Synacor, AT&T Push Back Launch of Portal Project
Synacor said it and AT&T have agreed to push back the launch of a next-gen desktop and mobile portal service to the first half of 2017.
When the contract was signed, they originally estimated that initial, limited deployments would be underway by Q4 2016, but revised that plan after teams from both sides began to craft more detailed development and deployment plans.
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“Given the size and expanded scope of this project and our prior recent joint planning, we've pushed back the official launch date,” Synacor CEO Himesh Bhise said Monday on the company’s Q3 earnings call. "The teams are working very well together."
The current plan is to launch new desktop and mobile apps in the first half of 2017, and then ramp up to complete the deployment through the rest of the year.
Bhise stressed that the overall financial expectation of the AT&T contract is “very much on track,” reiterating that the annual revenue run-rate from the project is still targeted for about $100 million once full deployment is reached.
“We remain pleased with our progress to date,” he said.
On that point, he noted that AT&T and Synacor have already introduced a beta of the new AT&T Live 2.0 mobile app for Android. The beta app, last updated on November 9, provides a curated news feed, breaking news alerts, and trending videos, among other features. So far, the beta app has received a consumer rating of 4.1 out of 5.
Synacor has also adjusted its Q4 guidance to reflect the revised timing of the contribution from the AT&T contract. The vendor, which specializes in customized portals, advertising, video streaming and TV Everywhere authentication technologies, current expects Q4 revenues of $34 million to $38 million, and EBITDA of up to $1 million.
For Q3, Synacor posted revenues of $31.7 million, up 20%, and above guidance of $29 million to $31 million. Advertising revenues rose 38% year-over year. The company also posted a net loss of $3.4 million due to product development investment for the AT&T project.
On the TVE front, Synacor said its Cloud ID business won deals with an SVOD service from a public telecom company and with an also yet-to-be-named regional cable provider.
Synacor also noted that it’s supporting the deployment of Apple’s Single Sign-On platform for video apps and cited its ongoing work for industry-wide standards with CTAM and the OATC (Open Authentication Technology Committee).
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In an interview, Bhise said “several” Synacor MVPD customers are now live with SSO on the Apple platform. “Our job is to make it easier for those operators that decide they want to participate on the Apple platform.”
Synacor also announced it had filed a shelf registration statement aimed at providing the company “with flexibility to access the capital markets in a timely manner.” Per the shelf registration statement, once declared effective by the SEC, Synacor may from time to time issue common stock up to an aggregate amount of $40 million.
“As we continue to accelerate our growth strategy and identify opportunities for expansion, we recognize that potential access to additional capital and the ability to provide opportunities for institutional investors to access Synacor stock could be beneficial, and we have filed this shelf registration to give us that optionality,” Bhise said in a statement.
“As one can surmise from our current financial performance, we do not have any present plans to issue securities under this registration statement,” he added on the Q3 call.
Synacor ended Q3 with $15.0 million in cash and cash equivalents, versus $16.3 million at the end of the prior quarter.
Synacor also said an initiative called “3/30/300” -- with a goal of generating $300 million in revenues and $30 million in EBIDTA in three years – is also on track.
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