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Synacor, Inc. reports 33.2% revenue decline in FY2020

03/18/2021 • About Synacor, Inc. ($SYNC) • By InTwits

Synacor, Inc. reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
  • Synacor, Inc. is a company in decline: FY2020 revenue growth was -33.2%, 5 years revenue CAGR was -5.9%
  • It operates with high leverage: Net Debt/EBITDA is 9.7x while industry average is 18.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.

Revenue and profitability

Synacor, Inc.'s Revenue dropped on 33.2%. Annual revenue decline showed slowdown in FY20Q4 - revenue dropped on 10.2%. Revenue decline was accelerating on average at -12.3 pp per annum in the last 5 years.

Net Income margin decreased on 6.8 pp from -7.4% to -14.2% in FY2020. During the last 5 years Net Income margin topped in FY2018 at -5.3% and was declining since that time.

Management team

The company's CEO Himesh Bhise has spent 6 years with the company. Synacor, Inc.'s CFO is Timothy J Heasley "Tim". Timothy J Heasley "Tim" has 2 years tenure at the company.

Financial and operational results

Synacor, Inc. ($SYNC) key annual financial indicators

mln. $201620172018201920202020/2019
Gross Profit68.270.071.359.9
Net Income-10.7-9.8-7.6-9.0-11.6
Balance Sheet
Short Term Debt1.
Long Term Debt6.
Cash flow
Revenue growth15.5%9.9%2.8%-15.3%-33.2%
EBITDA growth-98.2%-652.7%-941.8%106.5%

Gross Margin53.6%50.0%49.6%49.1%
EBITDA Margin0.1%-0.3%2.4%5.8%
SG&A, % of revenue33.4%30.5%30.3%32.4%
Net Income Margin-8.4%-7.0%-5.3%-7.4%-14.2%-6.8%
CAPEX, % of revenue4.7%5.6%4.3%3.1%

Net Debt/EBITDA-98.9x-3.6x-0.4x

Synacor, Inc. ($SYNC) key quoterly financial indicators

mln. $FY20Q1FY20Q2FY20Q3FY20Q4 YoY change
Revenue21181924 -35.3%-42.9%-40.9%-10.2%
Net Income-5-3-40 ----
Balance Sheet
Net Income Margin -22.0% -17.5% -21.4% 0.4% -14.9%-9.7%-9.5%2.6%

Peers in Application Software

Below you can find Synacor, Inc. benchmarking vs. other companies in Application Software industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.

Top companies by Revenue growth, %

Top 5 FY2016 FY2017 FY2018 FY2019 FY2020
VirnetX Holding Corp ($VHC)--0.2%-95.9%34.9%355,942.4%
AudioEye, Inc. ($AEYE)-175.5%106.6%90.2%90.2%
Cloudera, Inc. ($CLDR)-57.2%42.6%28.9%65.5%
Integrated Ventures Inc ($INTV)----8.9%62.7%
Smartsheet Inc. ($SMAR)-64.3%66.1%59.7%52.4%
Median (92 companies)12.0%15.7%15.2%19.5%14.7%
Synacor, Inc. ($SYNC)-9.9%2.8%-15.3%-33.2%

Top companies by Gross margin, %

Top 5 FY2016 FY2017 FY2018 FY2019 FY2020
Aware, Inc. ($AWRE)90.3%94.6%92.3%89.7%92.8%
Alteryx, Inc. ($AYX)81.3%83.4%91.0%90.6%91.1%
Autodesk, Inc. ($ADSK)85.2%83.2%85.2%88.9%90.1%
Smith Micro Software, Inc. ($SMSI)73.2%77.9%83.5%90.9%89.9%
Cadence Design Systems, Inc. ($CDNS)85.9%87.8%87.9%88.6%88.6%
Median (90 companies)64.2%64.6%66.0%68.4%70.0%

Top companies by EBITDA margin, %

Top 5 FY2016 FY2017 FY2018 FY2019 FY2020
VirnetX Holding Corp ($VHC)-1,837.2%-1,118.0%-40,379.4%-23,127.1%52.2%
j2 Global, Inc. ($JCOM)41.7%36.5%35.7%38.6%40.5%
Intelligent Systems Corporation ($INS)-5.4%-12.8%33.6%43.6%40.4%
Adobe Inc. ($ADBE)31.2%34.2%35.3%35.8%39.7%
SS&C Technologies Holdings, Inc. ($SSNC)34.9%37.9%27.7%38.2%38.3%
Median (90 companies)-5.3%-4.2%-3.3%2.7%7.2%

Top companies by CAPEX/Revenue, %

Top 5 FY2016 FY2017 FY2018 FY2019 FY2020
MicroStrategy Incorporated ($MSTR)0.5%0.8%1.4%2.1%234.8%
Integrated Ventures Inc ($INTV)--199.9%15.2%27.2%
Intelligent Systems Corporation ($INS)3.8%9.7%4.3%4.9%19.2%
LivePerson, Inc. ($LPSN)5.5%7.9%8.8%16.3%11.4%
PROS Holdings, Inc. ($PRO)4.7%0.8%0.7%2.1%11.3%
Median (88 companies)2.9%2.3%2.4%2.9%2.6%

Top companies by ROIC, %

Top 5 FY2016 FY2017 FY2018 FY2019 FY2020
VirnetX Holding Corp ($VHC)-210.9%-256.8%-416.3%-247.2%137.3%
Manhattan Associates, Inc. ($MANH)99.3%102.5%80.9%71.7%53.4%
Citrix Systems, Inc. ($CTXS)16.1%16.7%25.2%29.8%33.5%
Sonic Foundry, Inc. ($SOFO)-18.1%-50.6%-786.4%-31.3%
Paycom Software, Inc. ($PAYC)75.4%51.1%47.5%47.5%28.7%
Median (92 companies)-9.2%-10.2%-9.8%-4.2%-2.0%
Synacor, Inc. ($SYNC)-18.1%-19.1%-11.1%-14.0%-

Top companies by Net Debt / EBITDA

Top 5 FY2016 FY2017 FY2018 FY2019 FY2020
Dropbox, Inc. ($DBX)--3.8x-2.4x1,341.0x
Avaya Holdings Corp. ($AVYA)--7.4x-77.9x
Alteryx, Inc. ($AYX)--2.5x6.1x32.2x
Five9, Inc. ($FIVN)-6.7x-8.6x7.3x5.3x17.6x
Synchronoss Technologies, Inc. ($SNCR)----11.6x
Median (54 companies)-0.9x-0.8x-0.6x0.4x0.2x