Synacor, the Buffalo technology company that struggled financially for the last three years, is going on a hiring spree to fulfill a new contract with AT&T that will help the company more than double its revenue within the next three years, CEO Himesh Bhise said in an interview Thursday.
Synacor will hire dozens of information technology workers, for its Buffalo headquarters and for its offices elsewhere in this country and overseas, over the coming months, Bhise said before the company’s annual shareholders meeting.
Bhise declined to be more specific about how many workers Synacor would hire, but said the process already has started. Synacor has 400 workers in all, including a little less than 200 at its headquarters on the city’s waterfront.
“If there is anybody in Buffalo who is interested in tech who has great tech capabilities, we want to talk to them. Because in the Buffalo area, we don’t think there’s another company that provides the scale and breadth and depth of international experience, and breadth of digital products, that Synacor can offer for anybody trying to build a career in tech,” Bhise said before the shareholders meeting at the Buffalo HarborCenter Marriott.
The three-year AT&T deal, announced May 5, will generate about $100 million annually for Synacor after it fully takes effect in 2017. Synacor will manage and develop desktop and mobile portal services for AT&T.
Bhise said Thursday that the effort to win the contract, which previously was held by Yahoo, involved extensive meetings between AT&T and Synacor officials at both companies’ offices as AT&T performed its due diligence.
He said he had traveled to a meeting at Synacor’s office in Pune, India, outside Mumbai, as the agreement was coming together, and he signed the contract with AT&T on the flight back from Asia.
The deal is a lifeline for a company that has endured stagnant revenues of around $110 million annually since 2013 and that cut 70 local jobs two years ago.
But even before the AT&T deal, the Internet content provider slowly had started to turn things around, losing less money than it had in the past and improving its cash flow.
“It’s no secret we’ve been in the middle of a turnaround. And it is what it is. And everybody at the company has been heads-down, working really hard, and we’ve made a ton of progress,” Bhise said. “I mean, I think our products are much better than they’ve ever been. We’ve added great new people. We’ve added some great capabilities. We’ve made some acquisitions.”
The company that historically has relied on revenue from internet home pages, or portals, that it builds for its customers has, under Bhise, begun diversifying by expanding its advertising business and getting more revenue from recurring sources, such as by providing software as a service.
Also, Synacor bought email and messaging software provider Zimbra last fall to boost its email service business, and recently closed on the acquisition of digital advertising pioneer Technorati.
Looking ahead, Synacor has raised its revenue predictions for 2016 by $10 million, to $130 million to $135 million, and is predicting revenue of $225 million in 2017 and $300 million by 2019.
Last year, Bhise and other Synacor directors were under pressure from dissident shareholders to sell the company.
Its share price, which peaked at $5 when it went public in 2012, had sunk to $1.41 in early May before the AT&T deal. It soared to $3.64 the day of the announcement, and closed at $3.02 on Thursday.
“From our point of view, we’ve always been undervalued,” Bhise said.
Thursday’s annual meeting was uneventful – and brief. It lasted just nine minutes, and no shareholder asked a question.
Shareholders re-elected Marwan Fawaz and Michael Montgomery to three-year terms as members of Synacor’s board of directors, and they reappointed Deloitte & Touche as the company’s independent accounting firm.