Carbonite reported first-quarter 2019 adjusted earnings of 44 cents per share, which surged 63% year over year and beat the Zacks Consensus Estimate by 7 cents.
Non-GAAP revenues of $83 million comfortably beat the Zacks Consensus Estimate of $77 million and increased 27.8% year over year.
Revenues, excluding fair value adjustment of acquired deferred revenues, increased 26.8% from the year-ago quarter to $81.2 million.
Quarter Details
Services revenues (88% of revenues) soared 31% year over year to $71.5 million. Product revenues (12% of revenues) inched up 2.8% from the year-ago quarter to $9.7 million.
Carbonite noted that it remains on track with Mozy integration and that the pace of Mozy customer migration is accelerating.
Non-GAAP gross margin expanded 330 basis points (bps) year over year to 79.5%. Services and Product gross margin expanded 450 bps and 30 bps, respectively.
Adjusted EBITDA increased from $12.3 million in the year-ago quarter to $24.9 million in the reported quarter.
Non-GAAP research & development expenses as percentage of revenues declined 40 bps to 17.8%. Non-GAAP general & administrative expenses as percentage of revenues were 11.4%, down 220 bps. Moreover, non-GAAP sales & marketing expenses fell 480 bps to 24.8%.
Non-GAAP operating margin contracted 420 bps on a year-over-year basis to 50.5%.
Balance Sheet & Other Details
As of Mar 31, 2019, Carbonite had cash and cash equivalents of $252.6 million compared with $198.1 million as of Dec 31, 2018.
The company exited the quarter with long-term debt of $645.4 million. It also closed a $550 million term loan and new $130 million revolving credit facility in the reported quarter.
In the first quarter, Carbonite generated $18.7 million of cash from operating activities compared with $3.3 million in the year-ago quarter. Adjusted free cash flow was $19.7 million compared with $2.4 million in the year-ago quarter.
The company completed the acquisition of Webroot during the quarter.
Guidance
For second-quarter 2019, Carbonite expects non-GAAP revenues between $133 million and $137 million. Adjusted EBITDA is expected between $34 million and $36 million.
For 2019, it now expects non-GAAP revenues between $491 million and $505 million, better than previous guidance of $488-$502 million.
Non-GAAP gross margin is still expected in the range of 80.5%-81.5%.
Further, adjusted EBITDA is expected between $132 million and $137 million, better than previous guidance of $129-$134 million.
Zacks Rank and Stocks to Consider
Carbonite currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the same industry include CACI International (CACI - Free Report) , CGI Group (GIB - Free Report) and LogMein . All the three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth rate for CACI International, CGI Group and LogMein is pegged at 10%, 9% and 12.5%, respectively.
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Carbonite reported first-quarter 2019 adjusted earnings of 44 cents per share, which surged 63% year over year and beat the Zacks Consensus Estimate by 7 cents.
Non-GAAP revenues of $83 million comfortably beat the Zacks Consensus Estimate of $77 million and increased 27.8% year over year.
Revenues, excluding fair value adjustment of acquired deferred revenues, increased 26.8% from the year-ago quarter to $81.2 million.
Quarter Details
Services revenues (88% of revenues) soared 31% year over year to $71.5 million. Product revenues (12% of revenues) inched up 2.8% from the year-ago quarter to $9.7 million.
Carbonite noted that it remains on track with Mozy integration and that the pace of Mozy customer migration is accelerating.
Non-GAAP gross margin expanded 330 basis points (bps) year over year to 79.5%. Services and Product gross margin expanded 450 bps and 30 bps, respectively.
Adjusted EBITDA increased from $12.3 million in the year-ago quarter to $24.9 million in the reported quarter.
Non-GAAP research & development expenses as percentage of revenues declined 40 bps to 17.8%. Non-GAAP general & administrative expenses as percentage of revenues were 11.4%, down 220 bps. Moreover, non-GAAP sales & marketing expenses fell 480 bps to 24.8%.
Non-GAAP operating margin contracted 420 bps on a year-over-year basis to 50.5%.
Balance Sheet & Other Details
As of Mar 31, 2019, Carbonite had cash and cash equivalents of $252.6 million compared with $198.1 million as of Dec 31, 2018.
The company exited the quarter with long-term debt of $645.4 million. It also closed a $550 million term loan and new $130 million revolving credit facility in the reported quarter.
In the first quarter, Carbonite generated $18.7 million of cash from operating activities compared with $3.3 million in the year-ago quarter. Adjusted free cash flow was $19.7 million compared with $2.4 million in the year-ago quarter.
The company completed the acquisition of Webroot during the quarter.
Guidance
For second-quarter 2019, Carbonite expects non-GAAP revenues between $133 million and $137 million. Adjusted EBITDA is expected between $34 million and $36 million.
For 2019, it now expects non-GAAP revenues between $491 million and $505 million, better than previous guidance of $488-$502 million.
Non-GAAP gross margin is still expected in the range of 80.5%-81.5%.
Further, adjusted EBITDA is expected between $132 million and $137 million, better than previous guidance of $129-$134 million.
Zacks Rank and Stocks to Consider
Carbonite currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the same industry include CACI International (CACI - Free Report) , CGI Group (GIB - Free Report) and LogMein . All the three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth rate for CACI International, CGI Group and LogMein is pegged at 10%, 9% and 12.5%, respectively.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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