Carbon Black (CBLK) Tops Q4 EPS by 4c, Revenues Beat; Offers Q1 & FY19 Revenues Below Consensus

Carbon Black (NASDAQ: CBLK) reported Q4 EPS of ($0.20), $0.04 better than the analyst estimate of ($0.24). Revenue for the quarter came in at $56.9 million versus the consensus estimate of $55.69 million.

Fourth Quarter 2018 Financial Highlights

• Revenue: Total revenue was $56.9 million in the fourth quarter fiscal 2018, an increase of 27% year-over-year. Subscription, license and support revenue was $54.4 million, an increase of 31% year-over-year, and services revenue was $2.5 million, a decrease of 17% year-over-year.
• Gross Profit: Gross profit was $44.3 million in the fourth quarter fiscal 2018, representing a 78% gross margin, in line with the year-ago period. Non-GAAP gross profit was $44.9 million, representing a 79% non-GAAP gross margin, in line with the year-ago period.
• Loss from Operations: Loss from operations was ($19.5) million in the fourth quarter fiscal 2018, compared to ($14.0) million in the year-ago period. Non-GAAP loss from operations was ($15.0) million in the fourth quarter fiscal 2018, compared to ($11.3) million in the year-ago period.
• Net Loss: Net loss was ($18.6) million in the fourth quarter fiscal 2018. Net loss attributable to common stockholders was ($18.6) million, or ($0.27) per share based on 68.8 million weighted-average shares outstanding, in the fourth quarter fiscal 2018. In the year-ago period, net loss was ($14.8) million and net loss attributable to common stockholders was ($27.1) million, or ($2.51) per share based on 10.8 million weighted-average shares outstanding. Non-GAAP net loss was ($14.1) million, or ($0.20) per share based on 68.8 million weighted-average shares outstanding. This compares to ($11.3) million, or ($1.04) per share based on 10.8 million weighted-average shares outstanding, in the year-ago period.
• Cash and Cash Flow: As of December 31, 2018, Carbon Black had $160.6 million in cash, cash equivalents and short-term investments. During the three months ended December 31, 2018, Carbon Black used ($9.2) million of cash in operations and ($1.1) million in capital expenditures and capitalized software development costs, leading to negative free cash flow of ($10.3) million, compared to positive free cash flow of $3.6 million in the year-ago period.

“Carbon Black’s fourth quarter results were highlighted by 32% recurring revenue growth and 102% growth in cloud revenue,” said Patrick Morley, President and Chief Executive Officer of Carbon Black. “2018 was a critical year for Carbon Black, as we successfully transitioned to a cloud-first company. The endpoint protection market is at the very beginning stages of a once-in-a-generation platform shift to the cloud. We believe the powerful set of offerings available on our CB Predictive Security Cloud™ positions Carbon Black as the leading next-generation cloud platform and will enable us to consolidate the fragmented next-generation endpoint security market.”

Morley continued, “We introduced a significant number of innovative cloud products onto the Predictive Security Cloud during 2018. In 2019 we will focus on refining our demand generation and sales and channel enablement capabilities to sell our expanded cloud security platform. We expect this will have a near-term impact on growth and believe it is essential to maximizing the long-term market opportunity for the company.”

GUIDANCE:

Carbon Black sees Q1 2019 EPS of ($0.23)-($0.22), versus the consensus of ($0.21). Carbon Black sees Q1 2019 revenue of $56.5-57.5 million, versus the consensus of $58.53 million.

Carbon Black sees FY2019 EPS of ($0.64)-($0.61), versus the consensus of ($0.70). Carbon Black sees FY2019 revenue of $240-244 million, versus the consensus of $256.11 million.

For earnings history and earnings-related data on Carbon Black (CBLK) click here.

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