-
Notable customer wins include HBO NOW, TruVista and over 150 new
Zimbra enterprise and government customers around the world
-
Q4 net loss of $0.1 million and adjusted EBITDA of $3.6 million, up
from net loss of $3.1 million and adjusted EBITDA of $1.2 million in
Q4 2016
BUFFALO, N.Y.--(BUSINESS WIRE)--
Synacor, Inc. (NASDAQ: SYNC), the trusted multiscreen technology and
monetization partner for video, internet and communications providers,
device manufacturers, governments and enterprises, today announced its
financial results for the fourth quarter and year ended December 31,
2017.
“We ended the year with a strong fourth quarter,” said Synacor CEO
Himesh Bhise. “Our fourth-quarter revenue of $46 million represented an
increase of 32% from the fourth quarter of 2016, making it the highest
revenue quarter in the history of the company. We also delivered
adjusted EBITDA of $3.6 million, three-times the adjusted EBITDA from
the same quarter in the year prior.”
“Looking forward, we are focused on improved profitability balanced with
prudent investment in growth. Our revenue guidance of $150 million to
$155 million represents about 7% to 11% revenue growth, and our adjusted
EBITDA guidance of $7 million to $10 million is three to four times our
2017 adjusted EBITDA,” continued Bhise.
Recent Highlights
-
Signed 150 new Zimbra Email and Collaboration Suite customers,
including the city of Rennes, France, HiWin Technologies Corp. in
Taiwan, Maronda Homes in the U.S., and a European telecommunications
company.
-
Expanded Synacor’s relationship with HBO to include HBO NOW, making
Synacor the Authentication/Authorization provider for both HBO GO and
HBO NOW.
-
Renewed advanced portal partnership with Windstream and added TruVista
to the CloudID platform.
-
Launched Zimbra 8.8, with new features and tech stack enhancements
that improved the value proposition to operators and enterprises.
FY 2017 and Q4 2017 Financial Results
Revenue: For fiscal 2017, revenue was $140.0 million, an
increase of 10% from 2016. For the fourth quarter of 2017, revenue was
$46.0 million, meeting the Company’s financial guidance, an increase of
32% versus the fourth quarter of 2016.
Net Income: For fiscal 2017, net loss
narrowed to $9.8 million, or $(0.27) per share, compared with a net loss
of $10.7 million, or $(0.36) per share, in fiscal 2016. For the fourth
quarter of 2017, net loss was $0.1 million, or $(0.00) per share,
compared with a net loss of $3.1 million, or $(0.10) per share, in the
fourth quarter of 2016.
Adjusted EBITDA:
For fiscal 2017, adjusted earnings before interest, taxes, depreciation
and amortization (adjusted EBITDA), which excludes stock-based
compensation expense, was $2.3 million compared with $3.2 million for
fiscal 2016.
For the fourth quarter of 2017, adjusted EBITDA, which excludes
stock-based compensation expense, increased to $3.6 million compared
with $1.2 million for the fourth quarter of 2016.
Cash: The Company ended the fourth quarter of 2017 with
$22.5 million in cash and cash equivalents, compared with $22.9 million
at the end of the third quarter of 2017.
Guidance
Based on information available as of March 15, 2018, the Company is
providing financial guidance for the first quarter and full year 2018 as
follows:
-
Q1 2018 Guidance: Revenue for the first quarter of 2018
is projected to be in the range of $30 million to $32 million. The
Company expects to report a net loss of $2.6 million to $3.4 million
and adjusted EBITDA of $0.5 million to $1.0 million, which excludes
stock-based compensation expense of $500,000 to $600,000, depreciation
and amortization of $2.8 million to $3.0 million, and tax, interest
expense and other income and expense of approximately $300,000.
-
Fiscal 2018 Guidance: Revenue for the full year of 2018
is expected to be within the range of $150 million to $155 million.
The Company expects to report a net loss in the range of $4.4 million
to $8.6 million and adjusted EBITDA in the range of $7 million to $10
million, which excludes stock-based compensation expense of $2.0
million to $2.4 million, depreciation and amortization of $11.2
million to $12.0 million, and tax, interest expense, and other income
and expense of $1.2 million.
Conference Call Details
Synacor will host a conference call today at 5:00 p.m. ET to discuss the
fourth-quarter and fiscal year-end 2017 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 (833) 235-2655, with conference ID
6378502, or callers outside the U.S. may dial (647) 689-4151. Following
completion of the call, a recorded webcast replay will be available on
Synacor's website. To listen to the telephone replay through March 22,
2018, call toll-free (800) 585-8367, or callers outside the U.S. may
dial (416) 621-4642. The conference ID is 6378502.
About Synacor
Synacor (Nasdaq: SYNC) is the trusted technology development,
multiplatform services and revenue partner for 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.
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.
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 fiscal year 2018 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 pace
and degree to which the AT&T portal can be monetized; 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 March 15, 2018, and Synacor undertakes no duty to update
this information.
|
|
|
|
|
|
|
|
|
Synacor, Inc.
|
|
Condensed Consolidated Balance Sheets
|
|
(In thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
Assets
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
22,476
|
|
|
|
$
|
14,315
|
|
|
Accounts receivable, net
|
|
|
|
31,696
|
|
|
|
|
27,386
|
|
|
Prepaid expenses and other current assets
|
|
|
|
4,516
|
|
|
|
|
4,862
|
|
|
Total current assets
|
|
|
|
58,688
|
|
|
|
|
46,563
|
|
|
Property and equipment, net
|
|
|
|
20,505
|
|
|
|
|
14,406
|
|
|
Goodwill
|
|
|
|
15,955
|
|
|
|
|
15,943
|
|
|
Intangible assets
|
|
|
|
12,695
|
|
|
|
|
14,837
|
|
|
Other long-term assets
|
|
|
|
937
|
|
|
|
|
1,650
|
|
|
Total Assets
|
|
|
$
|
108,780
|
|
|
|
$
|
93,399
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
$
|
25,931
|
|
|
|
$
|
18,769
|
|
|
Accrued expenses and other current liabilities
|
|
|
|
7,075
|
|
|
|
|
11,684
|
|
|
Current portion of deferred revenue
|
|
|
|
11,605
|
|
|
|
|
12,149
|
|
|
Current portion of capital lease obligations
|
|
|
|
2,444
|
|
|
|
|
982
|
|
|
Total current liabilities
|
|
|
|
47,055
|
|
|
|
|
43,584
|
|
|
Long-term portion of capital lease obligations
|
|
|
|
3,371
|
|
|
|
|
1,014
|
|
|
Deferred revenue
|
|
|
|
3,682
|
|
|
|
|
3,917
|
|
|
Deferred income taxes and other
|
|
|
|
327
|
|
|
|
|
235
|
|
|
Long-term debt
|
|
|
|
—
|
|
|
|
|
5,000
|
|
|
Total Liabilities
|
|
|
|
54,435
|
|
|
|
|
53,750
|
|
|
Stockholders' Equity:
|
|
|
|
|
|
|
|
Common stock
|
|
|
|
396
|
|
|
|
|
316
|
|
|
Treasury stock
|
|
|
|
(1,881
|
)
|
|
|
|
(1,547
|
)
|
|
Additional paid-in capital
|
|
|
|
142,486
|
|
|
|
|
117,747
|
|
|
Accumulated deficit
|
|
|
|
(86,627
|
)
|
|
|
|
(76,850
|
)
|
|
Accumulated other comprehensive loss
|
|
|
|
(29
|
)
|
|
|
|
(17
|
)
|
|
Total stockholders’ equity
|
|
|
|
54,345
|
|
|
|
|
39,649
|
|
|
Total Liabilities and Stockholders' Equity
|
|
|
$
|
108,780
|
|
|
|
$
|
93,399
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Synacor, Inc.
|
|
Condensed Consolidated Statements of Operations
|
|
(In thousands except share and per share amounts)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Year ended
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
$
|
46,002
|
|
|
|
$
|
34,916
|
|
|
|
$
|
140,027
|
|
|
|
$
|
127,373
|
|
|
Costs and operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue (1)
|
|
|
|
25,409
|
|
|
|
|
18,047
|
|
|
|
|
70,053
|
|
|
|
|
59,146
|
|
|
Technology and development (1)(2)
|
|
|
|
6,692
|
|
|
|
|
6,357
|
|
|
|
|
27,642
|
|
|
|
|
25,612
|
|
|
Sales and marketing (2)
|
|
|
|
5,916
|
|
|
|
|
5,669
|
|
|
|
|
24,941
|
|
|
|
|
22,846
|
|
|
General and administrative (1)(2)
|
|
|
|
4,980
|
|
|
|
|
4,668
|
|
|
|
|
17,800
|
|
|
|
|
19,695
|
|
|
Depreciation and amortization
|
|
|
|
2,816
|
|
|
|
|
2,453
|
|
|
|
|
9,820
|
|
|
|
|
9,235
|
|
|
Total costs and operating expenses
|
|
|
|
45,813
|
|
|
|
|
37,194
|
|
|
|
|
150,256
|
|
|
|
|
136,534
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations
|
|
|
|
189
|
|
|
|
|
(2,278
|
)
|
|
|
|
(10,229
|
)
|
|
|
|
(9,161
|
)
|
|
Gain on sale of investment
|
|
|
|
85
|
|
|
|
|
—
|
|
|
|
|
1,987
|
|
|
|
|
—
|
|
|
Other expense
|
|
|
|
(174
|
)
|
|
|
|
(248
|
)
|
|
|
|
(2
|
)
|
|
|
|
(42
|
)
|
|
Interest expense
|
|
|
|
(105
|
)
|
|
|
|
(91
|
)
|
|
|
|
(433
|
)
|
|
|
|
(318
|
)
|
|
Loss before income taxes
|
|
|
|
(5
|
)
|
|
|
|
(2,617
|
)
|
|
|
|
(8,677
|
)
|
|
|
|
(9,521
|
)
|
|
Income tax provision
|
|
|
|
101
|
|
|
|
|
436
|
|
|
|
|
1,100
|
|
|
|
|
1,219
|
|
|
Net loss
|
|
|
$
|
(106
|
)
|
|
|
$
|
(3,053
|
)
|
|
|
$
|
(9,777
|
)
|
|
|
$
|
(10,740
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
(0.00
|
)
|
|
|
$
|
(0.10
|
)
|
|
|
$
|
(0.27
|
)
|
|
|
$
|
(0.36
|
)
|
|
Diluted
|
|
|
$
|
(0.00
|
)
|
|
|
$
|
(0.10
|
)
|
|
|
$
|
(0.27
|
)
|
|
|
$
|
(0.36
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used to compute net loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
38,727,724
|
|
|
|
|
30,677,457
|
|
|
|
|
36,381,299
|
|
|
|
|
30,251,685
|
|
|
Diluted
|
|
|
|
38,727,724
|
|
|
|
|
30,677,457
|
|
|
|
|
36,381,299
|
|
|
|
|
30,251,685
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Exclusive of depreciation shown separately.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Includes stock-based compensation as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
Year ended
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Technology and development
|
|
|
$
|
140
|
|
|
|
$
|
240
|
|
|
|
$
|
744
|
|
|
|
$
|
921
|
|
|
Sales and marketing
|
|
|
|
136
|
|
|
|
|
180
|
|
|
|
|
636
|
|
|
|
|
784
|
|
|
General and administrative
|
|
|
|
286
|
|
|
|
|
247
|
|
|
|
|
1,110
|
|
|
|
|
1,066
|
|
|
|
|
|
$
|
562
|
|
|
|
$
|
667
|
|
|
|
$
|
2,490
|
|
|
|
$
|
2,771
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Synacor, Inc.
|
|
Condensed Consolidated Statements of Cash Flows
|
|
(In thousands)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended
|
|
|
|
|
December 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
Cash Flows from Operating Activities:
|
|
|
|
|
|
|
|
Net loss
|
|
|
$
|
(9,777
|
)
|
|
|
$
|
(10,740
|
)
|
|
Adjustments to reconcile net loss to net cash (used in) provided by
operating activities:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
9,820
|
|
|
|
|
9,235
|
|
|
Loss on disposal of property and equipment
|
|
|
|
203
|
|
|
|
|
—
|
|
|
Capitalized software impairment
|
|
|
|
256
|
|
|
|
|
334
|
|
|
Stock-based compensation expense
|
|
|
|
2,490
|
|
|
|
|
2,771
|
|
|
Gain on sale of investment
|
|
|
|
(1,987
|
)
|
|
|
|
—
|
|
|
Provision for deferred income taxes
|
|
|
|
137
|
|
|
|
|
143
|
|
|
Change in allowance for doubtful accounts
|
|
|
|
(164
|
)
|
|
|
|
|
Increase in estimated value of contingent consideration
|
|
|
|
107
|
|
|
|
|
—
|
|
|
Change in operating assets and liabilities net of effect of
acquisition:
|
|
|
|
|
|
|
|
Accounts receivable, net
|
|
|
|
(4,146
|
)
|
|
|
|
(2,080
|
)
|
|
Prepaid expenses and other assets
|
|
|
|
346
|
|
|
|
|
(1,572
|
)
|
|
Other long-term assets
|
|
|
|
15
|
|
|
|
|
(314
|
)
|
|
Accounts payable, accrued expenses, and other current liabilities
|
|
|
|
3,261
|
|
|
|
|
9,286
|
|
|
Deferred revenue
|
|
|
|
(779
|
)
|
|
|
|
1,546
|
|
|
Other long-term liabilities
|
|
|
|
(45
|
)
|
|
|
|
(360
|
)
|
|
Net cash (used in) provided by operating activities
|
|
|
|
(263
|
)
|
|
|
|
8,249
|
|
|
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
|
Proceeds from sale of investment
|
|
|
|
2,645
|
|
|
|
|
—
|
|
|
Purchases of property and equipment
|
|
|
|
(7,876
|
)
|
|
|
|
(5,939
|
)
|
|
Acquisition
|
|
|
|
—
|
|
|
|
|
(2,500
|
)
|
|
Net cash used in investing activities
|
|
|
|
(5,231
|
)
|
|
|
|
(8,439
|
)
|
|
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
Net proceeds from offering of common stock
|
|
|
|
20,258
|
|
|
|
|
—
|
|
|
Payments of public offering issuance costs
|
|
|
|
(212
|
)
|
|
|
|
—
|
|
|
Repayments of long-term debt
|
|
|
|
(5,000
|
)
|
|
|
|
—
|
|
|
Repayments on capital lease obligations
|
|
|
|
(1,866
|
)
|
|
|
|
(1,672
|
)
|
|
Proceeds from exercise of common stock options
|
|
|
|
2,149
|
|
|
|
|
1,560
|
|
|
Purchase of treasury stock and shares received to satisfy minimum
tax withholding liabilities
|
|
|
|
(334
|
)
|
|
|
|
(215
|
)
|
|
Deferred acquisition payment
|
|
|
|
(1,300
|
)
|
|
|
|
(860
|
)
|
|
Net cash provided by (used in) financing activities
|
|
|
|
13,695
|
|
|
|
|
(1,187
|
)
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
|
(40
|
)
|
|
|
|
(5
|
)
|
|
Net increase (decrease) in Cash and Cash Equivalents
|
|
|
|
8,161
|
|
|
|
|
(1,382
|
)
|
|
Cash and Cash Equivalents at beginning of period
|
|
|
|
14,315
|
|
|
|
|
15,697
|
|
|
Cash and Cash Equivalents at end of period
|
|
|
$
|
22,476
|
|
|
|
$
|
14,315
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
Year ended
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
$
|
(106
|
)
|
|
|
$
|
(3,053
|
)
|
|
|
$
|
(9,777
|
)
|
|
|
$
|
(10,740
|
)
|
|
Provision for income taxes
|
|
|
|
101
|
|
|
|
|
436
|
|
|
|
|
1,100
|
|
|
|
|
1,219
|
|
|
Interest expense
|
|
|
|
105
|
|
|
|
|
91
|
|
|
|
|
433
|
|
|
|
|
318
|
|
|
Gain on sale of investment
|
|
|
|
(85
|
)
|
|
|
|
—
|
|
|
|
|
(1,987
|
)
|
|
|
|
—
|
|
|
Other expense
|
|
|
|
174
|
|
|
|
|
248
|
|
|
|
|
2
|
|
|
|
|
42
|
|
|
Depreciation and amortization
|
|
|
|
2,816
|
|
|
|
|
2,453
|
|
|
|
|
9,820
|
|
|
|
|
9,235
|
|
|
Capitalized software impairment
|
|
|
|
—
|
|
|
|
|
334
|
|
|
|
|
256
|
|
|
|
|
334
|
|
|
Stock-based compensation expense
|
|
|
|
562
|
|
|
|
|
667
|
|
|
|
|
2,490
|
|
|
|
|
2,771
|
|
|
Adjusted EBITDA
|
|
|
$
|
3,567
|
|
|
|
$
|
1,176
|
|
|
|
$
|
2,337
|
|
|
|
$
|
3,179
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20180315006403/en/
Source: Synacor, Inc.