Recurring Latin American revenue bolsters Synchronica's Q3

Wednesday, November 23, 2011

Growth in recurring revenue from deals with Latin America's two largest carriers América Móvil (NYSE: AMX) and Telefónica (NYSE: TEF) made the region one of the fastest growing for UK mobile email and synchronization solutions provider Synchronica in 3Q11, Synchronica's CTO Kim Hartlev told BNamericas.

"Latin America is one of our fastest growing regions. With 16 carriers in 16 countries in Latin America where we have agreements we [could potentially] reach around 480mn users. That means that in Mexico and Argentina, nine out of 10 mobile users will have the possibility of using our service and in Brazil five out of 10," he said.

Synchronica posted US$7mn in Q3 revenues, up 900% from the same period of 2010. Hartlev said that the acquisition of Nokia's (NYSE: NOK) operator-branded messaging business for North America at the end of June clearly had a major impact on the quarterly results.

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But recurring revenue grew 1,098% year-over-year with 48% of recurring revenue now delivered as software as a service.

"We're seeing that more and more is going to be hosted or cloud-based solutions. We're getting those requests all the time and operators in these financial times are not willing to have huge capex investments anymore, so they prefer a pay-as-you-go model where we provide everything as a hosted solution to them," Hartlev said.

In September Synchronica announced it had undergone a management restructuring resulting in the resignation of CEO Carsten Brinkschulte and appointment of CFO Angus Dent as CEO.

Hartlev said that following a series of acquisitions, the company is now entering a period of operations consolidation.

This resulted in a headcount cut and cost reduction program expected to see US$12mn/year in savings.

The executive said that Latin America had not been affected by the cost reductions. On the contrary, the company has been hiring new sales representatives.