Buffalo, New York-based telecom vendor Synacor reported record fourth quarter revenue of $46 million, up 32% year over year.
But the company continues to suffer from the slow sales ramp up of its 2016 deal with AT&T, for which Synacor was hired to deliver a series of customer experience portals.
The deal was expected to generate $100 million in annual revenue from 2017 through 2019. However, only $25 million showed up on the books in 2017.
"Clearly, this forecast is below the $100 million annual revenue target that AT&T and Synacor announced when we first discussed the portal contract and was a critical element of Synacor's $300 million 2019 target,” said Himesh Bhise, president and CEO of Synacor, in the company’s fourth-quarter earnings call with investment analysts last week. (Transcript courtesy of Seeking Alpha.)
“Nevertheless, it is important to remember that AT&T still represents an important customer win and business driver for Synacor,” Bhise added. “Beyond giving us desktop scale and broadening our offerings into the growing mobile market, it reflects market validation of the quality of our platform and enables us to continue to advance our products with one of the nation's largest telecommunications companies. And on an additional note, it yields significant incremental profitability for the company going forward now that the launch investment is behind us.”
Despite the slower-than-expected AT&T sales, Synacor enjoyed its best revenue quarter ever on the strength of its publisher advertising and software businesses.
“During the past 3.5 years, we have been pivoting Synacor away from a declining desktop search monetization business,” Bhise said.