Investor deck november 2017 final

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  • 1Contains proprietary and confidential information owned by Synacor, Inc. / 2017 Synacor, Inc.

    DRIVING GROWTH IN ATTRACTIVE DIGITAL MARKETS

    N O V E M B E R 2 0 1 7

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    SAFE HARBOR

    "Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: This presentation contains forward-looking statements concerning

    Synacors expected financial performance as well as Synacors 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.

    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 Synacors plans and strategies; the loss of a

    significant customer; the companys 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 Synacors 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.

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    INVESTMENT HIGHLIGHTS

    A Transformation Story with Multiple Profitable Growth Avenues

    STRONG OPPORTUNITIES FOR

    GROWTH

    RECURRING AND FEE-BASED REVENUE

    MASSIVE TRANSFORMATION

    ON A PATH:

    3 YEARS (2019)

    $30M EBITDA

    $300M REVENUE

    SEASONED MANAGEMENT

    TEAM

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    PORTALS EMAIL ANDCOLLABORATION

    MULTIPLATFORM VIDEO

    CLOUD ID

    ENGAGING CONSUMERS

    ADVERTISING

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    OUR MISSION

    We enable our customers to better engage

    with their consumers

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    TWO PRIMARY SOURCES OF REVENUE

    SEARCH AND ADVERTISING RECURRING AND FEE-BASED

    Advanced Portal

    Experiences

    Email/Collaboration Video Platform/Cloud IDAdvertising Solutions

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    MULTI-PLATFORM PORTAL EXPERIENCES DESIGNED FOR ENGAGEMENT AND MONETIZATION

    Personalized, curated, and relevant content experience that drives engagement and reinforces ISP brand across devices

    Modern design, stream-based experience

    Hundreds of thousands of articles and videos

    Push notification for breaking news

    Flexible and customizable for customer needs

    Monetization through integration with Synacor Media

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    Complete advertising platform:

    Strong Monetization Search, display, video and mobile Direct, programmatic, network

    Publisher and Portal Network Operated and managed portals Publisher platform

    Targeting Expertise Proprietary and third-party data Ad Ops and Analytics

    Hundredsof Publishers

    SYNACOR MEDIA: COMPELLING AD PLATFORM AT SCALE

    200MUniques

    35M+Broadband Households

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    SEARCH & ADVERTISING GROWTH OPPORTUNITY

    Launch AT&T

    Win new portal customers

    Programmatic growth

    Grow publisher reach and products

    Expand mobile monetization

    Digital Ad Spending

    12%

    $72BTotal Market

    Source: eMarketer, growth for 2016 2020Total Market for 2016

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    EMAIL & COLLABORATIONOPEN, SECURE, PRIVATE PRODUCT SUITE

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    Powering ~500M mailboxes

    one of the largest providers

    of white label email in the world

    Open source, on-prem software, and as a

    fully managed & hosted solution

    Unmatched migration

    & hosting capability

    Serving service providers,

    government agencies, and

    business enterprises globally

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    EMAIL & COLLABORATION GROWTH OPPORTUNITY

    Open source program to monetize ~400 million existing mailboxes

    Open Source Support subscription

    Suite Plus (e.g. backup, admin tools)

    Grow government customer base focusing on security & privacy

    Leverage partner community to accelerate feature development and grow sales

    Market Growth

    24%

    $19BTotal Market

    11Source: Radicati, growth for 2016 2020Total Market for 2016

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    VIDEO PLATFORM/CLOUD IDEND-TO-END VIDEO AND IDENTITY MANAGEMENT PLATFORM

    Ability to authenticate nearly all Pay TV households in US

    Selected to provide Cloud ID Authentication for HBO Go

    Supported deployment of Apples Single Sign-On platform

    Participating with CTAM & OATC on industry standards

    Debuted end-to-end TVE and OTT solutions for GVTC and Consolidated

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    VIDEO PLATFORM/CLOUD ID GROWTH OPPORTUNITY

    Win new video platform customers

    Win new content provider customers

    Extend Cloud-ID into new verticals and geographies

    Online OTT & Video Revenue

    28%

    $37BTotal Market

    13Source: Digital TV Research, 2010 2020Total Market for 2016

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    BLUE-CHIP CUSTOMERS AND PARTNERS

    Advertising and Content Partners

    Command and Simulation Solutions

    Chile

    120 Service Providers, 1,000 Government Agencies, 2,500 Businesses, 1,000 Publishers

    ADVERTISING

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    Win new portal and email service provider customers

    Win government email customers

    Win content providers

    Launch AT&T

    Programmatic Growth

    Expand mobile monetization

    4-PILLAR GROWTH AGENDA BUILT ON OPERATING DISCIPLINE

    Increase value for existing customers by optimizing consumer experience &

    monetization

    Innovate on Synacor-as-a-platform for advanced

    services

    Win new customers in current and related

    verticals

    Extend product portfolio into international and

    enterprise

    CLEAR STRATEGY FOR PROFITABLE REVENUE GROWTH

    Grow Open Source Support adoption

    Explore Cloud ID into new verticals

    Leverage partner community to accelerate email feature development

    Win customers in new geographies

    BUILT ON OPERATING DISCIPLINE

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    SYNACORS 3/30/300 PATHTARGETING $300M IN REVENUES AND $30M IN EBITDA IN 2019

    Revenue, $Millions Adjusted EBITDA*, $Millions

    *Please refer to the appendix for information regarding the reconciliation of GAAP net loss to adjusted EBITDA for twelve months ended December 31, 2015 and

    December 31, 2016 and for guidance for twelve months ending December 31, 2017. Guidance is as of November 14, 2017.

    INVESTING ~$10M BETWEEN 2H16 1H17 TO DEVELOP AND DEPLOY FOR A MAJOR CUSTOMER

    $110.2$127.4

    $140 - $145

    ~$300

    2015 2016 2017G 2019G

    $7.6

    $3.2 $0.8 - $2.8

    ~$30

    2015 2016 2017G 2019G

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    INVESTMENT HIGHLIGHTS

    A Transformation Story with Multiple Profitable Growth Avenues

    STRONG OPPORTUNITIES FOR

    GROWTH

    RECURRING AND FEE-BASED REVENUE

    MASSIVE TRANSFORMATION

    ON A PATH:

    3 YEARS (2019)

    $30M EBITDA

    $300M REVENUE

    SEASONED MANAGEMENT

    TEAM

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    THANK YOU

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    APPENDIX

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    ADJUSTED EBITDA RECONCILIATION

    2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 2016 Q1 2017 Q2 2017

    Revenue 110,245 30,260 30,476 31,721 34,916 127,373 26,540 31,216

    Net (loss) income (3,474) (1,565) (2,757) (3,365) (3,053) (10,740) (6,656) (3,276)

    Provision (benefit) for income taxes 239 144 260 379 436 1,219 446 309

    Interest expense 245 68 84 75 91 318 87 114

    Other (income) expense 16 (2) (242) 38 248 42 (6) (67)

    Depreciation and amortization 6,901 2,098 2,270 2,414 2,453 9,235 2,184 2,224

    Stock-based compensation 3,115 737 687 680 667 2,771 647 676

    Loss in equity interest 73 - - - - - - -

    Capitalized software impairment - - - - 334 334 - 256

    Acquisition costs 478 - - - - - - -

    Adjusted EBITDA 7,593 1,480 302 221 1,176 3,179 (3,298) 236

    Q3 2017

    36,269

    261

    127(99)

    2,596

    -

    -

    1,832

    244

    605

    -

    Gain on sale of investment - -- - - - - - (1,902)

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    FISCAL 2017 AND Q3 2017 GUIDANCE RECONCILIATION*

    Fiscal 2017 Guidance: Revenue for the full year of 2017 is now expected to be within the range of $140 million to $145 million. The Company expects to report a net loss in the range of $9.1 million to $11.4 million and adjusted