"Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: This presentation contains forward-l
SYNACOR NASDAQ: SYNC D R I V I N G G R O W T H I N AT T R A C T I V E D I G I TA L M A R K E T S
AT&T SELECTS SYNACOR TO ENABLE PORTAL SERVICES
MAY 5, 2016
Contains proprietary and confidential information owned by Synacor, Inc. © / 2016 Synacor, Inc.
SYNC SYNC
SAFE HARBOR
"Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: This presentation contains forward-looking statements concerning Synacor’s expected financial performance 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 forwardlooking statements the company makes. Synacor is under no obligation to, and expressly disclaims any such obligation to, update or alter forward-looking statements, whether as a result of new information, future events, or otherwise. The risks and uncertainties referred to above include - but are not limited to - risks associated with: execution of Synacor’s plans and strategies; the loss of a significant customer; the company’s 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; developments in display advertising technologies and practices; 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 Synacor’s 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 filed with the SEC. These documents are available on the SEC Filings section of the Investor Information section of the company's website at investor.synacor.com.
Contains proprietary and confidential information owned by Synacor, Inc. © / 2016 Synacor, Inc.
SYNC
2
MISSION
We enable our customers to better engage with their consumers
Contains proprietary and confidential information owned by Synacor, Inc. © / 2016 Synacor, Inc.
SYNC
3 3
TRUSTED TECHNOLOGY DEVELOPMENT, MULTIPLATFORM SERVICES AND REVENUE PARTNER Operate 50 portals 120M monthly visitors Authentication Reaches 75M Pay TV subscribers 500M mailboxes
Managed Portals
Ad Solutions
Contains proprietary and confidential information owned by Synacor, Inc. © / 2016 Synacor, Inc.
Video Platform/Cloud ID
SYNC
Email/Collaboration
4
MASSIVE TRANSFORMATION AT SYNACOR
Then: 1Q ‘14
Now: 1Q ‘16
PRODUCTS
• Desktop: Portals, Search, Advertising, Services
• Multiplatform: Portals, Search, Advertising, Email, Video, Cloud ID
CUSTOMERS
• 50 Service Providers
• 120 Service Providers • 3500 Enterprises, 1000 Web Publishers
GEOGRAPHY
• United States
• Worldwide
CHANNEL
• Direct Sales
• Direct Sales, 1500 Resellers
REVENUE
• 80% Search & Advertising, • 20% Fee-Based Revenue
• 60% Search & Advertising • 40% Recurring and Fee-Based Revenue
REACH
• 20 Million Monthly Portal Visitors
• 120 Million Monthly Total Visitors
Contains proprietary and confidential information owned by Synacor, Inc. © / 2016 Synacor, Inc.
SYNC
5
WINNING NEW CUSTOMERS
120 Service Providers
Won multiple contracts with communications providers to deploy Synacor’s End-to-End Video Solutions Won and expanded contracts with several communications companies for next-generation portals
1,000 Government Agencies
Won many email/collaboration engagements with domestic and international government agencies, such as:
2,500 Businesses
Won key new email/collaboration deals for many business enterprises, such as:
a large insurance and financial services company
the leading network technology service provider for many industries in Indonesia
an international defense agency
a leading retailer in Indonesia
the New York State Assembly
a leading provider of ICT infrastructure services in Thailand
The National Space Institute for India The Ministry of Foreign Affairs of The Russian Federation,
Contains proprietary and confidential information owned by Synacor, Inc. © / 2016 Synacor, Inc.
SYNC
1,000 Web Publishers
Serve 1,000+ publishers through the acquisition of Technorati Syndicated ad-supported video content modules to web publishers
6
AT&T SELECTS SYNACOR TO ENABLE PORTAL SERVICES
In partnership with AT&T, Synacor will: 1,000 120 • Develop and manage innovative desktop and Government Service mobile portal services designed to drive user Agencies Providers engagement •
Populate these portal experiences with rich Internet content sourced from popular brands
•
Monetize these experiences through search and advertising
Synacor honored to be selected by AT&T: 2,500 1,000 • Synacor selected in AT&T RFI process Businesses Web Publishers •
Portal services designed to engage AT&T’s user audience
•
3 year deal with auto-renewals
•
Value of ~$100M per year upon full deployment
INITIAL LAUNCHES IN 2H2016, NEXT-GEN PRODUCTS IN 2017
Contains proprietary and confidential information owned by Synacor, Inc. © / 2016 Synacor, Inc.
SYNC
7
WE ENABLE OUR CUSTOMERS TO BETTER ENGAGE WITH THEIR CONSUMERS
How all Synacor customers benefit: 2,500 1,000 • Benefits of platform development to Businesses Web Publishers drive engagement shared across all
Why we believe AT&T chose Synacor: 1,000 120 • A proven managed portal services platform Government Service Agencies • Providers Significantly improved monetization across
customers
mobile and desktop, video and display
•
Flexible technology and UX that serves as a foundation for next-gen development
•
A relevant product portfolio and strong team to enable additional services as needed
•
Increases scale of traffic to deliver higher quality content and improved search and advertising monetization
•
Strengthens Synacor’s financial profile and competitiveness
STRONG PIPELINE OF ADDITIONAL CUSTOMER OPPORTUNITIES
Contains proprietary and confidential information owned by Synacor, Inc. © / 2016 Synacor, Inc.
SYNC
8
ON A PATH:
INVESTMENT HIGHLIGHTS
• 3 YEARS (2019)
A Transformation Story with Multiple Profitable Growth Avenues
NEW MANAGEMENT TEAM
MASSIVE TRANSFORMATION
Contains proprietary and confidential information owned by Synacor, Inc. © / 2016 Synacor, Inc.
STRONG OPPORTUNITIES FOR GROWTH
SYNC SYNC
• $30M EBITDA • $300M REVENUE
RECURRING AND FEE-BASED REVENUE
9
SYNACOR’S PATH TO 3/30/300
GENERATING $300M IN REVENUES AND $30M IN EBITDA IN 3 YEARS Revenue, $Millions
Adjusted EBITDA*, $Millions
~$30 ~$300
$106.6
$110.2
$7.6 $2.2
2014
2015
2019E
2014
$8M
2015
2019E
PLANS TO INVEST $10 MILLION OVER 12 MONTHS TO DEVELOP AND DEPLOY AT&T *Please refer to the appendix for information regarding the reconciliation of GAAP net loss to adjusted EBITDA for twelve months ended December 31, 2014 and December 31, 2015. Contains proprietary and confidential information owned by Synacor, Inc. © / 2016 Synacor, Inc.
SYNC
10
2016 OBJECTIVES
✔•
Win new portal customers
• Become significant player in programmatic advertising • Win new video platform customers
• Extend Cloud ID into new customer verticals • Leverage Zimbra partner community to accelerate feature development and grow email/collaboration sales
• Launch open source support offering for email • Introduce Synacor products into new geographies
11
THANK YOU
Contains proprietary and confidential information owned by Synacor, Inc. © / 2016 Synacor, Inc.
SYNC
12
APPENDIX
Contains proprietary and confidential information owned by Synacor, Inc. © / 2016 Synacor, Inc.
SYNC
13
ADJUSTED EBITDA RECONCILIATION
Q1 2014 Q2 2014 Q3 2014 Q4 2014
2014
Q1 2015 Q2 2015 Q3 2015 Q4 2015
Revenue
25,248
24,191
26,231
30,910
106,580
26,730
24,716
Net Loss Provision (benefit) for income taxes Interest expense Other (income) expense Depreciation & amortization Stock-based compensation expense Loss on equity interest Gain on sale of domain Reduction in workforce Acquisition costs
(2,056) (684) 88 (8) 1,058 681 246 -
(1,868) (641) 23 (6) 1,117 847 344 (1,000) -
(2,596) (1,288) 75 14 1,133 1,226 239 1,260 -
(6,418) (12,931) 7,434 4,821 32 218 29 28 1,818 5,126 842 3,595 234 1,063 (1,000) 1,260 -$8M -
(1,073) 4 50 16 1,496 742 32 -
(1,082) 16 59 (17) 1,660 800 25 -
(675)
(1,184)
63
1,267
1,461
Adjusted EBITDA
Contains proprietary and confidential information owned by Synacor, Inc. © / 2016 Synacor, Inc.
3,971
SYNC
2,180
26,351 32,448 (931) 10 35 32 1,560 810 478
2015 110,245
(388) 209 102 (16) 2,185 764 16 -
(3,474) 239 245 16 6,901 3,115 73 478
1,994 2,872
7,593
14
