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Carbonite: Fiscal 2Q16 Financial Results

Cloud backup portion of data protection up 13%, DRaaS up 25%
This is a Press Release edited by StorageNewsletter.com on 2016.08.17

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(in $ million) 2Q15 2Q16 6 mo. 15 6 mo. 16
Revenue 34.0 53.4 67.0 101.6
Growth   57%   52%
Net income (loss) (4.8) 1.2 (11.1) (3.5)

Carbonite, Inc. announced financial results for the quarter ended June 30, 2016.

Q2'16 Highlights:

  • Revenue of $53.4 million increased 57% year over year.
  • Net income (loss) per share was $0.04, as compared to ($0.18) in the second quarter of 2015.

"I am very pleased with our progress, especially the expansion of our SMB business which grew approximately 150%. The EVault integration is exceeding expectations, yielding faster and better-than-expected synergies. Market demand for our expanded set of solutions is strong and growing, and I am confident in the team's ability to continue to drive results," said Mohamad Ali, president and CEO.

"We delivered strong revenue and bookings growth that drove record profitability in the quarter and resulted in our raised outlook for 2016. Our rapidly growing SMB business now represents the majority of total bookings and the strength of that business is a key driver of our improving financial results," said Anthony Folger, CFO.

Second Quarter 2016 Results:

  • Revenue was $53.4 million, an increase of 57% from $34.0 million in the second quarter of 2015. Non-GAAP revenue for the second quarter was $54.2 million, an increase of 60% from $34.0 million in the second quarter of 2015.1
  • Bookings were $53.7 million, an increase of 50% from $35.7 million in the second quarter of 2015.2
  • Gross margin was 70.3%, compared to 71.2% in the second quarter of 2015. Non-GAAP,oss margin was 72.5% in the second quarter, compared to 72.6% in the second quarter of 2015.3
  • Net income was $1.2 million, compared to a net loss of ($4.8) million in the second quarter of 2015.
  • Non-GAAP net income for the second quarter was $5.2 million, compared to non-GAAP net loss of ($0.3) million in the second quarter of 2015.4
  • Net income per share was $0.04 (basic and diluted), compared to a net loss per share of ($0.18) (basic and diluted) in the second quartr of 2015. Non-GAAP net income per shae was $0.19 (basic and diluted) for the second quarter, compared to non-GAAP net loss per share of ($0.01) (basic and diluted) in the second quarter of 2015.4
  • Total cash, cash equivalents and marketable securities were $43.2 million as of June 30, 2016, compared to $64.9 million as of December 31, 2015.
  • Cash flow from operations was $5.1 million, compared to $4.0 million in the second quarter of 2015. Adjusted free cash flow for the second quarter was $7.3 million, compared to $3.2 million in the second quarter of 2015.5

Business Outlook
For the third quarter of 2016, revenues are expected to be in the range of $44.5-$49.5 million and non-GAAP revenues are expected to be in the range of $45.0-$50.0 million. Non-GAAP net income per share is expected to be in the range of $0.06 - $0.10.

For the full year of 2016 the company is raising its financial guidance. Revenues are expected to be in the range of $192.7-$202.7 million and non-GAAP revenues are expected to be in the range of $195.0-$205.0 million. Non-GAAP net income per share is expected to be in the range of $0.48 - $0.52.

Our Comments

2Q16 bookings
Click to enlarge
carbonite f1

Abstracts of the earnings call transcript:

Mohamad Ali, president and CEO:
"The cloud backup portion of data protection is growing at more than double the pace of the overall market, roughly 13%. The disaster recovery as a service portion of the data protection market is growing at 25%."

Anthony Folger, CFO:
"In Q2, total bookings grew by approximately 50% year-over-year to 53.7 million. Our SMB bookings grew 147% to 32.3 million with strength largely attributable to sales of our EVault-branded offerings, a reflection of solid execution by our team and our partners as well as our integrations efforts running ahead of plan. It's also worth noting that for Q2, SMB bookings represented approximately 60% of total bookings compared to 37% in the prior year quarter.
"Our SMB bookings for Q2 were comprised of 24.5 million in subscription bookings and 7.8 million in software, hardware, and professional services. As we move into the back half of 2016 with new packaging and pricing for our EVault-branded solutions in market, our SMB subscription bookings will continue to be the strategic area of focus for our business.
"Our SMB SaaS business is currently at an annual bookings run rate of roughly $100 million, and we've consistently growing that business greater than 20% annually. In addition to being a high growth SaaS business that's rapidly approaching scale, it has a terrific financial model with gross margins at roughly 80%.
"On the consumer side, bookings declined by approximately 5% to 21.4 million, which was consistent with our expectations and the guidance that we provided of consumer being flat to down 10% for the full year 2016."

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