The public side of Synchronoss

After a promising start in 2001 followed by an uncertain race over the hurdles erected by the Internet and telecom bust, Synchronoss Technologies has persevered, survived, gone public (June 2006), had its first public earnings call and last week entered the video activation space for wireless.

For the quarter ending June 30, its second, Synchronoss reported last week net revenue of $17.4 million, an increase of 27% over last year’s second quarter and 11% sequentially. Stephen Waldis, president and CEO of Synchronoss, was pleased. The quarter highlighted the balancing of Synchronoss’ traditional but still growing wireless revenue with growing opportunities in the voice-over-IP space.

Synchronoss’ on-demand transaction management platform for service fulfillment and order management is also gaining traction from operators growing demand for e-commerce solutions.

“Though we’ve been in production with wireless operators since the beginning, we are getting a lot of calls to help operators whose customers want to use, say, Real Networks to activate a Sopranos episode,” Waldis said. “And for our business model the more complex the bundles and services, the faster we’ll grow.”

The company signed several service provider contracts in the VoIP market in the quarter, including Covad and SunRocket. The company now serves AT&T, Cablevision Systems Corp., Cingular Wireless, Level 3 Communications, Time Warner Cable, Verizon Business Solutions, and Vonage. Synchronoss also named Charles Hoffman, president and CEO of Covad Communications Group, to its Board of Directors.

Waldis said that even though SunRocket's business model is similar to that of Vonage, the company has more focus on services creation of complex services. The work Synchronoss is doing with them is in the early stages.

Thanks in part to its initial public offering and $7.9 million in non-GAAP gross profit in the quarter, Synchronoss had cash, cash equivalents, and marketable securities of $61.8 million as of June 30.

Part of that money has been used to complete the development of a video activation module to its ActivationNow platform, which will be deployed in the fourth quarter.

The ActivationNow platform automates, synchronizes and simplifies electronic service creation and management of advanced wireline, wireless and IP services. The company has now taken the product “up the stack” from automating transactions to enabling the delivery content and applications.

“One of the things we announced a week or two ago was a deal we have in wireless where we will be activating the physical content for video on cell phones. That will play well with the cable guys as they continue to get aggressive on their quadruple play,” Waldis said.