Shares in Synacor rose more than 9% Wednesday after the developer of TV Everywhere and OTT video authentication systems and customized Web portals announced fourth quarter earnings and revenues that handily beat guidance while also dropping in word that it is working with Sling TV, Dish Network's new OTT pay-TV service.
Update: Synacor shares reversed course Thursday, dropping 20 cents (8.51%) to $2.13 each in afternoon trading.
Sling TV, which launched nationally on February 9, has selected Synacor’s Cloud ID platform to authenticate and authorize Sling TV subscribers, Himesh Bhise, Synacor’s CEO, announced Wednesday on the company’s earnings call.
“Cloud ID will provide access control, entitlement vertification and fraud prevention” to Sling TV, he added. “Sling TV is at the vanguard of delivering TV services to broadband-connected devices and we are proud to be supporting them in this venture. “
On the financial front, Synacor posted revenues of $30.9 million, exceeding guidance of $25.3 million to $27 million, and EBITDA of $4 million, ahead of a guided range of $1.3 million to $2.3 million.
Synacor, which laid off about 20% of its workforce last fall as part of a restructuring, is forecasting first quarter revenues of $24 million to $26 million.
While Synacor’s fourth quarter results helped to boost Synacor’s stock, they are also amplified because Synacor, in recent months, has been dealing with two dissident shareholders that have previously pressed the company to seek a sale.
“We are executing well against our new strategy and have been working with the sense of urgency to drive both revenue growth and operating discipline,” said Bhise, who was named CEO last August.
Tied in, Synacor said it has reduced its dependency on desktop search as it looks to grow video inventory inquiries and display impression metrics become less relevant.
According to Bhise, Q4 marked the first time in Synacor’s history that advertising revenue exceeded search revenue. Search revenue, he said, represented 36% of revenue while advertising represented 45%, versus 50% and 32%, respectively, in the year earlier quarter.
Bhise also reiterated that Synacor is working with partners to create a an end-to-end streaming video platform. Of recent note, Synacor added some streaming tech to its own portfolio through the acquisition of Nimble TV.
Bhise added that Synacor has also been evaluating partnerships for other elements, including workflow management, coding and playback services, and will be “announcing an important partner in this area next week.”