Carbonite: Fiscal 1Q14 Financial Results

(in $ million)	1Q13	1Q14
Revenue	24.5	29.1
Growth		*19%*
Net income (loss)	(7.4)	(0.1)

Carbonite, Inc. announced financial results for the first quarter March 31, 2014.

First Quarter 2014 Results:

Revenue was $29.1 million, an increase of 19% from $24.5 million in the first quarter of 2013.
Bookings fwere $32.5 million, an increase of 11% from $29.3 million in the first quarter of 2013.
Net loss for the first quarter was ($1.0) million, compared to a net loss of ($7.4) million in the first quarter of 2013. Non-GAAP net income was $0.5 million, compared to non-GAAP net loss of ($4.7) million in the first quarter of 2013.
Net loss was ($0.04) per share (basic and diluted), compared to a net loss of ($0.29) per share (basic and diluted) in the first quarter of 2013. Non-GAAP net earnings were $0.02 per share (basic and diluted) for the first quarter, compared to non-GAAP net loss of ($0.18) per share (basic and diluted), in the first quarter of 2013.
Gross margin was 68.2%, compared to 63.9% in the first quarter of 2013. Non-GAAP gross margin was 69.0% in the first quarter, compared to 65.0% in the first quarter of 2013.2
Total cash and investments were $70.0 million as of March 31, 2014, compared to $56.5 million as of March 31, 2013.
Cash flow from operations was $7.3 million, compared to $3.8 million in the first quarter of 2013. Non-GAAP free cash flow for the first quarter was $4.2 million, compared to $0.7 million in the first quarter of 2013.

“I am pleased to announce another record-setting quarter of revenue and free cash flow,” said David Friend, chairman and CEO, Carbonite. “The success of our new Server Backup product announced in the first quarter reinforces that the hybrid approach to backup is resonating with customers and partners. Carbonite’s products are purposefully designed for ease-of-use, efficiency and affordability, all attributes which a hybrid solution of local and cloud backup can provide. Along with our best-in-class customer service, we believe Carbonite provides solutions that bring tremendous value to the SMB marketplace.”

Business Outlook
For the second quarter of 2014, revenues are expected to be in the range of $30.0-$30.2 million and non-GAAP net loss per share to be in the range of ($0.05)-($0.03).

For the full year of 2014, revenues are expected to be in the range of $121.7-$123.4 million and non-GAAP net loss per share to be in the range of ($0.10)-($0.04).

Carbonite’s expectations of non-GAAP net loss per share for the quarter and full year excludes stock-based compensation expense, patent litigation expense, amortization expense on intangible assets and assumes a tax rate of 0% and weighted average shares outstanding of approximately 26.6 million.

Comments

David Friend, chairman, president and CEO:
"The growth in SMB bookings was primarily driven by the outstanding performance of our hybrid Carbonite server backup product which we launched as a standalone product on January 8. Sales of server backup came in at more than double our internal projections and accelerated throughout the quarter.
"Last quarter, we talked to you briefly about the Carbonite hybrid backup appliance and we will begin shipments in Q2. The entry-level appliance includes 1TB of local storage and 500GB of cloud storage.
"The $99 per month price point is disruptive and will make hybrid backup available to even the smallest businesses. Our roadmap calls for future release of additional appliance models with increased capacity and expanded feature sets.
"The number of productive resellers increased 35% since last year and we continue to establish relationships with large distribution partners, like Tech Data, D&H and Synnex."

Anthony Folgern, CFO:
"Total customers at the end of the quarter were 1,507,000 compared to 1,471,000 in the same period last year.
"We still expect gross margin for the full year to be relatively flat compared to 2013 and free cash flow in the range of 12 million to 14 million for our one-time items associated with the relocation of our corporate headquarters in Boston and one of our data centers.
"In addition, we continue to expect the growth rate on SMB bookings to be in the range of 40% to 50% for the full year and consumer bookings to remain in a range of flat to low single-digit growth.
"Small business bookings accounted for 28% of total bookings during the quarter compared to 24% in the first quarter of 2013.
"When we ended Q1 we were just under 400,000 some under resellers and I think that's up from maybe 3,300-3,400 at this time last year."