- FY 2016 revenue of $127.4 million, a
16% year-over-year increase
- FY 2017 revenue guidance of $160
million to $170 million, reflecting 30% year-over-year growth at
midpoint of range
- Synacor on track with AT&T launch;
Announces several customer wins in email and video
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 and year ended December 31,
2016.
“We are seeing strong market validation of Synacor’s portal,
email, advertising and video products,” said Synacor CEO Himesh
Bhise. “We continue to make excellent progress toward the launch
and deployment of the AT&T portal, and we announced several new
customer wins in email and video.
“We begin 2017 a stronger Synacor, well positioned in attractive
and growing digital markets. We expect accelerated revenue growth
of about 30% this year, as we continue to progress on our Path to
3/30/300.”
Recent Highlights
- Made excellent progress on plan to
launch the new AT&T desktop and mobile web portal in the first
half of 2017, and deployment will be completed through 2017.
- Launched TV Everywhere video apps for
GVTC and Consolidated Communications, powered by Synacor’s
end-to-end video platform - now available in the Apple App Store
and Google Play Store.
- Selected to provide hosted email
service for a top 10 U.S. service provider.
- Added several new Zimbra email
customers, including a major international IT organization, a
European financial services company, an international state-owned
seaport enterprise, and an international police department.
FY 2016 and Q4 2016 Financial Results
Revenue: For fiscal 2016, total revenue was $127.4
million, an increase of 16% compared with fiscal 2015. For the
fourth quarter of 2016, total revenue was $34.9 million, an
increase of 8% compared with the fourth quarter of 2015.
Net Income: For fiscal 2016, net loss was $10.7
million, compared with net loss of $3.5 million in fiscal 2015,
reflecting the investment to support the AT&T portal business.
Earnings per share, or EPS, was a loss of $0.36 compared with a
loss of $0.12 in fiscal 2015. For the fourth quarter of 2016, net
loss was $3.1 million compared with a net loss of $0.4 million in
the fourth quarter of 2015. EPS was a loss of $0.10 compared with a
loss of $0.01 in the fourth quarter of 2015.
Adjusted EBITDA: For fiscal 2016, adjusted earnings
before interest, taxes, depreciation and amortization (adjusted
EBITDA), which excludes stock-based compensation expense, was $3.2
million compared with $7.6 million for fiscal 2015. The fiscal 2016
adjusted EBITDA includes $6.3 million in investment (operating
expense) to support the AT&T portal business. For the fourth
quarter of 2016, adjusted EBITDA was $1.2 million, which includes
$2.2 million in investment (operating expense) to support the
AT&T portal business. This compares with $2.9 million in
adjusted EBITDA for the fourth quarter of 2015.
Cash: Synacor ended the fourth quarter of 2016 with $14.3
million in cash and cash equivalents, compared with $15.0 million
at the end of the prior quarter. Cash generated by operating
activities was $1.5 million for the fourth quarter of 2016, despite
the investment in the AT&T portal business.
Guidance
Based on information available as of March 15, 2017, Synacor is
providing financial guidance for fiscal 2017 and the first quarter
of fiscal 2017 as follows:
- Fiscal 2017 Guidance: Revenue
for the full year of 2017 is projected to grow 26% to 33% to be in
the range of $160.0 million to $170.0 million. Synacor expects to
report a net loss in the range of $2.8 million to $8.0 million and
adjusted EBITDA in the range of $6.0 million to $10.0 million,
which excludes stock-based compensation expense of $2.8 million to
$3.2 million, depreciation and amortization of $8.8 million to $9.6
million, and tax, interest expense and other income and expense of
$1.2 million.
- Q1 2017 Guidance: Revenue for
the first quarter of 2017 is projected to be in the range of $26.0
million to $28.0 million. Synacor expects to report a net loss of
$6.2 million to $7.5 million and adjusted EBITDA of $(3.0) million
to $(4.0) 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.
Net Income and adjusted EBITDA guidance for the first quarter
and fiscal year 2017 reflect a portion of the $10 million
investment planned from 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 5:00 p.m. ET to
discuss the fourth-quarter and year-end financial results with the
investment community. Investors interested in listening to the
webcast should log on to the “Investors” section of Synacor’s
website under the subheading “Events and Presentations,” located at
www.synacor.com. To participate, please login approximately 10
minutes prior to the webcast. For those without access to the
internet, the call may be accessed toll-free via phone at (877)
201-0168, with conference ID 75167396, or callers outside the U.S.
may dial (647) 788-4901. 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 (800) 585-8367, or
callers outside the U.S. may dial (416) 621-4642. The conference ID
is 75167396.
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
We use 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 first-quarter and fiscal year 2017 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, Synacor’s
results could differ materially from the results expressed or
implied by the forward-looking statements we make.
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
Synacor’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 March 15, 2017, and Synacor undertakes no duty to
update this information.
Synacor, Inc. Condensed Consolidated Balance
Sheets (In thousands) (Unaudited)
December 31, December 31,
2016 2015 Assets Current
assets: Cash and cash equivalents $ 14,315 $ 15,697 Accounts
receivable, net 27,386 24,341 Prepaid expenses and other current
assets 4,862 3,290 Total current assets
46,563 43,328 Property and equipment, net 14,406 14,377 Goodwill
15,943 15,187 Intangible assets 14,837 14,798 Other long-term
assets 1,650 1,336
Total Assets
$ 93,399 $ 89,026
Liabilities and Stockholders' Equity Current liabilities:
Accounts payable $ 18,769 $ 9,004 Accrued expenses and other
current liabilities 11,684 9,765 Current portion of deferred
revenue 12,149 11,295 Current portion of capital lease obligations
982 1,574 Total current liabilities
43,584 31,638 Long-term portion of capital lease obligations 1,014
1,007 Long-term debt 5,000 5,000 Deferred revenue 3,917 3,225 Other
long-term liabilities 235 2,052
Total Liabilities 53,750
42,922 Stockholders' Equity: Common stock 316
306 Treasury stock (1,547 ) (1,332 ) Additional paid-in capital
117,747 113,238 Accumulated deficit (76,850 ) (66,110 ) Accumulated
other comprehensive (loss) income (17 ) 2
Total stockholders’ equity 39,649 46,104
Total Liabilities and Stockholders' Equity $
93,399 $ 89,026
Synacor, Inc.
Condensed Consolidated Statements of Operations (In
thousands except share and per share amounts)
(Unaudited) Three months ended For the Year
Ended December 31, December 31,
2016 2015 2016
2015 Revenue $ 34,916 $ 32,448 $
127,373 $ 110,245 Costs and operating expenses: Cost of revenue (1)
18,047 14,218 59,146 54,423 Technology and development (1)(2) 6,357
6,219 25,612 20,007 Sales and marketing (2) 5,669 4,797 22,846
16,272 General and administrative (1)(2) 4,668 5,106 19,695 15,543
Depreciation and amortization 2,453 2,185
9,235 6,901 Total costs and
operating expenses 37,194 32,525
136,534 113,146
Loss from operations
(2,278 ) (77 ) (9,161 ) (2,901 ) Other (expense) income (248
) 16 (42 ) (16 ) Interest expense (91 ) (102 )
(318 ) (245 )
Loss before income taxes and equity
interest
(2,617 ) (163 ) (9,521 ) (3,162 ) Provision for income taxes 436
209 1,219 239 Loss on equity interest — (16 )
— (73 ) Net loss $ (3,053 ) $ (388 ) $ (10,740
) $ (3,474 ) Net loss per share: Basic $ (0.10 ) $
(0.01 ) $ (0.36 ) $ (0.12 ) Diluted $ (0.10 ) $ (0.01 ) $ (0.36 ) $
(0.12 ) Weighted average shares used to compute net loss per
share: Basic 30,677,457 29,977,417
30,251,685 28,213,838 Diluted
30,677,457 29,977,417 30,251,685
28,213,838 Notes: (1) Exclusive of
depreciation shown separately. (2) Includes stock-based
compensation as follows:
Three months ended For the Year
Ended December 31, December 31,
2016 2015 2016
2015 Technology and development $ 240 $
243 $ 921 $ 936 Sales and marketing 180 226 784 942 General and
administrative 247 295 1,066
1,237 $ 667 $ 764 $ 2,771
$ 3,115
Synacor, Inc.
Condensed Consolidated Statements of Cash Flows (In
thousands) (Unaudited) For the Year Ended
December 31, 2016 2015
Cash Flows from Operating Activities: Net loss $
(10,740 ) $ (3,474 ) Adjustments to reconcile net loss to net cash
provided by operating activities: Depreciation and amortization
9,235 6,901 Stock-based compensation expense 2,771 3,115
Capitalized software impairment 334 — Provision for deferred income
taxes 143 — Loss in equity investment — 73 Change in assets and
liabilities net of effect of acquisition: Accounts receivable, net
(2,080 ) (362 ) Prepaid expenses and other current assets (1,572 )
(547 ) Other long-term assets (314 ) (167 ) Accounts payable 8,706
(3,579 ) Accrued expenses and other current liabilities 580 2,090
Deferred revenue 1,546 3,478 Other long-term liabilities
(360 ) 122
Net cash provided by operating
activities 8,249 7,650
Cash Flows from Investing Activities: Purchases of
property and equipment (5,939 ) (3,236 ) Acquisition net of cash
acquired (2,500 ) (17,260 )
Net cash used in
investing activities (8,439 )
(20,496 ) Cash Flows from Financing
Activities: Proceeds from bank financing — 5,000 Repayments on
capital lease obligations (1,672 ) (1,442 ) Proceeds from exercise
of common stock options 1,560 70
Purchase of treasury stock and shares
received to satisfy minimum tax withholdingliabilities
(215 ) (190 ) Payment of contingent consideration (860 )
(495 )
Net cash (used in) provided by financing
activities (1,187 ) 2,943
Effect of exchange rate changes on Cash
and Cash Equivalents
(5 ) — Net decrease in Cash and Cash
Equivalents (1,382 ) (9,903 ) Cash and Cash Equivalents at
beginning of period 15,697 25,600 Cash
and Cash Equivalents at end of period
$ 14,315
$ 15,697
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 For the Year Ended December 31,
December 31, 2016 2015
2016 2015
Reconciliation of Adjusted EBITDA: Net loss $ (3,053 ) $
(388 ) $ (10,740 ) $ (3,474 ) Provision for income taxes 436 209
1,219 239 Interest expense 91 102 318 245 Other expense (income)
248 (16 ) 42 16 Depreciation and amortization 2,453 2,185 9,235
6,901 Capitalized software impairment 334 — 334 — Stock-based
compensation expense 667 764 2,771 3,115 Loss on equity interest —
16 — 73 Acquisition costs — — —
478
Adjusted EBITDA $
1,176 $ 2,872 $
3,179 $ 7,593
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170315006419/en/
Investor Contact:Sharon Merrill AssociatesDavid Calusdian,
617-542-5300Presidentir@synacor.comorPress Contact:SynacorMatt
Wolfrom, 716-362-3880VP, Corporate
CommunicationsMatt.Wolfrom@synacor.com
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