Synacor Shares Rocket 158%

Stock has banner day after Synacor announces AT&T deal
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Synacor shares closed up 158%, to $3.64 each, Thursday, the day after the company announced a mobile and Web portal services contract with AT&T that will be worth about $100 million a year when it’s fully deployed by sometime in 2017.

Synacor will invest about $10 million over the next 12 months to develop and deploy the systems for the AT&T deal, Synacor CEO Himesh Bhise said in a conference call on Thursday, noting that the work will also improve the platforms for Synacor’s existing and new customers.

The AT&T agreement is a three-year deal with auto-renewals, Synacor said.

The deal with AT&T is “validation of our transformation, but also an indicator and accelerator of our future growth potential,” Bhise said.

On that note, Synacor also announced a new initiative it’s calling “3/30/300,” with a goal of generating $300 million in revenues and $30 million in EBIDTA in three years.  “This is now our path. It’s achievable and we’re already working hard toward it,” Bhise said.

Synacor has set 2016 revenue guidance of $125 million to $135 million.

Bhise said the plan is to get to $300 million by adding the $100 million coming way of the AT&T deal alongside growth from other organic and incremental growth in areas such as TV Everywhere authentication, advertising (including programmatic advertising), and opportunities in international and enterprise markets.

About 60% of Synacor’s revenue comes from search and advertising, with the rest coming way of recurring and fee-based models.

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