Synacor 2Q: Charter Relationship Changed

Charter’s long-standing relationship with Synacor is tapering off as the MSO has indicated it plans to take its Charter.net start Web page in-house. The MSO represents more than 10% of Synacor’s revenue. “We have signed an agreement to continue to provide services to Charter and explore new product and revenue opportunities,” CFO Bill Stuart said during the TV authentication service provider’s 2Q conference call last week. “Their contract has recently been amended to allow them to take over the portal,” which might happen in March next year, he said. Synacor has factored Charter’s impact into its 3Q guidance, which projects revenue of $25mln-$26mln. “We have several other opportunities in the pipeline,” including “a lot of opportunity for desktop and laptop in our traditional search and ad business,” Stuart noted. Synacor is also expanding into mobile, which is expected to contribute to revenue next year, he said. The takeaway from Charter’s move is “not that we just lost a customer. It was a company that decided… to do more in-house, and I completely respect that,” CEO Himesh Bhise, a former Comcast exec said. The new agreement with Charter offers “a whole series of new services and support over the next year,” he said. During the quarter, the company engaged 17.9mln average unique visitors per month, down 9% YOY. Revenue for the quarter was $24.2mln, compared to $26.7mln a year ago.