Synacor Maintains Second-Quarter and Full-Year 2019 Guidance as It Initiates Discussions with AT&T to Wind-Down Portal Services
July 11 2019 - 4:37PM
Business Wire
Synacor, Inc. (Nasdaq: SYNC), the trusted technology
development, multiplatform services and revenue partner for video,
internet and communications providers, device manufacturers,
governments and enterprises, today announced that it plans to begin
discussions with AT&T regarding a wind-down and user-migration
plan as it has been notified that AT&T intends to select
another provider of portal services for its ATT.net consumer
experience.
Synacor expects the planning and execution of a wind-down and
migration plan to take many months and will be subject to mutual
agreement between AT&T and Synacor. Based on this current
expectation, the Company is maintaining its previously announced
second-quarter and full-year 2019 guidance.
“Synacor is a $100 million plus revenue business without the
AT&T portal, and we have never been more excited about the
significant opportunities in our $49 million high-margin,
recurring-revenue-driven enterprise software business,” said Himesh
Bhise, Synacor’s chief executive officer. “Zimbra Email &
Collaboration and Cloud ID Identity and Access Management are
increasingly the platforms of choice for a growing number of
service providers and businesses around the world. We also are
encouraged by the growth in our publisher-focused advertising
business, where we have significantly increased the number of
active monthly publishers using our platform. Going forward these
create a software-oriented, higher overall margin profile for
Synacor.”
“The Synacor-powered ATT.net platform enabled AT&T to retake
control of its brand on the portal, drive strong user engagement
across mobile and desktop, and deliver against its advertising
budget expectations,” said Bhise. “While we were optimistic
regarding the strength of our renewal proposals as well as our
accomplishments for ATT.net, we have been actively managing the
Synacor business to prepare for any outcome and have remained
focused on our high-growth products and services. We will continue
to execute on our strategy to drive profitable growth through an
increasing level of high-margin revenue.”
In the first quarter of 2019, ATT.net represented $9.3 million
of the $20.7 million in revenue from Synacor’s Portal &
Advertising segment, which reported an adjusted EBITDA margin of
12.7%. Synacor’s Software and Services segment reported $11.2
million of revenues with an adjusted EBITDA margin of 25%.
Synacor Full-Year 2018 Revenue Excluding
ATT.net[1]
2018 Recurring Revenue
2018 Non-recurring
Revenue
2018 Totals
Software &
Services
$35.8M
$12.9M
$48.7M
Portal &
Advertising
$7.3M
$46.0M
$53.3M
2018 Totals
$43.1M
$58.9M
$102.0M
[1] See Company’s full-year 2018 earnings release dated March
13, 2019 available on its website at www.synacor.com for full-year
2018 financial results.
As of July 10, 2019, Synacor had a market capitalization of
$60.5 million. Based on its March 31, 2019 cash position of $13.5
million, this equates to an enterprise value of $47.0 million.
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 second-quarter and full-year
2019 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 the loss of a significant customer; the
nature and terms of a wind-down and migration plan with AT&T;
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-K 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 May 8, 2019, and Synacor undertakes no duty to
update this information.
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version on businesswire.com: https://www.businesswire.com/news/home/20190711005821/en/
Investor Contact: David Calusdian Sharon Merrill Associates
ir@synacor.com 617-542-5300
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