- Q1 2015 revenue of $26.7 million, exceeds guidance range of
$24.0 - $26.0 million
- Q1 2015 adjusted EBITDA of $1.3 million, exceeds guidance range
of $0.0 to $1.0 million
- Adjusted EBITDA of $1.3 million in Q1 2015 up from a year ago
loss of $0.7 million in Q1 2014
Synacor Inc. (Nasdaq:SYNC), the trusted technology development,
multiplatform services and revenue partner for video, internet and
communications providers, and device manufacturers, today announced
its financial results for the first quarter ended March 31,
2015.
"We continue to execute well against our strategy," said Synacor
CEO Himesh Bhise. "We are pleased to report first quarter financial
results that exceeded our expectations with sustained year over
year growth. We continue to diversify into attractive growth
markets--our advertising business continues to perform well, we are
growing our fee-based subscription revenues, and building
compelling advanced video solutions."
Q1 2015 Financial Results
Revenue: For the first quarter of 2015, total
revenue was $26.7 million, an increase of 6% compared to $25.2
million in the first quarter of 2014. Search and display
advertising revenue was $20.6 million, an increase of 4% compared
to $19.9 million in the first quarter of 2014. Subscription-based
revenue was $6.1 million, a 14% increase compared to $5.3 million
in the first quarter of 2014.
For the first quarter of 2015, Synacor averaged 22.0 million
multiplatform unique visitors per month, compared to 21.3 million
in the first quarter of 2014.
Adjusted EBITDA: For the first quarter of 2015,
adjusted earnings before interest, taxes, depreciation, and
amortization (EBITDA), which excludes stock-based compensation
expense, was $1.3 million, or 5% of revenue, compared to a loss of
$0.7 million in the first quarter of 2014.
Net Income: For the first quarter of 2015, net
loss was $1.1 million, compared to net loss of $2.1 million in the
first quarter of 2014. Earnings per share, or EPS, was a loss of
$0.04. The net loss includes stock-based compensation expense of
$0.7 million, or $0.03 per share, in the first quarter of 2015, as
compared to $0.7 million, or $0.02 per share, in the first quarter
of 2014. The EPS calculations for the first quarter of 2015 are
based on 27.4 million weighted average common shares outstanding.
The EPS calculations for the first quarter of 2014 are based on
27.4 million weighted average common shares outstanding.
Cash: The company ended the first quarter of
2015 with $26.8 million in cash and cash equivalents, compared to
$25.6 million at the end of the prior quarter. Cash generated by
operating activities was $2.2 million for the first quarter of
2015, compared to $1.2 million used in operating activities in the
same period of the prior year.
Business Outlook
Bhise continued, "We're building on these Q1 results and are
focused on continuing our progress in Q2 and throughout the year.
We're improving our products, growing monetization, and are a
stronger partner to our customers."
Based on information available as of April 30, 2015, the company
is providing financial guidance for the second quarter and
fiscal 2015 as follows:
- Q2 2015 Guidance: Revenue for the second
quarter of 2015 is projected to be in the range of $24.0 million to
$25.5 million. For the second quarter of 2015, the company expects
to report adjusted EBITDA of $0.2 million to $1.2 million.
- Fiscal 2015 Guidance: Revenue for the full
year of 2015 is projected to be in the range of $97.0 million to
$102.0 million. For the full year of 2015, the company expects to
report adjusted EBITDA of $2.0 million to $4.0 million.
Conference Call Details
Synacor will host a conference call today at 5 p.m. ET to
discuss the first quarter financial results with the investment
community. The live webcast of Synacor's earnings conference call
can be accessed at http://investor.synacor.com/events.cfm. To
participate, please login approximately ten minutes prior to the
webcast. For those without access to the Internet, the call may be
accessed toll-free via phone at (877) 837-3911, with conference ID
19318004, or callers outside the U.S. may dial (253) 237-1167.
Following completion of the call, a recorded webcast replay will be
available on Synacor's website through May 7, 2015. To listen to
the telephone replay, call toll-free (855) 859-2056, or callers
outside the U.S. may dial (404) 537-3406. The conference ID is
19318004.
About Synacor
Synacor (Nasdaq:SYNC) is the trusted technology development,
multiplatform services and revenue partner for video, internet and
communications providers, and device manufacturers. We deliver
modern, multiscreen experiences and advertising to their consumers
that require scale, actionable data and sophisticated
implementation. www.synacor.com
Non-GAAP Financial Measures
The company uses certain non-GAAP financial measures in this
release. Generally, a non-GAAP financial measure is a numerical
measure of a company's performance, financial position or cash
flows that either excludes or includes amounts that are not
normally excluded or included in the most directly comparable
measure calculated and presented in accordance with generally
accepted accounting principles (GAAP).
We report adjusted EBITDA because it is a key measure used by
our management and Board of Directors to understand and evaluate
our core operating performance and trends, to prepare and approve
our annual budget and to develop short- and long-term operational
plans. In particular, the exclusion of certain expenses in
calculating adjusted EBITDA can provide a useful measure for
period-to-period comparisons of our core business. Accordingly, we
believe that adjusted EBITDA provides useful information to
investors and others in understanding and evaluating our operating
results in the same manner as our management and Board of
Directors.
For a reconciliation of adjusted EBITDA to net income, the most
directly comparable financial measure calculated and presented in
accordance with GAAP, please refer to the table "Reconciliation of
GAAP to Non-GAAP Measures" in this press release.
The Synacor logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=11609
Safe Harbor Statement
"Safe Harbor" statement under the Private Securities Litigation
Reform Act of 1995: This press release contains forward-looking
statements concerning Synacor's expected financial performance
(including, without limitation, statements and information in the
Business Outlook section and the quotations from management), as
well as Synacor's strategic and operational plans. The achievement
or success of the matters covered by such forward-looking
statements involves risks, uncertainties and assumptions. If any
such risks or uncertainties materialize or if any of the
assumptions prove incorrect, the company's results could differ
materially from the results expressed or implied by the
forward-looking statements the company makes.
The risks and uncertainties referred to above include - but are
not limited to - risks associated with: execution of our plans and
strategies; the loss of a significant customer; our ability to
obtain new customers; expectations regarding consumer taste and
user adoption of applications and solutions; developments in
Internet browser software and search advertising technologies;
general economic conditions; expectations regarding the company's
ability to timely expand the breadth of services and products or
introduction of new services and products; consolidation within the
cable and telecommunications industries; changes in the competitive
dynamics in the market for online search and display advertising;
the risk that security measures could be breached and unauthorized
access to subscriber data could be obtained; potential third party
intellectual property infringement claims; and the price volatility
of our common stock.
Further information on these and other factors that could affect
the company's financial results is included in filings it makes
with the Securities and Exchange Commission from time to time,
including the section entitled "Risk Factors" in the company's most
recent Form 10-K, as amended, filed with the SEC. These documents
are available on the SEC Filings section of the Investor
Information section of the company's website at
http://investor.synacor.com/. All information provided in this
release and in the attachments is available as of April 30, 2015,
and Synacor undertakes no duty to update this information.
Synacor,
Inc. |
Condensed Consolidated
Balance Sheets |
(In
thousands) |
(Unaudited) |
|
|
|
|
As of |
As of |
|
December
31, |
March
31, |
|
2014 |
2015 |
Assets |
|
|
Current assets: |
|
|
Cash and cash equivalents |
$ 25,600 |
$ 26,750 |
Accounts receivable, net |
20,479 |
19,276 |
Prepaid expenses and other
current assets |
2,292 |
2,315 |
Deferred income taxes |
-- |
-- |
Total current
assets |
48,371 |
48,341 |
Property and equipment, net |
15,128 |
14,528 |
Deferred income taxes, non-current |
-- |
-- |
Other long-term assets |
101 |
74 |
Goodwill |
1,565 |
1,565 |
Convertible promissory note |
1,000 |
1,000 |
Investment in equity interest |
73 |
41 |
Total Assets |
$ 66,238 |
$ 65,549 |
|
|
|
Liabilities and Stockholders'
Equity |
|
|
Current liabilities: |
|
|
Accounts payable |
$ 12,545 |
$ 13,490 |
Accrued expenses and other
current liabilities |
8,403 |
7,150 |
Current portion of capital
lease obligations |
1,150 |
1,101 |
Total current
liabilities |
22,098 |
21,741 |
Long-term portion of capital lease
obligation |
1,383 |
1,436 |
Other long-term liabilities |
275 |
227 |
Total Liabilities |
23,756 |
23,404 |
Stockholders' Equity: |
|
|
Common stock |
279 |
279 |
Treasury stock |
(1,142) |
(1,197) |
Additional paid-in capital |
105,961 |
106,761 |
Accumulated deficit |
(62,636) |
(63,709) |
Accumulated other comprehensive
income |
20 |
11 |
Total
stockholders' equity |
42,482 |
42,145 |
Total Liabilities and Stockholders'
Equity |
$ 66,238 |
$ 65,549 |
|
|
|
|
|
|
Synacor,
Inc. |
Condensed Consolidated
Statements of Operations |
(In thousands except
share and per share amounts) |
(Unaudited) |
|
|
|
|
Three Months
Ended |
|
March
31, |
|
2014 |
2015 |
|
|
|
Revenue |
$ 25,248 |
$ 26,730 |
Costs and operating expenses: |
|
|
Cost of revenue (1) |
13,876 |
14,403 |
Technology and development
(1)(2) |
7,492 |
4,866 |
Sales and marketing (2) |
2,137 |
3,562 |
General and administrative
(1)(2) |
3,099 |
3,374 |
Depreciation |
1,058 |
1,496 |
Total costs and
operating expenses |
27,662 |
27,701 |
|
|
|
Income (loss) from operations |
(2,414) |
(971) |
|
|
|
Other expense |
8 |
(16) |
Interest expense |
(88) |
(50) |
Income (loss) before income taxes and equity
interest |
(2,494) |
(1,037) |
Provision (benefit) for income taxes |
(684) |
4 |
Loss on equity interest |
(246) |
(32) |
Net income (loss) |
$ (2,056) |
$ (1,073) |
|
|
|
|
|
|
Net income (loss) per share: |
|
|
Basic |
$ (0.07) |
$ (0.04) |
Diluted |
$ (0.07) |
$ (0.04) |
|
|
|
Weighted average shares used to compute net
income (loss) per share: |
|
|
Basic |
27,434,374 |
27,407,137 |
Diluted |
27,434,374 |
27,407,137 |
|
|
|
Notes: |
(1) Exclusive of depreciation
shown separately. |
(2) Includes stock-based
compensation as follows: |
|
Three Months
Ended |
|
March
31, |
|
2014 |
2015 |
Technology and development |
$ 327 |
$ 217 |
Sales and marketing |
108 |
241 |
General and administrative |
246 |
284 |
|
$ 681 |
$ 742 |
|
|
|
|
|
|
Synacor,
Inc. |
Condensed Consolidated
Statements of Cash Flows |
(In
thousands) |
(Unaudited) |
|
|
|
|
For the Three Months
Ended |
|
March
31, |
|
2014 |
2015 |
Cash Flows from Operating
Activities: |
|
|
Net loss |
$ (2,056) |
$ (1,073) |
Adjustments to reconcile net
loss to net cash provided (used) in operating activities: |
|
|
Depreciation |
1,058 |
1,496 |
Stock-based
compensation expense |
681 |
742 |
Provision for
deferred income taxes |
(709) |
— |
Loss in equity
investment |
246 |
32 |
Change in assets
and liabilities net of effect of acquisition: |
|
|
Accounts receivable, net |
(25) |
1,203 |
Prepaid expenses and other current assets |
(577) |
(23) |
Other long-term assets |
101 |
27 |
Accounts payable |
1,292 |
995 |
Accrued expenses and other current liabilities |
(979) |
(1,186) |
Other long-term liabilities |
(198) |
(48) |
Net cash provided (used) in operating
activities |
(1,166) |
2,165 |
Cash Flows from Investing
Activities: |
|
|
Purchases of property and
equipment |
(1,519) |
(600) |
Investment in equity
interest |
(245) |
— |
Net cash used in investing
activities |
(1,764) |
(600) |
Cash Flows from Financing
Activities: |
|
|
Repayments on capital lease
obligations |
(485) |
(392) |
Proceeds from exercise of
common stock options |
26 |
5 |
Purchase of treasury stock |
(56) |
— |
Net cash used in financing
activities |
(515) |
(387) |
Effect of exchange rate changes
on cash and cash equivalents |
8 |
(28) |
Net decrease in cash and cash
equivalents |
(3,437) |
1,150 |
Cash and cash equivalents -
beginning of year |
36,397 |
25,600 |
Cash and cash equivalents - end
of year |
$ 32,960 |
$ 26,750 |
|
|
|
|
|
|
Synacor,
Inc. |
Reconciliation of GAAP
to Non-GAAP Measures |
(In
thousands) |
(Unaudited) |
|
|
|
The following table presents a
reconciliation of net income (loss) to adjusted EBITDA for each of
the periods indicated: |
|
|
|
|
Three Months
Ended |
|
March
31, |
|
2014 |
2015 |
Reconciliation of Adjusted
EBITDA: |
|
|
Net income (loss) |
$ (2,056) |
$ (1,073) |
Provision (benefit) for income
taxes |
(684) |
4 |
Interest expense |
88 |
50 |
Other (income) expense |
(8) |
16 |
Depreciation |
1,058 |
1,496 |
Stock-based compensation |
681 |
742 |
Loss on equity interest |
246 |
32 |
Adjusted
EBITDA |
$ (675) |
$ 1,267 |
|
|
|
CONTACT: Investor Contact:
Denise Garcia, Managing Director
ICR
ir@synacor.com
716-362-3309
Press Contact:
Meredith Roth, VP, Corporate Communications
Synacor
mroth@synacor.com
716-362-3880
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