The mobile communications industry has undergone significant technological changes and advancements over the last twenty years. Thanks to evolution of mobile communications and rapid rise in mobile data, mobile technology companies are benefiting from the favorable industry trends, and Syniverse Holdings Inc. (SVR) is one among them.
Syniverse offers roaming, messaging and network services to about 700 telecommunications operators and to over 100 enterprise customers in around 160 countries. The company went public in February 2005 at $16 per share.
Though Syniverse faced a down year in 2009 as earnings and revenue lagged behind the year-ago numbers, things are now looking up for the company with roaming and messaging lines of its business gaining strength.
Let's walkthrough the company's historical financial performance and take a glimpse into its future.
A review of Syniverse's annual reports from 2005 through 2009 shows that while earnings have been erratic in the said time frame, revenue has consistently increased every year except in 2009. The company operates under three major lines of business, namely roaming, messaging, and network. Syniverse generates a major part of its revenue from its roaming line of business.
In 2009, net income declined to $65.67 million or $0.96 per share from $78.46 million or $1.15 per share in 2008. Revenue for the year dropped to $482.99 million from $506 million a year before.
The revenue decline was caused by economic downturn, lower prices associated with the renewal of the Verizon Wireless contract in September 2008 and by the loss of mobile data roaming transactions between Alltel Corp. and Sprint Nextel resulting from the Alltel/Sprint Nextel insourcing initiative combined with the Verizon acquisition of Alltel. Syniverse revenues are transaction-based charges under long-term contracts, typically running for a term of three years.
However, things are changing, and in the first quarter of fiscal 2010, the company achieved solid results helped by roaming volume growth and record number of transactions processed by its messaging platform.
Net income for the first quarter of 2010 was $19.7 million or $0.29 per share, up from $16 million or $0.23 per share in the year-ago quarter. Total revenue for the quarter was $149.0 million, a 36.8% increase compared to first quarter 2009.
The total revenue for the first quarter of 2010 included roaming revenue of $65.9 million, an 11.0% year-over-year increase; messaging revenue of $47.4 million, reflecting a five-fold growth and network revenue of $33.4 million, which declined 5.2% from the year-ago quarter.
As global economy recovers, there is bound to be an upswing in travel and a rise in the number of travelers is poised to increase the roaming volume.
Early this year, the company secured a multi-service contract win from telecom operator Viva, the latest addition in the Bahraini telecom market and part of Saudi Telecom Company Group. Syniverse will be providing a comprehensive suite of 10 roaming, messaging, network and turn-key solutions to Viva.
MES (Mobile Enterprise Services) solutions, which provide businesses a way to send time- and event-based text messages to their employees, customers and partners around the globe, is a strong area for Syniverse. There are two messaging categories - namely P2P (Person-to-Person) and A2P (Application-to-Person).
P2P messages are sent by one individual to another and include both SMS (short messaging service) and MMS (multimedia message service). A2P messages are used by companies that want to interact with their clients via an SMS application, for example mobile banking.
Syniverse's mobile messaging capabilities have got a boost from the 2009 acquisition of VeriSign Inc. The company continues to see significant growth in both A2P and P2P message delivery across its network. In the first quarter of 2010 , the company moved an average of 1.52 billion mobile messages per day , an increase of 32% from the first quarter of 2009 and an increase of nearly 17% from the fourth quarter of 2009.
In the first quarter of 2010, the company achieved an impressive customer retention rate of 99.75%.
In March of this year, the wireless association - CTIA (Cellular Telephone Industries Association) and participating carrier companies, led by America Movil and Telefónica, launched a new Latin America common short code, or CSC, initiative.
Syniverse has been selected by the CTIA to support the CSC program with a state-of-the art, fully scalable web-based platform that incorporates functionality ranging from registry to CSC search to payment capabilities. The purpose of this initiative is to create a centralized CSC registry process that allows wireless consumers, using almost any mobile device, to be able to obtain critical or timely information, contribute to a charitable cause, purchase content or participate in numerous interactive campaigns across Latin America.
The mobile data traffic is expected to double every year through 2014, according to Cisco VNI (Visual Networking Index) global mobile data traffic forecast. The number of mobile internet users is estimated to grow from 577 million in 2008 to 1700 million in 2013 in the world. The mobile data usage continues to be driven by smartphones and portables.
Market researcher iSuppli predicts global smartphone shipments to grow to 439 million units by 2013, more than doubling from 181 million in 2009. With growing proliferation of mobile devices and more consumers embracing mobile messaging, the future looks good for Syniverse's business.
Apart from the growing usage of connected devices like smartphones, netbooks, tablets like the iPad, Kindle and Sony readers, and increasing momentum in messaging, which are driving its growth, Syniverse says it is also benefiting from the exponential worldwide growth of popular community-based services, such as social networking and mobile giving, and new market entrants - cable operators, application developers and internet companies.
Syniverse is already moving messages for cable companies as well as application developers. In a post-financial report conference call, the company said that it secured a new messaging business contract from a major US-based social networking client for its international alerting and notifications in the recent first quarter.
The company is scheduled to report second-quarter results after the market closes on August 2nd.
Analysts are bullish about the company's earnings prospects, and over the past ninety days, they have revised up Q2 EPS estimate by 2 cents to $0.46 per share.
Based on the roaming volume and messaging volume trends, the company boosted its full-year 2010 earnings and revenue outlook in May. The company expects net income to range between $75.0 million and $83.5 million, up from its previous guidance of $70.5 million - $82.5 million.
The company foresees annual net revenue in the range of $605 million to $625 million, compared to its earlier guidance of $590 million - $620 million. The revised revenue outlook for 2010 reflects 25%-29% year-over-year growth, while the revised earnings guidance represents 14%-27% growth over 2009.
With favorable industry trends and good growth prospects ahead, Syniverse may be worth a look.
Stock Performance
The stock looks interesting, as it stands poised to test its multi-year closing high of $24.01 hit in early 2006, almost a year after it began trading following its public offering. A break above this key level may place the stock on track for further gains.
After hitting an all time closing low of $7.23 in late 2008, the stock has been on a recuperative run, broadly advancing in a primary uptrend, although amid some volatility. Since June this year, Syniverse has formed a near term sharp uptrend and is now comfortably trading above its 50-day and 200-day moving averages, which are currently at 20.13 and 18.37, respectively. Nevertheless, caution may be the watchword, as shares trade at overbought levels after an over 30% climb since early June.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.