Synacor Exceeds 2018 Revenue Guidance, Reports 11% Increase in Recurring Software Revenue
Synacor, Inc. (Nasdaq: SYNC), the trusted technology development, multiplatform services and revenue partner for video, internet and communications providers, device manufacturers, governments and enterprises, today announced its financial results for the fourth quarter and full year ended December 31, 2018.
“We delivered strong operating results,” said Himesh Bhise, Synacor’s chief executive officer. “Our 2018 adjusted EBITDA of $8.5 million was up significantly from $2.3 million a year ago. High-margin recurring software revenue from our collaboration and identity platforms was $35.8 million, growing 11% year over year.”
“In 2019, we will continue to focus on this high-margin, recurring revenue. Along with our shift to segment reporting, we are aligning organizational processes to better drive performance in each of our Software and Advertising businesses. This is reflected in our adjusted EBITDA guidance of $10 million to $12 million, which is 18% to 42% higher than 2018,” added Bhise.
- Closed a three-million-user, cloud-based email deal for a large Japanese telecommunications company, in partnership with IIJ.
- Signed 116 new Zimbra email business and government customers worldwide, bringing the 2018 total to 426 new customers.
- Signed Newsy, a next-generation national news network, to the growing list of content providers that use Synacor Cloud ID.
- The Zimbra X email and collaboration platform is now powered by Oracle Cloud and is available in the Oracle Cloud Marketplace.
FY 2018 and Q4 2018 Financial Results
Revenue: For the fourth quarter of 2018, revenue was $39.4 million, exceeding the Company’s financial guidance. Advertising revenue was down 17% as the Company proactively steered away from low-margin publisher-based advertising revenue. Recurring software revenue grew 7.3% compared with the fourth quarter of 2017.
For fiscal 2018, revenue was $143.9 million. Recurring software revenue was up 11% and Advertising revenue was up 2%.
Net Income: For the fourth quarter of 2018, net loss was $0.4 million, or $(0.01) per share, compared with a net loss of $0.1 million, or $(0.00) per share, in the fourth quarter of 2017. The fourth quarter of 2018 was negatively impacted by a $0.6 million capitalized software impairment.
For fiscal 2018, net loss narrowed to $7.6 million, or $(0.19) per share, compared with a net loss of $9.8 million, or $(0.27) per share, in fiscal 2017.
Adjusted EBITDA: For the fourth quarter of 2018, adjusted EBITDA increased 12.7% to $4.0 million from $3.6 million for the fourth quarter of 2017. Adjusted EBITDA excludes stock-based compensation, other income and expense, capitalized software impairment, restructuring costs, and certain legal and professional fees.