Synacor, Inc. Investor Presentation
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Transcript of Synacor, Inc. Investor Presentation
SAFE HARBOR statement
"Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: This presentation contains forward-looking statements concerning Synacor’s expected financial performance as well as 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 herein include – but are not limited to - risks associated with: execution of our plans and strategies; the loss of a significant customer; expectations regarding consumer taste and user adoption of applications and solutions; 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 display 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; 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-Q filed with the SEC on May 15, 2012. These documents are available on the SEC Filings section of the Investor Information section of the company's website at http://investor.synacor.com/.
SYNC
3
TAKING DIGITAL MEDIA & CABLE "TO THE CLOUD"
PROFITABLE BUSINESS MODEL
UNIQUE
PLATFORM SCALABLE
LARGE & ENGAGED
CONSUMER BASE
EXCELLENT CUSTOMER RETENTION
RAPID ANNUAL
REVENUE GROWTH
CONTENT & SERVICE PARTNERS (SAMPLE)
INDUSTRY STARTPAGES CONSUMERS
(Q2 2012, as measured by comScore)
CABLE SATELLITE
CUSTOMERS
CONSUMER ELECTRONICS
TELECOM
INTEGRATE ENGAGE AUTHENTICATE
INTEGRATIONS COMPLETED FOR OUR CUSTOMERS (SAMPLE)
5
20M AVG MONTHLY UNIQUE VISITORS
56% 27% DISPLAY
17%
SUBSCRIBER-BASED
MONETIZING THE CONNECTED CONSUMER
NOTE: Q2 2012 % OF TOTAL REVENUE
SEARCH & DISPLAY ADVERTISING
ONE-TIME
DIRECT AD SALES
SEARCH
OTHER VAS
EMAIL TVE
DIGITAL SCALE
20M UNIQUE VISITORS
(MONTHLY AVERAGE FOR QUARTER)
(as measured by comScore)
NOTE: Q2 2012 RESULTS
238M SEARCH QUERIES
(QUARTERLY )
(as measured by Google AdSense)
10B ADVERTISING IMPRESSIONS
(QUARTERLY )
(as measured by DoubleClick & Other Partners)
7
Market Opportunity
SOURCE: US AND WESTERN EUROPE - GARTNER “FORECAST: CONSUMER FIXED VOICE, INTERNET AND BROADBAND SERVICES, WORLDWIDE, 2009-2016, 1Q12 UPDATE” AND LATIN AMERICA - SNL KAGAN “GLOBAL MULTICHANNEL BROADBAND HOUSEHOLDS, 2011”
HIGH SPEED INTERNET HOUSEHOLDS
46M AMERICA LATIN
91M US
~25% 122M EUROPE
WESTERN
8
Market Opportunity
SOURCE: 2011 WORLDWIDE SALES; PC’S - GARTNER “SWOT: TOSHIBA, CONSUMER PC BUSINESS, WORLDWIDE” APRIL 2012” AND TABLETS - GARTNER “QUARTERLY STATISTICS: PERSONAL COMPUTERS BY MAJOR MARKET, WORLDWIDE, 2007-2011, FEBRUARY 2012”
CONSUMER ELECTRONICS MANUFACTURED DEVICES
210M PCs 69M
TABLETS
9
Market Opportunity
SOURCE: PRICEWATERHOUSECOOPERS, “INTERNET ADVERTISING: WIRED AND MOBILE” 2011. NOTE: INTERNATIONAL SEARCH AND DISPLAY ADVERTISING INCLUDES CLASSIFIED, RICH MEDIA, VIDEO, MOBILE, AND OTHER INTERNET ADVERTISING.
SEARCH & DISPLAY ADVERTISING REVENUE
70.6
20.6
28.4 25.9 23.3
$31.0B
50.0 75.1 66.7 58.0 $83.6B
81.3 92.6 103.5
$114.6B
INTERNATIONAL CAGR 2011-2015 13%
US CAGR 2011-2015 11%
US$ (billions)
2011 2012
2013
2014
2015
10
Market Opportunity
SOURCE: ‘CISCO VISUAL NETWORKING INDEX: FORECAST & METHODOLOGY, 2010-2015’, 2011.
INTERNET VIDEO WORLDWIDE CONSUMPTION
2011 2012
2013
2014
2015
8,079 24,357 17,583 12,146 33,620 CAGR 2011-2015 33% PETABYTE/MONTH
PB/MONTH
11
customers’ CHALLENGES
SATELLITE CABLE CONSUMER ELECTRONICS
TELECOM
CORD CUTTING CHURN
DUMB PIPE
OVER THE TOP (HULU, NETFLIX, AMAZON PRIME)
RELATIONSHIP BEYOND THE SALE
DISINTERMEDIATION
DEVICE PROLIFERATION
PARTNERS ARE COMPETITORS
12
SOLUTIONS
TV EVERYWHERE
BRAND OWNERSHIP
COMPETITORS NOW PARTNERS
INCREASED VALUE & ENGAGEMENT
INCREASED MONETIZATION
CONTENT MANAGEMENT
AUTHENTICATION
INNOVATIVE PRODUCT
13
IMAP
REST
XML
SAML
SOAP
LDAP
OAuth
SOCKET
POP
REST
XML
SOAP
LDAP
HTML
File of Consumer Data
Query Consumer Entitlement Data
Consumer Email Data Based on Authentication
SAML
Consumer Profile Data
Consumer Subscription Data
Goo
d Ta
rget
Dat
a
Consumer Account Data
Synacor E-mail Platform
Synacor TVE and Video Platform
Synacor Search & Display Ad Platform
Synacor VAS & App Platform
Synacor Entitlements
Service
Synacor Batch Processing
Service
Synacor Message Oriented
Middleware 3rd Party Value Added Services
Content Providers
Programmer Sites
Customer Billing System
Customer Provisioning
System
Customer Database
Customer Identify Management
System
Customer Email
Platform
Customer Batch File
Customer Backend Systems
Synacor Consumer Profile Manager
PLATFORM – BEHIND THE SCENES
integrate engage authenticate
14
PRODUCTS AND SERVICES
TV EVERYWHERE
ENTERTAINMENT
SEARCH ADVERTISING
DISPLAY ADVERTISING
COMMUNICATIONS & SOCIAL MEDIA
VALUE ADDED SERVICES
15
STARTPAGE
PRODUCTS AND SERVICES
16
TV EVERYWHERE
PRODUCTS AND SERVICES
AUTHENTICATION
INTEGRATION ENGAGEMENT
PRESENTATION 17
PRODUCTS AND SERVICES
BRANDING, promotion, publishing, integrated search, user settings
INTEGRATED HTML5 apps that work across all devices
CARBYN
18
PRODUCTS AND SERVICES
the cross-device, everywhere experience
CARBYN
19
CUSTOMER ACQUISITION
<500k 500k - 2M
> 2M CE MANUFACTURER
subscribers PRE-2008 2012
20
Industry Evolution
SYNACOR LAUNCHES FULL PRODUCT SUITE
WITH EMBARQ
EARTHLINK PREVIOUS STARTPAGE PROVIDER
2007
SYNACOR LAUNCHES FULL PRODUCT SUITE
WITH QWEST
MICROSOFT PREVIOUS STARTPAGE PROVIDER
2010
CENTURYLINK ACQUIRES QWEST
2011
STARTPAGE
CENTURYTEL ACQUIRES EMBARQ, BECOMES
CENTURYLINK, & ADOPTS SYNACOR
ASK.COM PREVIOUS STARTPAGE PROVIDER
2009
Industry Consolidation… Adding More Customers… Generating More Revenue
21
Expanding Market Opportunity
TOSHIBA INTERNET STARTPAGE LAUNCHED
SEP 2010
GOOGLE REFERRED TOSHIBA TO
SYNACOR
2010
MASTER SERVICES AGREEMENT SIGNED
JUL 2010
TOSHIBA’S TABLET INTERNET STARTPAGE
LAUNCHED
AUG 2011
VALUE-ADDED SERVICES LAUNCHED (GAMES, SPORTS, VARIETY)
OCT 2011
Customer challenge
“Relationship Beyond the Sale”
Solution
Synacor Startpage, VAS, Multi-Device Experience
22
COMPETITIVE LANDSCAPE
PORTAL POINT SOLUTIONS
TIME TO MARKET RAPID N/A LONG
COMPLEXITY TO CUSTOMER LOW MEDIUM VERY HIGH
MONETIZATION
END-TO-END SOLUTION
BRAND FRIENDLY PORTAL (sample)
POINT SOLUTIONS (sample)
N/A
23
CONSUMER ELECTRONICS
TV EVERYWHERE CLOUD/ APPS/ MOBILE
INTERNATIONAL
FUTURE GROWTH OPPORTUNITIES
SELLING INTO NEW & EXISTING
CUSTOMERS
FINANCIAL OVERVIEW
UNIQUE VISITORS
SEARCH QUERIES
ADVERTISING IMPRESSIONS
QUARTERLY REVENUE
ANNUAL REVENUE
ADJUSTED EBITDA
OPERATING METRICS & FINANCIALS
UNIQUE VISITORS
Q2-11 20M
Q2-12 14M
Q2-10 9M
(monthly average for quarter)
SOURCE: COMSCORE 26
OPERATING METRICS & FINANCIALS
SEARCH QUERIES
Q2-11 154M
Q2-10 104M
238M Q2-12
SOURCE: GOOGLE ADSENSE 27
OPERATING METRICS & FINANCIALS
ADVERTISING IMPRESSIONS
Q2-11 6B
Q2-10 4B 10B
Q2-12
SOURCE: DOUBLECLICK AND OTHER PARTNERS 28
OPERATING METRICS & FINANCIALS
QUARTERLY REVENUE
Q2-11 19.5M
Q2-10 15.9M $30.8M
Q2-12
29
OPERATING METRICS & FINANCIALS
ANNUAL REVENUE
2008 2009
2010
2011
$91.1M 66.2M 52.6M 60.8M
30
OPERATING METRICS & FINANCIALS
ADJUSTED EBITDA
0.0M 3.4M
$7.6M 3.4M
2008 2009
2010
2011
31
TAKING DIGITAL MEDIA & CABLE "TO THE CLOUD"
PROFITABLE BUSINESS MODEL
UNIQUE
PLATFORM SCALABLE
LARGE & ENGAGED
CONSUMER BASE
EXCELLENT CUSTOMER RETENTION
RAPID ANNUAL
REVENUE GROWTH