipeline of new opportunities is solid.

It is important to highlight, however, that from a long term perspective what is exciting to us is not just voice over IP as a standalone service, but rather its move by service providers towards bundled and converged services in which voice over IP is part of that transaction mix.

Service providers are increasingly looking to introduce complex bundled services and it's critical to have the technology systems in place that enable them to orchestrate the activation and provisioning of triple and quadruple play services.

During the first quarter we introduced the ConvergenceNow platform, the next generation of our on-demand services platform in order to help our customers effectively transition their business towards converged services to take advantage of a tremendous market opportunity and remain competitive.

ConvergenceNow accelerates the order to cash process for complex service bundles including voice, video, wireless, high speed internet access and content.

In addition, ConvergenceNow addresses the recent network and architectural upgrades that service providers are using to deliver bundled solutions and enables an environment with a single point of access to numerous agnostic communication and entertainment services.

Given the rapid deployment schedules within most of our customers for converged services and the increased marketing focus related reflected in our customers' forecasts, we have invested above our normal 8% to 10% in capital expenditures in the first quarter of 2007.

Larry will discuss in more detail in a few minutes what we believe that our customers are preparing to significantly increase the number of transactions we will be handling in the next 12 months and so we have enhanced our infrastructure in anticipation of supporting this growth.

From a high level perspective, our ConvergenceNow platform will enable Synchronoss to deliver even a higher level of value added and cost savings for our customers.

And while we have proven our ROI at customers such as Time Warner Cable and many others by dramatically reducing their cost per activation, we believe our ConvergenceNow platform will enable our customers to receive a multiple return on their investment by leveraging a single platform that automates transactions across a combination of integrated services.

For example, using round numbers, reducing a cost per activation from $20 to $30 to a $10 fee through automation and best practices is obviously of high interest.

However, if you take the cost of activating a combination of voice, video, data, and wireless, we could potentially reduce the cost of that activation from over $100 to just $10 to $20, again using round numbers for illustrative purposes.

This is huge for our customers and it increases the stickiness of our on-demand model as we become more embedded into their systems and operations. And importantly, Synchronoss is uniquely positioned to capitalize on the opportunity as a result of our existing customer relations, network integration skills and our best in class technology.

Early examples of our ConvergenceNow platform are in use at Time Warner with its voice over IP and wireless service offerings and at AT&T with the Unity bundled service offerings announced in the first quarter.

We believe we will see additional customers begin to utilize the full set of enhanced features now available to them via our ConvergenceNow platform as they introduce converged services based on the fact that we have already proven our value proposition and ability to help minimize costs while continually updating and optimizing the customer experience. In doing so we will be expanding our relationships as we take on additional transaction types.

Another element of our expansion into converged services is expected to move into production in the second quarter, that being transactions related to handheld devices.

We believe that our growing experience and expertise in this area and proven success with these transactions over time will enable Synchronoss to pursue additional opportunities in the handheld arena, just as we previously leveraged our domain expertise to expand into other market segments.

From an overall perspective, we believe converged services will become an important driver to our revenue in 2008 and beyond. But the most important thing is Synchronoss again out ahead of the market with high value added differentiated solutions for our most important blue-chip customers who are driving the market today.

In summary, our first quarter was strong and looking ahead I have never been more optimistic about the strength and the opportunities related to our relationship with AT&T and we expect our business outside of AT&T, specifically our voice over IP and converged services, to remain strong throughout 2007.

And as a result and as Larry will discuss, we are materially increasing our revenue and profitability expectations based on the strength of our overall business and greater visibility into contributions from these new programs and transaction types that we are currently working on.

So with that, let me turn it over to Larry to discuss our results in more detail. Larry?

Thank you, Steve.

I would like to provide additional details on our first quarter performance in addition to commenting on our guidance for the second quarter and full year of 2007. Starting with the income statement, revenue was a record $21.3 million. That's up 36% over the fourth quarter of last year and 5% sequentially.

As Steve pointed out, the year-over-year growth rate of our business related to AT&T increased significantly compared to the fourth quarter and the strength in our voice over IP business further increased the overall revenue growth of the company in the quarter.

Specifically, the combined AT&T grew 30% on a year-over-year basis and the strong sequential growth of 20% increased AT&T to 68% of our total revenue in the quarter. That's up from 60% in the previous quarter, but down from 72% in the first quarter of 2006.

This growth is attributed to additional transactions coupled with the related services associated with some of the new transactions expected in the second half o the year.

Our voice over IP related revenue generated strong year-over-year growth of over 55%, while it was down approximately 18% on a sequential basis. This was generally in line with our expectations for the first quarter and, as Steve pointed out, we expect our business outside of AT&T to grow in the 40% range for the full year.

From a revenue mix perspective, 81% of our revenue came from transactions processed in the first quarter of 2007, while the remaining 19% of our total revenue was generated from subscriptions and professional services, which can at times be performed ahead of expected transaction flow.

Turning to costs and expenses. We will review our numbers on both a GAAP and non-GAAP basis. There is a reconciliation table between the two in our earnings release. Our non-GAAP results excludes FAS 123R stock-based compensation expense.

Non-GAAP gross profit was $11.8 million, representing an increase of 69% on a year-over-year basis and gross margin of 55%. This was a decrease from the previous quarter's unusually high level of 58%.

However, it was up from 44% in the prior year period and it was slightly better than our expectations across margins in the low 50% range.

With respect to the sequential down-tick, this was as expected, as I discussed in our last call, and was related to investments that were made to support new programs and transaction types.

Similar to our past experience with customers as transactions -- and transactions, our gross margins are typically at the lowest level at the beginning of a new program and then they increase over time as greater levels of automation are realized.

The slight overachievement in gross margin for the quarter is a result of favorable automation rates and transaction mix.

I would reiterate that there can be a degree of fluctuation in our gross margins depending upon the specific mix of transactions across our entire customer base as the gross margin is different across transaction types, as well as for the same transaction at progressing stages of the automation lifecycle.

Now let me move to the first quarter operating expenses. Non-GAAP research and development expenses came in at $1.9 million, or 9% of revenue, and relatively flat compared to the fourth quarter of 2006.

Non-GAAP selling, general, and administrative expenses were $2.9 million, or 14% of revenue.

As we discussed last quarter, we expect SG&A expenses to increase in 2007 due to Sarbanes-Oxley costs and investments in sales and marketing to support our growth related to both announced new transactions as well as further business development activities.

Depreciation and amortization was $1.1 million, representing 5% of our revenue. This was higher by approximately $200,000 from the fourth quarter of 2006 due to the continued expansion of our infrastructure to handle the growth of transactions, including the recently announced new transactions.

Continued revenue growth and strong margins led to non-GAAP income from operations of $5.9 million, an increase of 133% on a year-over-year basis, and a margin of 28%.

With the first quarter effective tax rate of 41.9%, our resulting non-GAAP net income was $4 million with a non-GAAP diluted earnings per share of $0.12, which was up 100% year-over-year and a penny above the high end of our previously issued guidance.

On a GAAP basis, including stock-based compensation expense of $512,000, the resulting GAAP income from operations and net income for the quarter was $5.4 million and $3.7 million respectively.

The resulting GAAP diluted earnings per share was $0.11 based on approximately 33 million diluted shares outstanding.

Now moving to the balance sheet. Total cash, cash equivalents, and marketable securities totaled $78.2 million at the end of the first quarter, down $800,000 compared to the end of the fourth quarter. The change in cash was the result of positive cash from operations of $3.4 million, offset by $4.4 million in capital expenditures.

As I've stated before, expectations for capital expenditures are typically around 8% to 10% of revenues, despite the fact that we have seen lower percentages in the past few years. When discussing our gross margins we noted that we are making investments to handle new transactions and this includes increased capacity.

With that said, I do expect that for the full year our capital expenditures will fall within the range of the 8% to 10% of revenue.

Now let me turn to the guidance for the second quarter and full year of 2007. Let me begin with the second quarter.

For the second quarter of 2007, we expect total revenues in the range of $26 million to $28 million, which would represent growth of approximately 50% to 60% on a year-over-year basis and growth of 22% to 31% on a sequential basis.

We have materially increased our guidance on both year-over-year and quarter-over-quarter growth based on discussions with our customers, our [bottoms-up] forecast review across all segments of our business and incremental improvement in visibility related to new programs and transaction types that we are working on.

From a profitability perspective, we currently anticipate second quarter non-GAAP EPS between $0.14 and $0.15. Our EPS forecast assumes a tax rate of 41.9% and 33.2 million shares outstanding.

From a full year perspective we are increasing our revenue guidance from $101 million to $103 million to a range of $108 million to $112 million.

This would represent year-over-year growth of 49% to 55%, a material increase from our previous expectations of 40% to 42% year-over-year growth and an acceleration from 34% growth in 2006.

While our visibility has improved since last quarter, the increase in the size of our guidance range for both the quarter and the year reflects the fact that the early stages of new transactions carry the greatest amount of uncertainty as it relates to timing and magnitude of ramp.

That said, I believe higher growth for the overall company has improved considerably since last quarter.

From a profitability perspective, we continue to expect our full year gross margins to be somewhere in the low to mid 50% range, an increase from 51% in 2006.

As I pointed out earlier, our gross margin is based on the mix of transactions and the initial automation rates with new customers and new transactions added to our existing customers.

Based on an increased revenue forecast and unchanged estimate of gross margins in the low to mid 50% range, we currently anticipate non-GAAP diluted EPS of $0.58 to $0.62 in 2007, an increase from our previous guidance of $0.48 to $0.52 and an increase of 30% from our preliminary [2000] estimate of $0.44 to $0.48.

Our full year non-EPS guidance assumes a tax rate of 41.9% and approximately 33.3 million shares outstanding.

In summary, we are pleased with the company's performance in the first quarter, which was highlighted by revenue and profitability that were better than expected. Even more importantly, we see significant opportunities ahead and our business momentum is strong and growing.

This is evidenced by the material increase in our revenue and profitability forecast for 2007, which is the second time we have increased our forecast since the beginning of the year.

With that, let me turn it over to the operator to begin the Q&A.

[OPERATOR INSTRUCTIONS]

And your first question comes from the line of Liz Grausam with Goldman Sachs. Please proceed.

Hi, guys. Thanks for taking the call. Question on where the upside is coming in your revenue. It seems like you've continued to up-sell customers much more rapidly than you had anticipated when signing them.

Can you kind of break out for us in the upside you've seen how much of it is actually new customers that you've brought on line over the quarter versus really accelerating the penetration into your existing base?

Hey, Liz, this is Steve. We certainly have contributions from both new customers as well as existing customers but the primary driver that has happened as well is reflected in our guidance going forward [sooner] is that we are penetrating our existing accounts that are new in a much more rapid fashion.

And what's driving that? Is it the ConvergenceNow platform that you've put out there that's drawing more attention to your capabilities or is it just real success rates off the bat that have brought in the expense lines for your customers more rapidly than they had expected?

I think it's a combination, Liz, of two things. One is that customers are deploying -- all of our customers, whether it's our cable MSOs or our traditional carriers, are really making convergence a centerpiece of their ongoing strategy.

But as I pointed out in some of the remarks that I had made, the economics and the value that we're providing is becoming that much more compelling for the service provider in the sense that they are looking at significant savings that are above and beyond what we traditionally used to give them in a single service environment.

And in terms of your CapEx trends, Larry, clearly you had a big expense in the quarter building out capacity. How should we think about your CapEx budget moving through the year as you clearly are going to be rolling on a lot of business?

As I said, I expect the CapEx to be roughly 8% to 10% of our revenue by the end of the year.

Okay.

We definitely frontloaded it this year but it should settle out about 8% to 10% by the end of the year.

great. Thanks, guys. Congrats on the quarter.

Thanks, Liz.

And your next question comes from the line of Tom Ernst with Deutsche Bank. Please proceed.

Good afternoon, gentlemen. Thank you.

Hey, Tom.

Hey, Tom.

Following up on Liz's question, wondering, you highlight very strong growth looking forward for AT&T. Should we expect that a lot of the sequential move we have here in Q2 is related to AT&T? Is that what you were implying?

Yes.

Yes.

Okay, fantastic. I'm curious, you highlighted AT&T and the VoIP market and I know you've been -- you've been selling or making -- or proposing to sell into other wireless operators. I'm curious, what is the momentum, traction and emphasis that you see throughout the rest of the wireless industry?

We have. I think one of the -- we are actually starting to see some decent momentum. Again, we don't discuss our specific pipeline but we feel pretty confident about the other wireless providers that we've been engaged in in the sense that as you see wireless growth in the industry, or at least the gross add portions, tapering off.

The need to be essentially more converged and to drive higher ARPUs is becoming more relevant and I think that plays very well to us going forward.

And so our story, as I had indicated earlier, in terms of converged versus standalone VoIP is starting to resonant more of the economics, I think, and in my opinion are becoming too compelling to ignore.

Okay, perfect. And one more follow-up, if you'll permit. I asked this question last quarter, so I'm curious if it's changed since we're three months later. Have you found any anecdotes of the AT&T iPhone announcement catalyzing inbound inquiries into you from particularly international carriers but also domestic?

In terms of our perspective, Tom, we certainly have given our -- finishing our first year as a public company. We've had a great opportunity to get more exposure just in a lot of our results with our existing accounts and so that has absolutely contributed to some inbound calls in regards to our just work in convergence, both in our customers that are primarily stationed here in the U.S. but have obviously have the international presence as well.

Thank you again.

And your next question comes from the line of Tom Roderick of Thomas Weisel Partners. Please proceed.

Hey, guys. This is actually [Gore Halpasen] for Tom Roderick.

How are you?

Good. How you guys doing?

Great.

I had a question on the VoIP side of the business. It's good to see that Vonage is still contributing, but in the event that they do sort of disappear, do you think you guys will be able to capture that churn with your -- sort of your leverage to the rest of the VoIP market?

Well, we certainly believe that we have a customer base that services all that market from both our traditional [IXE] carriers as well as the cable operators. Certainly at the end of the day nothing's ever a zero sum game where you go from one provider to the other.

But what has been very helpful to us is over the past year and a half, obviously, as the cable market, and especially Comcast and Time Warner, have entered this space significantly we have shared in that transactional growth.

And as our numbers have reflected, although Vonage is a good customer, a great customer for us, these other providers as well are continuing quarter after quarter to contribute good growth for us.

So although we've certainly guided with that view in terms of what we thought was a responsible view, but we clearly continue to see, as we sit here today, no material changes in our voice over IP business.

Excellent, excellent. And with regards to Comcast, are you guys still only managing the fallout management there or is there opportunity to sort of extend your reach within Comcast?

Well, we certainly can't get into the specifics of what we do, but we have been able to handle additional and we anticipate handling additional transaction types for Comcast. And so both Comcast and Time Warner is our kind of 2006 big cable wins. We feel very good about the progress that we've made in those accounts.

Great. And just one final question from me. On the AT&T side of the business, could you maybe talk a little bit about the sort of automation rate you're seeing right now and how those have sort of been trending as you add in more complex transaction types?

Well, I think from our perspective, I can't discuss any of the specifics, but what I can tell you is that the breadth of services that certainly the new AT&T can provide we would -- we believe that we have a more compelling value proposition in the sense of being able to really bring to market a lot of the services and technologies that they believe give them a very strong competitive advantage in the market.

And so obviously our ability to drive economics into that business is going to be based upon our ability to drive high automation rates. And so I can't get into the specifics of it, we're very pleased and I think AT&T is as well in terms of the progress we're making in that area.

Great. Thank you very much, guys.

Thank you.

And your next question comes from the line of Jonathan Hoopes with ThinkEquity. Please proceed.

Thanks for taking my question and good job --

Hey, Jonathan. How are you?

Jonathan Hoopes. I'm doing great, thank you. Good.

Without going into specifics on your relationship or the contract details that you have between yourselves and AT&T, can you tell us how much further along you are in knowing what your economic opportunity is, specifically related to the iPhone?

I know last time we asked this question it was kind of still in the working out phase. Does your '07 outlook here have a firm handle on what the iPhone is going to drive or does it -- is it still kind of pending?

Jonathan, we can't provide any comment on that relationship. But what I can tell you is that we believe that the overall economics that we think we can provide in terms of savings and an outstanding customer experience continue to be really compelling for the client and I think provides us upside as well so that there can be kind of a true win/win situation.

And I think as they've combined not just in these different areas on the consumer side but as well as some of the other channels that I mentioned earlier that I think the ability to bring that to market and our ability to demonstrate the heightened economic savings through our technology and through automation is starting to show a little bit stronger and more evident.

Okay. Could we move on to the VoIP side? Could you share with us what your understanding is from a legal standpoint how extensible, if at all, Verizon's claims against Vonage could be to your other VoIP operator customers?

You know, Jonathan, I'm not obviously a patent attorney and I can't give any information in great detail.

What I can tell you is that in talking with our customers and a lot of the public information that has been out there and watching how they interact with us in terms of these VoIP deployments, we haven't seen any type of hesitation as I sit here today or any material change in their plans post the Vonage Verizon litigation.

Great. Thank you very much.

Great. Thanks, Jonathan.

And your next question comes as a follow-up question from the line of Tom Roderick with Thomas Weisel Partners. Please proceed.

Hi, guys. It's Gore again. This is sort of a pretty broad based question. Can you maybe talk a little bit about the sort of the international opportunity? Haven't really delved much into that, but can you sort of give us your thoughts on where you think you might sort of see opportunity in the future?

Yes, well, we see -- certainly, Gore. We see a great opportunity for, as networks converge, for different platforms that we think that as some of our customers get more of a global reach, kind of connected in that, that we think that that would provide more opportunity for us just for the fact that adding international into a set of converged services is obviously going to add with complexity as defined today times five or six as you can imagine with the various different networks that are in place.

And so one of the things that we have focused very hard on is the execution side of the opportunities and growth within our existing accounts. But clearly we do see international as an opportunity for us to grow and we do see that as an opportunity where our value proposition certainly will resonate well.

Great. Thank you very much.

There are no further questions in the queue at this time. I would now like to turn the call over to CEO Steve Waldis for closing remarks. Please proceed, sir.

Great. Again, I want to thank everybody for spending some time with us today and we look forward to continually communicating with all of you throughout the year on the events at Synchronoss Technologies. Thank you very much and enjoy the day.

Thank you for your attendance in today's conference. This concludes the presentation. You may now disconnect. Good day.