Synchronoss Technologies (SNCR) Q2 2018 Earnings Conference Call Transcript

Synchronoss Technologies (SNCR -0.54%)
Q2 2018 Earnings Conference Call
Aug. 9, 2018 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Greetings, and welcome to the Synchronoss Technologies second-quarter 2018 financial results conference call. [Operator instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brian Denyeau. Thank you, Mr.

Denyeau. You may begin.

Brian Denyeau -- Investor Relations

Thank you. Good afternoon, everyone. Thank you, and welcome to the Synchronoss Technologies second-quarter 2018 earnings call. We'll be discussing the results announced in the press release issued after the market closed today.

Joining me on the call today is Glenn Lurie, president and chief executive officer of Synchronoss; David Clark, Synchronoss' new chief financial officer; and Larry Irving, Synchronoss' former chief financial officer. During this call, there will be references to our prospects and expectations for the third quarter and second half of 2018 and beyond and other statements relating to our business that may be considered forward-looking statements within the meaning of the federal securities laws, including statements about our financial trends, future results from operations and financial position, business prospects, and market opportunities and prospects. Generally, these forward-looking statements are identified by words such as "expect," "believe," "anticipate," "intend," and other indications of future expectations. These forward-looking statements are based on the business environment as we currently see it and as such include certain risks and uncertainties.

Please refer to our earnings press release and our SEC filings for more information on the specific risk factors that could cause our actual results to differ materially from the forward-looking statements that we make in today's discussion. Any forward-looking statements that we make on this call are based on assumptions as of today and we undertake no obligation to update these statements as a result of new information or future events. In addition to U.S. GAAP reporting, we will report certain financial measures that do not conform to GAAP.

We believe these non-GAAP measures enhance the understanding of our performance. Reconciliation of the GAAP measure to their non-GAAP measure, in addition to the descriptions of the non-GAAP measures can be found on today's earnings press release. With that, I will turn the call over to Glenn. Glenn?

Glenn Lurie -- President and Chief Executive Officer

Thanks, Brian, and thank you to all of you for joining us today. Before I review our second-quarter results and strategic priorities in more detail, I would like to spend a few minutes addressing some of the key questions and areas of concern that we have heard since we held our last financial update call on July 2. The restatement of financials for the years of 2015 and 2016, along with the filing of our 2017 10-K and 10-Q for the first quarter of 2018 was a massive undertaking that we are very pleased is behind us. And we recognize that the pure volume of data, plus the added complexity of implementing ASC 606 and the various one-time fees related to the restatement effort may have made these financials complicated.

Given these complexities, the team and I did the best we could do to explain these during last month's business update call, but I understand there will still be some lingering questions out there. Accordingly, I would like to start and make several opening points. First, we expect Synchronoss to generate positive EBITDA and free cash flow in the second half of 2018 and to exit the year with an adjusted EBITDA run rate margin of approximately 15%. Second, the second quarter represented what we expect to be the low point in 2018 for revenue as we expect to generate sequential revenue growth in the second half of 2018.

Third, our 2018 revenue will only benefit by approximately $17 million from financial restatement of prior-period revenue due to the restatement and the transition to ASC 606. Fourth, we expect cloud revenue to grow during the second half of 2018 despite the fact we have revenue being spread over the base length of our contracts. Q2 cloud revenue is at a low point, and we will only go up from here, which we will go into greater detail in a few moments. Fifth, we have sufficient liquidity today to meet our financial obligations.

We also have multiple avenues to repay our bondholders over the next year. And finally, we remain in discussions with NASDAQ on resolving any outstanding information requests in order to lift the suspension of trading of our common stock on NASDAQ. At this time, we do not have a time line on when this will occur, but we do anticipate this will be resolved in the near future. Synchronoss has come through the restatement and divestiture process a more focused company that is well-positioned for future success.

We have signed important agreements with Verizon, AT&T, and Sprint, while also acquiring honeybee to significantly enhance our digital experience platform and each of these will be positive contributors to our growth going forward. Synchronoss has a long history of generating significant top-line growth with substantial profitability and free cash flow. Based on what we'll discuss today, you will see we are well-positioned to return to that type of performance with a focus on executing on our strategic initiatives. As part of this process, we have been conducting a thorough review of our cost structure with the help of a leading third-party consulting firm.

We have identified substantial opportunities to reduce expenses and increase efficiency while continuing to invest in our growth. The cost-saving initiatives we have implemented to date will generate savings of over $20 million in 2018. In addition, we are identifying further cost-saving actions in the second half of this year that will yield approximately $25 million of incremental annualized cost savings in 2019. Do note, the cost review process will be ongoing, and we anticipate we'll be able to generate additional savings over time.

David will discuss this in greater detail in his section. I would now like to take a few moments to provide an update about each of our product platforms. We are fortunate and have made strategic decisions to have a diverse product portfolio that provides a number of exciting opportunities for future growth. I will start by discussing our cloud business.

Carriers initially saw cloud as a free, subscriber value-added service that increased user satisfaction and aided in the churn reduction by creating customer stickiness. The freemium model gave carriers access to as many subscribers as possible but also created a growing cost center that outpaced the additional revenue it generated. During the same time, the market saw increased participation in cloud backup and restore as content stored on a smartphone grew at exponential rates. This change has caused the content coming from the smartphone to be considered more valuable by many customers than the phone itself.

Additionally, the number of hacks, data breaches, and misuses of the data made customers seek an environment that was absolutely safe and secure and had their best interest in mind. These changes have created an opportunity for carriers globally to reset their model to a premium offering by delivering a simple, compelling customer experience and back end. With backup and absolute data integrity, our carrier customers are seeing growing number of subscribers deciding to buy into the cloud offering. This resulted in fewer cloud subscribers overall, but created a growing base of higher ARPU subscribers at substantially less overall cost with higher profitability.

The result is a growing services business, creating a vital new revenue stream for the carrier, while also driving overall customer satisfaction and loyalty. This is also an opportunity for the carrier to take ownership and support of the entire subscriber relationship, meaning both handset, as well as content or media for their customers. Prior to the shift, much of our Synchronoss' cloud revenue was in hosting, a lower operating margin and capital-intensive business. As storage costs have dramatically decreased and options for hosting partners have increased, it is more cost-effective for Synchronoss to outsource most of our hosting.

Synchronoss was traditionally an in-house hosting provider to its cloud customers. By outsourcing hosting, we are, therefore, improving margins and profitability related to our entire cloud business. We are also staying true to the new Synchronoss strategy, which is database software and services company. Reducing our dependency from hosting and the hosting model is one that gives us higher margins, stickier reoccurring subscriber revenue, provides a better long-term opportunity for Synchronoss and for our new and existing accounts.

Our cloud offering is a comprehensive, value-added solution that provides our customers a new revenue stream, as well as a critically needed opportunity for end-user engagement, which positions Synchronoss directly in the value chain of helping our target customers improve revenue and customer loyalty. Overall, this has given us a wonderful proof point that the cloud business can be profitable and a way of driving incremental revenue, which creates new selling opportunities for Synchronoss to utilize our white-label service and sell to carriers globally. In the first half of the year, the reduction in hosting revenue was larger than the increase we've generated in subscriber revenue for this new premium subscriber model. Hosting revenue is now largely out of our current run rate.

And starting in the third quarter, we will begin generating sequential growth in our reported cloud revenue. Another factor impacting near-term cloud revenue is simply related to timing. Under accounting standards, we are required to aggregate the minimum values of the base contract and recognize ratably over three years. Volumes that exceed the minimums are also spread over the remaining life of the contract as well.

As a result of this treatment, we do expect to collect approximately $30 million more dollars in cash this year than we will recognize as revenue in our cloud business. In summary, I would like to reiterate my earlier point that we expect cloud revenue to reflect sequential growth from this point on in 2018 and beyond, and we are very excited about the overall opportunities in cloud. We are seeing strong adoption among premium subscribers, which is trending ahead of expectations and our sales funnel of carrier opportunities has never been larger than it is today. Turning to our digital business, which we refer to as digital experience platform or DXP.

In today's market, TMT companies have to provide a seamless digital customer journey in an omni-channel environment in order to compete. For those companies, digital transformation isn't a buzzword, it's a complete strategic imperative. A successful digital transformation for all companies is actually quite difficult to execute and is exacerbated by the increase that we are seeing in M&A activity, in bundled offerings, disparate systems and legacy billing environments found inside many large TMT companies. With DXP and the integration of honeybee, we have created a single digital platform that can unify these systems to provide a frictionless experience for their customers across any channel and any touchpoint.

There are four key elements to our DXP platform, each of which represents exciting growth opportunities: our legacy activation product, which provides a powerful, yet complementary data abstraction layer that automates fulfillment and workflows to unify back-end system; digital portal, which is an easy-to-use digital interface that enables self-care through a seamless customer experience across channels and touchpoints; digital broker, which helps our customers drive additional revenue by offering value-added services from ISVs and other third-party providers, which enriches the experience for the carrier customers; and digital journey, which is the new naming for our honeybee platform, is a differentiated unified experience to deliver best-in-class true omnichannel customer experience throughout the entire customer journey. We are very pleased with the reactions and the reception from both current and potential new customers to our digital experience platform. And based on the number of proof of concepts we currently have in place with several customers, we look forward to announcing and discussing new deals with you very soon. Turning to our messaging business, we had another strong performance in the second quarter.

The messaging market is undergoing the biggest transformation in its history with the rise of OTT, over the top, revenue generating messaging applications like WhatsApp, Line and WeChat. These -- the increase in popularity of these apps has taken a massive bite out of carrier messaging business, as well as started the disintermediation of carrier customers around the world. I'm excited to announce today, for the first time, a carrier partnership in Japan was formed and launched a rich communication service, messaging product and Synchronoss' advanced messaging platform is a key element in the Japanese partnership's overall strategy and offer. The leading carriers in Japan are using our platform to deliver an advanced messaging experience to their customers, while taking on the OTTs and driving new incremental revenue opportunities for themselves.

This is a unified, advanced messaging offering with ubiquitous RCS functionality that allows them to change the messaging game, while also setting themselves up for scaled incremental feature and functionality to drive new revenues and customer satisfaction. With Synchronoss' vital role in this truly groundbreaking effort and offering, we expect our messaging revenues to continue to grow along with the opportunities to expand our Messaging footprint to other key markets and carriers globally. Each of these areas I've described above is significant part of our current business today, and we expect each will continue to be a positive contributor to our growth. Another area that we are particularly excited about is IoT.

We believe this will be the next long-term pillar of growth for Synchronoss. We have a unique capability of being able to activate nontraditional devices across carriers and across operating systems with a cloud platform that can cost-effectively store and move massive amounts of data. We can layer across this advanced analytics platform to provide customers with the ability to make real-time decisions that will improve their business and solve real problems. This is a unique and highly differentiated state of capabilities that we have and we believe present a great growth opportunity over time.

We announced earlier this year that we joined the AT&T Smart Cities Strategic Alliance, is a great example of the type of opportunities our platform are well suited for. We have a growing pipeline of opportunities in IoT and look forward to sharing more with you in the near future. Before I wrap up, I would like to talk about the management transition we announced this afternoon. I am thrilled to announce that David Clark has been appointed Synchronoss' new chief financial officer.

David joined the company in June as EVP of finance. He has almost 20 years of experience as a public company CFO, 15 of which is with companies in or related to the mobile phone industry. I look forward to partnering with him going forward. David is replacing Larry Irving, who will again be retiring from Synchronoss.

On behalf of the board of directors and everybody at Synchronoss, I want to thank Larry for his tremendous contributions to the company. His decision to return to the company last year was instrumental in helping us complete the financial restatement process. Larry will continue with Synchronoss in a consultative engagement through early 2019. I'd like to wish Larry all the best in his reretirement.

To summarize, Synchronoss has turned the corner and will return to growth and profitability in the second half of 2018. Our mission to provide platforms that enable TMT customers to deliver simple, engaging digital, cloud, messaging and IoT experience to customers is resonating with customers. We're diligently focused on executing on our strategic priorities, which we are confident we will deliver significant improvements in our financial performance and generate substantial value for our shareholders. With that, I would like to now return the call over to our new Chief Financial Officer David Clark. David?

David Clark -- Chief Financial Officer

Thank you, Glenn, and thank you for the kind words. I'm excited to help lead Synchronoss into its next stage of growth and profitability. Synchronoss has world-class people and products and the type of strategic customer relationships you rarely find. I look forward to meeting many of you in the months ahead.

With that, let me turn to our second-quarter results, which we shortly filed with the SEC through our 10-Q. Please note that these results are presented on an ASC 606 basis and all the numbers that I'll be going through will be non-GAAP, a reconciliation of which can be found in the press release on our Investor Relations site. Revenue in the second quarter was $76.7 million, compared to $119 million in the second quarter of 2017. The primary drivers of this year-over-year decline were the following: one, approximately $28 million of one-time revenue recognized in the second quarter of 2017 from prior years related to our financial restatement, of which approximately $24 million relates to the restatement of revenue stemming from the timing of receiving and executing contract from a customer and approximately $4 million is related to previously recognized professional services revenue required to be amortized over the term of the contract under revenue guideline; and finally, approximately $14 million related our cloud business transitioning from a freemium to a premium subscriber model as discussed by Glenn.

Revenue growth on a year-over-year basis would have essentially been down $9 million adjusting for these two nonrecurring items in the 605 to 606 transition. Cloud revenue was $38.7 million, compared to $77.7 million in the year-ago period. As Glenn just discussed, this is primarily due to the restatement revenue impact of transitioning from freemium to premium subscriber model and related changes in hosting. The transition from a freemium to a premium subscriber model reflects the near-term impact of this change in the cloud business model.

We're now through this transition period and seeing strong growth in premium subscriber additions. Accordingly, we anticipate sequential revenue growth in cloud revenue in the second half of the year. Digital revenue was $22.2 million, compared to $28.1 million in the year-ago period. This net decrease was driven by reduction in business volumes.

However, with the integration of honeybee into our digital experience platform and based on the proof of concepts we currently have in place with several customers, we anticipate sequential revenue growth in digital in the second half of the year. Messaging revenue was $15.8 million, compared to $13.1 million in the year-ago period. The growth in messaging was driven primarily by new sales in the market associated with the carrier partnership in Japan, as Glenn previously noted. We expect our messaging revenues to continue to grow along with our opportunities to expand our messaging footprint in other markets globally.

Breaking down revenue further, 76% of second-quarter revenue was from recurring revenue sources like subscriptions and transactions. The remaining 24% consisted of nonrecurring services like professional services and licensing. We are pleased with the growing percentage of our business that is recurring, which increases the visibility and predictability of the model. Turning to profitability, our gross profit was $38.5 million, which represents a non-GAAP gross margin of 50.2%.

This compares to a 60.7% gross margin in the year-ago period, with a large part of that being driven by the restated recognized revenue that had no associated cost with it. We expect to see gross margins increase from Q2 levels due to the expected increases in revenue, as well as the actions we are taking to significantly lower our cost of revenue. A major component of this initiative is the consolidation and restructuring of our current hosting platforms that are expected to yield an annualized reduction in hosting cost of as much as $20 million. We continue to evaluate all aspects of our operations to identify additional areas where we can streamline costs and gain greater efficiency while still investing to drive growth.

Non-GAAP operating loss for the continuing operations was $15 million and adjusted EBITDA was a positive $12,000. This compares to non-GAAP income from operations of $18.4 million and adjusted EBITDA of $33.5 million in the second quarter of 2017. We incurred $9.3 million of one-time expenses in the second quarter related to the restatement process, bringing our year-to-date total to $16 million. We will see these costs dissipate in the third quarter as a result of the completion of our financial restatement process.

However, we do anticipate there will be some associated accounting and legal costs going forward. Non-GAAP loss per share from continuing operations was $0.48 based on 39.5 million shares outstanding compared to non-GAAP net income per share from continuing operations of $0.24 in the second-quarter 2017 based on 44.6 million shares outstanding. Turning to our balance sheet, cash used in operations during the second quarter was $62 million and free cash flow was a negative $65.8 million. We ended the second quarter with $240.4 million of cash, cash-equivalents, restricted cash, and marketable securities.

This is down from $320 million at the end of the first quarter, a decline of almost $80 million. As a reminder, we indicated on our last call that second quarter had a number of significant one-time cash uses which totaled $51.2 million. This included approximately a $20 million cash tax payment, primarily related to a gain booked from the sale of Intralinks, an $11 million payment for the purchase price of honeybee and payments to various professional services firms associated with restatement process in the amount of $21 million. In addition, we had a significant increase in the second quarter related to the timing of a customer payment of $25.2 million, all of which are expected to be received in the third quarter.

In summary, of the $80 million reduction in cash in the second quarter, $51.2 million was one-time, nonrecurring cash spend and $25.2 million related to the timing of customer payment, as we noted above. It is anticipated that our cash balances will grow going forward in the second half of the year, and we will end the year with approximately $270 million to $280 million of cash as a result of positive EBITDA performance, significant reduction in one-time cash payments, and improvement in customer collections. Before turning to guidance, I'd like to spend a moment addressing our relationship with STI. At this point, we are not a guarantor of any third-party debt to STI.

In fact, STI has fully repaid its senior debt obligations ahead of schedule, and we are working with STI to get current on their outstanding receivables owing to Synchronoss. Now turning to guidance, as Glenn mentioned, we expect to generate positive adjusted EBITDA in the second half of 2018 and to exit the year with an adjusted EBITDA margin run rate of approximately 15%. The combination of improving cloud revenues and continued strength in messaging and DXP coupled with a positive impact of the cost-saving initiatives we are undertaking and the winding down of the one-time restatement expenses underscores our confidence in our ability to deliver significant improvement in our financial performance during the third quarter. For the full year, we expect to achieve the following: total revenues of $325 million to $335 million, which includes $17 million net benefit from restated revenue and the adoption of ASC 606 from prior periods.

While we aren't providing guidance by quarter, directionally, we would expect both the third and fourth quarter to be above our second-quarter level. Adjusted EBITDA is expected to come in at $10 million to $20 million, which equates to a second-half adjusted EBITDA of $17 million to $27 million. We expect to generate leverage throughout the business in the second half of 2018 across all three expense categories: cost of revenue, SG&A, and R&D. As I said, we expect to end the year with cash, cash equivalents, restricted cash and marketable securities of $270 million to $280 million.

In closing, we have made tremendous progress in the first half of 2018 in positioning Synchronoss for future success. With the restatement behind us and multiple growth drivers starting to ramp, we expect to quickly start returning to revenue growth and adjusted EBITDA profitability. We're excited about the positive momentum in the business and focused on maximizing the opportunities in front of us. And with that, Claudia, we're happy to take questions.

Questions and Answers:

Operator

Thank you, sir. [Operator instructions] Our first question is from Tom Roderick with Stifel. Please go ahead, sir.

Tom Roderick -- Stifel Financial Corp. -- Analyst

Hey, gentlemen, good afternoon. Thank you for taking my questions. And Glenn, thank you very much for lots and lots of detail in there, particularly on sort of the changing nature of some of the cloud relationships and then how that goes forward on premium. I was hoping we can dig in on that a little bit.

And David, if you don't mind just jumping in with some of the numbers so that we can kind of get a sense for where we're all going to be on level-setting on the cloud-revenue basis. It sounds like this should probably be the low-water mark in the quarter. But, Glenn, can you just talk a little bit more detail about sort of that mix in how the premium subscriber base begins to grow from here? Is that just a function of big customers like Verizon marketing this to their customers more aggressively and you get more people to sign up and take more storage? Is there a revenue share component to that? Talk about how that grows. And then also as you've outlined the hosting business has now declined down to a de minimis amount, what happens when the gross margins on that business? Should we start to see those going up? Are there duplicative costs in there right now that are holding gross margins down temporarily? Can you help us understand where gross margins go on the overall business now that you've shifted to that premium subscriber base? That would be great.

Thanks.

Glenn Lurie -- President and Chief Executive Officer

First of all, thank you for the questions, Tom. Appreciate it very, very much. So as we've gone forward and made this transition, you're absolutely right, it's about marketing to the customers. Now, remember a majority of our customers have a few months of free to get the customer going.

So the goal that we look to do is to get a very high percentage of those customers opting in to at least take that service as a free service and the second thing you're looking for is the conversion rate of those customers to actually paying. And in both cases, Tom, we're seeing that higher than we anticipated with our partners. So we're seeing very, very high initial take rates, and we're also seeing much, much higher take when they have to go convert to actually paying for the product itself. Also, the usage has actually been higher than we anticipated and the churn has been lower as well.

So when you throw all those metrics into a box and shake it up, it feels pretty good. Now I said the first part about learning, we work hand in hand with our carrier partners to market, and we also share best practices among carriers. And it is our sense we got carriers in the U.S. and obviously globally that are going through this.

So we are actually seeing all of that get better. On the hosting side, as I said, we're going through a transition, right? And that transition has been one of the reduction in -- obviously, in hosting. You all know, I think everybody in the call knows, that hosting has got more choices, gotten less expensive, the whole idea around it has become better and easier for us. So as we move that off, we've got to transition kind of both ways.

We do expect, to your point, that gross margin will go up, and we do expect to see that improve, not just in cloud, but we expect to see that improve overall -- in the overall company. David, anything you want to add?

David Clark -- Chief Financial Officer

The only thing I'd add, Tom, it is the expectation that the gross margin will go up because of the hosting that Glenn just mentioned. It will be tempered a little bit because you've got to remember that rev rec requires us to recognize even the overachieved revenue over the life of any hosting contracts. I just want to make sure we're clear on that. We might -- we will see benefits in over-achieving these expectations.

Glenn Lurie -- President and Chief Executive Officer

Right.

Tom Roderick -- Stifel Financial Corp. -- Analyst

OK, excellent. That's helpful. Let me shift to the cost-cutting side of the discussion. So it sounds like there's a number of sort of fixed costs associated with hosting that will go away and maybe they will go away pretty quickly.

Can you just get a little bit more specific about what those are? Presumably, you've got a lot of hardware and assets in data centers that are depreciating by nature. Is there -- are there one-time writedowns associated with moving off of those costs? When we think about $20 million in costs in the second half and $25 million in the incremental next year, how much of those need to be driven by sort of staff reductions? How much gets driven by fixed costs that maybe perhaps we should expect the one-time writedowns were just moving out of certain facilities?

Glenn Lurie -- President and Chief Executive Officer

Yes, it's a good question. We don't expect any one-time writedowns. And let me step back for a second. We have different types of relationships, Tom, with the carriers.

Some carriers ask for us to host. Some carriers wanted to post themselves. Other gave us an opportunity to look at third parties. So we kind of have a mismatch that we're working through in doing this and making the shift.

So it's kind of hard to answer it in one specific way. So we -- you can imagine, we're working on all of those. Also, we have an opportunity here in some cases that we're going to be moving. There still will be some hosting that we have to do depending on the customer.

We will be moving that, obviously, to a much lower-cost third party that will be our partner in doing that. So you can imagine that there will be some reductions in cost structures around potential FTEs. There are some reductions in costs that could be coming on any sort of center that we have, but we don't see any big one-time writedowns.

Tom Roderick -- Stifel Financial Corp. -- Analyst

OK, that's helpful. Last one from me. I appreciate some of the details around the SGI relationship there. It's awfully good to know you're no longer a guarantor on that debt.

What should investors expect with respect to when you will be repaid for the acquisition purchase price? How that sort of gets done over time? What are the mechanics of what the original acquisition purchase price was meant to be? And how does that get paid to Synchronoss at this point?

Glenn Lurie -- President and Chief Executive Officer

So I'll start and let Dave jump in. I would say this is -- it's a good question, Tom. There's not a lot we can say. The key element for us is we've got a very good working relationship with them.

As you know, they were a part of Synchronoss many years ago. We -- as we said in our prepared remarks, they are doing well in the sense of they got rid of one set of debt, they are paying us and they're trying to get that back up to -- from accounts-receivable perspective, they're doing much better. I think that's really all we can say around where they are. David, anything else you want to add?

David Clark -- Chief Financial Officer

No. As I said in the remarks, we are working with them to make sure they're coming current. I think we're going to continue to work with them to try to achieve the end you're prescribing, Tom, where we get our monies returned. But we've got to look at alternatives.

So we'll probably have more to say about them in future calls.

Glenn Lurie -- President and Chief Executive Officer

Yes. I'll say one last thing, too. As we do more, Tom, in the digital business, and we talked about our digital platform, they do play a role with some of -- we do have joint customers. We are seeing a lot of interest in our DXP platform.

And candidly, we would expect that they will get some of that business with us because they do what they do very, very well. And so we have some joint customers, we have some discussions going on and we're doing some of those discussions joint, which I think will help them in the long run as well.

Tom Roderick -- Stifel Financial Corp. -- Analyst

Excellent. Appreciate the detail, guys. That's it for me. Thank you.

Glenn Lurie -- President and Chief Executive Officer

Thanks for the questions. We appreciate it.

Operator

There are no further questions registered at this time. I would like to turn the floor back over to Glenn Lurie for closing comments.

Glenn Lurie -- President and Chief Executive Officer

OK. So thank you very much. And Tom, again, thanks for the questions. To everybody, we're very excited about where we sit and where we're positioned.

We are also excited to be here doing an earnings call as we got the refiling done. And I would just say, I want to say thank you again to Larry, he's sitting to my right here, for him coming back and the work that he did. I'm very excited about David being a part of the team, and we're just really excited about second half of 2018. So thank you all very much, and hope you have a great day.

Operator

[Operator signoff]

Duration: 37 minutes

Call Participants:

Brian Denyeau -- Investor Relations

Glenn Lurie -- President and Chief Executive Officer

David Clark -- Chief Financial Officer

Tom Roderick -- Stifel Financial Corp. -- Analyst

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