Carbonite: Fiscal 3Q13 Financial Results

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

Highlights:

• On July 23, it announced Enhanced Server Backup, a new product designed to bring enterprise database server backup capabilities to the small business market. Enhanced Server Backup is an integrated hybrid solution that backups the Windows System State. A server can be restored in its entirety with backup rates reaching approximate speeds in excess of one gigabit per second.
• On July 29, it announced the beta release of its BC appliance which creates complete server backup images on local backup for speed, and cloud backup for ultimate safety when primary equipment fails.
• On August 7, it signed an agreement with Tech Data, a technology wholesaler with more than 120,000 resellers worldwide, to offer suite of cloud data protection solutions through Tech Data’s TDCloud business unit.

“The continued strong performance of our SMB product line, up roughly 80% year over year in Q3, shows that the investments we are making in this market are paying off. Furthermore, the success we’re seeing with our new server backup product validates last year’s acquisition of Zmanda,” said David Friend, chairman and CEO, Carbonite. “Our rapidly-growing network of value-added resellers exerts a strong influence in the purchasing decisions of many small businesses and this distribution channel is proving to be an excellent complement to our traditional advertising-driven direct sales model. We expect SMB to be the dominant driver of our growth in 2014 and beyond, and we think that our comprehensive solutions that include server backup, endpoint backup, and BC appliances, will allow us to continue our rapid expansion into the business market.”

Financial and Operating Metrics for 3Q13

• Revenue for the third quarter was $27.7 million, an increase of 28% from $21.6 million in the third quarter of last year.
• Bookings for the third quarter were $27.6 million, an increase of 14% from $24.3 million in the third quarter of last year.
• Net loss for the third quarter was ($1.2) million, compared to ($3.4) million last year. Non-GAAP net income for the third quarter was $0.2 million compared to non-GAAP net loss of ($1.9) million in the third quarter of last year.
• Net loss for the third quarter was ($0.05) per share (basic and diluted), compared to a net loss of ($0.13) per share (basic and diluted) in the third quarter of last year. Non-GAAP EPS was $0.01 for the third quarter, compared to non-GAAP EPS ($0.07) in the third quarter of last year. Gross margin for the third quarter was 67.9%, compared to 66.6% in the third quarter of last year. Non-GAAP gross margin was 68.7% in the third quarter, compared to 67.3% in the third quarter of last year.
• Cash, cash equivalents and marketable securities were $62.3 million as of September 30, 2013, compared to $58.5 million as of June 30, 2013 and $66.3 million as of September 30, 2012.
• Cash flow from operations for the third quarter was $2.4 million, compared to $2.4 million in the third quarter of last year. Non-GAAP free cash flow for the third quarter of 2013 was $1.4 million, compared to $567,000 in the third quarter of last year.3
• Quarterly retention rate was in the 96% to 97% range, consistent with prior quarters since 2009.

Business Outlook
For the fourth quarter of 2013, the company expects total revenue to be in the range of $28.3 million to $28.5 million and non-GAAP net loss per diluted common share to be in the range of ($0.04) to ($0.02).

The company expects total revenue for 2013 to be in the range of $106.7 million to $106.9 million and non-GAAP net loss per diluted common share to be in the range of ($0.23) to ($0.21).