- Quarterly revenue of $32.2 million, an increase of 11% year-over-year
- Annual revenue of $122.0 million, an increase of 34% year-over-year
- Quarterly adjusted EBITDA of $3.5 million vs. $2.7 million in prior year
- Annual adjusted EBITDA of $11.6 million vs. $7.6 million in prior year
BUFFALO, N.Y., Feb. 20, 2013 (GLOBE NEWSWIRE) -- Synacor, Inc. (Nasdaq:SYNC), leading provider of next-gen startpages, TV Everywhere solutions, and cloud-based Identity Management (IDM) services across multiple devices for cable, satellite, telecom and consumer electronics companies, today announced its financial results for the fourth quarter and fiscal year 2012.
"We are proud of Synacor's achievements and growth in 2012, as we experienced record numbers of search queries, advertising impressions, and unique visitors. This engagement produced record revenue and adjusted EBITDA for the year," said Synacor CEO Ron Frankel. "Our success was also evident from our many accomplishments in 2012 including our initial public offering, the acquisition of Carbyn, the launch of Cloud ID and Social Login, and major customer wins. We are very proud of our employees, customers and partners. While we remain passionate about our long-term opportunities, we expect 2013 to be transitional.
Q4 2012 Financial Results
Revenue: For the fourth quarter of 2012, total revenue was $32.2 million, an 11% increase over $28.9 million in the fourth quarter of 2011. Search and display advertising revenue was $27.1 million, a 13% increase compared to $24.0 million in the fourth quarter of 2011. Subscription-based revenue was $5.1 million, a 4% increase compared to $4.9 million in the fourth quarter of 2011.
Net Income: For the fourth quarter of 2012, net income was $0.8 million. This compared to $7.7 million in the fourth quarter of 2011, which included a $6.1 million income tax benefit for the reduction of our deferred tax asset valuation allowance. Diluted earnings per share, or EPS, was $0.03. Net income includes stock-based compensation expense of $0.5 million, or $0.02 per share, in the fourth quarter of 2012, as compared to $0.3 million, or $0.01 per share, in the fourth quarter of 2011. The diluted EPS calculation for the fourth quarter of 2012 is based on 28.6 million weighted average fully diluted common shares outstanding. The diluted EPS calculation for the fourth quarter of 2011 was based on 23.0 million shares.
Adjusted EBITDA: For the fourth quarter of 2012, adjusted EBITDA, which excludes stock-based compensation expense, was $3.5 million, or 11% of revenue, compared to $2.7 million, or 9% of revenue, in the fourth quarter of 2011.
Key Business Metrics: For the fourth quarter of 2012, Synacor averaged 20.3 million unique visitors per month, an increase of 8% from 18.7 million unique visitors in the fourth quarter of 2011. Search queries were 225 million for the fourth quarter of 2012, a decrease of 8% from 245 million in the fourth quarter of 2011. Advertising impressions grew 41% to 11.7 billion, compared to 8.3 billion in the fourth quarter of 2011.
Cash: For the fourth quarter of 2012, Synacor generated $4.8 million in cash from operating activities, compared to $4.7 million in the fourth quarter of 2011.
Fiscal 2012 Financial Results
Revenue: For fiscal 2012, total revenue was $122.0 million, a 34% increase over $91.1 million in fiscal 2011. Search and display advertising revenue was $101.6 million, a 41% increase compared to $72.1 million in fiscal 2011. Subscription-based revenue was $20.4 million, an 8% increase compared to $19.0 million in fiscal 2011.
Net Income: For fiscal 2012, net income was $3.8 million. This compared to $9.9 million in fiscal 2011, which included a $6.1 million income tax benefit for the reduction of our deferred tax asset valuation allowance. Diluted earnings per share, or EPS, was $0.14. Net income includes stock-based compensation expense of $2.0 million, or $0.07 per share, in fiscal 2012, as compared to $0.9 million, or $0.04 per share, in fiscal 2011. The diluted EPS calculation for fiscal 2012 is based on 28.1 million weighted average fully diluted common shares outstanding. The diluted EPS calculation for fiscal 2011 was based on 22.0 million shares.
Adjusted EBITDA: For fiscal 2012, adjusted EBITDA, which excludes stock-based compensation expense, was $11.6 million, or 10% of revenue, compared to $7.6 million, or 8% of revenue, in fiscal 2011.
Key Business Metrics: For fiscal 2012, Synacor averaged 20.4 million unique visitors per month, an increase of 40% from 14.6 million unique visitors in fiscal 2011. Search queries were 968 million for the year, an increase of 29% from 749 million in fiscal 2011. Advertising impressions grew 52% to 42.2 billion, compared to 27.7 billion in fiscal 2011.
Cash: For fiscal 2012, Synacor generated $14.7 million in cash from operating activities, compared to $8.7 million in fiscal 2011. The company ended the year with $41.9 million in cash and cash equivalents, compared to $10.9 million at the end of the prior year.
"In 2012, Synacor achieved record financial performance in revenue and adjusted EBITDA," said Synacor CFO Bill Stuart. "In 2013, Synacor will continue to build upon the foundation we have established— investing in our products, employees, customers and partners, as we position Synacor for the long-term."
Business Outlook
Based on information available as of February 20, 2013, the company is providing financial guidance for the first quarter and fiscal 2013 as follows:
- Q1 2013 Guidance: Revenue for the first quarter of 2013 is projected to be in the range of $28.5 million to $29.5 million. For the first quarter of 2013, the company expects to report adjusted EBITDA of $1.6 million to $2.0 million.
- Fiscal 2013 Guidance: We are forecasting based on our existing customers' activity. Growth may develop as we sign and launch new customers and new products and services. With this in mind, we expect to report revenue of $122.0 to $126.0 million and adjusted EBITDA of $11.6 to $12.6 million for 2013. We believe that we have potential for upside, subject to the performance and timing of the recently announced and future customer wins as well as other strategic initiatives we are currently developing.
Conference Call Details
Synacor will host a conference call today at 5 p.m. ET to discuss the fourth quarter and fiscal 2012 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 94113666, 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 through March 6, 2013. 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 94113666.
About Synacor
Synacor's white-label platform enables cable, satellite, telecom and consumer electronics companies to deliver TV Everywhere, digital entertainment, cloud-based services and apps to their end-consumers across multiple devices, strengthening those relationships while monetizing the engagement. Synacor (Nasdaq:SYNC), is headquartered in Buffalo, NY. For more information, visit synacor.com. Integrate. Authenticate. Engage.
The Synacor logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=11609
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; expectations regarding consumer taste and user adoption of applications and solutions; 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-Q filed with the SEC on November 14, 2012. 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 February 20, 2013, and Synacor undertakes no duty to update this information.
| Synacor, Inc. | ||
| Condensed Consolidated Balance Sheets | ||
| (In thousands) | ||
| (Unaudited) | ||
|
As of December 31, |
As of December 31, |
|
| 2011 | 2012 | |
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $ 10,925 | $ 41,944 |
| Accounts receivable, net | 14,336 | 15,624 |
| Deferred income taxes | 3,534 | 1,999 |
| Prepaid expenses and other current assets | 1,811 | 1,831 |
| Total current assets | 30,606 | 61,398 |
| Property and equipment, net | 8,301 | 11,043 |
| Deferred income taxes, non-current | 2,549 | 2,527 |
| Other long-term assets | 1,926 | 543 |
| Goodwill | — | 819 |
| Total Assets | $ 43,382 | $ 76,330 |
| Liabilities and Stockholders' Equity | ||
| Current liabilities: | ||
| Accounts payable | $ 12,498 | $ 14,204 |
| Accrued expenses and other current liabilities | 5,492 | 7,328 |
| Current portion of bank financing | 250 | — |
| Current portion of capital lease obligations | 1,593 | 2,127 |
| Total current liabilities | 19,833 | 23,659 |
| Long-term portion of capital lease obligation | 2,098 | 1,712 |
| Other long-term liabilities | 71 | 148 |
| Total Liabilities | 22,002 | 25,519 |
| Stockholders' Equity: | ||
| Common stock | 31 | 275 |
| Preferred stock | 28,432 | — |
| Treasury stock | (569) | (569) |
| Additional paid-in capital | 45,639 | 99,449 |
| Accumulated other comprehensive income | — | (6) |
| Accumulated deficit | (52,153) | (48,338) |
| Total stockholders' equity | 21,380 | 50,811 |
| Total liabilities and stockholders' equity | $ 43,382 | $ 76,330 |
| Synacor, Inc. | |||||||
| Condensed Consolidated Statements of Operations | |||||||
| (In thousands except share and per share data) | |||||||
| (Unaudited) | |||||||
|
Three months ended December 31, |
Twelve months ended December 31, |
||||||
| 2011 | 2012 | 2011 | 2012 | ||||
| Revenue | $ 28,945 | $ 32,178 | $ 91,060 | $ 121,981 | |||
| Costs and operating expenses: | |||||||
| Cost of revenue (1) | 15,789 | 17,188 | 48,661 | 66,620 | |||
| Research and development (1)(2) | 5,958 | 6,974 | 20,228 | 25,603 | |||
| Sales and marketing (2) | 2,771 | 2,344 | 8,582 | 9,120 | |||
| General and administrative (1)(2) | 1,992 | 2,627 | 6,879 | 11,011 | |||
| Depreciation | 717 | 1,083 | 2,667 | 3,779 | |||
| Total costs and operating expenses | 27,227 | 30,216 | 87,017 | 116,133 | |||
| Income from operations | 1,718 | 1,962 | 4,043 | 5,848 | |||
| Other income (expense) | 1 | (6) | (17) | 1 | |||
| Interest expense | (45) | (62) | (109) | (270) | |||
| Income before income taxes | 1,674 | 1,894 | 3,917 | 5,579 | |||
| (Benefit) provision for income taxes | (6,070) | 1,104 | (6,015) | 1,764 | |||
| Net income | 7,744 | 790 | 9,932 | 3,815 | |||
| Undistributed earnings allocated to preferred stockholders | 6,692 | — | 8,583 | — | |||
| Net income attributable to common stockholders | $ 1,052 | $ 790 | $ 1,349 | $ 3,815 | |||
| Net income per share attributable to common stockholders: | |||||||
| Basic | $ 0.35 | $ 0.03 | $ 0.59 | $ 0.16 | |||
| Diluted | $ 0.34 | $ 0.03 | $ 0.45 | $ 0.14 | |||
| Weighted average shares used to compute net income per share attributable to common stockholders: | |||||||
| Basic | 3,005,714 | 27,132,303 | 2,303,443 | 24,411,194 | |||
| Diluted | 22,776,471 | 28,611,056 | 21,974,403 | 28,097,313 | |||
| Notes: | |||||||
| (1) Exclusive of depreciation shown separately. | |||||||
| (2) Includes stock-based compensation as follows: | |||||||
|
Three months ended December 31, |
Twelve months ended December 31, |
||||||
| 2011 | 2012 | 2011 | 2012 | ||||
| Research and development | $ 90 | $ 150 | $ 295 | $ 523 | |||
| Sales and marketing | 62 | 112 | 203 | 404 | |||
| General and administrative | 128 | 234 | 422 | 1,072 | |||
| $ 280 | $ 496 | $ 920 | $ 1,999 | ||||
| Synacor, Inc. | ||
| Condensed Consolidated Statements of Cash Flows | ||
| (In thousands) | ||
| (Unaudited) | ||
|
Twelve months ended December 31, |
||
| 2011 | 2012 | |
| Cash Flows from Operating Activities: | ||
| Net income | $ 9,932 | $ 3,815 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Depreciation | 2,667 | 3,779 |
| Stock-based compensation expense | 920 | 1,999 |
| Loss on disposal of property and equipment | 11 | 35 |
| Benefit from deferred income taxes | (6,083) | 1,557 |
| Change in assets and liabilities net of effect of acquisition: | ||
| Accounts receivable, net | (4,682) | (1,288) |
| Prepaid expenses and other current assets | (45) | 253 |
| Other long-term assets | 164 | 380 |
| Accounts payable | 4,120 | 2,335 |
| Accrued expenses and other current liabilities | 1,709 | 1,715 |
| Other long-term liabilities | (35) | 77 |
| Net cash provided by operating activities | 8,678 | 14,657 |
| Cash Flows from Investing Activities: | ||
| Purchases of property and equipment | (1,848) | (4,269) |
| Cash paid for business acquisition | — | (600) |
| Net cash used in investing activities | (1,848) | (4,869) |
| Cash Flows from Financing Activities: | ||
| Proceeds from sale/leaseback | 794 | — |
| Repayment on bank financing | (500) | (250) |
| Repayments on capital lease obligations | (1,719) | (2,336) |
| Proceeds from exercise of common stock options | 372 | 1,212 |
| Proceeds from initial public offering | — | 25,364 |
| Initial public offering costs | (264) | (2,753) |
| Net cash (used in) provided by financing activities | (1,317) | 21,237 |
| Effect of exchange rate changes on cash and cash equivalents | — | (6) |
| Net (Decrease) Increase in Cash and Cash Equivalents | 5,513 | 31,019 |
| Cash and Cash Equivalents at beginning of period | 5,412 | 10,925 |
| Cash and Cash Equivalents at end of period | $ 10,925 | $ 41,944 |
| Synacor, Inc. | |||||
| Reconciliation of GAAP to Non-GAAP Measures | |||||
| (In thousands except share and per share data) | |||||
| (Unaudited) | |||||
| The following table presents a reconciliation of net income to adjusted EBITDA for each of the periods indicated: | |||||
|
Three months ended December 31, |
Twelve months ended December 31, |
||||
| 2011 | 2012 | 2011 | 2012 | ||
| Reconciliation of Adjusted EBITDA: | |||||
| Net income | $ 7,744 | $ 790 | $ 9,932 | $ 3,815 | |
| Provision (benefit) for income taxes | (6,070) | 1,104 | (6,015) | 1,764 | |
| Interest expense | 45 | 62 | 109 | 270 | |
| Other (income) expense | (1) | 6 | 17 | (1) | |
| Depreciation | 717 | 1,083 | 2,667 | 3,779 | |
| Stock-based compensation | 280 | 496 | 920 | 1,999 | |
| Adjusted EBITDA | $ 2,715 | $ 3,541 | $ 7,630 | $ 11,626 | |
| Synacor, Inc. | ||||||
| Key Business Metrics | ||||||
| (Unaudited) | ||||||
|
Three months ended December 31, |
Twelve months ended December 31, |
|||||
| 2011 | 2012 | 2011 | 2012 | |||
| Key Business Metrics: | ||||||
| Unique Visitors (1) | 18,726,975 | 20,297,897 | 14,619,254 | 20,440,169 | ||
| Search Queries (2) | 245,100,528 | 225,339,761 | 748,576,869 | 968,233,560 | ||
| Advertising Impressions (3) | 8,287,683,124 | 11,712,643,988 | 27,749,105,979 | 42,170,186,571 | ||
| Notes: | ||||||
| (1) Reflects the number of unique visitors to our customers' websites computed on an average monthly basis during the applicable period, as measured by comScore. | ||||||
| (2) Reflects the total number of search queries during the applicable period, as reported by Google. | ||||||
| (3) Reflects the total number of advertising impressions during the applicable period, as reported by DoubleClick and other partners. | ||||||