Company Quick10K Filing
Synacor
Price1.46 EPS-0
Shares39 P/E-7
MCap57 P/FCF11
Net Debt-15 EBIT-8
TEV42 TEV/EBIT-6
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-03-31 Filed 2020-05-15
10-K 2019-12-31 Filed 2020-03-06
10-Q 2019-09-30 Filed 2019-11-07
10-Q 2019-06-30 Filed 2019-08-09
10-Q 2019-03-31 Filed 2019-05-10
10-K 2018-12-31 Filed 2019-03-14
10-Q 2018-09-30 Filed 2018-11-09
10-Q 2018-06-30 Filed 2018-08-09
10-Q 2018-03-31 Filed 2018-05-10
10-K 2017-12-31 Filed 2018-03-16
10-Q 2017-09-30 Filed 2017-11-14
10-Q 2017-06-30 Filed 2017-08-14
10-Q 2017-03-31 Filed 2017-05-15
10-K 2016-12-31 Filed 2017-03-22
10-Q 2016-09-30 Filed 2016-11-14
10-Q 2016-06-30 Filed 2016-08-15
10-Q 2016-03-31 Filed 2016-05-16
10-K 2015-12-31 Filed 2016-03-22
10-Q 2015-09-30 Filed 2015-11-17
10-Q 2015-06-30 Filed 2015-08-14
10-Q 2015-03-31 Filed 2015-05-14
10-K 2014-12-31 Filed 2015-03-12
10-Q 2014-09-30 Filed 2014-11-14
10-Q 2014-06-30 Filed 2014-08-14
10-Q 2014-03-31 Filed 2014-05-15
10-K 2013-12-31 Filed 2014-03-26
10-Q 2013-09-30 Filed 2013-11-14
10-Q 2013-06-30 Filed 2013-08-13
10-Q 2013-03-31 Filed 2013-05-14
10-K 2012-12-31 Filed 2013-03-26
10-Q 2012-09-30 Filed 2012-11-14
10-Q 2012-06-30 Filed 2012-08-14
10-Q 2012-03-31 Filed 2012-05-15
10-K 2011-12-31 Filed 2012-03-30
8-K 2020-07-24
8-K 2020-06-29 Enter Agreement, Leave Agreement, Other Events, Exhibits
8-K 2020-06-15
8-K 2020-05-27
8-K 2020-05-27
8-K 2020-05-06
8-K 2020-04-08
8-K 2020-03-03
8-K 2020-03-03
8-K 2020-02-11
8-K 2019-11-06
8-K 2019-08-07
8-K 2019-08-07
8-K 2019-05-16
8-K 2019-05-08
8-K 2019-03-28
8-K 2019-03-13
8-K 2019-03-01
8-K 2018-11-08
8-K 2018-10-01
8-K 2018-08-24
8-K 2018-08-01
8-K 2018-05-24
8-K 2018-05-17
8-K 2018-05-09
8-K 2018-04-24
8-K 2018-03-27
8-K 2018-02-22
8-K 2017-12-31

SYNC 10Q Quarterly Report

Part I. Financial Information
Item 1. Condensed Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-10.1 ex101.htm
EX-31.1 sync-20200331xexx311.htm
EX-31.2 sync-20200331xexx312.htm
EX-32.1 sync-20200331xexx321.htm

Synacor Earnings 2020-03-31

Balance SheetIncome StatementCash Flow
1108866442202012201420172020
Assets, Equity
503826142-102012201420172020
Rev, G Profit, Net Income
1581-6-13-202012201420172020
Ops, Inv, Fin

sync-20200331
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Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________________________________________________________________________
FORM 10-Q
_____________________________________________________________________________________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2020
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission File Number 001-33843
________________________________________________________________________________________________
sync-20200331_g1.jpg
Synacor, Inc.
(Exact name of registrant as specified in its charter)
________________________________________________________________________________________________
Delaware16-1542712
(State or other jurisdiction of incorporation)(I.R.S. Employer Identification No.)

40 La Riviere Drive, Suite 30014202
Buffalo, (Zip Code)
New York
(Address of principal executive offices)
________________________________________________________________________________________________
Registrant’s telephone number, including area code: (716) 853-1362
________________________________________________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading
Symbol(s)
Name of each exchange on which registered
Common Stock, $0.01 Par Value
SYNCThe Nasdaq Stock Market LLC
(voting)
(The Nasdaq Global Market)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
As of May 13, 2020, there were 39,449,337 shares of the registrant’s common stock outstanding.



Table of Contents
SYNACOR, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
Page

1

Table of Contents
PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SYNACOR, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED
AS OF MARCH 31, 2020 AND DECEMBER 31, 2019
(In thousands except for share and per share data)
March 31,
2020
December 31,
2019
ASSETS
CURRENT ASSETS:
Cash and cash equivalents$8,922  $10,966  
Accounts receivable—net of allowance of $589 and $585
14,820  20,532  
Prepaid expenses and other current assets4,181  2,989  
Total current assets27,923  34,487  
PROPERTY AND EQUIPMENT, net14,234  14,948  
OPERATING LEASE RIGHT-OF-USE ASSETS, net4,051  4,765  
GOODWILL15,934  15,948  
INTANGIBLE ASSETS, net7,875  8,411  
OTHER ASSETS1,136  1,319  
Total assets$71,153  $79,878  
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable$12,588  $12,583  
Accrued expenses and other current liabilities3,313  5,878  
Current portion of deferred revenue5,952  6,509  
Current portion of long-term debt and finance leases1,819  2,529  
Current portion of operating lease liabilities1,826  2,165  
Total current liabilities25,498  29,664  
LONG-TERM PORTION OF DEBT AND FINANCE LEASES986  729  
LONG-TERM PORTION OF OPERATING LEASE LIABILITIES2,411  2,846  
DEFERRED REVENUE2,295  2,366  
DEFERRED INCOME TAXES295  275  
OTHER LONG-TERM LIABILITIES341  334  
Total liabilities31,826  36,214  
COMMITMENTS AND CONTINGENCIES (Note 8)
STOCKHOLDERS’ EQUITY:
Preferred stock – par value $0.01 per share; authorized 10,000,000 shares; none issued    
Common stock – par value $0.01 per share; authorized 100,000,000 shares; 40,266,348 shares issued and 39,361,813 shares outstanding at March 31, 2020 and 40,075,475 shares issued and 39,201,477 shares outstanding at December 31, 2019
403  401  
Treasury stock – at cost, 904,535 shares at March 31, 2020 and 873,998 shares at December 31, 2019
(1,971) (1,931) 
Additional paid-in capital146,844  146,460  
Accumulated deficit(105,272) (100,747) 
Accumulated other comprehensive loss(677) (519) 
Total stockholders’ equity39,327  43,664  
Total liabilities and stockholders’ equity$71,153  $79,878  
The accompanying notes are an integral part of these condensed consolidated financial statements.
2

Table of Contents
SYNACOR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
FOR THE THREE MONTHS ENDED MARCH 31, 2020 AND 2019
(In thousands except for share and per share data)
Three Months Ended
March 31,
20202019
REVENUE$20,583  $31,824  
COSTS AND OPERATING EXPENSES:
Cost of revenue (exclusive of depreciation and amortization shown separately below)10,729  16,506  
Technology and development (exclusive of depreciation and amortization shown separately below)3,108  4,546  
Sales and marketing4,368  5,991  
General and administrative (exclusive of depreciation and amortization shown separately below)4,466  4,465  
Depreciation and amortization2,214  2,435  
Total costs and operating expenses24,885  33,943  
LOSS FROM OPERATIONS(4,302) (2,119) 
OTHER INCOME, net167  216  
INTEREST EXPENSE(59) (64) 
LOSS BEFORE INCOME TAXES(4,194) (1,967) 
PROVISION FOR INCOME TAXES331  277  
NET LOSS$(4,525) $(2,244) 
NET LOSS PER SHARE:
Basic$(0.11) $(0.06) 
Diluted$(0.11) $(0.06) 
WEIGHTED AVERAGE SHARES USED TO COMPUTE NET LOSS PER SHARE:
Basic39,677,738  39,038,642  
Diluted39,677,738  39,038,642  
The accompanying notes are an integral part of these condensed consolidated financial statements.
3

Table of Contents

SYNACOR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS – UNAUDITED
FOR THE THREE MONTHS ENDED MARCH 31, 2020 AND 2019
(In thousands)
Three Months Ended
March 31,
20202019
Net loss$(4,525) $(2,244) 
Other comprehensive loss:
Changes in foreign currency translation adjustment(158) (137) 
Comprehensive loss$(4,683) $(2,381) 
The accompanying notes are an integral part of these condensed consolidated financial statements.
4

Table of Contents
SYNACOR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY – UNAUDITED
FOR THE THREE MONTHS ENDED MARCH 31, 2020 AND 2019
(In thousands except for share data)


Common StockTreasury StockAdditional
Paid-in
Capital
Accumulated
Deficit
Accumulated Other Comprehensive LossTotal
SharesAmountSharesAmount
BALANCE—January 1, 201939,880,054  $399  852,482  $(1,899) $144,739  $(91,726) $(342) $51,171  
Exercise of common stock options24,819  —  —  —  37  —  —  37  
Stock-based compensation cost—  —  —  —  347  —  —  347  
Vesting of restricted stock units, net of treasury stock416  —  125  —  —  —    
Net loss—  —  —  —  —  (2,244) —  (2,244) 
Other comprehensive loss—  —  —  —  —  —  (137) (137) 
BALANCE—March 31, 201939,905,289  $399  852,607  $(1,899) $145,123  $(93,970) $(479) $49,174  


Common StockTreasury StockAdditional
Paid-in
Capital
Accumulated
Deficit
Accumulated Other Comprehensive LossTotal
SharesAmountSharesAmount
BALANCE—January 1, 202040,075,475  $401  873,998  $(1,931) $146,460  $(100,747) $(519) $43,664  
Stock-based compensation cost—  —  —  —  386  —  —  386  
Vesting of restricted stock units, net of treasury stock190,873  2  30,537  (40) (2) —  —  (40) 
Net loss—  —  —  —  —  (4,525) —  (4,525) 
Other comprehensive loss—  —  —  —  —  —  (158) (158) 
BALANCE—March 31, 202040,266,348  $403  904,535  $(1,971) $146,844  $(105,272) $(677) $39,327  
The accompanying notes are an integral part of these condensed consolidated financial statements.
5

Table of Contents
SYNACOR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
FOR THE THREE MONTHS ENDED MARCH 31, 2020 AND 2019
(In thousands)
Three Months Ended
March 31,
20202019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss$(4,525) $(2,244) 
Adjustments to reconcile net loss to net cash and cash equivalents
provided by (used in) operating activities:
Depreciation and amortization2,740  2,487  
Asset impairment  226  
Stock-based compensation expense377  331  
Provision for deferred income taxes20  20  
Change in allowance for doubtful accounts4  38  
Changes in operating assets and liabilities:
Accounts receivable, net5,708  4,522  
Prepaid expenses and other assets(1,017) (432) 
Operating lease right-of-use assets and liabilities, net(59) 29  
Accounts payable, accrued expenses and other liabilities(2,408) (4,598) 
Deferred revenue(628) (684) 
Net cash provided by (used in) operating activities212  (305) 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment(965) (1,325) 
Net cash used in investing activities(965) (1,325) 
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments on long-term debt and finance leases(1,107) (694) 
Proceeds from exercise of common stock options  37  
Purchase of treasury stock and shares received to satisfy minimum tax
withholdings
(40)   
Net cash used in financing activities(1,147) (657) 
Effect of exchange rate changes on cash and cash equivalents(144) (140) 
NET DECREASE IN CASH AND CASH EQUIVALENTS(2,044) (2,427) 
Cash and cash equivalents, beginning of period10,966  15,921  
Cash and cash equivalents, end of period$8,922  $13,494  
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest$59  $64  
Cash paid for income taxes$112  $248  
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING TRANSACTIONS:
Minimum long-term debt and finance lease payments in accounts payable$159  $26  
Accrued property and equipment expenditures$360  $95  
The accompanying notes are an integral part of these condensed consolidated financial statements.
6

Table of Contents
SYNACOR, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED
AS OF MARCH 31, 2020 AND DECEMBER 31, 2019, AND
FOR THE THREE MONTHS ENDED MARCH 31, 2020 AND 2019
1. The Company and Summary of Significant Accounting Principles
Synacor, Inc., together with its consolidated subsidiaries (collectively, the “Company” or “Synacor”), is a digital technology company that provides email and collaboration software, cloud-based identity management platforms, managed web and mobile portals, and advertising solutions. The Company’s customers include communications providers, media companies, government entities and enterprises. Synacor is a trusted partner for enterprise software platforms and monetization solutions that Synacor delivers through public and private cloud software-as-a-service, software licensing, and professional services. Synacor enables clients to deepen their engagement with their consumers and users.
Basis of Presentation
The interim unaudited condensed consolidated financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. In the opinion of the Company’s management, the interim unaudited condensed consolidated financial statements include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position for the periods presented. These interim unaudited condensed consolidated financial statements are not necessarily indicative of the results expected for the full fiscal year or for any subsequent period.
The accompanying condensed consolidated balance sheet as of December 31, 2019 was derived from the audited financial statements as of that date, but does not include all the information and footnotes required by U.S. GAAP. These financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.
Accounting Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Such estimates primarily relate to unsettled transactions and events as of the date of the financial statements. Actual results could differ materially from these estimates and judgments.
Many of our estimates require increased judgment due to the significant volatility, uncertainty and economic disruption of the recent global COVID-19 pandemic. We will continue to monitor the effects of the COVID-19 pandemic, and our estimates and judgments may change materially as new events occur or additional information becomes available to us.
Concentrations of Risk
As of March 31, 2020 and December 31, 2019, the Company had concentrations equal to or exceeding 10% of the Company’s accounts receivable as follows:
Accounts Receivable
March 31, 2020December 31, 2019
Portal & Advertising Customer A 14 %
* - Less than 10%
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For the three months ended March 31, 2020 and 2019, the Company had concentrations equal to or exceeding 10% of the Company’s revenue as follows:
Revenue
Three Months Ended
March 31,
20202019
Google search 11 %
Portal & Advertising Customer A 13 %
* - Less than 10%
For the three months ended March 31, 2020 and 2019, the following customers received revenue-share payments equal to or exceeding 10% of the Company’s cost of revenue:
Cost of Revenue
Three Months Ended
March 31,
20202019
Portal & Advertising Customer B 30 %
* - Less than 10%
Recent Accounting Pronouncements
Not Yet Adopted
In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) No. 2016-13 ("ASU 2016-13") Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss model which requires the use of forward-looking information to calculate credit loss estimates. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to certain available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes result in earlier recognition of credit losses. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. Early adoption is permitted. The Company does not believe the impact of adopting this standard will be material to its consolidated financial statements and related disclosures.
Recently Adopted
In August 2018, the FASB issued ASU No. 2018-15, Customer’s Accounting For Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU 2018-15”), which aligns the requirements for capitalizing implementation costs in a cloud computing arrangement with the requirements for capitalizing implementation costs incurred for an internal-use software license. Adoption of this guidance is required for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years and early adoption is permitted. The amendments will be applied prospectively to all implementation costs incurred after adoption. There was no impact to the Company's condensed consolidation financial statements for the quarter ended March 31, 2020 as a result of adopting this standard update on January 1, 2020.
The Company considers the applicability and impact of all ASUs. ASUs not listed above were assessed and determined to be either not applicable, or had or are expected to have minimal impact on the Company’s financial statements and related disclosures.
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2. Revenue from Contracts with Customers
The Company generates all of its revenue from contracts with customers. Many of the Company’s contracts with customers contain multiple performance obligations. For these contracts, the Company accounts for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. Standalone selling prices of software licenses are typically estimated using the residual approach. Standalone selling prices of services are typically estimated based on observable transactions when these services are sold on a standalone basis. The Company usually expects payment within 30 to 90 days from the invoice date (fulfillment of performance obligations or per contract terms). None of the Company’s contracts as of March 31, 2020 contained a significant financing component. Differences between the amount of revenue recognized and the amount invoiced are recognized as deferred revenue.
Disaggregation of revenue
The following table provides information about disaggregated revenue for the three months ended March 31, 2020 and 2019 by the timing of revenue recognition, and includes a reconciliation of the disaggregated revenue by reportable segment (in thousands):
Three Months Ended
March 31,
20202019
Software & Services
Products and services transferred over time$8,330  $8,875  
Products transferred at a point in time2,732  2,283  
Total Software & Services11,062  11,158  
Portal & Advertising
Products and services transferred over time1,224  1,506  
Products transferred at a point in time8,297  19,160  
Total Portal & Advertising9,521  20,666  
Total Revenue$20,583  $31,824  
Revenue disaggregated by geography, based on the billing address of our customer, consists of the following (in thousands):
Three Months Ended
March 31,
20202019
Revenue
United States$15,295  $26,274  
International5,288  5,550  
Total revenue$20,583  $31,824  
Remaining Performance Obligations
Deferred revenue is recorded when cash payments are received or due in advance of revenue recognition from software licenses, professional services, and maintenance agreements. The timing of revenue recognition may differ from the timing of billings to customers. The changes in deferred revenue, inclusive of both current and long-term, are as follows (in thousands):
Beginning balance - January 1, 2020
$8,875  
Recognition of deferred revenue(2,793) 
Deferral of revenue2,254  
Effect of foreign currency translation(89) 
Ending balance - March 31, 2020$8,247  
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The majority of the deferred revenue balance above relates to the maintenance and support contracts for the Company's email software licenses. These are recognized straight-line over the life of the contract, with the majority of the balance being recognized within the next twelve months.
Practical Expedients
The Company generally expenses sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within sales and marketing expenses.
The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which revenue is recognized at the amount to which the Company has the right to invoice for services performed.
3. Leases
The Company enters into various noncancelable operating lease agreements for certain of our offices, data centers, colocations and network equipment. The Company’s leases have original lease periods expiring between 2020 and 2025. Many leases include one or more options to renew. The Company does not assume renewals in its determination of the lease term unless the renewals are deemed to be reasonably assured at lease commencement. The Company’s variable lease payments are immaterial and its lease agreements do not contain any material residual value guarantees or material restrictive covenants. Operating lease costs are included in cost of revenue and general and administrative costs in the Company’s condensed consolidated statements of operations. Finance lease amortization costs are included in depreciation and amortization, and finance lease interest costs are included in interest expense in the Company’s condensed consolidated statements of operations.
The components of lease costs are as follows (in thousands):
Three Months Ended
March 31, 2020
Three Months Ended
March 31, 2019
Finance lease cost
Amortization of right-of-use assets$1,012  $628  
Interest42  189  
Operating lease cost717  1,090  
Total lease cost$1,771  $1,907  
The lease term and discount rate are as follows :
March 31, 2020December 31, 2019
Weighted Average Remaining Lease Term
Operating leases2.1Years2.0Years
Finance leases1.8Years1.2Years
Weighted Average Discount Rate
Operating leases6.0   6.0   
Finance leases4.5   5.0   
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The following is a schedule, by years, of maturities of lease liabilities as of March 31, 2020 (in thousands):
Operating LeasesFinance Leases
The remainder of 2020$1,594  $1,696  
20211,601  701  
2022930  405  
2023434  66  
202434  29  
2025  2  
Total undiscounted cash flows4,593  2,899  
Less imputed interest(356) (94) 
Present value of lease liabilities$4,237  $2,805  
Supplemental cash flow information related to leases are as follows (in thousands):
Three Months Ended
March 31, 2020
Three Months Ended
March 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$778  $1,202  
Operating cash flows from finance leases$42  $576  
Financing cash flows from finance leases$1,107  $48  
Lease liabilities arising from obtaining right-of-use-assets:
Operating leases$  $  
Finance leases$557  $  

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4. Goodwill and Intangible Assets
The changes in the carrying amount of goodwill for the three months ended March 31, 2020 are as follows (in thousands):
Software & ServicesPortal & AdvertisingTotal
December 31, 2019$11,804  $4,144  $15,948  
Effect of foreign currency translation(14)   (14) 
March 31, 2020$11,790  $4,144  $15,934  
The Company tests goodwill for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. As a result of the potential future financial impacts of the COVID-19 pandemic, particularly on our Portal & Advertising segment, the Company assessed its goodwill for impairment concluding that there was no impairment as of March 31, 2020. The Company has no accumulated impairment losses.
Intangible assets consisted of the following (in thousands):
March 31, 2020December 31, 2019
Customer and publisher relationships$14,780  $14,780  
Technology2,330  2,330  
Trademark300  300  
Intangible assets, gross17,410  17,410  
Less accumulated amortization(9,535) (8,999) 
Intangible assets, net$7,875  $8,411  
The Company tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. As a result of the potential future financial impacts of the COVID-19 pandemic, the Company assessed its long-lived assets for impairment and concluded that there was no impairment as of March 31, 2020.
Amortization of intangible assets totaled $0.5 million for the three months ended March 31, 2020 and 2019.  Based on acquired intangible assets recorded at March 31, 2020, amortization is expected to be $1.5 million for the remainder of 2020, $1.4 million in 2021, $1.3 million in 2022, $1.3 million in 2023, $1.3 million in 2024 and $0.9 million thereafter.
5. Property and Equipment – Net
Property and equipment, net consisted of the following (in thousands):
March 31, 2020December 31, 2019
Computer equipment$25,784  $25,392  
Computer software31,813  31,037  
Furniture and fixtures1,304  1,315  
Leasehold improvements1,097  1,116  
Work in process (primarily software development costs)253  187  
Other260  136  
Property and equipment, gross60,511  59,183  
Less accumulated depreciation(46,277) (44,235) 
Property and equipment, net$14,234  $14,948  
Depreciation expense totaled $1.7 million and $2.0 million for the three months ended March 31, 2020 and 2019, respectively.
Property and equipment includes computer equipment and software held under finance leases of $11.3 million and $10.8 million as of March 31, 2020 and December 31, 2019, respectively. Accumulated depreciation of computer equipment and software held under finance leases amounted to $7.0 million as of March 31, 2020. Accumulated depreciation of computer equipment and software held under capital leases amounted to $6.2 million as of December 31, 2019.
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For the three months ended March 31, 2020 and 2019, respectively, the Company capitalized a total of $0.4 million and $0.7 million of costs that occurred during the application development phase, related to the development of internal-use software. The Company capitalized a total of $0.5 million and $0.3 million of costs related to the development of software for sale or license for the three months ended March 31, 2020 and 2019, respectively, that occurred after technological feasibility had been achieved.
Amortization of software capitalized for internal use was $0.7 million for the three months ended March 31, 2020 and $1.1 million for the three months ended March 31, 2019, and included in depreciation and amortization in the consolidated statement of operations. Amortization of software for sale or license was $0.5 million for the three months ended March 31, 2020 and is included in cost of revenue in the consolidated statement of operations. Amortization of software for sale or license was not material for the three months ended March 31, 2019.
There were no impairment charges during the three months ended March 31, 2020. Impairment charges related to software, previously capitalized for internal use, for the three months ended March 31, 2019 was $0.2 million and was included in general and administrative expense in the consolidated statement of operations. The impairment charges were a result of circumstances that indicated that the carrying values of the assets were not fully recoverable. The Company utilizes the discounted cash flow method to determine the fair value of the capitalized software assets. 
The following table sets forth long-lived tangible assets by geographic area (in thousands):
March 31, 2020December 31, 2019
Long-lived tangible assets:
United States$13,954  $14,629  
International280  319  
Total long-lived tangible assets$14,234  $14,948  

6. Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following (in thousands):
March 31, 2020December 31, 2019
Accrued compensation$1,607  $4,209  
Accrued content fees and other costs of revenue308  151  
Accrued taxes343  192  
Other1,055  1,326  
Total$3,313  $5,878  

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7. Segment Information
The Company operates its business in two reportable segments: 1) Software & Services and 2) Portal & Advertising. Software & Services generates revenue by providing cloud-based identity management solutions and email/collaboration products. Portal & Advertising generates managed portal fees and advertising revenue from its traffic on its Managed Portals and other advertising solutions it provides for publishers.
The Company’s operations are organized and managed by type of products and services and segment information is reported accordingly. The Company’s chief operating decision maker (the “CODM”) is its Chief Executive Officer. The CODM reviews financial performance and allocates resources by reportable segment. There have been no operating segments aggregated to arrive at the Company’s reportable segments.
The accounting policies of each segment are the same as those described in the summary of significant accounting policies, refer to Note 1— Summary of Significant Accounting Policies, for further details. The Company evaluates the performance of its segments and allocates resources to them based on Segment Adjusted EBITDA. Segment Adjusted EBITDA is defined as EBITDA (earnings before interest, income taxes, depreciation and amortization) adjusted for certain non-cash items and other non-recurring income and expenses.
Revenue for all operating segments include only transactions with unaffiliated customers and there is no intersegment revenue.
The Company does not account for, and does not report to management, its assets or capital expenditures by segment other than goodwill and intangible assets used for impairment analysis purposes.
The tables below summarize the financial information for the Company’s reportable segments for the three months ended March 31, 2020 and 2019 (in thousands). The “Corporate Unallocated Expenses” category, as it relates to Segment Adjusted EBITDA, primarily includes corporate overhead costs, such as rent, payroll and related benefit costs and professional services which are not directly attributable to any individual segment.
Three Months Ended
March 31, 2020
RevenueCost of revenue (1)Segment Adjusted
EBITDA
Software & Services$11,062  $3,206  $3,528  
Portal & Advertising9,521  7,523  (241) 
Corporate Unallocated Expenses—  —  (2,974) 
Total Company$20,583  $10,729  $313  

Three Months Ended
March 31, 2019
RevenueCost of revenue (1)Segment Adjusted
EBITDA
Software & Services$11,158  $3,503