Form 8-K Carbonite Inc For: May 03

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May 3, 2016 7:10 AM EDT


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 
FORM 8-K

 
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

 
Date of Report (Date of earliest event reported): May 3, 2016

 
CARBONITE, INC.
(Exact name of registrant as specified in its charter)
 
Delaware
 
001-35264
 
33-1111329
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
Two Avenue de Lafayette, Boston, Massachusetts 02111
(Address of principal executive offices, including ZIP code)
(617) 587-1100
(Registrant’s telephone number, including area code)

 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
¨
Written communications pursuant to Rule 425 under the Securities Act (17 C.F.R. §230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 C.F.R. §230.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 C.F.R. §14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 C.F.R. §13e-4(c))

 




Item 2.02
Results of Operations and Financial Condition
On May 3, 2016, Carbonite, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended March 31, 2016. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

The information furnished under this Item 2.02, including Exhibit 99.1 incorporated by reference herein, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 7.01
Regulation FD Disclosure
In connection with the issuance of the press release attached hereto as Exhibit 99.1, the Company is holding a public conference call and webcast on May 3, 2016, at 8:30 a.m. ET, during which the Company will provide the investor presentation attached as Exhibit 99.2 to this Current Report. The presentation will also be posted on the investor relations portion of the Company’s website.

The information furnished under this Item 7.01, including Exhibit 99.1 and Exhibit 99.2 incorporated by reference herein, shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section and shall not be deemed to be incorporated by reference into any filing under the Securities Act, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
    
Item 9.01
Exhibits
 
(d)
Exhibits.
 
99.1
Press Release dated May 3, 2016
 
99.2
Investor Presentation dated May 3, 2016




SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized on May 3, 2016.
 
 
CARBONITE, INC.
 
 
 
 
By:
/s/ Danielle Sheer
 
Name:
Danielle Sheer
 
Title:
VP and General Counsel




Exhibit 99.1
Carbonite Announces Fiscal First Quarter 2016 Results
Revenue and Bookings Growth Exceeds 40%; Company Increases 2016 Outlook

BOSTON, MA - May 3, 2016 - Carbonite, Inc. (NASDAQ: CARB), a leading provider of cloud backup and disaster recovery solutions for small and midsize businesses (SMBs), today announced financial results for the quarter ended March 31, 2016.
Q1'16 Highlights:
•
Non-GAAP revenue of $48.7 million increased 47% year over year.1 Revenue of $48.1 million increased 46% year over year.
•
Bookings of $52.3 million increased 42% year over year.2 
•
SMB bookings grew 124% year over year.
•
Non-GAAP net income (loss) per share was $0.15 compared with ($0.05) year over year.4 Net loss per share was ($0.17) compared with ($0.23) year over year.
“I am very pleased to report that SMB bookings grew by more than 120% year over year, and for the first time, SMB accounted for more than 50% of total quarterly bookings. SMB demand for cloud backup and disaster recovery solutions continues to grow, driven by the need to protect valuable data against an evolving threat landscape.  With the Carbonite product line-up providing market-leading cloud backup for small businesses, and the EVault product suite providing best-in-class disaster recovery as a service (DRaaS) solutions for mid-size businesses, we are well positioned to capitalize on all of the opportunities ahead,” said Mohamad Ali, President and CEO of Carbonite.
“Our strong performance in the first quarter was driven by bookings of EVault-branded products combined with better than 25% bookings growth of Carbonite-branded SMB products, led by our Carbonite Server Backup solution. Both consumer and SMB retention rates remained at all-time highs and we drove gross margin improvement and improved profitability through disciplined cost management,” said Anthony Folger, CFO of Carbonite.
First Quarter 2016 Results:
•
Revenue for the first quarter was $48.1 million, an increase of 46% from $33.0 million in the first quarter of 2015. Non-GAAP revenue for the first quarter was $48.7 million, an increase of 47% from $33.0 million in the first quarter of 2015.1 
•
Bookings for the first quarter were $52.3 million, an increase of 42% from $36.9 million in the first quarter of 2015.2 
•
Gross margin for the first quarter was 69.3%, compared to 69.7% in the first quarter of 2015. Non-GAAP gross margin was 71.9% in the first quarter, compared to 71.1% in the first quarter of 2015.3 
•
Net loss for the first quarter was ($4.7) million, compared to a net loss of ($6.2) million in the first quarter of 2015. Non-GAAP net income for the first quarter was $4.1 million, compared to non-GAAP net loss of ($1.4) million in the first quarter of 2015.4 
•
Net loss per share for the first quarter was ($0.17) (basic and diluted), compared to a net loss per share of ($0.23) (basic and diluted) in the first quarter of 2015. Non-GAAP net income per share was $0.15 (basic and diluted) for the first quarter, compared to non-GAAP net loss per share of ($0.05) (basic and diluted) in the first quarter of 2015.4 
•
Total cash, cash equivalents and marketable securities were $42.0 million as of March 31, 2016, compared to $64.9 million as of December 31, 2015.
•
Cash flow from operations for the first quarter was ($6.8) million, compared to $2.6 million in the first quarter of 2015. Free cash flow for the first quarter was ($0.5) million, compared to $2.6 million in the first quarter of 2015.5 
 
1 
Non-GAAP revenue excludes the impact of purchase accounting adjustments for the acquisition of EVault.
2 
Bookings represent the aggregate dollar value of customer subscriptions received during a period and are calculated as revenue recognized during a particular period plus the change in total deferred revenue, excluding deferred revenue recorded in connection with acquisitions, net of foreign exchange during the same period.
3 
Non-GAAP gross margin excludes the impact of purchase accounting adjustments, amortization expense on intangible assets, stock-based compensation expense and acquisition-related expense.
4 
Non-GAAP net income (loss) and non-GAAP net income (loss) per share excludes the impact of purchase accounting adjustments, amortization expense on intangible assets, stock-based compensation expense, litigation-related expense, restructuring-related expense, acquisition-related expense, hostile takeover-related expense, and CEO transition expense.
5 
Free cash flow is calculated by subtracting the cash paid for the purchase of property and equipment and adding the payments related to corporate headquarter relocation, acquisition-related payments, hostile takeover-related payments, CEO transition payments, restructuring-related payments, litigation-related payments and the cash portion of the lease exit charge from net cash provided by operating activities.





An explanation of non-GAAP measures is provided under the heading “Non-GAAP Financial Measures” below, and reconciliations to the most comparable GAAP measures are provided in the tables at the end of this press release.

Business Outlook

For the second quarter of 2016, non-GAAP revenues are expected to be in the range of $42.5-$47.5 million and non-GAAP net income per share to be in the range of $0.01 - $0.05 (basic and diluted).
For the full year of 2016, non-GAAP revenues are expected to be in the range of $177.5-$192.5 million and non-GAAP net income per share to be in the range of $0.31 - $0.35 (basic and diluted).
Carbonite’s expectations of non-GAAP net income per share for the second quarter and full year of 2016 excludes the impact of purchase accounting adjustments, stock-based compensation expense, litigation-related expense, acquisition-related expense, amortization expense on intangible assets and assumes a 2016 effective tax rate of 0% and weighted average shares outstanding of approximately 27.1 million for the second quarter and full year of 2016.
Conference Call and Webcast Information
In conjunction with this announcement, Carbonite will host a conference call on Tuesday, May 3, 2016 at 8:30 a.m. ET to review the results. This call will be webcast live and can be found in the investor relations section of the Company's website at http://investor.carbonite.com. The conference call can also be accessed by dialing (877) 303-1393 in the United States or (315) 625-3228 internationally with the passcode 80071329.
Following the completion of the call, a recorded replay will be available on the company’s website, http://investor.carbonite.com, under “Events & Presentations” through May 3, 2017.
Non-GAAP Financial Measures
This press release contains non-GAAP financial measures including bookings, non-GAAP revenue, non-GAAP gross margin, non-GAAP net income (loss) and non-GAAP net income (loss) per share, non-GAAP operating expense and free cash flow. Bookings represent the aggregate dollar value of customer subscriptions received during a period and are calculated as revenue recognized during a particular period plus the change in total deferred revenue, excluding deferred revenue recorded in connection with acquisitions, net of foreign exchange during the same period. Non-GAAP revenue excludes the impact of purchase accounting adjustments for the acquisition of EVault. Non-GAAP gross margin excludes the impact of purchase accounting adjustments, amortization expense on intangible assets, stock-based compensation expense and acquisition-related expense. Non-GAAP net income (loss) and non-GAAP net income (loss) per share excludes the impact of purchase accounting adjustments, amortization expense on intangible assets, stock-based compensation expense, litigation-related expense, restructuring-related expense, acquisition-related expense, hostile takeover-related expense, and CEO transition expense. Non-GAAP operating expense excludes amortization expense on intangible assets, stock-based compensation expense, litigation-related expense, restructuring-related expense, acquisition-related expense, hostile takeover-related expense, and CEO transition expense. Free cash flow is calculated by subtracting the cash paid for the purchase of property and equipment and adding the payments related to corporate headquarter relocation, acquisition-related payments, hostile takeover-related payments, CEO transition payments, restructuring-related payments, litigation-related payments and the cash portion of the lease exit charge from net cash provided by operating activities.
The Company believes that these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to the Company’s financial condition and ordinary results of operations. The Company’s management uses these non-GAAP measures to compare the Company’s performance to that of prior periods and uses these measures in financial reports prepared for management and the Company’s board of directors. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company’s financial measures with other software-as-a-service companies, many of which present similar non-GAAP financial measures to investors.
The Company does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant items that are required by GAAP to be recorded in the Company’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management. In order to compensate for these limitations, management presents its non-GAAP financial measures in connection with its GAAP results. The Company urges investors to review the




reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures, which it includes in press releases announcing financial results, including this press release, and not to rely on any single financial measure to evaluate the Company’s business.
Cautionary Language Concerning Forward-Looking Statements
This Press Release contains "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent the Company's views as of the date they were first made based on the current intent, belief or expectations, estimates, forecasts, assumptions and projections of the Company and members of our management team. Words such as "expect," "anticipate," "should," "believe," "hope," "target," "project," "goals," "estimate," "potential," "predict," "may," "will," "might," "could," "intend," variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Those statements include, but are not limited to, statements regarding guidance on our future financial results and other projections or measures of future performance. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond the Company's control. The Company's actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including, but not limited to, the Company's ability to profitably attract new customers and retain existing customers, the Company's dependence on the market for cloud backup services, the Company's ability to manage growth, and changes in economic or regulatory conditions or other trends affecting the Internet and the information technology industry. These and other important risk factors are discussed under the heading "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 filed with the Securities and Exchange Commission (the "SEC"), which is available on www.sec.gov, and elsewhere in any subsequent periodic or current reports filed by us with the SEC. Except as required by applicable law, we do not undertake any obligation to update our forward-looking statements to reflect future events, new information or circumstances.
About Carbonite
Carbonite, Inc. (Nasdaq: CARB) provides cloud backup and recovery solutions to secure personal and business data. The Carbonite family of cloud backup software, together with the EVault disaster recovery portfolio, offer a full data protection suite for users that range from individuals to midsize businesses. Learn why more than 1.5 million customers trust Carbonite with their data by visiting Carbonite.com.
Investor Relations Contact:
Emily Walt
Carbonite
617-927-1972

Media Contact:

Emily Held, PAN Communications (for Carbonite)
617-502-4300

Sarah King
Carbonite
617-421-5601





Carbonite, Inc.
Condensed Consolidated Statement of Operations (unaudited)
(In thousands, except share and per share amounts)

 
Three Months Ended
March 31,
 
2016
 
2015
Revenue
$
48,115

 
$
33,026

Cost of revenue
14,755

 
10,014

Gross profit
33,360

 
23,012

Operating expenses:
 
 
 
Research and development
8,736

 
6,929

General and administrative
11,420

 
7,576

Sales and marketing
16,882

 
14,381

Restructuring charges
773

 
119

Total operating expenses
37,811

 
29,005

Loss from operations
(4,451
)
 
(5,993
)
Interest and other (expense) income, net
(150
)
 
(33
)
Loss before income taxes
(4,601
)
 
(6,026
)
Provision (benefit) for income taxes
95

 
204

Net loss
$
(4,696
)
 
$
(6,230
)
Net loss per share:
 
 
 
Basic and diluted
$
(0.17
)
 
$
(0.23
)
Weighted-average shares outstanding:
 
 
 
Basic and diluted
27,055,269

 
27,239,201






Carbonite, Inc.
Condensed Consolidated Balance Sheets (unaudited)
(In thousands)
 
 
March 31, 2016
 
December 31,
2015
Assets
 
 
 
Current assets
 
 
 
Cash and cash equivalents
$
41,009

 
$
63,936

Marketable securities
1,000

 
1,000

Trade accounts receivable, net
12,743

 
3,736

Prepaid expenses and other current assets
10,514

 
3,188

Restricted cash
135

 
135

Total current assets
65,401

 
71,995

Property and equipment, net
26,377

 
22,083

Other assets
220

 
167

Acquired intangible assets, net
17,053

 
8,640

Goodwill
23,620

 
23,105

Total assets
$
132,671

 
$
125,990

Liabilities and Stockholders’ Equity
 
 
 
Current liabilities
 
 
 
Accounts payable
$
5,129

 
$
8,384

Accrued expenses
16,478

 
11,559

Current portion of deferred revenue
89,824

 
80,269

Total current liabilities
111,431

 
100,212

Deferred revenue, net of current portion
20,054

 
18,434

Other long-term liabilities
5,970

 
6,271

Total liabilities
137,455

 
124,917

Stockholders’ equity
 
 
 
Common stock
279

 
278

Additional paid-in capital
168,047

 
165,391

Treasury stock, at cost
(8,938
)
 
(5,693
)
Accumulated deficit
(165,639
)
 
(160,943
)
Accumulated other comprehensive income
1,467

 
2,040

Total stockholders’ (deficit) equity
(4,784
)
 
1,073

Total liabilities and stockholders’ (deficit) equity
$
132,671

 
$
125,990







Carbonite, Inc.
Condensed Consolidated Statement of Cash Flows (unaudited)
(In thousands)
 
 
Three Months Ended
March 31,
 
2016
 
2015
Operating activities
 
 
 
Net loss
$
(4,696
)
 
$
(6,230
)
Adjustments to reconcile net loss to net cash provided by operating activities:
 
 
 
Depreciation and amortization
4,339

 
3,354

Loss (gain) on disposal of equipment
432

 
(33
)
Accretion of discount on marketable securities
—

 
(9
)
Stock-based compensation expense
2,343

 
2,468

Provision for (reduction of) reserves on accounts receivable
759

 
(20
)
Other non-cash items, net
360

 
107

Changes in assets and liabilities, net of acquisition:
 
 
 
Accounts receivable
(9,711
)
 
(795
)
Prepaid expenses and other current assets
(5,408
)
 
(1,065
)
Other assets
(40
)
 
218

Accounts payable
(2,523
)
 
1,172

Accrued expenses
3,549

 
(611
)
Other long-term liabilities
(381
)
 
184

Deferred revenue
4,220

 
3,831

Net cash (used in) provided by operating activities
(6,757
)
 
2,571

Investing activities
 
 
 
Purchases of property and equipment
(1,924
)
 
(3,289
)
Proceeds from sale of property and equipment
—

 
33

Proceeds from maturities of marketable securities and derivatives
—

 
12,712

Purchases of marketable securities and derivatives
(538
)
 
—

Increase in restricted cash
—

 
(136
)
Payment for acquistion, net of cash acquired
(11,000
)
 
—

Net cash (used in) provided by investing activities
(13,462
)
 
9,320

Financing activities
 
 
 
Proceeds from exercise of stock options
314

 
1,276

Repurchase of common stock
(3,246
)
 
—

Net cash (used in) provided by financing activities
(2,932
)
 
1,276

Effect of currency exchange rate changes on cash
224

 
(212
)
Net (decrease) increase in cash and cash equivalents
(22,927
)
 
12,955

Cash and cash equivalents, beginning of period
63,936

 
46,084

Cash and cash equivalents, end of period
$
41,009

 
$
59,039







Carbonite, Inc.
Reconciliation of GAAP to Non-GAAP Measures (unaudited)
(In thousands, except share and per share amounts)
Reconciliation of GAAP Revenue to Non-GAAP Revenue
 
Three Months Ended
March 31,
 
2016
 
2015
GAAP revenue
$
48,115

 
$
33,026

Add:
 
 
 
Fair value adjustment of acquired deferred revenue (1)
563

 
—

Non-GAAP revenue
$
48,678

 
$
33,026

(1) Excludes the impact of purchase accounting adjustments for the acquisition of EVault.
Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit
 
Three Months Ended
March 31,
 
2016
 
2015
Gross profit
$
33,360

 
$
23,012

Add:
 
 
 
Fair value adjustment of acquired deferred revenue
563

 
—

Amortization of intangibles
682

 
316

Stock-based compensation expense
214

 
167

Acquisition-related expense
182

 
—

Non-GAAP gross profit
$
35,001

 
$
23,495

Non-GAAP gross margin
71.9
%
 
71.1
%
Calculation of Non-GAAP Net Income (Loss) and Non-GAAP Net Income (Loss) per Share
 
Three Months Ended
March 31,
 
2016
 
2015
Net loss
$
(4,696
)
 
$
(6,230
)
Add:
 
 
 
Fair value adjustment of acquired deferred revenue
563

 
—

Amortization of intangibles
997

 
479

Stock-based compensation expense
2,343

 
2,468

Litigation-related expense
1

 
88

Restructuring-related expense
768

 
115

Acquisition-related expense
4,148

 
356

Hostile takeover-related expense
—

 
1,297

CEO transition expense
—

 
54

Non-GAAP net income (loss)
$
4,124

 
$
(1,373
)
Weighted-average shares outstanding:
 
 
 
Basic and diluted
27,055,269

 
27,239,201

Non-GAAP net income (loss) per share:
 
 
 
Basic and diluted
$
0.15

 
$
(0.05
)




Reconciliation of GAAP Operating Expense to Non-GAAP Operating Expense
 
 
Three Months Ended
March 31,
 
2016
 
2015
Research and development
$
8,736

 
$
6,929

Less:
 
 
 
Stock-based compensation expense
285

 
325

Acquisition-related expense
238

 
—

Non-GAAP research and development
$
8,213

 
$
6,604

 
 
 
 
General and administrative
$
11,420

 
$
7,576

Less:
 
 
 
Amortization of intangibles
70

 
54

Stock-based compensation expense
1,633

 
1,733

Litigation-related expense
1

 
88

Acquisition-related expense
3,609

 
61

Hostile takeover-related expense
—

 
1,297

CEO transition expense
—

 
54

Non-GAAP general and administrative
$
6,107

 
$
4,289

 
 
 
 
Sales and marketing
$
16,882

 
$
14,381

Less:
 
 
 
Amortization of intangibles
245

 
109

Stock-based compensation expense
211

 
243

Acquisition-related expense
119

 
295

Non-GAAP sales and marketing
$
16,307

 
$
13,734

 
 
 
 
Restructuring charges
$
773

 
$
119

Less:
 
 
 
Restructuring-related expense
768

 
115

Non-GAAP restructuring charges
$
5

 
$
4







Calculation of Bookings
 
 
Three Months Ended
March 31,
 
2016
 
2015
Revenue
$
48,115

 
$
33,026

Add:
 
 
 
Deferred revenue ending balance
109,878

 
95,007

Impact of foreign exchange
—

 
241

Less:
 
 
 
Impact of foreign exchange
145

 
—

Beginning deferred revenue from acquisitions
6,830

 
—

Deferred revenue beginning balance
98,703

 
91,424

Change in deferred revenue balance
4,200

 
3,824

Bookings
$
52,315

 
$
36,850


Calculation of Free Cash Flow
 
 
Three Months Ended
March 31,
 
2016
 
2015
Net cash (used in) provided by operating activities
$
(6,757
)
 
$
2,571

Subtract:
 
 
 
Purchases of property and equipment
1,924

 
3,289

Add:
 
 
 
Payments related to corporate headquarter relocation
—

 
1,309

Acquisition-related payments
7,056

 
75

Hostile takeover-related payments
—

 
1,262

CEO transition payments
—

 
29

Restructuring-related payments
102

 
—

Cash portion of lease exit charge
66

 
622

Litigation-related payments
924

 
—

Free cash flow
$
(533
)
 
$
2,579



CARBONITE 2016 FIRST QUARTER FINANCIAL RESULTS May 3, 2016

 
EMILY WALT Director, Investor Relations

 
SAFE HARBOR STATEMENT These slides and the accompanying oral presentation contain "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent the Company's views as of the date they were first made based on the current intent, belief or expectations, estimates, forecasts, assumptions and projections of the Company and members of our management team. Words such as "expect," "anticipate," "should," "believe," "hope," "target," "project," "goals," "estimate," "potential," "predict," "may," "will," "might," "could," "intend," variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Those statements include, but are not limited to, statements regarding guidance on our future financial results and other projections or measures of future performance, the expected future results of the acquisition of EVault, including revenues and growth rates; the Company’s ability to successfully integrate EVault’s business; and the Company’s expectations regarding its future performance. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond the Company's control. The Company's actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including, but not limited to, the Company's ability to profitably attract new customers and retain existing customers, including the customers of EVault, the Company's dependence on the market for cloud backup services, the Company's ability to manage growth, and changes in economic or regulatory conditions or other trends affecting the Internet and the information technology industry. These and other important risk factors are discussed under the heading "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 filed with the Securities and Exchange Commission, which is available on www.sec.gov. Except as required by law, we do not undertake any obligation to update our forward-looking statements to reflect future events, new information or circumstances. This presentation contains non-GAAP financial measures including, but not limited to, non-GAAP Revenue, non-GAAP Gross Margin, non-GAAP EPS and Free Cash Flow. A reconciliation to GAAP can be found in the financial schedules included in our most recent earnings press release which can be found on Carbonite’s website, investors.carbonite.com, in the Company’s filings or with the SEC at www.sec.gov. 3

 
MOHAMAD ALI President & CEO

 
ANTHONY FOLGER CFO & Treasurer

 
carbonite.com $23.8 $22.6 $21.7 $21.6 $22.9 $13.1 $13.1 $12.5 $15.8 $29.4 $36.9 $35.7 $34.2 $37.4 $52.3 $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 Q115 Q215 Q315 Q415 Q116 Consumer SMB Q116 BOOKINGS 6 Q116 Growth Y/Y Total Bookings $52.3M 42% SMB $29.4M 124% Consumer $22.9M (3%) Source: SEC filings SMB 56% of Total Bookings

 
carbonite.com BOOKINGS: SMB DRIVING GROWTH, CONSUMER DRIVING CASH SMB Consumer • SMB Bookings $29.4M • SMB Subscription Bookings $24.3M • Margin Profile 80%+ Cloud Backup and DRaaS Cloud Backup • Consumer Bookings $22.9M • Cash Contribution ~$4.0M • Margin Profile Mid-60% SaaS Subscription Model Key to Long-Term Strategy

 
carbonite.com Q116 NON-GAAP REVENUE 8 $33.0 $34.0 $34.6 $35.1 $48.7 $0.0 $20.0 $40.0 $60.0 Q115 Q215 Q315 Q415 Q116 Q116 Growth Y/Y Total Revenue $48.7M 47% Source: SEC filings For a full reconciliation of GAAP to non-GAAP, please see the Appendix.

 
carbonite.com Q116 Non-GAAP GROSS MARGINS 9 71.1% 72.6% 73.2% 75.3% 71.9% 50.0% 60.0% 70.0% 80.0% Q115 Q215 Q315 Q415 Q116 For a full reconciliation of GAAP to non-GAAP, please see the Appendix. Q116 Growth Y/Y Non-GAAP Gross Margin 71.9% 80 bps Source: SEC filings

 
carbonite.com Q116 TOTAL CASH AND FREE CASH FLOW 10 $2.6 $3.2 $1.4 $7.1 ($0.5) ($8.0) ($4.0) $0.0 $4.0 $8.0 Q115 Q215 Q315 Q415 Q116 Free Cash Flow For a full reconciliation of GAAP to non-GAAP, please see the Appendix Numbers may not foot due to rounding. Q116 Total Cash and Investments $42M Total Stock Repurchases $3.2M Source: SEC filings

 
11 carbonite.com 2016 BUSINESS OUTLOOK Second Quarter and Full Year Non-GAAP Expectations Q216 Non-GAAP Revenue $42.5 - $47.5M Non-GAAP EPS $0.01 - $0.05 2016 SMB Bookings $102.5M - $112.5M Consumer Bookings Y/Y Growth (10%) – 0% Non-GAAP Revenue $177.5M - $192.5M Non-GAAP EPS $0.31 - $0.35 Non-GAAP Gross Margin 69.0% - 71.0% Free Cash Flow $9.0M - $13.0M

 
MOHAMAD ALI President & CEO

 
carbonite.com 13 Source: Gartner, Forrester CAPABILITIES: CAPITALIZE ON GROWING MARKETS • Companies using cloud-based backup and disaster recovery will DOUBLE to 24% by 2017 • DRaaS market is expected to grow at a 30% CAGR by 2018

 
14 carbonite.com Q1 Completed milestones  Closed European portion of EVault transaction  Completed three-year audit of EVault’s financials Q2 Expected Milestones  Select data center consolidations  Refresh pricing and packaging of EVault subscription offering INTEGRATION UPDATE COST Drive operational synergies

 
15 carbonite.com 2016 GOALS Product Repositioning to Drive Productivity • Carbonite brand is purpose-built for smaller businesses • EVault brand is more sophisticated for mid-size businesses Strengthen Relationships with EVault Alliances, MSPs • Strategic alliances valuable partners • MSPs new market for Carbonite CUSTOMERS Bring new capabilities to customers PARTNERS Improve GTM through Channel Partners

 
16 carbonite.com TRENDS IN CLOUD BACKUP AND DISASTER RECOVERY: RANSOMWARE The Ransomware threat is real • 6,000,000+ ransomware viruses in existence • $325M+ in damages in 2015 • Backing up with Carbonite is a proven defense • Carbonite helped over 5000 customers recover from ransomware in last 12 months Sources: McAfee Labs, Cyber Threat Security Alliance, Carbonite Ransomware Variants Q4 2015 Q4 2014 2M+ 6M+

 
17 carbonite.com Evault Cloud Backup brings comprehensive DRaaS solutions to SMB customers Windows Linux IBM AIX VMware Hyper-V Oracle HP-UX Sun Solaris IBM iSeries AGENTS Manage & Monitor Backup Heath Troubleshoot Problems Reporting PORTAL VAULTS Secure Data Centers Encrypted Data Best practice retention (30/11) Optimized Performance SSAE 16 Compliant 24/7 Operations TRENDS IN CLOUD BACKUP AND DISASTER RECOVERY: DRaaS

 
18 carbonite.com Q116 RESULTS SUCCESSFULLY ALIGNED WITH 2016 GOALS PARTNERS Improve GTM through Channel Partners CUSTOMERS Bring new capabilities to customers COST Drive operational synergies

 
THANK YOU

 
APPENDIX

 
DEFINITION OF Non-GAAP MEASURES Bookings: Represent the aggregate dollar value of customer subscriptions received during a period and are calculated as revenue recognized during a particular period plus the change in total deferred revenue, excluding deferred revenue recorded in connection with acquisitions, net of foreign exchange during the same period. Non-GAAP revenue: Excludes the impact of purchase accounting adjustments for the acquisition of EVault. Non-GAAP gross margin: Excludes the impact of purchase accounting adjustments, amortization expense on intangible assets, stock-based compensation expense, and acquisition-related expense. Non-GAAP net income (loss) and non-GAAP net income (loss) per share: Excludes the impact of purchase accounting adjustments, amortization expense on intangible assets, stock-based compensation expense, litigation-related expense, restructuring-related expense, acquisition-related expense, hostile takeover-related expense, and CEO transition expense. Non-GAAP operating expense: Excludes amortization expense on intangible assets, stock-based compensation expense, litigation related expense, restructuring-related expense, acquisition-related expense, hostile takeover-related expense, and CEO transition expense. Free cash flow: Calculated by subtracting the cash paid for the purchase of property and equipment and adding the payments related to corporate headquarter relocation, acquisition-related payments, hostile takeover-related payments, CEO transition payments, restructuring-related payments, litigation-related payments and the cash portion of the lease exit charge from net cash provided by operating activities.

 

 

 

 

 

 

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