Carbonite: Fiscal 2Q13 Financial Results

Carbonite, Inc. announced financial results for the quarter ended June 30, 2013.

"Carbonite delivered a strong quarter, highlighted by accelerating bookings growth, continued robust performance in the small business market and our fourth consecutive quarter of positive free cash flow," said David Friend, chairman and CEO. "We made significant progress strengthening our product portfolio, especially as it relates to our increasing focus on the small business market, and in expanding our indirect distribution channels. The steps that we’re taking to transform the business, combined with the investments we’ve already made in our brand, infrastructure and support, position us well to deliver solutions that keep the world’s small businesses running."

Financial and Operating Metrics for 2Q13

• Bookings were $27.4 million, an increase of 24% from $22.1 million in the second quarter 2012.
• Revenue was $26.2 million, an increase of 30% from $20.2 million in the second quarter of 2012.
• Gross margin was 67.7%, compared to 65.5% in the second quarter of 2012.
• Net loss was ($2.3) million, compared to ($4.2) million in the second quarter of 2012.
• Net loss was ($0.09) per share (basic and diluted), compared to a net loss of ($0.17) per share (basic and diluted) in the second quarter of 2012.
• Non-GAAP gross margin, which excludes amortization expense on intangible assets and stock-based compensation expense, was 68.8%, compared to 66.2% in the second quarter of 2012.
• Non-GAAP net loss, which excludes amortization expense on intangible assets, stock-based compensation expense, patent litigation expense, and a lease exit charge associated with our data center relocation was ($0.4) million or ($0.02) per share compared to ($2.9) million or ($0.11) per share in the second quarter of 2012.
• Cash flow from operations was $3.4 million, compared to $1.4 million in the second quarter of 2012.
• Non-GAAP free cash flow was $1.2 million, compared to ($2.1) million in the second quarter of 2012.
• Non-GAAP free cash flow was $654,000, compared to ($4.6) million in the first quarter of 2012.
• Cash, cash equivalents and marketable securities were $58.5 million as of June 30, 2013, compared to $56.5 million as of March 31, 2013 and $65.7 million as of June 30, 2012.
• Quarterly retention rate was in the 96% to 97% range, consistent with prior quarters since 2009.

Recent Business Highlights:

• Announced that it is bringing enterprise server backup capabilities to the small business market with the introduction of Enhanced Server Backup. Enhanced Server Backup delivers the speed of local backup plus the safety of cloud backup.
• Announced a beta program for its new line of all-in-one BC appliances. Carbonite’s appliances will be tuned for speed for backup and restore operations, and will include VM failover and will offer the speed benefits of local backups along with the ultimate safety of cloud storage.
• Named best cloud backup and DR vendor (Gold winner) in ChannelPro-SMB’s 2013 Readers’ Choice Awards. More than 1,000 VARs, MSPs, systems integrators, custom builders and IT consultants in the channel cast their votes for the most SMB and partner-friendly products, technologies, services, programs, and professional organizations in the channel today.
• Expanded the executive team with the appointment of Randy Bogue as VP of Talent. He joins with nearly two decades of experience in recruiting and talent management, will be responsible for talent acquisition, retention, development and enhancing company’s high performance culture.
• Named one of the Best Places to Work by the Boston Business Journal for the fourth consecutive year. The honor recognizes achievements in creating an environment that attracts and retains talented people through a combination of great opportunities, dedicated peers and a unique company culture.
• Expanded the content available on its Small Business Hub, with Friends with Friend, a video series hosted by Carbonite CEO, David Friend. The series will appear on Carbonite’s Small Business Hub, which features information and resources on how small businesses can increase productivity and streamline operations.

Business Outlook

• Third Quarter 2013: The company expects total revenue for the third quarter to be in the range of $26.9 million to $27.1 million and non-GAAP net loss per common share to be in the range of ($0.07) to ($0.08). Carbonite’s expectations of non-GAAP net loss per diluted common share for the third quarter exclude stock-based compensation expense, patent litigation expense and amortization expense on intangible assets, and assume a tax rate of 0% and weighted average shares outstanding of approximately 26.2 million.
• Full Year 2013: The company expects 2013 total revenue to be in the range of $105.0 million to $106.0 million and non-GAAP net loss per diluted common share to be in the range of ($0.34) to ($0.36). Carbonite’s expectations of non-GAAP net loss per common share for the full year excludes stock-based compensation expense, patent litigation expense, a lease exit charge and amortization expense on intangible assets, and assumes a tax rate of 0% and weighted average shares outstanding of approximately 26.0 million.

To read the earnings call transcript