UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________________________________________________________________________
FORM 8-K
________________________________________________________________________________________________ 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 11, 2020
________________________________________________________________________________________________

Synacor, Inc.
(Exact name of registrant as specified in its charter)
________________________________________________________________________________________________

					
Delaware	 	001-33843	 	16-1542712	
(State or other jurisdiction
of incorporation)	 	(Commission File Number)	 	(IRS Employer
Identification No.)	
		
		40 La Riviere Drive, Suite 300
Buffalo, New York, 14202			
		(Address of principal executive offices, including zip code)	 		
					
		(716) 853-1362 			
		(Registrant’s telephone number, including area code)			
					
		Not Applicable			
		(Former name or former address, if changed since last report)			
________________________________________________________________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 	☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	

 	☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	

 	☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	

 	☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	
Securities registered pursuant to Section 12(b) of the Act:
															
Title of Each Class	 	Trading Symbol(s)	 	Name of each exchange on which registered	
Common Stock, $0.01 Par Value (voting)	 	SYNC	 	The Nasdaq Stock Market LLC
(The Nasdaq Global Market)	

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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.  ☐

	

Item 2.02. Results of Operations and Financial Condition.
On November 11, 2020, Synacor, Inc. issued a press release announcing its financial results for the quarter ended September 30, 2020. The full text of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Synacor, Inc. is making reference to non-GAAP financial information in both the press release and the conference call. A reconciliation of these non-GAAP financial measures to the comparable GAAP financial measures is contained in the attached press release.

Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.

Exhibit No.	  	Description			
				
99.1 		  	Press release issued by Synacor, Inc. dated November 11, 2020			

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

							
	 		 	Synacor, Inc.	
				
Date: November 12, 2020	 		 	By:	 	/s/ Timothy J. Heasley	
	 		 		 	Timothy J. Heasley	
	 		 		 	Chief Financial Officer and Secretary	

Exhibit 99.1

Synacor Reports Third Quarter 2020 Financial Results
--Company delivers 17% growth in Zimbra Enterprise SaaS and Cloud ID SaaS revenue
--Reinstates Financial Guidance for Fourth Quarter 2020

BUFFALO, N.Y., November 11, 2020 – Synacor, Inc. (Nasdaq: SYNC), a leading provider of cloud-based Collaboration and Identity Management software and services serving global enterprises, video, internet and communications providers, and governments, today announced its financial results for the third quarter ended September 30, 2020.

Third Quarter Highlights

•Third quarter revenue of $18.5 million
•GAAP net loss of $4.0 million, inclusive of $1.8 million of restructuring and impairment charges
•Adjusted EBITDA of $1.0 million with near break-even operating cash flow
•Portal & Advertising Segment Adjusted EBITDA margin of 7% with sequential revenue growth of 16%, showing solid recovery post the onset of COVID-19
•$8.1 million of recurring software revenue, that included 17% year-over-year growth in our focus areas of Zimbra Enterprise SaaS and Cloud ID SaaS
•Company reinstates financial guidance for the fourth quarter 2020, including expectations for continued double-digit Enterprise SaaS growth, double-digit Adjusted EBITDA margins and positive free cash flow

“Our third quarter results provide real evidence of Synacor’s transformation into a world-class Enterprise SaaS company that is also committed to expanded margins and positive cash flow,” said Himesh Bhise, Synacor’s Chief Executive Officer. “Zimbra Enterprise SaaS plus Cloud ID SaaS delivered 17% year-over-year growth, our second consecutive quarter of double digit Enterprise SaaS revenue growth that we expect will continue into 2021. We have also improved profitability: year-to-date Software Segment adjusted EBITDA margin expanded to 32% from 27% a year ago, and our Portal & Advertising Segment adjusted EBITDA margin was 7% in Q3 and break-even year-to-date, despite the impact of COVID-19.”

Bhise added, “We enter Q4 and 2021 with noteworthy Cloud ID customer launches, a compelling new Zimbra Cloud collaboration platform, a pronounced market recovery underway in Advertising, a robust sales pipeline, and a cost structure that will yield positive free cash-flow.”

Recent Operating Highlights

•Over 200 new and expansion customers for Zimbra email and collaboration platform delivered through worldwide channel partners
•Debuted Zimbra Cloud in North America – an integrated collaboration suite for small business with email, videoconferencing, chat, and cloud storage – for $2.95 per month with a 30-day free trial
•Signed four expansion deals for Cloud ID with content streaming and service provider customers; and pipeline remains robust
•Achieved significant launch milestones with current Cloud ID customers that will grow active users, including smart-speaker enablement for a large digital services provider, doubling of traffic with a Canadian OTT provider, and going live with content network Epix
•Active advertising publishers were 104 at the end of the third quarter, reflecting proactive reduction of less profitable publishers to enhance segment profitability
•Renewed six Zimbra contracts, three Cloud ID contracts, and two portal contracts with service providers in North America
•Unallocated corporate G&A declined 29% compared to the year ago quarter as a result of previously announced $10 million of cost reductions
Financial Results:
Revenue
For the third quarter of 2020, revenue was $18.5 million, compared to reported revenue of $31.4 million, or $23.7 million when excluding the ATT.net portal business, in the third quarter of 2019. The decline was primarily driven by the COVID-19 impact on our business.
Revenue in our Software & Services segment totaled $10.1 million, compared with $11.1 million in the third quarter of 2019, as double-digit growth in Enterprise SaaS was offset by COVID-19 related declines in consumer email, maintenance, and enterprise licenses.
Revenue in our Portal & Advertising segment totaled $8.4 million, compared with reported revenue of $20.3 million, or $12.6 million net of the ATT.net portal business, in the third quarter of 2019. Revenue increased 16% sequentially compared to the second quarter of 2020, and continues to improve into the fourth quarter, despite the impact from COVID-19.
Net Loss
Net loss for the third quarter of 2020 was $4.0 million, or $0.10 per share, compared with a net loss of $3.7 million, or $0.10 per share, in the prior year. Adjusted net loss was $2.3 million, or $0.05 per share in the current quarter, compared with an adjusted net loss of $1.0 million, or $0.03 per share, in the third quarter of 2019. Adjusted net loss excludes asset impairments, restructuring charges and certain legal and professional fees.
Adjusted EBITDA
Adjusted EBITDA for the third quarter of 2020 was $1.0 million, or 5.3% of revenue, compared with $2.7 million, or 8.7% of revenue, in the third quarter of 2019. Adjusted EBITDA excludes stock-based compensation, other income and expense, asset impairments, restructuring costs, and certain legal and professional fees.
Cash

Cash and cash equivalents at the end of the third quarter was $4.3 million, compared with $6.0 million at the end of the second quarter. The Company continues to have no borrowings on its $12 million credit facility, and expects to be cash flow positive beginning with the fourth quarter of 2020 on a go-forward basis.
Guidance

The Company previously suspended its practice of providing financial guidance on May 6, 2020 given the uncertainties regarding the COVID-19 pandemic. Due to improved visibility, the Company has decided to reinstate financial guidance.

Based on information available as of November 11, 2020, the Company is providing guidance as follows for the fourth quarter 2020:
•Revenue of $20.0 million to $22.0 million
•GAAP net loss of $0.5 million to $1.1 million
•Adjusted EBITDA of $2.5 million to $3.1 million
Conference Call Details
Synacor will host a conference call today at 5 p.m. ET to discuss its third quarter 2020 financial results. The live webcast of the Company’s earnings conference call can be accessed at https://www.synacor.com/investor-relations/events-and-presentations. To participate, please dial 1-833-235-2655 (toll free) or 1-647-689-4151 (international) and reference conference ID 4592597.

Following the conclusion of the live call, a replay of the webcast will be available on the Investor Relations section of the Company's website for at least 90 days. A telephonic replay of the conference call will also be available from 8 p.m. ET on November 11, 2020 until 11:59 p.m. ET on November 18, 2020 by dialing 1-800-585-8367 or 1-416-621-4642 and using the pin number 4592597.
About Synacor
Synacor (Nasdaq: SYNC) is a cloud-based software and services company serving global video, internet and communications providers, device manufacturers, governments and enterprises. Synacor’s mission is to enable its customers to better engage with their consumers. Its customers use Synacor’s technology platforms and services to scale their businesses and extend their subscriber relationships. Synacor delivers managed portals, advertising solutions, email and collaboration platforms, and cloud-based identity management. www.synacor.com
Non-GAAP Financial Measures
The Company uses certain non-GAAP financial measures in this release. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles (GAAP).

We report adjusted EBITDA because it is a key measure used by our management and Board of Directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operational plans. In particular, the exclusion of certain expenses in calculating adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core business. Accordingly, we believe that adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and Board of Directors.

For a reconciliation of adjusted EBITDA to net loss, the most directly comparable financial measure calculated and presented in accordance with GAAP, please refer to the table “Reconciliation of GAAP to Non-GAAP Measures” in this press release.

We report adjusted net loss and adjusted diluted earnings per share because we believe these measures provide investors with additional information to assess our financial performance. These measures should be viewed as supplemental data, rather than substitutes or alternatives to the comparable GAAP measures. For a reconciliation of our GAAP Condensed Consolidated Statements of Operations to our adjusted non-GAAP measures, please refer to the table “Reconciliation of Adjusted Financial Measures” in this press release.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

“Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements concerning Synacor’s expected financial performance including, without limitation, its fourth quarter and full year 2020 guidance, the statements and quotations from management, statements regarding the impact of the Company’s cost reduction plan on its future financial results, statements regarding future revenue improvement in the Portal & Advertising segment and Enterprise SaaS, statements regarding the ability to achieve positive cash flow in future periods, and 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 forward-looking statements the Company makes.

The risks and uncertainties referred to above include – but are not limited to – risks associated with: the impact of the COVID-19 pandemic on our business, execution of our plans and strategies; our ability to obtain new customers; our ability to integrate the assets and personnel from acquisitions; expectations regarding consumer taste and user adoption of applications and solutions; developments in internet browser software and search advertising technologies; 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 digital 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 or other legal claims against Synacor; and the price volatility of our 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 http://investor.synacor.com/. All information provided in this release and in the attachments is available as of November 11, 2020, and except as required by applicable law, Synacor undertakes no duty to update this information.

Synacor, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)

		September 30, 2020		December 31, 2019	
Assets	
Current assets:					
Cash and cash equivalents		$	4,280 			$	10,966 		
Accounts receivable, net		12,809 			20,532 		
Prepaid expenses and other current assets		3,287 			2,989 		
Total current assets		20,376 			34,487 		
Property and equipment, net		12,192 			14,948 		
Operating lease right-of-use assets		3,458 			4,765 		
Goodwill		15,943 			15,948 		
Intangible assets		6,820 			8,411 		
Other assets		876 			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 liabilities		3,725 			5,878 		
Current portion of deferred revenue		5,750 			6,509 		
Current portion of long-term debt and finance leases		1,018 			2,529 		
Current portion of operating lease liabilities		2,434 			2,165 		
Total current liabilities		21,524 			29,664 		
Long-term portion debt and finance leases		1,309 			729 		
Deferred revenue		1,696 			2,846 		
Long-term portion of operating lease liabilities		1,629 			2,366 		
Deferred income taxes		334 			275 		
Other long-term liabilities		248 			334 		
Total Liabilities		26,740 			36,214 		
Stockholders' Equity:					
Common stock		405 			401 		
Treasury stock		(2,004)			(1,931)		
Additional paid-in capital		147,572 			146,460 		
Accumulated deficit		(112,416)			(100,747)		
Accumulated other comprehensive loss		(632)			(519)		
Total stockholders’ equity		32,925 			43,664 		
Total Liabilities and Stockholders' Equity		$	59,665 			$	79,878 		

Synacor, Inc.
Condensed Consolidated Statements of Operations
(In thousands except share and per share amounts)
(Unaudited)

		Three Months Ended September 30,		Nine Months Ended September 30,	
		2020		2019		2020		2019	
									
Revenue		$	18,529 			$	31,366 			$	57,288 			$	95,039 		
Costs and operating expenses:									
Cost of revenue (1)		10,403 			15,634 			30,168 			49,292 		
Technology and development (1)(2)		3,085 			5,545 			9,136 			14,668 		
Sales and marketing (2)		3,410 			5,473 			11,581 			17,014 		
General and administrative (1)(2)		3,238 			5,648 			10,978 			14,068 		
Depreciation and amortization		1,991 			2,605 			6,430 			7,607 		
Total costs and operating expenses		22,127 			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 taxes		203 			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:									
Basic		39,503,951 			39,073,998 			39,405,791 			39,047,561 		
Diluted		39,503,951 			39,073,998 			39,405,791 			39,047,561 		
Notes:									
(1) Exclusive of depreciation and amortization shown separately.							
(2) Includes stock-based compensation as follows:							
		Three Months Ended September 30,		Nine Months Ended September 30,	
		2020		2019		2020		2019	
Technology and development		$	50 			$	103 			$	163 			$	298 		
Sales and marketing		97 			149 			301 			375 		
General and administrative		186 			277 			629 			511 		
		$	333 			$	529 			$	1,093 			$	1,184 		

Synacor, Inc.
Reconciliation of GAAP to Non-GAAP Measures
(In thousands)
(Unaudited)

The following table presents a reconciliation of net loss to adjusted EBITDA for each of the periods indicated:

		Three Months Ended September 30,		Nine Months Ended September 30,	
		2020		2019		2020		2019	
Reconciliation of Adjusted EBITDA:									
Net loss		$	(3,962)			$	(3,725)			$	(11,669)			$	(8,456)		
Provision for income taxes		203 			207 			736 			757 		
Interest expense		37 			80 			146 			199 		
Other expense (income), net		124 			(101)			(218)			(110)		
Depreciation and amortization		2,562 			3,036 			8,059 			8,509 		
Asset impairment**		687 			1,525 			687 			1,751 		
Stock-based compensation expense		333 			529 			1,093 			1,184 		
Restructuring costs		1,099 			819 			1,219 			819 		
Certain legal and professional services fees*		(94)			370 			1,704 			1,406 		
Adjusted EBITDA		$	989 			$	2,740 			$	1,757 			$	6,059 		

						
*	"Certain legal and professional services fees" includes legal fees and other related expenses outside the ordinary course of business, as well as fees and expenses related to merger and acquisition activities.	
**	"Asset Impairment" includes impairment charges related to property, plant and equipment, capitalized software and leased assets.	

Synacor, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

		Nine Months Ended September 30,	
		2020		2019	
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 amortization		8,081 			8,513 		
Asset impairment		687 			1,751 		
Stock-based compensation expense		1,093 			1,184 		
Provision for deferred income taxes		59 			59 		
Change in allowance for doubtful accounts		(20)			77 		
Changes in operating assets and liabilities:					
Accounts receivable, net		7,743 			5,369 		
Prepaid expenses and other assets		122 			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 period		10,966 			15,921 		
Cash and cash equivalents, end of period		$	4,280 			$	15,232 		

Synacor, Inc.
Segment Results
(In thousands except percentages)
(Unaudited)
The Company operates its business in two reportable segments which are determined on the basis of the products and services provided to customers, identified as follows:
(i) Software & Services, which includes email / collaboration (Zimbra) and identity management (Cloud ID).
(ii) Portal & Advertising, which includes managed portals and advertising solutions for publishers.
The following table presents the key segment financial measures for the periods indicated. Please refer to the Reconciliation of GAAP to Non-GAAP Measures schedule for the reconciliation of Adjusted EBITDA.

		Three Months Ended September 30,		Nine Months Ended September 30,	
		2020		2019		% Change		2020		2019		% Change	
Segment Revenue:													
Software & Services		$	10,116 			$	11,091 			(8.8)	%		$	32,093 			$	32,837 			(2.3)	%	
Portal & Advertising		8,413 			20,275 			(58.5)	%		25,195 			62,202 			(59.5)	%	
Total		$	18,529 			$	31,366 			(40.9)	%		$	57,288 			$	95,039 			(39.7)	%	
													
Segment Adjusted EBITDA:												
Software & Services		$	2,890 			$	3,378 			(14.4)	%		$	10,136 			$	8,966 			13.0 	%	
Portal & Advertising		588 			2,881 			(79.6)	%		(56)			8,036 			(100.7)	%	
Unallocated Corporate Expense		(2,489)			(3,519)			29.3 	%		(8,323)			(10,943)			23.9 	%	
Total		$	989 			$	2,740 			(63.9)	%		$	1,757 			$	6,059 			(71.0)	%	
													
Segment Adjusted EBITDA margin*													
Software & Services		28.6 	%		30.5 	%		-190 bps		31.6 	%		27.3 	%		430 bps	
Portal & Advertising		7.0 	%		14.2 	%		-720 bps		(0.2)	%		12.9 	%		-1310 bps	
Total		5.3 	%		8.7 	%		-340 bps		3.1 	%		6.4 	%		-330 bps	

* Adjusted EBITDA as a percent of revenue
The following tables presents a disaggregation of segment revenue for the periods indicated based upon the accounting definition of revenue recognition:
(i) Recurring = revenue recognized over time
(ii) Non-recurring = revenue recognized at a point in time

																																							
		Three Months Ended September 30,		Nine Months Ended September 30,	
		2020		2019		% Change		2020		2019		% Change	
Software & Services Revenue:													
Recurring		$	8,139 			$	8,240 			(1.2)	%		$	24,532 			$	25,143 			(2.4)	%	
Non-recurring		1,977 			2,851 			(30.7)	%		7,561 			7,334 			3.1 	%	
Discontinued Products **		— 			— 			— 	%		— 			360 			(100.0)	%	
Total		$	10,116 			$	11,091 			(8.8)	%		$	32,093 			$	32,837 			(2.3)	%	
													
Portal & Advertising Revenue:													
Recurring		$	554 			$	1,274 			(56.5)	%		$	2,659 			$	3,982 			(33.2)	%	
Non-recurring		7,859 			19,001 			(58.6)	%		22,536 			58,220 			(61.3)	%	
Total		$	8,413 			$	20,275 			(58.5)	%		$	25,195 			$	62,202 			(59.5)	%	
													
Total Revenue:													
Recurring		$	8,693 			$	9,514 			(8.6)	%		$	27,191 			$	29,125 			(6.6)	%	
Non-recurring		9,836 			21,852 			(55.0)	%		30,097 			65,554 			(54.1)	%	
Discontinued Products **		— 			— 			— 	%		— 			360 			— 	%	
Total		$	18,529 			$	31,366 			(40.9)	%		$	57,288 			$	95,039 			(39.7)	%	

** VAM video product line which was discontinued during Q1 2019.

Synacor, Inc.
Reconciliation of Adjusted Financial Measures
(In thousands except per share amounts)
(Unaudited)

		Three months ended September 30, 2020	
		Per GAAP Statements		Asset Impairment		Restructuring Costs		Certain Legal & Professional Fees		Adjusted Non-GAAP	

											
Revenue		$	18,529 									$	18,529 		
Costs and operating expenses:											
Cost of revenue (1)		10,403 									10,403 		
Technology and development (1)(2)		3,085 					(405)					2,680 		
Sales and marketing (2)		3,410 					(561)					2,849 		
General and administrative (1)(2)		3,238 			(687)			(133)			94 			2,512 		
Depreciation and amortization		1,991 									1,991 		
Total costs and operating expenses		22,127 			(687)			(1,099)			94 			20,435 		
Loss from operations		(3,598)			687 			1,099 			(94)			(1,906)		
Other expense, net		(124)									(124)		
Interest expense		(37)									(37)		
Loss before income taxes		(3,759)			687 			1,099 			(94)			(2,067)		
Provision for income taxes (3)		203 									203 		
Net loss		$	(3,962)			$	687 			$	1,099 			$	(94)			$	(2,270)		
Diluted EPS		$	(0.10)			$	0.02 			$	0.03 			$	— 			$	(0.05)		
											
		Three months ended September 30, 2019	
		Per GAAP Statements		Asset Impairment		Restructuring Costs		Certain Legal & Professional Fees		Adjusted Non-GAAP	

											
Revenue		$	31,366 									$	31,366 		
Costs and operating expenses:											
Cost of revenue (1)		15,634 					(292)					15,342 		
Technology and development (1)(2)		5,545 					(329)					5,216 		
Sales and marketing (2)		5,473 					(192)					5,281 		
General and administrative (1)(2)		5,648 			(1,525)			(6)			(370)			3,747 		
Depreciation and amortization		2,605 									2,605 		
Total costs and operating expenses		34,905 			(1,525)			(819)			(370)			32,191 		
Loss from operations		(3,539)			1,525 			819 			370 			(825)		
Other income, net		101 									101 		
Interest expense		(80)									(80)		
Loss before income taxes		(3,518)			1,525 			819 			370 			(804)		
Provision for income taxes (3)		207 									207 		
Net loss		$	(3,725)			$	1,525 			$	819 			$	370 			$	(1,011)		
Diluted EPS		$	(0.10)			$	0.04 			$	0.02 			$	0.01 			$	(0.03)		
Notes:
(1)Exclusive of depreciation and amortization shown separately.
(2)Includes stock-based compensation
(3)No income tax effects to adjustments presented due to full valuation allowance.

Synacor’s management believes that certain non-GAAP measures of Adjusted Net Loss and Adjusted Diluted Earnings per Share provide investors with additional information to assess the Company’s financial performance. These measures should be viewed as supplemental data, rather than substitutes or alternatives to the comparable GAAP measures.

Synacor, Inc.
Reconciliation of Adjusted Financial Measures
(In thousands except per share amounts)
(Unaudited)

		Nine months ended September 30, 2020	
		Per GAAP Statements		Asset Impairment		Restructuring Costs		Certain Legal & Professional Fees		Adjusted Non-GAAP	

											
Revenue		$	57,288 									$	57,288 		
Costs and operating expenses:											
Cost of revenue (1)		30,168 									30,168 		
Technology and development (1)(2)		9,136 					(405)					8,731 		
Sales and marketing (2)		11,581 					(561)					11,020 		
General and administrative (1)(2)		10,978 			(687)			(253)			(1,704)			8,334 		
Depreciation and amortization		6,430 									6,430 		
Total costs and operating expenses		68,293 			(687)			(1,219)			(1,704)			64,683 		
Loss from operations		(11,005)			687 			1,219 			1,704 			(7,395)		
Other income, net		218 									218 		
Interest Expense		(146)									(146)		
Loss before income taxes		(10,933)			687 			1,219 			1,704 			(7,323)		
Provision for income taxes (3)		736 									736 		
Net loss		$	(11,669)			$	687 			$	1,219 			$	1,704 			$	(8,059)		
Diluted EPS		$	(0.30)			$	0.02 			$	0.03 			$	0.04 			$	(0.21)		
											
		Nine months ended September 30, 2019	
		Per GAAP Statements		Asset Impairment		Restructuring Costs		Certain Legal & Professional Fees		Adjusted Non-GAAP	

											
Revenue		$	95,039 									$	95,039 		
Costs and operating expenses:											
Cost of revenue (1)		49,292 					(292)					49,000 		
Technology and development (1)(2)		14,668 					(329)					14,339 		
Sales and marketing (2)		17,014 					(192)					16,822 		
General and administrative (1)(2)		14,068 			(1,751)			(6)			(1,406)			10,905 		
Depreciation and amortization		7,607 									7,607 		
Total costs and operating expenses		102,649 			(1,751)			(819)			(1,406)			98,673 		
Loss from operations		(7,610)			1,751 			819 			1,406 			(3,634)		
Other income, net		110 									110 		
Interest Expense		(199)									(199)		
Loss before income taxes		(7,699)			1,751 			819 			1,406 			(3,723)		
Provision for income taxes (3)		757 									757 		
Net loss		$	(8,456)			$	1,751 			$	819 			$	1,406 			$	(4,480)		
Diluted EPS		$	(0.22)			$	0.04 			$	0.02 			$	0.04 			$	(0.11)		

Notes:
(1)Exclusive of depreciation and amortization shown separately.
(2)Includes stock-based compensation
(3)No income tax effects to adjustments presented due to full valuation allowance.

Synacor’s management believes that certain non-GAAP measures of Adjusted Net Loss and Adjusted Diluted Earnings per Share provide investors with additional information to assess the Company’s financial performance. These measures should be viewed as supplemental data, rather than substitutes or alternatives to the comparable GAAP measures.

Contact:
FNK IR
Rob Fink
+1.646.809.4048
rob@fnkir.com

Meredith Roth VP, Marketing & Corporate Communications
Synacor
+1.770.846.1911
mroth@synacor.com