Synacor Inc. (NASDAQ:SYNC), the trusted multiscreen technology and
monetization partner for video, internet and communications
providers, device manufacturers, and enterprises, today announced
its financial results for the quarter ended June 30, 2016.
“We delivered another strong quarter for Synacor with
significant year-over-year revenue growth and adjusted EBITDA that
exceeded our previously announced guidance,” said Synacor CEO
Himesh Bhise. “We are pleased with our progress in preparing to
support our AT&T business and are advancing in line with our
plans for deployment over 2017.”
“We remain confident in the foundation that we have laid for
future growth. Our continued trajectory toward $300 million in
revenue in three years is reflected in the demonstrated progress we
are making against our 2016 strategic objectives,” Bhise concluded.
Recent Highlights
- Invested the initial $1.5 million (operating expense), out of
the previously announced $10 million total investment in support of
the recently won AT&T portal business
- Selected by a major television programmer to provide Cloud ID
authentication services
- Integrated Cloud ID to enable Single Sign On (SSO) for iOS and
Apple TV users. Announced Cloud ID alignment with CTAM recommended
approach
- Expanded partnership with Consolidated Communications to
include Synacor’s End-to-End Video Solutions
- Launched Zimbra Collaboration 8.7, a new version release that
includes enhanced security through two-factor authentication,
enhanced anti-spam capabilities, and administrative features that
reduce Total Cost of Ownership for enterprises and service
providers
- Continued to add customers and partners for our Zimbra
offerings. Executed agreements for more than 2.5 million mailboxes,
and became part of the Oracle Cloud Marketplace
Q2 2016 Financial Results
Revenue: For the second quarter of 2016, total
revenue was $30.5 million, an increase of 23% compared with the
second quarter of 2015. Recurring and fee-based revenue
increased 126% compared with the second quarter of 2015.
Net Income: For the second
quarter of 2016, net loss was $2.8 million, compared with net loss
of $1.1 million in the second quarter of 2015, reflecting the
investment to support the AT&T portal business. Earnings per
share, or EPS, was a loss of $0.09 compared with a loss of $0.04 in
the second quarter of 2015.
Adjusted EBITDA: For the second quarter of
2016, adjusted earnings before interest, taxes, depreciation, and
amortization (adjusted EBITDA), which excludes stock-based
compensation expense, was $0.3 million compared with $1.5 million,
for the second quarter of 2015. The Q2 2016 adjusted EBITDA
reflects the $1.5 million investment (operating expense) to support
the recently won AT&T portal business.
Cash: The Company ended the second quarter of
2016 with $16.3 million in cash and cash equivalents, compared with
$15.7 million at the end of the prior quarter. Cash generated
by operating activities was $1.8 million for the second quarter of
2016, despite the investment in the AT&T portal
business.
Guidance
Based on information available as of August 3, 2016, the company
is providing financial guidance for the third quarter and fiscal
2016 as follows:
- Q3 2016 Guidance: Revenue for the third
quarter of 2016 is projected to be in the range of $29.0 million to
$31.0 million. The company expects to report a net loss of $5.2
million to $6.5 million and adjusted EBITDA of ($2.0 million) to
($3.0 million), which excludes stock-based compensation expense of
$0.7 million to $0.8 million, depreciation and amortization of $2.2
million to $2.4 million and tax, interest expense and other income
and expense of $0.3 million.
- Fiscal 2016 Guidance: Revenue for the full
year of 2016 is projected to be in the range of $130.0 million to
$135.0 million. The company expects to report a net loss in the
range of $10.5 million to $12.6 million and adjusted EBITDA in the
range of $0.5 million to $2.0 million, which excludes stock-based
compensation expense of $2.8 million to $3.0 million, depreciation
and amortization of $8.8 million to $9.2 million, and tax, interest
expense and other income and expense of $0.9 million.
Net Income and adjusted EBITDA guidance for the third quarter
and fiscal year 2016 reflect a portion of the $10 million
investment planned between the second quarter of 2016 through the
first quarter of 2017 to deploy portal services for
AT&T.
Conference Call Details
Synacor will host a conference call today at 5 p.m. ET to
discuss the second-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
55425876, 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. 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 55425876.
About Synacor
Known for managed portals and apps, advertising, email and
collaboration, authentication, and end-to-end advanced video
services, Synacor (Nasdaq:SYNC) is the trusted technology
development, multiplatform services and revenue partner for video,
internet and communications providers, device manufacturers, and
enterprises. We deliver modern, multiscreen experiences and
advertising to their consumers that require scale, actionable data
and sophisticated implementation. Synacor enables our
customers to better engage with their consumers.
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.
Safe Harbor Statement Under the Private Securities
Litigation Reform Act of 1995
"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, its expectations related to the
AT&T contract, its third-quarter and fiscal year 2016 and
three-year guidance, the statements and quotations from management
and 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, including execution against our agreement with
AT&T; the loss of a significant customer; our ability to obtain
new customers; our ability to integrate the assets and personnel
from acquisitions; 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 digital
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 or
other legal claims against Synacor; 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-Q 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 August 3, 2016, and Synacor undertakes no duty to
update this information.
| |
| Synacor, Inc. |
| Condensed Consolidated Balance
Sheets |
| (In thousands) |
| (Unaudited) |
| |
June 30, |
|
December 31, |
| |
|
2016 |
|
|
|
2015 |
|
|
Assets |
|
|
|
| Current assets: |
|
|
|
| Cash and cash equivalents |
$ |
16,295 |
|
|
$ |
15,697 |
|
| Accounts receivable, net |
|
19,052 |
|
|
|
24,341 |
|
| Prepaid expenses and other current
assets |
|
5,188 |
|
|
|
3,290 |
|
| Total current assets |
|
40,535 |
|
|
|
43,328 |
|
| Property and equipment,
net |
|
13,996 |
|
|
|
14,377 |
|
| Goodwill |
|
15,949 |
|
|
|
15,187 |
|
| Intangible assets,
net |
|
15,881 |
|
|
|
14,798 |
|
| Investment |
|
1,000 |
|
|
|
1,000 |
|
| Other long-term
assets |
|
300 |
|
|
|
336 |
|
| Total
Assets |
$ |
87,661 |
|
|
$ |
89,026 |
|
| |
|
|
|
| Liabilities and
Stockholders' Equity |
|
|
|
| Current
liabilities: |
|
|
|
| Accounts payable |
$ |
10,704 |
|
|
$ |
9,004 |
|
| Accrued expenses and other current
liabilities |
|
12,015 |
|
|
|
9,765 |
|
| Current portion of deferred
revenue |
|
10,279 |
|
|
|
11,295 |
|
| Current portion of capital lease
obligations |
|
1,472 |
|
|
|
1,574 |
|
| Total current liabilities |
|
34,470 |
|
|
|
31,638 |
|
| Long-term portion of
capital lease obligations |
|
1,035 |
|
|
|
1,007 |
|
| Long-term debt |
|
5,000 |
|
|
|
5,000 |
|
| Deferred revenue |
|
3,210 |
|
|
|
3,225 |
|
| Other long-term
liabilities |
|
500 |
|
|
|
2,052 |
|
| Total
Liabilities |
|
44,215 |
|
|
|
42,922 |
|
| Stockholders'
Equity: |
|
|
|
| Common stock |
|
308 |
|
|
|
306 |
|
| Treasury stock |
|
(1,398 |
) |
|
|
(1,332 |
) |
| Additional paid-in capital |
|
115,097 |
|
|
|
113,238 |
|
| Accumulated deficit |
|
(70,432 |
) |
|
|
(66,110 |
) |
| Accumulated other comprehensive
(loss) income |
|
(129 |
) |
|
|
2 |
|
| Total stockholders’ equity |
|
43,446 |
|
|
|
46,104 |
|
| Total
Liabilities and Stockholders' Equity |
$ |
87,661 |
|
|
$ |
89,026 |
|
| |
|
|
|
| Synacor,
Inc. |
|
| Condensed Consolidated Statements of
Operations |
|
| (In thousands except share and per share
amounts) |
|
| (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Three months ended |
|
Six months ended |
|
| |
June 30, |
|
June 30, |
|
| |
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
| |
|
|
|
|
|
|
|
|
|
Revenue |
$ |
30,476 |
|
|
$ |
24,716 |
|
|
$ |
60,736 |
|
|
$ |
51,446 |
|
|
| Costs
and operating expenses: |
|
|
|
|
|
|
|
|
| Cost of revenue (1) |
|
13,516 |
|
|
|
12,504 |
|
|
|
26,488 |
|
|
|
26,908 |
|
|
| Technology and development
(1)(2) |
|
6,591 |
|
|
|
4,561 |
|
|
|
12,464 |
|
|
|
9,427 |
|
|
| Sales and marketing (2) |
|
5,620 |
|
|
|
3,639 |
|
|
|
11,270 |
|
|
|
7,201 |
|
|
| General and administrative
(1)(2) |
|
5,134 |
|
|
|
3,351 |
|
|
|
10,156 |
|
|
|
6,724 |
|
|
| Depreciation and amortization |
|
2,270 |
|
|
|
1,660 |
|
|
|
4,368 |
|
|
|
3,156 |
|
|
| Total costs and operating
expenses |
|
33,131 |
|
|
|
25,715 |
|
|
|
64,746 |
|
|
|
53,416 |
|
|
| |
|
|
|
|
|
|
|
|
| Loss
from operations |
|
(2,655 |
) |
|
|
(999 |
) |
|
|
(4,010 |
) |
|
|
(1,970 |
) |
|
|
|
|
|
|
|
|
|
|
|
| Other
income |
|
242 |
|
|
|
17 |
|
|
|
244 |
|
|
|
1 |
|
|
| Interest
expense |
|
(84 |
) |
|
|
(59 |
) |
|
|
(152 |
) |
|
|
(109 |
) |
|
| Loss
before income taxes and equity interest |
|
(2,497 |
) |
|
|
(1,041 |
) |
|
|
(3,918 |
) |
|
|
(2,078 |
) |
|
|
Provision for income taxes |
|
260 |
|
|
|
16 |
|
|
|
404 |
|
|
|
21 |
|
|
| Loss in
equity interest |
|
- |
|
|
|
(25 |
) |
|
|
- |
|
|
|
(57 |
) |
|
| Net
loss |
$ |
(2,757 |
) |
|
$ |
(1,082 |
) |
|
$ |
(4,322 |
) |
|
$ |
(2,156 |
) |
|
| |
|
|
|
|
|
|
|
|
| Net loss
per share: |
|
|
|
|
|
|
|
|
| Basic |
$ |
(0.09 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.14 |
) |
|
$ |
(0.08 |
) |
|
| Diluted |
$ |
(0.09 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.14 |
) |
|
$ |
(0.08 |
) |
|
| |
|
|
|
|
|
|
|
|
| Weighted
average shares used to compute net loss per share: |
|
|
|
|
|
|
|
|
| Basic |
|
30,070,759 |
|
|
|
27,534,119 |
|
|
|
30,031,286 |
|
|
|
27,475,481 |
|
|
| Diluted |
|
30,070,759 |
|
|
|
27,534,119 |
|
|
|
30,031,286 |
|
|
|
27,475,481 |
|
|
| |
|
|
|
|
|
|
|
|
| Notes: |
|
|
|
|
|
|
|
|
| (1)
Exclusive of depreciation and amortization shown separately. |
|
|
|
|
|
|
|
| (2) Includes
stock-based compensation as follows: |
|
|
|
|
|
|
|
|
| |
Three months ended |
|
Six months ended |
|
| |
June 30, |
|
June 30, |
|
| |
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
| Technology and development |
$ |
202 |
|
|
$ |
253 |
|
|
$ |
443 |
|
|
$ |
470 |
|
|
| Sales and marketing |
|
208 |
|
|
|
244 |
|
|
|
431 |
|
|
|
485 |
|
|
| General and administrative |
|
277 |
|
|
|
303 |
|
|
|
550 |
|
|
|
586 |
|
|
| |
$ |
687 |
|
|
$ |
800 |
|
|
$ |
1,424 |
|
|
$ |
1,541 |
|
|
| |
|
|
|
|
|
|
|
|
| Synacor, Inc. |
|
| Condensed Consolidated Statements of Cash
Flows |
|
| (In thousands) |
|
| (Unaudited) |
|
|
|
|
|
|
|
| |
Six months ended |
|
| |
June 30, |
|
|
|
|
2016 |
|
|
|
2015 |
|
|
| Cash Flows from
Operating Activities: |
|
|
|
|
| Net loss |
$ |
(4,322 |
) |
|
$ |
(2,156 |
) |
|
| Adjustments to reconcile net loss
to net cash provided by operating activities: |
|
|
|
|
| Depreciation and amortization |
|
4,368 |
|
|
|
3,156 |
|
|
| Stock-based compensation
expense |
|
1,424 |
|
|
|
1,541 |
|
|
| Loss in equity interest |
|
- |
|
|
|
57 |
|
|
| Change in assets and liabilities
net of effect of acquisition: |
|
|
|
|
| Accounts receivable, net |
|
6,254 |
|
|
|
3,435 |
|
|
| Prepaid expenses and other
assets |
|
(1,866 |
) |
|
|
381 |
|
|
| Accounts payable |
|
850 |
|
|
|
(2,133 |
) |
|
| Accrued expenses and other
liabilities |
|
(15 |
) |
|
|
(152 |
) |
|
| Deferred revenue |
|
(1,031 |
) |
|
|
- |
|
|
| Net cash used
provided by operating activities |
|
5,662 |
|
|
|
4,129 |
|
|
| |
|
|
|
|
| Cash Flows from
Investing Activities: |
|
|
|
|
| Acquisition |
|
(2,500 |
) |
|
|
- |
|
|
| Purchases of property and
equipment |
|
(2,004 |
) |
|
|
(1,561 |
) |
|
| Net cash used in
investing activities |
|
(4,504 |
) |
|
|
(1,561 |
) |
|
| |
|
|
|
|
| Cash Flows from
Financing Activities: |
|
|
|
|
| Repayments on capital lease
obligations |
|
(838 |
) |
|
|
(672 |
) |
|
| Proceeds from exercise of common
stock options |
|
336 |
|
|
|
70 |
|
|
| Treasury shares received to satisfy
minimum tax withholdings |
|
(66 |
) |
|
|
- |
|
|
| Deferred acquisition payment |
|
- |
|
|
|
(495 |
) |
|
| Net cash used in
financing activities |
|
(568 |
) |
|
|
(1,097 |
) |
|
| Effect of exchange rate changes on
cash and cash equivalents |
|
8 |
|
|
|
(8 |
) |
|
| Net increase in Cash and Cash
Equivalents |
|
598 |
|
|
|
1,463 |
|
|
| Cash and Cash Equivalents at
beginning of period |
|
15,697 |
|
|
|
25,600 |
|
|
| Cash and Cash Equivalents at end of
period |
$ |
16,295 |
|
|
$ |
27,063 |
|
|
| |
|
|
|
|
| Synacor, Inc. |
| Reconciliation of GAAP to Non-GAAP
Measures |
| (In thousands) |
| (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
| The
following table presents a reconciliation of net loss to adjusted
EBITDA for each of the periods indicated: |
| |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
Three months ended |
|
Six months ended |
| |
|
|
|
June 30, |
|
June 30, |
| |
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Adjusted EBITDA: |
|
|
|
|
|
|
|
|
| Net loss |
|
|
|
$ |
(2,757 |
) |
|
$ |
(1,082 |
) |
|
$ |
(4,322 |
) |
|
$ |
(2,156 |
) |
| Provision for income
taxes |
|
|
260 |
|
|
|
16 |
|
|
|
404 |
|
|
|
21 |
|
| Interest expense |
|
|
|
84 |
|
|
|
59 |
|
|
|
152 |
|
|
|
109 |
|
| Other income |
|
|
|
|
(242 |
) |
|
|
(17 |
) |
|
|
(244 |
) |
|
|
(1 |
) |
| Depreciation and
amortization |
|
|
2,270 |
|
|
|
1,660 |
|
|
|
4,368 |
|
|
|
3,156 |
|
| Stock-based
compensation expense |
|
|
687 |
|
|
|
800 |
|
|
|
1,424 |
|
|
|
1,541 |
|
| Loss on equity
interest |
|
|
|
- |
|
|
|
25 |
|
|
|
- |
|
|
|
57 |
|
| Adjusted
EBITDA |
|
|
$ |
302 |
|
|
$ |
1,461 |
|
|
$ |
1,782 |
|
|
$ |
2,727 |
|
| |
|
|
|
|
|
|
|
|
|
|
Contacts
Investor Contact:
David Calusdian, Executive Vice President & Partner
Sharon Merrill
ir@synacor.com
716-362-3309
Press Contact:
Matt Wolfrom, VP, Corporate Communications
Synacor
Matt.Wolfrom@synacor.com
716-362-3880
Synacor (NASDAQ:SYNC)
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From Mar 2024 to Apr 2024
Synacor (NASDAQ:SYNC)
Historical Stock Chart
From Apr 2023 to Apr 2024
