Synacor announced that it's in the process of winding down its deal with AT&T to maintain the ATT.net consumer portal.
The loss of AT&T is a blow to Synacor's bottom line as ATT.net accounted for $9.3 million of Buffalo, NY-based Synacor's $20.7 million first quarter revenue. Synacor said it will take months to end the three-year portal relationship with AT&T, but it's working with the telco on a user migration plan to another unnamed technology services provider.
"The recent news from Synacor will not affect our customers’ email or portal user experience," AT&T Spokesman Jim Greer said in an email to FierceTelecom. "We plan to share exciting new features and changes to our ATT.net services soon."
Even with the loss of AT&T, Synacor is maintaining its previously announced second-quarter and full-year 2019 guidance. In its first quarter earnings release on May 8, Synacor said it expected to have $31 million to $33 million in second quarter revenue and $137 million to $145 million in revenue for all of 2019, along with net losses in both the second quarter and for the year.
“Synacor is a $100-million-plus revenue business without the AT&T portal, and we have never been more excited about the significant opportunities in our $49 million high-margin, recurring-revenue-driven enterprise software business,” said Synacor CEO Himesh Bhise, in a statement. “The Synacor-powered ATT.net platform enabled AT&T to retake control of its brand on the portal, drive strong user engagement across mobile and desktop, and deliver against its advertising budget expectations,”
“While we were optimistic regarding the strength of our renewal proposals as well as our accomplishments for ATT.net, we have been actively managing the Synacor business to prepare for any outcome and have remained focused on our high-growth products and services. We will continue to execute on our strategy to drive profitable growth through an increasing level of high-margin revenue.”
Synacor announced the change in its portal relationship with AT&T after the Nasdaq closed Thursday night. Synacor's stock was down more than 11% in after-hours trading, but was up 1.51% by noon.