Synacor Maintains Second-Quarter and Full-Year 2019 Guidance as It Initiates Discussions with AT&T to Wind-Down Portal Services
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 that it plans to begin discussions with AT&T regarding a wind-down and user-migration plan as it has been notified that AT&T intends to select another provider of portal services for its ATT.net consumer experience.
Synacor expects the planning and execution of a wind-down and migration plan to take many months and will be subject to mutual agreement between AT&T and Synacor. Based on this current expectation, the Company is maintaining its previously announced second-quarter and full-year 2019 guidance.
“Synacor is a $100 million plus revenue business without the AT&T portal, and we have never been more excited about the significant opportunities in our $49 million high-margin, recurring-revenue-driven enterprise software business,” said Himesh Bhise, Synacor’s chief executive officer. “Zimbra Email & Collaboration and Cloud ID Identity and Access Management are increasingly the platforms of choice for a growing number of service providers and businesses around the world. We also are encouraged by the growth in our publisher-focused advertising business, where we have significantly increased the number of active monthly publishers using our platform. Going forward these create a software-oriented, higher overall margin profile for Synacor.”
“The Synacor-powered ATT.net platform enabled AT&T to retake control of its brand on the portal, drive strong user engagement across mobile and desktop, and deliver against its advertising budget expectations,” said Bhise. “While we were optimistic regarding the strength of our renewal proposals as well as our accomplishments for ATT.net, we have been actively managing the Synacor business to prepare for any outcome and have remained focused on our high-growth products and services. We will continue to execute on our strategy to drive profitable growth through an increasing level of high-margin revenue.”
In the first quarter of 2019, ATT.net represented $9.3 million of the $20.7 million in revenue from Synacor’s Portal & Advertising segment, which reported an adjusted EBITDA margin of 12.7%. Synacor’s Software and Services segment reported $11.2 million of revenues with an adjusted EBITDA margin of 25%.
Synacor Full-Year 2018 Revenue Excluding ATT.net