- Fourth quarter revenue of $26.8 million, in line with
guidance
- Fourth quarter GAAP net loss of $0.6 million and Adjusted
EBITDA of $3.4 million, both exceeding the high end of the guidance
range
- Signed a significant new Cloud ID customer; continued success
in Zimbra sales bookings; and growth in Publisher Advertising
- Announces Board nominees and commences search for new
Chairperson in anticipation of the merger with Qumu; Kevin Rendino
appointed as interim Chairman
Synacor, Inc. (Nasdaq: SYNC), a cloud-based software and
services company serving global video, internet and communications
providers, device manufacturers, governments and enterprises, today
announced its financial results for the fourth quarter and
year-ended December 31, 2019.
“We have been laying the foundation for growth in our Software
business while delivering on our Adjusted EBITDA targets,” said
Himesh Bhise, Synacor’s Chief Executive Officer. “Our Q4 results
reflect increasing customer validation of our Collaboration and
Identity product roadmap, continued growth in our publisher
advertising business, and expanded company EBITDA margins from
streamlined operations and cost reductions. We have also begun
planning for the integration of Qumu and its industry-leading video
platform to bolster our software revenue growth, rationalize costs,
improve operating scale and expand profitability.”
Recent Highlights
- 25.3% reduction in operating expenses compared to the year ago
quarter and delivered Adjusted EBITDA margin of 12.8%
- Significant Cloud ID contract signed to support digital
streaming growth of a large subscription services provider.
- Launched version 9 of Zimbra email and collaboration platform,
with modern, easy-to-use features and industry leading
extensibility.
- 98 new customers and 190 contract expansions for Zimbra email
and collaboration platform delivered through worldwide channel
partners.
- Active publishers in the Publisher Advertising business were
116 compared to 89 in the year ago quarter.
- On February 11, announced the highly synergistic merger with
Qumu. The combined company will be a collaboration software focused
business with about $50 million of recurring revenue, opportunities
to accelerate growth and expected annualized operating synergies of
$4 million to $5 million.
Fourth Quarter and Full Year Financial Results:
Revenue
For the fourth quarter of 2019, revenue was $26.8 million, in
line with the Company’s financial guidance, compared to $39.4
million in the fourth quarter of 2018. The decrease was primarily
due to the loss of the AT&T portal contract in Q3’19, which
contributed $12.1 million in revenue in Q4’18.
Software & Services revenue totaled $11.6 million in the
fourth quarter of 2019, compared with $12.4 million in the fourth
quarter of 2018. The fourth quarter of 2018 included $0.4 million
in revenue from a discontinued product and $0.3 million in
non-recurring services revenue. Portal & Advertising revenue
totaled $15.2 million in the fourth quarter of 2019, compared with
$27.0 million in the year-ago period. The decline was due to the
loss of the AT&T portal contract in Q3’19.
For fiscal year 2019, total revenue was $121.8 million, compared
to $143.9 in fiscal year 2018. Software & Services revenue was
$44.5 million compared to $48.7 million in the prior year. The
decline was primarily related to discontinued product and
non-recurring services revenue which contributed $1.2 million and
$2.5 million respectively in 2018. Portal & Advertising revenue
was $77.4 million, compared to $95.2 million in fiscal 2018. The
decline was primarily due to the loss of the AT&T portal
contract in Q3’19.
Net Loss
For the fourth quarter of 2019, net loss was $0.6 million, or
($0.01 per share), compared with a net loss of $0.4 million, or
($0.01 per share), in the fourth quarter of 2018.
Net loss for fiscal year 2019 was $9.0 million, or ($0.23 per
share), compared to a net loss of $7.6 million, or ($0.19 per
share) in fiscal year 2018.
Adjusted EBITDA
For the fourth quarter of 2019, adjusted EBITDA was $3.4 million
(12.8% of revenue), compared with $4.0 million (10.2% of revenue)
in the fourth quarter of 2018. Adjusted EBITDA excludes stock-based
compensation, other income and expense, asset impairments,
restructuring costs, and certain legal and professional fees.
For fiscal year 2019, adjusted EBITDA was $9.5 million (7.8% of
revenue), compared with $8.5 million (5.9% of revenue) in fiscal
year 2018.
Cash
The Company ended the fourth quarter of 2019 with $11.0 million
in cash and cash equivalents, compared with $15.2 million at the
end of the third quarter of 2019 and $15.9 million at December 31,
2018, due primarily to a one-time adjustment related to the
wind-down of ATT.net.
Guidance
Based on information available as of March 3, 2020, the Company
is providing guidance for first quarter and full year 2020. Other
than committed transaction costs, this excludes any effects from
the Qumu merger.
- Q1 2020 Guidance: Revenue for the first quarter of 2020 is
projected to be in the range of $21.5 million to $23.5 million. The
Company expects to report a GAAP net loss of $4.0 million to $4.5
million and adjusted EBITDA of $0.5 million to $1.0 million.
- Fiscal 2020 Guidance: Revenue for full year 2020 is expected to
be in the range of $95.0 million to $102.0 million. The Company
expects to report a net loss in the range of $7.7 million to $9.7
million and adjusted EBITDA in the range of $6.0 million to $8.0
million.
Board Transition in Anticipation of Qumu Merger
Synacor had previously announced that pursuant to the merger
agreement, the Board of Directors of the combined software-focused
Synacor and Qumu company will consist of seven directors - three
directors to be appointed by Synacor, two directors to be appointed
by Qumu, Synacor CEO Himesh Bhise, and a new, seventh independent
director with software and SaaS experience to serve as
Chairperson.
Today, the Synacor Board named Lisa Donohue, Marwan Fawaz, and
Kevin Rendino, and the Qumu Board named Mary Chowning and Neil Cox,
as the directors who will join Himesh Bhise, following the closing
of the proposed merger with Qumu to serve on the reconstituted
board of the combined company.
The Board has engaged Heidrick & Struggles, a prominent
executive search firm, to identify and evaluate candidates to serve
as the combined company’s seventh Director and new Chairperson.
Synacor also announced today that Jordan Levy has resigned as
Chairman of the Board, and is stepping down from the Board of
Directors effective immediately. Kevin Rendino has been appointed
Interim Chairman. In addition, Gary Ginsberg and Scott Murphy have
notified the Board that they will complete their current terms as
independent directors and will not stand for re-election at the
2020 Annual Meeting. Effective at the time of the 2020 Annual
Meeting, the size of Synacor’s Board of Directors will be reduced
from nine to seven members. Andrew Kau and Michael Montgomery have
notified the Board that they intend to resign from their positions
immediately prior to the closing of the proposed merger to allow
the two Qumu appointees (Mary Chowning and Neil Cox) to join the
Synacor Board.
“On behalf of the entire board, I want to thank Jordy for his
years of service as Chair of Synacor’s Board of Directors,”
commented Kevin Rendino, Interim Synacor Chairman and CEO of 180
Degree Capital. “180 Degree Capital holds a significant stake in
Synacor and is aligned with shareholders in the goal to narrow the
disconnect in Synacor’s valuation relative to its intrinsic value.
As Synacor advances its SaaS transformation and works to close the
merger with Qumu, with a continued focus on profitability, we
believe there is significant opportunity to unlock value for
shareholders. The Board believes that identifying a permanent,
independent, director with relevant software experience to serve as
Chairperson of the Company is just one but a vital step in
Synacor’s evolution.”
Conference Call Details
Synacor will host a conference call today at 5 p.m. ET to
discuss the fourth quarter and fiscal year-end 2019 financial
results. The live webcast of Synacor’s earnings conference call can
be accessed at
https://www.synacor.com/investor-relations/events-and-presentations.
To participate, please dial 1-833-235-2655 (toll free) or
1-647-689-4151 (international) and reference conference ID
8885819.
Following the conclusion of the live call, a replay of the
webcast will be available on the Investor Relations section of the
Company's website for at least 90 days. A telephonic replay of the
conference call will also be available from 8 p.m. ET on March 3,
2020, until 11:59 p.m. ET on March 17, 2020, by dialing
1-800-585-8367 or 1-416-621-4642 and using the pin number
8885819.
About Synacor
Synacor (Nasdaq: SYNC) is a cloud-based software and services
company serving global video, internet and communications
providers, device manufacturers, governments and enterprises.
Synacor’s mission is to enable its customers to better engage with
their consumers. Its customers use Synacor’s technology platforms
and services to scale their businesses and extend their subscriber
relationships. Synacor delivers managed portals, advertising
solutions, email and collaboration platforms, and cloud-based
identity management. 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 loss, 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.
We report adjusted net loss and adjusted diluted earnings per
share because we believe these measures provide investors with
additional information to assess our financial performance. These
measures should be viewed as supplemental data, rather than
substitutes or alternatives to the comparable GAAP measures. For a
reconciliation of our GAAP Condensed Consolidated Statements of
Operations to our adjusted non-GAAP measures, please refer to the
table “Reconciliation of Adjusted Financial 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 first-quarter and full-year 2020
guidance, anticipated benefits from the merger with Qumu, 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: : Synacor and Qumu’s
ability or inability to obtain shareholder approval as required for
the merger or to satisfy other conditions the merger; the effect of
the announcement of the merger on Synacor and Qumu’s ability to
retain and hire key personnel and maintain relationships with
customers, suppliers and others with whom Synacor or Qumu does
business; disruption of Synacor management’s attention due to the
merger; the combined company’s ability to achieve cost reductions
and cost synergies from the merger; execution of our plans and
strategies, including 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-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 March 3, 2020, and Synacor undertakes no duty to
update this information.
No Offer or Solicitation
This press release does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval with respect to the proposed merger or
otherwise. No offer of securities shall be made except by means of
a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended.
Additional Information and Where to Find It
In connection with the proposed merger between Synacor and Qumu,
Synacor intends to file a registration statement on Form S-4
containing a joint proxy statement/prospectus of Synacor and Qumu
and other documents concerning the proposed merger with the SEC.
The definitive proxy statement will be mailed to the stockholders
of Synacor and Qumu in advance of the meeting. BEFORE MAKING ANY
VOTING DECISION, SYNACOR’S AND QUMU’S RESPECTIVE STOCKHOLDERS ARE
URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS IN ITS ENTIRETY
WHEN IT BECOMES AVAILABLE AND ANY OTHER DOCUMENTS FILED BY EACH OF
SYNACOR AND QUMU WITH THE SEC IN CONNECTION WITH THE PROPOSED
MERGER OR INCORPORATED BY REFERENCE THEREIN BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND
THE PARTIES TO THE PROPOSED TRANSACTION. Investors and security
holders will be able to obtain a free copy of the joint proxy
statement/prospectus and other documents containing important
information about Synacor and Qumu, once such documents are filed
with the SEC, through the website maintained by the SEC at
www.sec.gov. Synacor makes available free of charge at
www.synacor.com, copies of materials it files with, or furnishs to,
the SEC. The contents of the website referenced above are not
deemed to be incorporated by reference into the registration
statement or the joint proxy statement/prospectus.
Participants in the Solicitation
This document does not constitute a solicitation of proxy, an
offer to purchase or a solicitation of an offer to sell any
securities. Synacor, Qumu and their respective directors, executive
officers and certain employees may be deemed to be participants in
the solicitation of proxies from the stockholders of Synacor and
Qumu in connection with the proposed merger. Information regarding
the special interests of these directors and executive officers in
the proposed merger will be included in the joint proxy
statement/prospectus referred to above. Security holders may also
obtain information regarding the names, affiliations and interests
of Synacor’s directors and executive officers in Synacor’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2018,
which was filed with the SEC on March 14, 2019, and its definitive
proxy statement for the 2019 annual meeting of stockholders, which
was filed with the SEC on April 5, 2019. Security holders may
obtain information regarding the names, affiliations and interests
of Qumu’s directors and executive officers in Qumu’s Annual Report
on Form 10-K for the fiscal year ended December 31, 2018, which was
filed with the SEC on March 15, 2019, and its definitive proxy
statement for the 2019 annual meeting of shareholders, which was
filed with the SEC on April 9, 2019. To the extent the holdings of
Synacor securities by Synacor’s directors and executive officers or
the holdings of Qumu securities by Qumu’s directors and executive
officers have changed since the amounts set forth in Synacor’s or
Qumu’s respective proxy statement for its 2019 annual meeting of
stockholders, such changes have been or will be reflected on
Statements of Change in Ownership on Form 4 filed with the SEC.
Additional information regarding the interests of such individuals
in the proposed merger will be included in the joint proxy
statement/prospectus relating to the proposed merger when it is
filed with the SEC. These documents (when available) may be
obtained free of charge from the SEC’s website at www.sec.gov,
Synacor’s website at www.synacor.com and Qumu’s website at
www.qumu.com. The contents of the websites referenced above are not
deemed to be incorporated by reference into the registration
statement or the joint proxy statement/prospectus.
Synacor, Inc.
Condensed Consolidated Balance
Sheets
(In thousands)
(Unaudited)
December 31, 2019
December 31, 2018
Assets
Current assets:
Cash and cash equivalents
$
10,966
$15,921
Accounts receivable, net
20,532
25,567
Prepaid expenses and other current
assets
2,989
3,779
Total current assets
34,487
45,267
Property and equipment, net
14,948
18,707
Operating lease right-of-use assets
4,765
—
Goodwill
15,948
15,941
Intangible assets
8,411
10,553
Other assets
1,319
995
Total Assets
$
79,878
$91,463
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable
$
12,583
$19,174
Accrued expenses and other current
liabilities
5,878
7,849
Current portion of deferred revenue
6,509
6,672
Current portion of long-term debt and
finance leases
2,529
2,328
Current portion of operating lease
liabilities
2,165
—
Total current liabilities
29,664
36,023
Long-term portion of debt and finance
leases
729
1,367
Deferred revenue
2,366
—
Long-term portion of operating lease
liabilities
2,846
2,214
Deferred income taxes
275
231
Other long-term liabilities
334
457
Total Liabilities
36,214
40,292
Stockholders' Equity:
Common stock
401
399
Treasury stock
(1,931
)
(1,899
)
Additional paid-in capital
146,460
144,739
Accumulated deficit
(100,747
)
(91,726
)
Accumulated other comprehensive loss
(519
)
(342
)
Total stockholders’ equity
43,664
51,171
Total Liabilities and Stockholders'
Equity
$
79,878
$91,463
Synacor, Inc.
Condensed Consolidated Statement
of Operations
(In thousands except for share
and per share data)
(Unaudited)
Three Months Ended December
31,
Twelve Months Ended December
31,
2019
2018
2019
2018
Revenue
$
26,806
$
39,398
$
121,845
$
143,879
Costs and operating expenses:
Cost of revenue (1)
12,698
20,946
61,990
73,304
Technology and development (1)(2)
3,605
5,679
18,273
23,753
Sales and marketing (2)
4,776
5,609
21,790
24,116
General and administrative (1)(2)
3,666
4,838
17,734
19,454
Depreciation and amortization
2,258
2,325
9,865
9,641
Total costs and operating expenses
27,003
39,397
129,652
150,268
(Loss) income from operations
(197
)
1
(7,807
)
(6,389
)
Other expense, net
(127
)
(166
)
(17
)
(212
)
Interest expense
(69
)
(73
)
(268
)
(338
)
Loss before income taxes
(393
)
(238
)
(8,092
)
(6,939
)
Provision for income taxes
172
138
929
616
Net loss
$
(565
)
$
(376
)
$
(9,021
)
$
(7,555
)
Net loss per share:
Basic
$
(0.01
)
$
(0.01
)
$
(0.23
)
$
(0.19
)
Diluted
$
(0.01
)
$
(0.01
)
$
(0.23
)
$
(0.19
)
Weighted average shares used to compute
net loss per share:
Basic
39,190,444
39,009,442
39,090,239
38,895,301
Diluted
39,190,444
39,009,442
39,090,239
38,895,301
Notes:
(1) Exclusive of depreciation and
amortization shown separately.
(2) Includes stock-based compensation as
follows:
Three Months Ended December
31,
Twelve Months Ended December
31,
2019
2018
2019
2018
Technology and development
$
40
$
120
$
338
$
489
Sales and marketing
138
100
513
474
General and administrative
254
133
765
841
$
432
$
353
$
1,616
$
1,804
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 December
31,
Twelve Months Ended December
31,
2019
2018
2019
2018
Reconciliation of Adjusted
EBITDA:
Net loss
$
(565
)
$
(376
)
$
(9,021
)
$
(7,555
)
Provision for income taxes
172
138
929
616
Interest expense
69
73
268
338
Other expense, net
127
166
17
212
Depreciation and amortization
2,742
2,516
11,251
9,832
Long-lived asset impairment
—
552
1,751
552
Stock-based compensation expense
432
353
1,616
1,804
Restructuring costs *
140
77
959
1,111
Certain legal expenses **
293
367
1,098
1,400
Certain professional services fees ***
34
154
635
154
Adjusted EBITDA
$
3,444
$
4,020
$
9,503
$
8,464
*
"Restructuring costs" include severance
expense, contract termination costs and other exit or disposal
costs.
**
"Certain legal expenses" include legal
fees and other related expenses outside the ordinary course of
business.
***
“Certain professional services fees”
includes fees and expenses related to merger and acquisition
activities.
Synacor, Inc.
Condensed Consolidated Statements
of Cash Flows
(In thousands)
(Unaudited)
Twelve Months Ended December
31,
2019
2018
Cash Flows from Operating
Activities:
Net loss
$
(9,021
)
$
(7,555
)
Adjustments to reconcile net loss to net
cash and cash equivalents provided by operating activities:
Depreciation and amortization
11,251
9,832
Long-lived asset impairment
1,751
552
Stock-based compensation expense
1,616
1,804
Provision for deferred income taxes
44
(248
)
Change in allowance for doubtful
accounts
360
126
Changes in operating assets and
liabilities:
Accounts receivable, net
4,676
6,002
Prepaid expenses and other assets
526
879
Operating lease right-of-use assets and
liabilities, net
95
—
Accounts payable, accrued expenses and
other liabilities
(8,828
)
(5,391
)
Deferred revenue
(11
)
(3,945
)
Net cash provided by operating
activities
2,459
2,056
Cash Flows from Investing
Activities:
Purchases of property and equipment
(3,772
)
(6,256
)
Net cash used in investing
activities
(3,772
)
(6,256
)
Cash Flows from Financing
Activities:
Repayments on long-term debt and finance
leases
(3,427
)
(2,422
)
Payments of financing issuance costs
(60
)
—
Proceeds from exercise of common stock
options
60
385
Purchase of treasury stock and shares
received to satisfy minimum tax withholdings
(32
)
(18
)
Net cash used in financing
activities
(3,459
)
(2,055
)
Effect of exchange rate changes on cash
and cash equivalents
(183
)
(300
)
Net decrease in Cash and Cash
equivalents
(4,955
)
(6,555
)
Cash and cash equivalents, beginning of
period
15,921
22,476
Cash and cash equivalents, end of
period
$
10,966
$
15,921
Synacor, Inc.
Segment Results
(In thousands)
(Unaudited)
Effective March 31, 2019, the Company
concluded that we now have two reportable segments which were
determined on the basis of the products and services provided to
customers, identified as follows:
(i) Software & Services, which
includes email / collaboration (Zimbra) and identity management
(Cloud ID).
(ii) Portal & Advertising, which
includes managed portals and advertising solutions for
publishers.
The following table presents the key
segment financial measures for the periods indicated. Please refer
to the Reconciliation of GAAP to Non-GAAP Measures schedule for the
reconciliation of Adjusted EBITDA.
Three Months Ended December
31,
Twelve Months Ended December
31,
2019
2018
% Change
2019
2018
% Change
Segment Revenue:
Software & Services
$
11,648
$
12,414
(6.2)
%
$
44,485
$
48,692
(8.6)
%
Portal & Advertising
15,158
26,984
(43.8)
%
77,360
95,187
(18.7)
%
Total
$
26,806
$
39,398
(32.0)
%
$
121,845
$
143,879
(15.3)
%
Segment Adjusted EBITDA:
Software & Services
$
3,565
$
3,255
9.5
%
$
12,531
$
14,305
(12.4)
%
Portal & Advertising
2,621
4,542
(42.3)
%
10,657
10,788
(1.2)
%
Unallocated Corporate G&A Expense
(2,742)
(3,777)
27.4
%
(13,685)
(16,629)
17.7
%
Total
$
3,444
$
4,020
(14.3)
%
$
9,503
$
8,464
12.3
%
Segment Adjusted EBITDA margin*:
Software & Services
30.6
%
26.2
%
440 bps
28.2
%
29.4
%
-120 bps
Portal & Advertising
17.3
%
16.8
%
50 bps
13.8
%
11.3
%
240 bps
Total
12.8
%
10.2
%
260 bps
7.8
%
5.9
%
190 bps
* Adjusted EBITDA as a percent of segment revenue
The following tables presents a disaggregation of segment
revenue for the periods indicated based upon the accounting
definition of revenue recognition:
(i) Recurring = revenue recognized over time (ii) Non-recurring
= revenue recognized at a point in time
Three Months Ended December
31,
Twelve Months Ended December
31,
2019
2018
% Change
2019
2018
% Change
Software & Services Revenue:
Recurring
$
8,526
$
8,849
(3.7
)
%
$
33,669
$
34,396
(2.1
)
%
Non-recurring
3,122
3,205
(2.6
)
%
10,456
12,754
(18.0
)
%
Discontinued Product **
—
360
(100.0
)
%
360
1,542
(76.7
)
%
Total
$
11,648
$
12,414
(6.2
)
%
$
44,485
$
48,692
(8.6
)
%
Portal & Advertising Revenue:
Recurring
$
1,186
$
1,537
(22.8
)
%
$
5,168
$
7,254
(28.8
)
%
Non-recurring
13,972
25,447
(45.1
)
%
72,192
87,933
(17.9
)
%
Total
$
15,158
$
26,984
(43.8
)
%
$
77,360
$
95,187
(18.7
)
%
Total Revenue:
Recurring
$
9,712
$
10,386
(6.5
)
%
$
38,837
$
41,650
(6.8
)
%
Non-recurring
17,094
28,652
(40.3
)
%
82,648
100,687
(17.9
)
%
Discontinued Product **
—
360
(100.0
)
%
360
1,542
(76.7
)
%
Total
$
26,806
$
39,398
(32.0
)
%
$
121,845
$
143,879
(15.3
)
%
** VAM video product line which was discontinued during Q1
2019.
Synacor, Inc.
Reconciliation of Adjusted
Financial Measures
(In thousands except per share
amounts)
(Unaudited)
Three months ended December
31, 2019
Per GAAP Statements
Asset Impairment
Restructuring Costs
Certain Legal &
Professional Fees
Adjusted Non-GAAP
Revenue
$
26,806
$
26,806
Costs and operating expenses:
Cost of revenue (1)
12,698
58
12,756
Technology and development
(1)(2)
3,605
(41
)
3,564
Sales and marketing (2)
4,776
(54
)
4,722
General and administrative
(1)(2)
3,666
—
(103
)
(327
)
3,236
Depreciation and amortization
2,258
2,258
Total costs and operating
expenses
27,003
—
(140
)
(327
)
26,536
(Loss) income from operations
(197
)
—
140
327
270
Other expense, net
(127
)
(127
)
Interest expense
(69
)
(69
)
(Loss) income before income
taxes
(393
)
—
140
327
74
Provision for income taxes
(3)
172
172
Net loss
$
(565
)
$
—
$
140
$
327
$
(98
)
Diluted EPS
$
(0.01
)
$
0.00
$
0.00
$
0.01
$
0.00
Three months ended December
31, 2018
Per GAAP Statements
Asset Impairment
Restructuring Costs
Certain Legal &
Professional Fees
Adjusted Non-GAAP
Revenue
$
39,398
$
39,398
Costs and operating expenses:
Cost of revenue (1)
20,946
$
20,946
Technology and development
(1)(2)
5,679
(15
)
$
5,664
Sales and marketing (2)
5,609
—
$
5,609
General and administrative
(1)(2)
4,838
(552
)
(62
)
(521
)
$
3,703
Depreciation and amortization
2,325
2,325
Total costs and operating
expenses
39,397
(552
)
(77
)
(521
)
38,247
Income from operations
1
552
77
521
1,151
Other expense, net
(166
)
$
(166
)
Interest expense
(73
)
(73
)
(Loss) income before income
taxes
(238
)
552
77
521
912
Provision for income taxes
(3)
138
138
Net (loss) income
$
(376
)
$
552
$
77
$
521
$
774
Diluted EPS
$
(0.01
)
$
0.01
$
0.00
$
0.01
$
0.01
Notes:
(1) Exclusive of depreciation and
amortization shown separately.
(2) Includes stock-based compensation
(3) No income tax effects to adjustments
presented due to full valuation allowance.
Synacor's management believes that certain non-GAAP measures of
Adjusted Net Loss and Adjusted Diluted Earnings per Share provide
investors with additional information to assess the Company's
financial performance. These measures should be viewed as
supplemental data, rather than substitutes or alternatives to the
comparable GAAP measures.
Synacor, Inc.
Reconciliation of Adjusted
Financial Measures
(In thousands except per share
amounts)
(Unaudited)
Twelve months ended December
31, 2019
Per GAAP Statements
Asset Impairment
Restructuring Costs
Certain Legal &
Professional Fees
Adjusted Non-GAAP
Revenue
$
121,845
$
121,845
Costs and operating expenses:
Cost of revenue (1)
61,990
(234
)
61,756
Technology and development (1)(2)
18,273
(370
)
17,903
Sales and marketing (2)
21,790
(246
)
21,544
General and administrative (1)(2)
17,734
(1,751
)
(109
)
(1,733
)
14,141
Depreciation and amortization
9,865
9,865
Total costs and operating expenses
129,652
(1,751
)
(959
)
(1,733
)
125,209
Loss from operations
(7,807
)
1,751
959
1,733
(3,364
)
Other expense, net
(17
)
(17
)
Interest Expense
(268
)
(268
)
Loss before income taxes
(8,092
)
1,751
959
1,733
(3,649
)
Provision for income taxes (3)
929
929
Net loss
$
(9,021
)
$
1,751
$
959
$
1,733
$
(4,578
)
Diluted EPS
$
(0.23
)
$
0.04
$
0.02
$
0.04
$
(0.12
)
Twelve months ended December
31, 2018
Per GAAP Statements
Asset Impairment
Restructuring Costs
Certain Legal &
Professional Fees
Adjusted Non-GAAP
Revenue
$
143,879
$
143,879
Costs and operating expenses:
Cost of revenue (1)
73,304
73,304
Technology and development (1)(2)
23,753
(298
)
23,455
Sales and marketing (2)
24,116
(339
)
23,777
General and administrative (1)(2)
19,454
(552
)
(474
)
(1,554
)
16,874
Depreciation and amortization
9,641
9,641
Total costs and operating expenses
150,268
(552
)
(1,111
)
(1,554
)
147,051
Loss from operations
(6,389
)
552
1,111
1,554
(3,172
)
Other expense, net
(212
)
(212
)
Interest Expense
(338
)
(338
)
Loss before income taxes
(6,939
)
552
1,111
1,554
(3,722
)
Provision for income taxes (3)
616
616
Net loss
$
(7,555
)
552
$
1,111
$
1,554
$
(4,338
)
Diluted EPS
$
(0.19
)
$
0.01
$
0.03
$
0.04
$
(0.11
)
Notes:
(1) Exclusive of depreciation and
amortization shown separately.
(2) Includes stock-based compensation
(3) No income tax effects to adjustments
presented due to full valuation allowance.
Synacor's management believes that certain non-GAAP measures of
Adjusted Net Loss and Adjusted Diluted Earnings per Share provide
investors with additional information to assess the Company's
financial performance. These measures should be viewed as
supplemental data, rather than substitutes or alternatives to the
comparable GAAP measures.
Synacor, Inc.
Guidance Reconciliation
(In millions)
(Unaudited)
Q1-2020
FY 2020
Net Loss
$(4.0) - $(4.5)
$(7.7) - $(9.7)
Taxes, Interest & Other
Income/Expense
0.3
1.2
Depreciation & Amortization
2.9
10.0
Stock-based Compensation
0.5
2.5
Certain Legal and Professional Fees
1.3
2.0
Adjusted EBITDA
$0.5 - $1.0
$6.0 - $8.0
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200303005979/en/
FNK IR Rob Fink +1.646.809.4048 rob@fnkir.com
Meredith Roth VP, Marketing & Corporate Communications
Synacor +1.770.846.1911 mroth@synacor.com
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