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 2020-09-30 Filed 2020-11-12
10-Q 2020-06-30 Filed 2020-08-13
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 2020-11-18
8-K 2020-11-11 Earnings, Exhibits
8-K 2020-08-11 Earnings, Exhibits
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-31.1 sync-20200930xexx311.htm
EX-31.2 sync-20200930xexx312.htm
EX-32.1 sync-20200930xexx321.htm

Synacor Earnings 2020-09-30

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

sync-20200930
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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 September 30, 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-20200930_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 November 9, 2020, there were 39,644,363 shares of the registrant’s common stock outstanding.



Table of Contents
SYNACOR, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
Page
Notes to the Condensed Consolidated Financial Statements – Unaudited as of September 30, 2020 and December 31, 2019, and for the Three and Nine Months Ended September 30, 2020 and 2019

1

Table of Contents
PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SYNACOR, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED
AS OF SEPTEMBER 30, 2020 AND DECEMBER 31, 2019
(In thousands except for share and per share data)
September 30,
2020
December 31,
2019
ASSETS
CURRENT ASSETS:
Cash and cash equivalents$4,280 $10,966 
Accounts receivable—net of allowance of $565 and $585
12,809 20,532 
Prepaid expenses and other current assets3,287 2,989 
Total current assets20,376 34,487 
PROPERTY AND EQUIPMENT, net12,192 14,948 
OPERATING LEASE RIGHT-OF-USE ASSETS, net3,458 4,765 
GOODWILL15,943 15,948 
INTANGIBLE ASSETS, net6,820 8,411 
OTHER ASSETS876 1,319 
Total assets$59,665 $79,878 
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable$8,597 $12,583 
Accrued expenses and other current liabilities3,725 5,878 
Current portion of deferred revenue5,750 6,509 
Current portion of long-term debt and finance leases1,018 2,529 
Current portion of operating lease liabilities2,434 2,165 
Total current liabilities21,524 29,664 
LONG-TERM PORTION OF DEBT AND FINANCE LEASES1,309 729 
LONG-TERM PORTION OF OPERATING LEASE LIABILITIES1,629 2,846 
DEFERRED REVENUE1,696 2,366 
DEFERRED INCOME TAXES334 275 
OTHER LONG-TERM LIABILITIES248 334 
Total liabilities26,740 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; 40,508,235 shares issued and 39,574,075 shares outstanding at September 30, 2020 and 40,075,475 shares issued and 39,201,477 shares outstanding at December 31, 2019
405 401 
Treasury stock – at cost, 934,160 shares at September 30, 2020 and 873,998 shares at December 31, 2019
(2,004)(1,931)
Additional paid-in capital147,572 146,460 
Accumulated deficit(112,416)(100,747)
Accumulated other comprehensive loss(632)(519)
Total stockholders’ equity32,925 43,664 
Total liabilities and stockholders’ equity$59,665 $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 AND NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019
(In thousands except for share and per share data)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2020201920202019
REVENUE$18,529 $31,366 $57,288 $95,039 
COSTS AND OPERATING EXPENSES:
Cost of revenue (exclusive of depreciation and amortization shown separately below)10,403 15,634 30,168 49,292 
Technology and development (exclusive of depreciation and amortization shown separately below)3,085 5,545 9,136 14,668 
Sales and marketing3,410 5,473 11,581 17,014 
General and administrative (exclusive of depreciation and amortization shown separately below)3,238 5,648 10,978 14,068 
Depreciation and amortization1,991 2,605 6,430 7,607 
Total costs and operating expenses22,127 34,905 68,293 102,649 
LOSS FROM OPERATIONS(3,598)(3,539)(11,005)(7,610)
OTHER (EXPENSE) INCOME, net(124)101 218 110 
INTEREST EXPENSE(37)(80)(146)(199)
LOSS BEFORE INCOME TAXES(3,759)(3,518)(10,933)(7,699)
PROVISION FOR INCOME TAXES203 207 736 757 
NET LOSS$(3,962)$(3,725)$(11,669)$(8,456)
NET LOSS PER SHARE:
Basic$(0.10)$(0.10)$(0.30)$(0.22)
Diluted$(0.10)$(0.10)$(0.30)$(0.22)
WEIGHTED AVERAGE SHARES USED TO COMPUTE NET LOSS PER SHARE:
Basic39,503,951 39,073,998 39,405,791 39,047,561 
Diluted39,503,951 39,073,998 39,405,791 39,047,561 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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SYNACOR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS – UNAUDITED
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019
(In thousands)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2020201920202019
Net loss$(3,962)$(3,725)$(11,669)$(8,456)
Other comprehensive loss:
Changes in foreign currency translation adjustment57 (136)(113)(151)
Comprehensive loss$(3,905)$(3,861)$(11,782)$(8,607)
The accompanying notes are an integral part of these condensed consolidated financial statements.
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SYNACOR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY – UNAUDITED
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020
(In thousands except for share data)
Common StockTreasury StockAdditional
Paid-in
Capital
Accumulated
Deficit
Accumulated Other Comprehensive LossTotal
SharesAmountSharesAmount
BALANCE—July 1, 202040,353,854 $404 904,535 $(1,971)$147,233 $(108,454)$(689)$36,523 
Stock-based compensation cost— — — — 340 — — 340 
Vesting of restricted stock units, net of treasury stock154,381 1 29,625 (33)(1)— — (33)
Net loss— — — — — (3,962)— (3,962)
Other comprehensive income— — — — — — 57 57 
BALANCE—September 30, 202040,508,235 $405 934,160 $(2,004)$147,572 $(112,416)$(632)$32,925 


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— — — — 1,116 — — 1,116 
Vesting of restricted stock units, net of treasury stock432,760 4 60,162 (73)(4)— — (73)
Net loss— — — — — (11,669)— (11,669)
Other comprehensive loss— — — — — — (113)(113)
BALANCE—September 30, 202040,508,235 $405 934,160 $(2,004)$147,572 $(112,416)$(632)$32,925 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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SYNACOR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY – UNAUDITED
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2019
(In thousands except for share data)
Common StockTreasury StockAdditional
Paid-in
Capital
Accumulated
Deficit
Accumulated Other Comprehensive LossTotal
SharesAmountSharesAmount
BALANCE—July 1, 201939,917,519 $399 856,373 $(1,905)$145,464 $(96,457)$(357)$47,144 
Exercise of common stock options — — —  — —  
Stock-based compensation cost— — — — 535 — — 535 
Vesting of restricted stock units, net of treasury stock62,877 17,625 (26)— — — (25)
Net loss— — — — — (3,725)— (3,725)
Other comprehensive loss— — — — — — (136)(136)
BALANCE—September 30, 201939,980,396 $400 873,998 $(1,931)$145,999 $(100,182)$(493)$43,793 


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 options26,527 — — — 40 — — 40 
Stock-based compensation cost— — — — 1,220 — — 1,220 
Vesting of restricted stock units, net of treasury stock73,815 21,516 (32)— — — (31)
Net loss— — — — — (8,456)— (8,456)
Other comprehensive loss— — — — — — (151)(151)
BALANCE—September 30, 201939,980,396 $400 873,998 $(1,931)$145,999 $(100,182)$(493)$43,793 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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SYNACOR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019
(In thousands)
Nine Months Ended
September 30,
20202019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss$(11,669)$(8,456)
Adjustments to reconcile net loss to net cash and cash equivalents
provided by (used in) operating activities:
Depreciation and amortization8,081 8,513 
Asset impairment687 1,751 
Stock-based compensation expense1,093 1,184 
Provision for deferred income taxes59 59 
Change in allowance for doubtful accounts(20)77 
Changes in operating assets and liabilities:
Accounts receivable, net7,743 5,369 
Prepaid expenses and other assets122 59 
Operating lease right-of-use assets and liabilities, net(109)36 
Accounts payable, accrued expenses and other liabilities(5,561)(3,132)
Deferred revenue(1,429)(251)
Net cash (used in) provided by operating activities(1,003)5,209 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment(2,640)(3,159)
Net cash used in investing activities(2,640)(3,159)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments on long-term debt and finance leases(2,863)(2,531)
Proceeds from exercise of common stock options 40 
Payment of debt issuance costs (60)
Purchase of treasury stock and shares received to satisfy minimum tax
withholdings
(73)(32)
Net cash used in financing activities(2,936)(2,583)
Effect of exchange rate changes on cash and cash equivalents(107)(156)
NET DECREASE IN CASH AND CASH EQUIVALENTS(6,686)(689)
Cash and cash equivalents, beginning of period10,966 15,921 
Cash and cash equivalents, end of period$4,280 $15,232 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest$145 $198 
Cash paid for income taxes$407 $574 
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING TRANSACTIONS:
Minimum long-term debt and finance lease payments in accounts payable$ $277 
Accrued property and equipment expenditures$ $146 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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SYNACOR, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED
AS OF SEPTEMBER 30, 2020 AND DECEMBER 31, 2019, AND
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 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 September 30, 2020 and December 31, 2019, the Company had concentrations equal to or exceeding 10% of the Company’s accounts receivable as follows:
Accounts Receivable
September 30, 2020December 31, 2019
Portal & Advertising Customer A*13 %
* - Less than 10%
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For the three and nine months ended September 30, 2020 and 2019, the Company had concentrations equal to or exceeding 10% of the Company’s revenue as follows:
Revenue
Three Months Ended
September 30,
Nine Months Ended
September 30,
2020201920202019
Google search11 %**11 %
Portal & Advertising Customer A*13 %*13 %
* - Less than 10%
For the three and nine months ended September 30, 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
September 30,
Nine Months Ended
September 30,
2020201920202019
Portal & Advertising Customer B*18 %*26 %
* - 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. In November 2019, the FASB issued ASU 2019-10, "Financial Instruments - Credit Loss (topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842)", which defers the effective date for public filers that are considered small reporting companies, as defined by the Securities and Exchange Commission, to fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The standard is effective for the Company 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 three and nine months ended September 30, 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 September 30, 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 and nine months ended September 30, 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
September 30,
Nine Months Ended
September 30,
2020201920202019
Software & Services
Products and services transferred over time$8,139 $8,240 $24,532 $25,503 
Products transferred at a point in time1,977 2,851 7,561 7,334 
Total Software & Services10,116 11,091 32,093 32,837 
Portal & Advertising
Products and services transferred over time554 1,274 2,659 3,982 
Products transferred at a point in time7,859 19,001 22,536 58,220 
Total Portal & Advertising8,413 20,275 25,195 62,202 
Total Revenue$18,529 $31,366 $57,288 $95,039 
Revenue disaggregated by geography, based on the billing address of our customer, consists of the following (in thousands):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2020201920202019
Revenue
United States$13,077 $25,717 $41,044 $78,965 
International5,452 5,649 16,244 16,074 
Total revenue$18,529 $31,366 $57,288 $95,039 
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(7,646)
Deferral of revenue6,133 
Effect of foreign currency translation84 
Ending balance - September 30, 2020
$7,446 
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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 non-cancellable 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
September 30,
Nine Months Ended
September 30,
2020201920202019
Finance lease cost
Amortization of right-of-use assets$628 $958 $2,609 $1,586 
Interest32 211 100 400 
Operating lease cost705 1,129 2,030 2,219 
Total lease cost$1,365 $2,298 $4,739 $4,205 
The lease term and discount rate are as follows:
September 30, 2020December 31, 2019
Weighted Average Remaining Lease Term
Operating leases1.7Years2.0Years
Finance leases2.1Years1.2Years
Weighted Average Discount Rate
Operating leases6.0 %6.0 %
Finance leases3.7 %5.0 %
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The following is a schedule, by years, of maturities of lease liabilities as of September 30, 2020 (in thousands):
Operating LeasesFinance Leases
The remainder of 2020
$644 $276 
20212,180 1,070 
20221,042 765 
2023441 328 
202436 29 
2025 3 
Total undiscounted cash flows4,343 2,471 
Less imputed interest(280)(144)
Present value of lease liabilities$4,063 $2,327 
Supplemental cash flow information related to leases are as follows (in thousands):
Nine Months Ended
September 30,
20202019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$1,429 $2,324 
Operating cash flows from finance leases$100 $400 
Financing cash flows from finance leases$2,863 $1,586 
Lease liabilities arising from obtaining right-of-use-assets:
Operating leases$1,010 $64 
Finance leases$1,675 $1,925 
During the three and nine months ended September 30, 2020, the Company recorded $0.5 million in impairment charges related to operating lease ROU assets associated with certain leased office spaces being used in a manner different than originally planned, as part of cost cutting initiatives, these charges are included in general and administrative expense in the consolidated statement of operations. No such impairment charges occurred in the three and nine months ended September 30, 2019.
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4.    Goodwill and Intangible Assets
The changes in the carrying amount of goodwill for the nine months ended September 30, 2020 are as follows (in thousands):
Software & ServicesPortal & AdvertisingTotal
December 31, 2019$11,804 $4,144 $15,948 
Effect of foreign currency translation(5) (5)
September 30, 2020$11,799 $4,144 $15,943 
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. The Company, as a result of the potential future financial impacts of the COVID-19 pandemic, particularly on its Portal & Advertising segment, assessed its goodwill for impairment as of March 31, 2020, for which all reporting units were found to have a fair value greater than their carrying value. As of September 30, 2020, the Company considered the current and future macroeconomic and market conditions, along with its current market capitalization, projected cash flows and forecasts, and projections relating to the impact of the COVID-19 pandemic on each of its reporting units. The Company determined that a triggering event had not occurred as of September 30, 2020 that would require an additional interim impairment test to be performed.
As such, no impairment charges were recorded for the three and nine months ended September 30, 2020. The Company has no accumulated impairment losses.
Intangible assets consisted of the following (in thousands):
September 30, 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(10,590)(8,999)
Intangible assets, net$6,820 $8,411 
Amortization of intangible assets totaled $0.5 million for the three months ended September 30, 2020 and 2019, and $1.6 million for the nine months ended September 30, 2020 and 2019.  Based on acquired intangible assets recorded at September 30, 2020, amortization is expected to be $0.6 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):
September 30, 2020December 31, 2019
Computer equipment$26,959 $25,392 
Computer software33,236 31,037 
Furniture and fixtures913 1,315 
Leasehold improvements882 1,116 
Work in process (primarily software development costs)19 187 
Other172 136 
Property and equipment, gross62,181 59,183 
Less accumulated depreciation(49,989)(44,235)
Property and equipment, net$12,192 $14,948 
Depreciation expense totaled $2.0 million and $2.1 million for the three months ended September 30, 2020 and 2019, respectively. Depreciation expense totaled $6.5 million and $6.5 million for the nine months ended September 30, 2020 and 2019, respectively.
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Property and equipment includes computer equipment and software held under finance leases of $12.5 million and $10.8 million as of September 30, 2020 and December 31, 2019, respectively. Accumulated depreciation of computer equipment and software held under finance leases amounted to $8.5 million as of September 30, 2020 and $6.2 million as of December 31, 2019.
For the three months ended September 30, 2020 and 2019, respectively, the Company capitalized a total of $0.3 million and $0.4 million of costs that occurred during the application development phase, related to the development of internal-use software. The Company capitalized a total of $0.3 million and $0.4 million of costs related to the development of software for sale or license for the three months ended September 30, 2020 and 2019, that occurred after technological feasibility had been achieved.
For the nine months ended September 30, 2020 and 2019, respectively, the Company capitalized a total of $1.0 million and $1.9 million of costs that occurred during the application development phase, related to the development of internal-use software. The Company capitalized a total of $1.1 million of costs related to the development of software for sale or license for both the nine month periods ended September 30, 2020 and 2019, respectively, that occurred after technological feasibility had been achieved.
Amortization of software capitalized for internal use was $0.6 million and $1.0 million for the three months ended September 30, 2020 and September 30, 2019 and $1.9 million and $3.5 million for the nine months ended September 30, 2020 and September 30, 2019, respectively. Amortization of software capitalized for internal use is included in depreciation and amortization in the condensed consolidated statements of operations.
Amortization of software for sale or license was $0.6 million and $0.4 million for the three months ended September 30, 2020 and September 30, 2019 and $1.6 million and $0.9 million for the nine months ended September 30, 2020 and September 30, 2019, respectively. Amortization of software for sale or license is included in cost of revenue in the condensed consolidated statements of operations.
Impairment charges related to property and equipment for the three and nine months ended September 30, 2020 and September 30, 2019 are included in general and administrative expense in the condensed consolidated statements of operations. The impairment charges during the three months ended September 30, 2020 were comprised of assets associated with certain leased office spaces being used in a manner different than originally planned, as well as software impairment. The Company utilizes the discounted cash flow method to determine the fair value of the assets.  As a result of this analysis, the Company determined that the carrying values of the assets were not fully recoverable.
Impairment charges (in thousands) related to property and equipment for the three and nine months ended September 30, 2020 and September 30, 2019 are as follows:
Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
Computer equipment$27 $2 $27 $2 
Computer software 1,331  1,557 
Furniture and fixtures57 102 57