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Synacor Beats Revenue and Adjusted EBITDA Outlook for Q1 2015

4:01 PM ET 4/30/15 | Dow Jones

Synacor Beats Revenue and Adjusted EBITDA Outlook for Q1 2015

Delivers 6% Year over Year Revenue Growth

-- Q1 2015 revenue of $26.7 million, exceeds guidance range of $24.0 - $26.0

million

-- Q1 2015 adjusted EBITDA of $1.3 million, exceeds guidance range of $0.0

to $1.0 million

-- Adjusted EBITDA of $1.3 million in Q1 2015 up from a year ago loss of

$0.7 million in Q1 2014

BUFFALO, N.Y., April 30, 2015 (GLOBE NEWSWIRE) -- Synacor Inc. (Nasdaq:SYNC), the trusted technology development, multiplatform services and revenue partner for video, internet and communications providers, and device manufacturers, today announced its financial results for the first quarter ended March 31, 2015.

"We continue to execute well against our strategy," said Synacor CEO Himesh Bhise. "We are pleased to report first quarter financial results that exceeded our expectations with sustained year over year growth. We continue to diversify into attractive growth markets--our advertising business continues to perform well, we are growing our fee-based subscription revenues, and building compelling advanced video solutions."

Q1 2015 Financial Results

Revenue: For the first quarter of 2015, total revenue was $26.7 million, an increase of 6% compared to $25.2 million in the first quarter of 2014. Search and display advertising revenue was $20.6 million, an increase of 4% compared to $19.9 million in the first quarter of 2014. Subscription-based revenue was $6.1 million, a 14% increase compared to $5.3 million in the first quarter of 2014.

For the first quarter of 2015, Synacor averaged 22.0 million multiplatform unique visitors per month, compared to 21.3 million in the first quarter of 2014.

Adjusted EBITDA: For the first quarter of 2015, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), which excludes stock-based compensation expense, was $1.3 million, or 5% of revenue, compared to a loss of $0.7 million in the first quarter of 2014.

Net Income: For the first quarter of 2015, net loss was $1.1 million, compared to net loss of $2.1 million in the first quarter of 2014. Earnings per share, or EPS, was a loss of $0.04. The net loss includes stock-based compensation expense of $0.7 million, or $0.03 per share, in the first quarter of 2015, as compared to $0.7 million, or $0.02 per share, in the first quarter of 2014. The EPS calculations for the first quarter of 2015 are based on 27.4 million weighted average common shares outstanding. The EPS calculations for the first quarter of 2014 are based on 27.4 million weighted average common shares outstanding.

Cash: The company ended the first quarter of 2015 with $26.8 million in cash and cash equivalents, compared to $25.6 million at the end of the prior quarter. Cash generated by operating activities was $2.2 million for the first quarter of 2015, compared to $1.2 million used in operating activities in the same period of the prior year.

Business Outlook

Bhise continued, "We're building on these Q1 results and are focused on continuing our progress in Q2 and throughout the year. We're improving our products, growing monetization, and are a stronger partner to our customers."

Based on information available as of April 30, 2015, the company is providing financial guidance for the second quarter and fiscal 2015 as follows:

-- Q2 2015 Guidance: Revenue for the second quarter of 2015 is projected to

be in the range of $24.0 million to $25.5 million. For the second quarter

of 2015, the company expects to report adjusted EBITDA of $0.2 million to

$1.2 million.

-- Fiscal 2015 Guidance: Revenue for the full year of 2015 is projected to

be in the range of $97.0 million to $102.0 million. For the full year of

2015, the company expects to report adjusted EBITDA of $2.0 million to

$4.0 million.

Conference Call Details

Synacor will host a conference call today at 5 p.m. ET to discuss the first 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 [phone], with conference ID 19318004, or callers outside the U.S. may dial [phone]. Following completion of the call, a recorded webcast replay will be available on Synacor's website through May 7, 2015. To listen to the telephone replay, call toll-free [phone], or callers outside the U.S. may dial [phone]. The conference ID is 19318004.

About Synacor

Synacor (Nasdaq:SYNC) is the trusted technology development, multiplatform services and revenue partner for video, internet and communications providers, and device manufacturers. We deliver modern, multiscreen experiences and advertising to their consumers that require scale, actionable data and sophisticated implementation. 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 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

"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, statements and information in the Business Outlook section and the quotations from management), as well as 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; the loss of a significant customer; our ability to obtain new customers; 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 display 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; 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, as amended, 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 April 30, 2015, and Synacor undertakes no duty to update this information.

Synacor, Inc.

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

As of As of

December 31, March 31,

------------ ---------

2014 2015

------------ ---------

Assets

Current assets:

Cash and cash equivalents $ 25,600 $ 26,750

Accounts receivable, net 20,479 19,276

Prepaid expenses and other current assets 2,292 2,315

Deferred income taxes -- --

------------ ---------

Total current assets 48,371 48,341

Property and equipment, net 15,128 14,528

Deferred income taxes, non-current -- --

Other long-term assets 101 74

Goodwill 1,565 1,565

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April 30, 2015 16:01 ET (20:01 GMT)