Carbonite Announces Fourth Quarter and Full Year 2018 Financial Results
BOSTON--(BUSINESS WIRE)--Feb 7, 2019--Carbonite, Inc. (NASDAQ: CARB), a global leader in data protection, today announced financial results for the quarter and full year ended December 31, 2018. Carbonite also announced that Linda Connly, a sales and marketing veteran, has joined its Board of Directors.
Full Year 2018 Highlights:Revenue of $296.4 million increased 24% year-over-year. Non-GAAP revenue of $301.9 million increased 23% year-over-year. 1 Net income was $7.6 million, compared to net loss of ($4.0) million in 2017. Net income (loss) per share was $0.24 (basic) and $0.22 (diluted), as compared to ($0.14) in 2017 (basic and diluted). Non-GAAP net income per share was $1.80 (basic) and $1.66 (diluted), as compared to $0.82 (basic) and $0.79 (diluted) in 2017. 2 Adjusted EBITDA of $77.0 million, or 26% of non-GAAP revenue, compared to $38.9 million, or 16% of non-GAAP revenue in 2017. 3
“We delivered on our strategic priorities in 2018,” said Mohamad Ali, CEO of Carbonite. “We significantly strengthened our product platform and introduced one of the most complete Software-as-a-Service data protection portfolios in the market; we did this while successfully continuing our acquisition integration work and driving meaningful improvements in profitability. In 2019 we plan to build upon these efforts, further expanding our data protection platform and delivering a broader set of solutions to our customers, while we invest aggressively in our distribution channels with a focus on driving continued growth and profitability.”
Recent Highlights:In a separate announcement, Carbonite today announced that it has entered into a definitive agreement to acquire Webroot, Inc., a leading cybersecurity company, for approximately $618.5 million in cash. The Company will fund the transaction with existing cash on hand and funds secured under a new credit facility. Following closing, expected in the first quarter of 2019, the transaction is expected to be immediately accretive on an earnings and cash flow basis. Linda Connly, a sales and marketing veteran with more than 25 years of experience, was appointed to the Carbonite Board of Directors as a Class II director.
The Company uses a variety of operational and financial metrics, including non-GAAP financial measures, to evaluate its performance and financial condition. The accompanying financial data includes additional information regarding these metrics and a reconciliation of non-GAAP financial information to GAAP. The presentation of non-GAAP financial information should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
Fourth Quarter 2018 Results:Revenue for the fourth quarter was $77.0 million, an increase of 25% from $61.7 million in the fourth quarter of 2017. Non-GAAP revenue for the fourth quarter was $78.0 million, an increase of 24% from $62.8 million in the fourth quarter of 2017. 1 Bookings for the fourth quarter were $78.8 million, an increase of 31% from $60.2 million in the fourth quarter of 2017. 4 Net income for the fourth quarter was $0.7 million, compared to net loss of ($1.6) million in the fourth quarter of 2017. Non-GAAP net income for the fourth quarter was $16.2 million, compared to non-GAAP net income of $8.8 million in the fourth quarter of 2017. 2 Net income per share for the fourth quarter was $0.02 (basic and diluted), compared to net loss per share of ($0.06) (basic and diluted) in the fourth quarter of 2017. Non-GAAP net income per share was $0.47 (basic) and $0.45 (diluted) for the fourth quarter, compared to non-GAAP net income per share of $0.31 (basic) and $0.30 (diluted) in the fourth quarter of 2017. 2 Adjusted EBITDA for the fourth quarter was $20.8 million, compared to $13.0 million in the fourth quarter of 2017. 3 Gross margin for the fourth quarter was 71.2%, compared to 72.8% in the fourth quarter of 2017. Non-GAAP gross margin was 77.9% in the fourth quarter, compared to 77.6% in the fourth quarter of 2017. 5 Cash flow from operations for the fourth quarter was $19.8 million, compared to $13.9 million in the fourth quarter of 2017. Adjusted free cash flow for the fourth quarter was $17.1 million, compared to $9.7 million in the fourth quarter of 2017. 6
Full Year 2018 Results:Revenue for the full year was $296.4 million, an increase of 24% from $239.5 million in 2017. Non-GAAP revenue for the full year was $301.9 million, an increase of 23% from $246.1 million in 2017. 1 Bookings for the full year were $307.0 million, an increase of 25% from $245.9 million in 2017. 4 Net income for the full year was $7.6 million, compared to net loss of ($4.0) million in 2017. Non-GAAP net income for the full year was $55.9 million, compared to non-GAAP net income of $22.8 million in 2017. 2 Net income per share for the full year was $0.24 (basic) and $0.22 (diluted), compared to net loss per share of ($0.14) (basic and diluted) in 2017. Non-GAAP net income per share was $1.80 (basic) and $1.66 (diluted) for the full year, compared to non-GAAP net income per share of $0.82 (basic) and $0.79 (diluted) in 2017. 2 Adjusted EBITDA for the full year was $77.0 million, compared to $38.9 million in 2017. 3 Gross margin for the full year was 71.2%, compared to 70.7% in 2017. Non-GAAP gross margin for the full year was 77.4%, compared to 75.5% in 2017. 5 Cash flow from operations for the full year was $53.6 million, compared to $31.2 million in 2017. Adjusted free cash flow for the full year was $50.1 million, compared to $20.1 million in 2017. 6
About Linda Connly
Ms. Connly has extensive experience leading go-to-market transformations within technology organizations. She currently serves as the interim Managing Director, Americas, at Rackspace, a managed cloud computing company, and is the Founder and CEO of The Connly Advisory Services, a consulting practice that provides go-to-market advisory services. Prior to these roles, she led the sales integration for Dell and EMC, the largest tech merger in history, and led EMC’s Global Inside Sales.
In addition to her corporate leadership experience, Ms. Connly has been awarded a number of industry accolades, including the Boston Chamber of Commerce Pinnacle Award for “Achievement in Management,” and VAR Business Magazine’s “50 Most Powerful Women in Technology.”
“Ms. Connly is an exceptional addition to our board and brings a powerful combination of sales, marketing, and technology experience to Carbonite,” said Mohamad Ali, President and CEO at Carbonite. “She has expertise in optimizing the go-to-market strategies for some of the most successful technology organizations today and she will play a key role in helping Carbonite execute on our long-term vision.”
Based on the information available as of February 7, 2019, Carbonite expects the following for the first quarter and full year of 2019:
First Quarter 2019:
Full Year 2019:
Carbonite’s expectations of adjusted EBITDA for the first quarter and full year of 2019 excludes the impact of interest expense, net, income taxes, depreciation, amortization, purchase accounting adjustments on acquired deferred revenue, stock-based compensation expense, litigation-related expense, restructuring-related expense and acquisition-related expense from net income (loss). The “Business Outlook” above assumes nine months of contribution from Webroot.
Conference Call and Webcast Information
Carbonite will host a conference call on Thursday, February 7, 2018 at 5:30 p.m. ET to review these results and discuss its agreement to acquire Webroot, announced separately today. This call will be webcast live and can be found in the investor relations section of the Company’s website at http://investor.carbonite.com. The conference call can also be accessed by dialing (877) 303-1393 in the United States or (315) 625-3228 internationally with the passcode 9768609.
Following the completion of the call, a recorded replay will be available on the Company’s website, http://investor.carbonite.com, under “Events & Presentations”.
Non-GAAP Financial Measures
To supplement our consolidated financial statements presented in accordance with GAAP, this press release contains non-GAAP financial measures, including bookings, non-GAAP revenue, non-GAAP business revenue, non-GAAP consumer revenue, non-GAAP gross margin, non-GAAP net income and non-GAAP net income per share, non-GAAP operating expense, adjusted EBITDA and adjusted free cash flow.
The Company believes that these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to the Company’s financial condition and ordinary results of operations. The Company’s management uses these non-GAAP measures to compare the Company’s performance to that of prior periods and uses these measures in financial reports prepared for management and the Company’s board of directors. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company’s financial measures with other software-as-a-service companies, many of which present similar non-GAAP financial measures to investors.
The Company does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant items that are required by GAAP to be recorded in the Company’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management. The Company urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures provided in the tables at the end of this press release, and not to rely on any single financial measure to evaluate the Company’s business.
With respect to our expectations under “Business Outlook” above, the Company has not reconciled non-GAAP gross margin to gross margin or adjusted EBITDA to net income (loss) in this press release because we do not provide guidance for amortization expense on intangible assets, depreciation expense, stock-based compensation expense, litigation-related expense, income tax expense, restructuring-related expense, interest expense, and acquisition-related expense as we are unable to quantify certain of these amounts that would be required to be included in the GAAP measure without unreasonable efforts. In addition, the Company believes such reconciliations would imply a degree of precision that would be confusing or misleading to investors.
Cautionary Language Concerning Forward-Looking Statements
Certain matters discussed in this press release, including under “Business Outlook,” have “forward-looking statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements may generally be identified as such because the context of such statements will include words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” or words of similar import. Similarly, statements that describe the Company’s future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, our ability to consummate the Webroot acquisition, integrate the Webroot acquisition and other acquisitions into our operations and achieve the expected operational and financial benefits of such acquisitions and the timing of such benefits, our ability to profitably attract new customers and retain existing customers, our dependence on the market for cloud backup services, our ability to manage growth, changes in economic or regulatory conditions or other trends affecting the Internet and the information technology industry, and those discussed in the section titled “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017 filed with the Securities and Exchange Commission (the “SEC”), which is available on www.sec.gov, and elsewhere in any subsequent periodic or current reports filed by us with the SEC. Except as required by applicable law, we do not undertake any obligation to update our forward-looking statements to reflect future events, new information or circumstances.
Carbonite provides a robust Data Protection Platform for businesses, including backup, disaster recovery, high availability and workload migration technology. The Carbonite Data Protection Platform supports global businesses with secure cloud infrastructure. To learn more visit www.Carbonite.com.
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CONTACT: Investor Relations Contact:
KEYWORD: UNITED STATES NORTH AMERICA MASSACHUSETTS
INDUSTRY KEYWORD: TECHNOLOGY DATA MANAGEMENT SOFTWARE
SOURCE: Carbonite, Inc.
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PUB: 02/07/2019 04:09 PM/DISC: 02/07/2019 04:09 PM