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Share Name | Share Symbol | Market | Type |
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Synacor Inc | NASDAQ:SYNC | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 2.19 | 2.20 | 2.20 | 0 | 01:00:00 |
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 September 30, 2016.
“We delivered another solid quarter, exceeding our guidance and achieving double-digit top-line growth, margin expansion and growth in recurring and fee-based revenue,” said Synacor CEO Himesh Bhise. “We are making great strides in advancing our technology and products, in particular this quarter, with our AT&T partnership, Zimbra Open Source and Cloud ID offerings.
“We remain well positioned in the growing digital markets that we serve and are on track to deliver on our target of $300 million in revenue and $30 million in adjusted EBITDA in 2019,” said Bhise.
Recent Highlights
Q3 2016 Financial Results
Revenue: For the third quarter of 2016, revenue was $31.7 million, an increase of 20% compared with the third quarter of 2015. Recurring and fee-based revenue represented 42% of our revenue.
Net Income: For the third quarter of 2016, net loss was $3.4 million, compared with net loss of $0.9 million in the third quarter of 2015, reflecting the investment to deploy and support the AT&T portal contract. Earnings per share, or EPS, was a loss of $0.11 compared with a loss of $0.03 in the third quarter of 2015.
Adjusted EBITDA: For the third quarter of 2016, adjusted earnings before interest, taxes, depreciation, and amortization (adjusted EBITDA), which excludes stock-based compensation expense, was $0.2 million compared with $2.0 million for the third quarter of 2015. Adjusted EBITDA in the third quarter of 2016 reflects the $2.3 million investment (operating expense) to support the AT&T portal business won earlier this year.
Cash: The Company ended the third quarter of 2016 with $15.0 million in cash and cash equivalents, compared with $16.3 million at the end of the prior quarter.
Guidance
“We are making excellent progress with our AT&T partnership. The teams have been working hard on developing the expanded breadth of new features and refining the deployment program. We are planning the launch of the new AT&T desktop and mobile web portal in the first half of 2017, rather than a limited Q4 2016 release. We continue to expect the deployment will ramp and monetize through 2017 as previously discussed. Revenue contribution from AT&T is now expected to begin in 2017, and we are adjusting our financial guidance for Q4 2016 accordingly. The combined AT&T and Synacor team feels confident in our ability to execute against the new timeline and pleased with our progress to date,” concluded Bhise.
Based on information available as of November 14, 2016, the company is providing financial guidance for the fourth quarter and fiscal 2016 as follows:
Conference Call Details
Synacor will host a conference call today at 5 p.m. ET to discuss the third-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 10216750, 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 10216750.
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. Synacor delivers modern, multiscreen experiences and advertising to their consumers that require scale, actionable data and sophisticated implementation. Synacor enables its customers to better engage with their consumers. www.synacor.com
SYNC-G
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 fourth-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 November 14, 2016, and Synacor undertakes no duty to update this information.
Synacor, Inc. Condensed Consolidated Balance Sheets (In thousands) (Unaudited) September 30, December 31, 2016 2015 Assets Current assets: Cash and cash equivalents $ 15,028 $ 15,697 Accounts receivable, net 19,993 24,341 Prepaid expenses and other current assets 4,599 3,290 Total current assets 39,620 43,328 Property and equipment, net 14,815 14,377 Goodwill 15,949 15,187 Intangible assets, net 15,376 14,798 Other long-term assets 1,303 1,336 Total Assets $ 87,063 $ 89,026 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 11,905 $ 9,004 Accrued expenses and other current liabilities 13,265 9,765 Current portion of deferred revenue 9,946 11,295 Current portion of capital lease obligations 1,170 1,574 Total current liabilities 36,286 31,638 Long-term portion of capital lease obligations 1,151 1,007 Long-term debt 5,000 5,000 Deferred revenue 2,878 3,225 Other long-term liabilities 486 2,052 Total Liabilities 45,801 42,922 Stockholders' Equity: Common stock 312 306 Additional paid-in capital 116,224 113,238 Accumulated deficit (73,797 ) (66,110 ) Treasury stock (1,460 ) (1,332 ) Accumulated other comprehensive (loss) income (17 ) 2 Total stockholders’ equity 41,262 46,104 Total Liabilities and Stockholders' Equity $ 87,063 $ 89,026 Synacor, Inc. Condensed Consolidated Statements of Operations (In thousands except share and per share amounts) (Unaudited) Three months ended Nine months ended September 30, September 30, 2016 2015 2016 2015 Revenue $ 31,721 $ 26,351 $ 92,457 $ 77,797 Costs and operating expenses: Cost of revenue (1) 14,611 13,298 41,099 40,205 Technology and development (1)(2) 6,791 4,361 19,255 13,788 Sales and marketing (2) 5,907 4,274 17,177 11,475 General and administrative (1)(2) 4,871 3,712 15,027 10,437 Depreciation and amortization 2,414 1,560 6,782 4,716 Total costs and operating expenses 34,594 27,205 99,340 80,621 Loss from operations (2,873 ) (854 ) (6,883 ) (2,824 ) Other (expense) income (38 ) (32 ) 206 (31 ) Interest expense (75 ) (35 ) (227 ) (144 ) Loss before income taxes and equity interest (2,986 ) (921 ) (6,904 ) (2,999 ) Provision for income taxes 379 10 783 30 Loss in equity interest - - - (57 ) Net loss $ (3,365 ) $ (931 ) $ (7,687 ) $ (3,086 ) Net loss per share: Basic $ (0.11 ) $ (0.03 ) $ (0.26 ) $ (0.11 ) Diluted $ (0.11 ) $ (0.03 ) $ (0.26 ) $ (0.11 ) Weighted average shares used to compute net loss per share: Basic 30,260,172 27,924,939 30,108,725 27,617,125 Diluted 30,260,172 27,924,939 30,108,725 27,617,125 Notes: (1) Exclusive of depreciation and amortization shown separately. (2) Includes stock-based compensation as follows: Three months ended Nine months ended September 30, September 30, 2016 2015 2016 2015 Technology and development $ 238 $ 224 $ 681 $ 694 Sales and marketing 173 231 604 716 General and administrative 269 355 819 942 $ 680 $ 810 $ 2,104 $ 2,352 Synacor, Inc. Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) Nine months ended September 30, 2016 2015 Cash Flows from Operating Activities: Net loss $ (7,687 ) $ (3,086 ) Adjustments to reconcile net loss to net cash provided in operating activities: Depreciation and amortization 6,782 4,716 Stock-based compensation expense 2,104 2,352 Reduction of estimated fair value of contingent consideration 90 - Loss in equity interest - 57 Change in assets and liabilities net of effect of acquisition: Accounts receivable, net 5,313 3,169 Prepaid expenses and other assets (1,282 ) 643 Accounts payable 1,842 (1,003 ) Accrued expenses and other liabilities 1,245 36 Deferred revenue (1,696 ) (706 )Net cash (used in) provided by operating activities
6,711 6,178 Cash Flows from Investing Activities: Acquisition, net of cash acquired (2,500 ) (17,260 ) Purchases of property and equipment (4,246 ) (2,474 )Net cash (used in) provided by investing activities
(6,746 ) (19,734 ) Cash Flows from Financing Activities: Repayments on capital lease obligations (1,242 ) (975 ) Proceeds from bank financing - 4,940 Proceeds from exercise of common stock options 744 70 Payment of minimum tax withholdings in exchange for treasury stock shares (128 ) - Deferred acquisition payment - (495 ) Net cash (used in) provided by financing activities (626 ) 3,540 Effect of exchange rate changes on cash and cash equivalents (8 ) (15 ) Net decrease in Cash and Cash Equivalents (669 ) (10,031 ) Cash and Cash Equivalents at beginning of period 15,697 25,600 Cash and Cash Equivalents at end of period $ 15,028 $ 15,569 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 Nine months ended September 30, September 30, 2016 2015 2016 2015 Reconciliation of Adjusted EBITDA: Net loss $ (3,365 ) $ (931 ) $ (7,687 ) $ (3,086 ) Provision for income taxes 379 10 783 30 Interest expense 75 35 227 144 Other expense (income) 38 32 (206 ) 31 Depreciation and amortization 2,414 1,560 6,782 4,716 Stock-based compensation expense 680 810 2,104 2,352 Acquisition costs - 478 - 478 Loss on equity interest - - - 57 Adjusted EBITDA $ 221 $ 1,994 $ 2,003 $ 4,722
View source version on businesswire.com: http://www.businesswire.com/news/home/20161114006520/en/
Investor Contact:Sharon Merrill AssociatesDavid Calusdian, 617-542-5300Executive Vice Presidentir@synacor.comorPress Contact:SynacorMatt Wolfrom, 716-362-3880VP, Corporate CommunicationsMatt.Wolfrom@synacor.com
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