3 Key Takeaways From Carbonite Inc. (NASDAQ: CARB)’s 2Q Report


Carbonite Inc. (NASDAQ: CARB)’s 2Q2016 results caught many by surprise because the performance turned out to be better than Wall Street expected. The management has also added icing on the cake by providing an outlook that sits pretty above the consensus estimates. Now, here are three important takeaways from the earnings report.

Sales increase 60%

If you look at the revenue that Carbonite Inc. (NASDAQ: CARB) reported for the latest quarter and compare that with the revenue of the same quarter a year ago, you see that the topline improved 60% on an adjusted basis. But on GAAP basis, sales increased 57% YoY. In absolute dollar terms, non-GAAP sales were $54.2 million and GAAP sales were $53.4 million.

Take note that the Carbonite’s non-GAAP revenue figure excludes certain one-time impacts such as accounting adjustments relating to the acquisition of EVault.

Coming to the bottom-line, Carbonite posted adjusted EPS of $0.19, indicating a significant improvement from EPS loss of $0.01 in the year-ago quarter. The EPS in the latest quarter also outperformed the expectation of Wall Street for EPS of $0.03.

The health of SaaS business

The management of Carbonite Inc. (NASDAQ: CARB) said that they are impressed by the performance of the SMB SaaS business. Sales in the division are said to be expanding at the rate of more than 20% annually. With that annual bookings are said to be in the vicinity of $100 million. Not only is SaaS business growing rapidly in scale, but it also has a compelling margin. Carbonite revealed that gross profit margin in the business is around 80%, indicating that the division has an attractive financial model.

With continued strong execution, the management sees the growth of SaaS business picking up pace and margins improving.

3Q2016 outlook for Carbonite Inc. (NASDAQ: CARB)

Carbonite Inc. (NASDAQ:CARB) guided higher than consensus estimate for the current quarter and fiscal year. The management is looking for 3Q2016 EPS in the band of $0.06 to $0.10. Revenue is expected in the range of $44.5 to $49.5 million. Analysts are looking for EPS of $0.06, which is on the lower end of Carbonite’s guidance.


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