Press Releases

Syniverse Reports First Quarter 2009 Results, Affirms Existing 2009 Earnings Guidance

TAMPA, Fla. – May 7, 2009 – Syniverse Holdings, Inc. (NYSE: SVR), a leading provider of technology and business solutions for the global telecommunications industry, today reported that results for first quarter 2009 were aligned with the company’s expectations and affirmed earnings guidance for 2009.

• Total revenue for first quarter 2009 was $108.9 million, a 5.8% decrease compared to first quarter 2008.


• Net revenue, which excludes off-network database queries, was $107.7 million, a 6% decrease compared to first quarter 2008.


• Net income was $16.0 million, or $0.23 per diluted share, 4.2% and 2.7% increases respectively compared to first quarter 2008.


• Cash net income, a non-GAAP financial measure described below, was $23.1 million, or $0.34 per diluted share, 7.6% and 8.1% decreases respectively compared to first quarter 2008.


• Adjusted EBITDA, a non-GAAP financial measure described below, was $47.2 million, a 10.9% decrease compared to first quarter 2008.


• Net cash provided by operating activities was $17.0 million in the first quarter 2009 compared to $23.3 million in the first quarter 2008.


• Operating free cash flow, a non-GAAP financial measure described below, was $10.2 million in the first quarter 2009 compared to $15.9 million in the first quarter 2008.

“We are pleased to report first quarter results that are in line with our expectations and that the company is well positioned for the remainder of 2009,” said Tony Holcombe, President and CEO. “Syniverse continues to execute on its global business plan and post solid results, even during a tough year for the global economy. The wireless sector remains strong and exhibits continued growth in messaging and mobile data on a global basis.”

David Hitchcock, Executive Vice President and CFO said, “Strong cost controls helped Syniverse maintain its historic margins during the first quarter, all while improving the efficiency of the business. Our view of 2009 remains on track and, consequently, we are reiterating our existing guidance.”

Please refer to the information set forth below under the captions “Non-GAAP Measures” and “Reconciliation of Non-GAAP Measures to GAAP” for an explanation of non-GAAP financial measures as well as a reconciliation of such non-GAAP financial measures to GAAP financial measures.

First Quarter 2009 Service Line Revenue

Technology Interoperability Services
Technology interoperability services revenues were $62.9 million in the quarter, an 8.4% decrease compared to first quarter 2008. Clearing house revenues were down while growth in messaging and mobile data slowed due to customer-specific events, including major customer renewals and certain insourcing decisions.

Network Services
Network services revenues were $30.0 million in the quarter, a 0.8% increase compared to first quarter 2008, primarily due to increases in SS7 transport.

Number Portability Services
Number portability services revenues were $7.2 million in the quarter, a 4.2% increase compared to first quarter 2008 due to increased porting volumes.

Call Processing Services
Call processing services revenues were $7.2 million in the quarter, a 14.7% decrease compared to first quarter 2008 primarily due to expected declines in signaling solutions and legacy fraud-related services.

Enterprise Solutions
Enterprise solutions revenues were $0.4 million in first quarter 2009.

Off-Network Database Queries (Pass-Through)
Pass-through revenues for first quarter 2009 were $1.2 million.

First Quarter 2009 Business Highlights

• Syniverse was selected to provide mobile number portability services for 10 years in India’s Zone 1, which includes New Dehli and Mumbai. Syniverse has been granted the license and expects to begin offering these services by the end of the third quarter 2009.


• The company continued its successful integration of BSG Wireless, with $6.0 million of annualized run-rate cost savings realized through March 31, 2009.


• Syniverse commercially launched several new products, including SyniverseSM NEXT, the industry’s first comprehensive advanced messaging hub. Other product announcements included a portfolio of business intelligence solutions that enables mobile operators to optimize roaming services based on a real-time view of subscriber roaming behavior and network performance and a global IPX Network Transport Solution.


• Syniverse announced that Lori Gonnu would join the company as executive vice president and general manager, and lead the company’s global roaming and interworking service offerings.

Outlook

The company affirmed the following outlook for 2009:

Net Revenues		$460 - $480 million
Net Income		$64.5 - 74 million
Adjusted EBITDA		$210 - $225 million
Cash Net Income		$99 - $108 million
Operating Free Cash Flow		in excess of $100 million

With the continuing successful integration of BSG Wireless, Syniverse expects to realize approximately $12.0 million of annualized run-rate cost savings by the end of 2009. Approximately $6.0 million of the expected cost savings have been realized through March 31, 2009, with the remainder to be realized by the end of 2009. Expected Adjusted EBITDA and cash net income have been adjusted to exclude the one-time costs related to integrating the businesses and the duplicative costs that are expected to be eliminated by the end of 2009. For periods beginning on Jan. 1, 2009, cash net income assumes a long-term effective tax rate of 37.5%; for periods through Dec. 31, 2008, the long-term effective tax rate assumption was 39%.

Non-GAAP Measures

Syniverse's cash net income is determined by first calculating adjusted net income. Adjusted net income is calculated by (i) adding the following items to net income: provision for income taxes, restructuring, SFAS 123R non-cash compensation, purchase accounting amortization and BSG Wireless transition expenses; (ii) adjusting the resulting pre-tax sum for a provision for income taxes at an assumed long-term tax rate of 37.5% (39.0% for all periods through Dec. 31, 2008), which excludes the effect of our net operating losses; and (iii) adding to that sum the cash benefit of our tax-deductible goodwill. The cash benefit is a result of the differing treatments of approximately $362.0 million of goodwill on our balance sheet, which primarily is the result of acquisitions that we made from Verizon in February 2002 and IOS North America in September 2004. Specifically, while this goodwill is not amortized for GAAP purposes, the amortization of goodwill is nonetheless deductible in calculating our taxable income and, hence, reduces actual cash tax liabilities.

Syniverse's Adjusted EBITDA is determined by adding the following items to net income: interest expense, net, provision for income taxes, depreciation and amortization, restructuring, SFAS 123R non-cash compensation, and BSG Wireless transition expenses.

Syniverse's operating free cash flow is determined by subtracting capital expenditures from net cash provided by operating activities.

A reconciliation of adjusted net income, cash net income and Adjusted EBITDA to net income, the closest GAAP financial measure, is presented in the financial tables below under the heading “Reconciliation of Non-GAAP Measures to GAAP.” A reconciliation of operating free cash flow to net cash provided by operating activities, the closest GAAP measure, is presented in the financial tables below under the heading “Reconciliation of Non-GAAP Measures to GAAP.”

We present adjusted net income, cash net income and related per-share amounts because we believe they provide useful information regarding our operating results in addition to our GAAP measures. We believe that adjusted net income provides our investors with valuable insight into our profitability exclusive of certain adjustments. In addition, cash net income provides further insight into the cash impact resulting from the different treatments of goodwill for financial reporting and tax purposes. We rely on adjusted net income and cash net income as primary measures of Syniverse’s earnings exclusive of these certain and other non-cash charges.

We present Adjusted EBITDA and operating free cash flow because we believe that Adjusted EBITDA and operating free cash flow provide useful information regarding our continuing operating results. We rely on Adjusted EBITDA and operating free cash flow as primary measures to review and assess the operating performance of our management team in connection with our executive compensation and bonus plans. We also review Adjusted EBITDA and operating free cash flow to compare our current operating results with corresponding periods and with the operating results of other companies in our industry. In addition, we utilize Adjusted EBITDA and operating free cash flow as an assessment of our overall liquidity and our ability to meet our debt service obligations.

We believe that the disclosure of Adjusted EBITDA, operating free cash flow, adjusted net income and cash net income is useful to investors as these non-GAAP measures form the basis of how our management team reviews and considers our operating results. By disclosing these non-GAAP measures, we believe that we create for investors a greater understanding of, and an enhanced level of transparency into, the means by which our management team operates our company. We also believe these measures can assist investors in comparing our performance to that of other companies on a consistent basis without regard to certain items that do not directly affect our ongoing operating performance or cash flows.

Adjusted EBITDA, operating free cash flow, adjusted net income and cash net income have limitations as analytical tools, and you should not rely upon them, or consider them in isolation or as a substitute for GAAP measures, such as net income, cash flows from operating activities and other consolidated income or other cash flows statement data prepared in accordance with GAAP. In addition, these non-GAAP measures may not be comparable to other similarly titled measures of other companies. Because of these limitations, Adjusted EBITDA and operating free cash flow should not be considered as measures of discretionary cash available to us to invest in the growth of our business. Adjusted net income and cash net income also should not be considered as a replacement for, or a measure that should be used or analyzed in lieu of, net income. We attempt to compensate for these limitations by relying primarily upon our GAAP results and using Adjusted EBITDA, operating free cash flow, adjusted net income and cash net income as supplemental information only.

First Quarter 2009 Earnings Call

Syniverse will host a conference call today, May 7, at 4:30 p.m. ET to discuss these results. To participate on this call, U.S. callers may dial toll free 1-866-700-7477; international callers may dial direct (+1) 617-213-8840. The passcode for this call is 61936990. This event also will be webcast live over the Internet in listen-only mode at www.syniverse.com/investorevents. A replay of this call will be available beginning at approximately 7:30 p.m. ET on May 7 and will remain available through May 21 at 11:59 p.m. ET. To access the replay, U.S. callers may dial toll free 1-888-286-8010; international callers may dial direct (+1) 617-801-6888. The replay passcode is 51042888.

About Syniverse

Syniverse Technologies (NYSE:SVR) solutions allow more than 650 communications companies in over 140 countries to provide seamless mobile services by making it possible for disparate technologies and standards to interoperate. Syniverse's flexibility and customer focus permit its customers to quickly react to market changes and demands, enabling the delivery of everything from voice calls to sophisticated data and video services wherever and whenever subscribers need them. With more than 20 years in the industry, Syniverse is headquartered in Tampa, Florida, U.S.A., and has offices in major cities around the globe. Syniverse is ISO 9001:2000 certified and TL 9000 approved, adhering to the principles of customer focus and quality improvement practices. More information is available at www.syniverse.com. The contents of our website are not incorporated into or otherwise a part of this press release.

Cautionary Notice Regarding Forward-Looking Statements

Certain of the statements in this press release may constitute “forward-looking statements” for purposes of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as such may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Syniverse to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements include, without limitation: statements regarding Syniverse’s position for long-term success; global wireless trends; Syniverse’s expectations to begin offering services in India; Syniverse’s expectations of several new products, including Syniverse NEXT; Syniverse’s ability to continue to report positive results in future periods and/or to continue to experience growth; Syniverse’s ability to continue to successfully and timely integrate BSG Wireless, and to realize the anticipated cost savings of that integration when and in the amounts anticipated; Syniverse’s belief of the value of Non-GAAP measures to its investors; Syniverse’s positioning in a worsening global economy; Syniverse’s ability to reduce its long-term effective tax rate; and Syniverse’s guidance for 2009, as contained under the caption “Outlook,” including, without limitation, expected net revenues, net income, Adjusted EBITDA, cash net income and operating free cash flow for 2009, as well as the assumptions, estimates, and judgments applied in creating such guidance.

These forward-looking statements are based upon information presently available to the Company’s management and are inherently subjective, uncertain and subject to change, due to any number of risks and uncertainties, including, without limitation, those other risks and factors discussed in Syniverse’s Annual Report on Form 10-K for the year ended Dec. 31, 2008 under the captions “Cautionary Notice Regarding Forward-Looking Statements” and “Risk Factors” and otherwise in Syniverse’s reports and filings that it makes with the Securities and Exchange Commission.

You should not place undue reliance on any forward-looking statements, since those statements speak only as of the date that they are made. Syniverse has no obligation and does not undertake to publicly update, revise or correct any of the forward-looking statements after the date of this Press Release, or after the respective dates on which such statements otherwise are made, whether as a result of new information, future events, or otherwise, except as otherwise may be required by law.