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): February 12, 2018 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) 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) (IRS Employer Identification No.) 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)) Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2). Emerging growth company If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 1.01 Entry into a Material Definitive Agreement On February 12, 2018, Carbonite, Inc. (the Company ) entered into a definitive Master Acquisition Agreement (the Agreement ) with EMC Corporation ( EMC ), Mozy, Inc. ( Mozy ) and Dell Technologies Inc. pursuant to which the Company will acquire all of the issued and outstanding capital stock of Mozy, a cloud backup service for consumers and businesses, and certain related business assets owned by EMC or its affiliates, for a purchase price of $145.8 million in cash, subject to potential adjustments for working capital. The Company expects the acquisition to close during the first quarter of 2018. The Agreement contains customary representations, warranties, covenants and indemnities, including a covenant of the Company to use its reasonable best efforts to obtain debt financing for the transaction in accordance with the terms of a commitment letter for a $120.0 million revolving credit facility. Consummation of the transaction is also subject to various conditions, including receipt of governmental approvals and other customary closing conditions. The Agreement contains termination rights, including a right for either party to terminate the Agreement if the closing shall not have occurred on or before July 1, 2018, subject to certain conditions. Item 2.02 Results of Operations and Financial Condition On February 13, 2018, Carbonite, Inc. (the Company ) issued a press release announcing its financial results for the quarter and full year ended December 31, 2017. 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 February 13, 2018, at 5:30 p.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 February 13, 2018 99.2 Investor Presentation dated February 13, 2018
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 February 13, 2018. CARBONITE, INC. By: Name: Title: /s/ Danielle Sheer Danielle Sheer General Counsel
Carbonite Announces Fourth Quarter and Full Year 2017 Financial Results FY 2017 Revenue Growth of 16% with Expanding Profitability Announces Agreement to Acquire Mozy, Inc. from Dell Technologies Inc. Exhibit 99.1 BOSTON, MA - February 13, 2018 - Carbonite, Inc. (NASDAQ: CARB), a leader in data protection, today announced financial results for the quarter and full year ended December 31, 2017. The Company also announced it has entered into a definitive agreement to acquire Mozy, Inc. ("Mozy") from a subsidiary of Dell Technologies Inc. The deal expands Carbonite s customer base and better positions Carbonite to offer its data protection platform to every segment of the market. We are thrilled to announce the acquisition of Mozy, said Mohamad Ali, President and CEO of Carbonite. Carbonite s competitive advantage is our flexible data protection platform, which serves every scenario, from backing up individual laptops to maintaining uptime for hundreds of business servers. This deal provides Mozy customers scalable options for the future and gives Carbonite a broader base to which we offer our solutions. The total purchase price for Mozy is $145.8 million in cash. The Company will fund the transaction with existing cash and newly secured financing commitments in the form of a $120.0 million revolving credit facility. The credit agreement will allow the Company to borrow, as needed, for general corporate purposes, including acquisitions. The transaction is expected to close during the first quarter of 2018 and is subject to customary closing conditions and regulatory approvals. Barclays acted as financial advisor to the Company for the acquisition of Mozy. Stifel also acted as an advisor. Full Year 2017 Highlights: Revenue of $239.5 million increased 16% year-over-year. Non-GAAP revenue of $246.1 million increased 18% year-over-year. 1 Bookings of $245.9 million increased 17% year-over-year. 2 Net loss per share was ($0.14), as compared to ($0.15) in 2016 (basic and diluted). Non-GAAP net income per share was $0.82 (basic) and $0.79 (diluted), as compared to $0.61 (basic) and $0.60 (diluted) in 2016. 4 2017 was another successful year for Carbonite. We built and integrated the major elements of our leading data protection platform for businesses. We launched new programs and tools to better enable our partners, and again we were recognized for excellence in customer support. I am confident in our path forward and our ability to continue to execute the long-term strategic transformation we started just a few years ago, said Mohamad Ali, President and CEO of Carbonite. We delivered solid bookings and revenue growth for the year and a meaningful increase in profitability. We remain focused on operational excellence, continuing to streamline the business and efficiently drive results. Our guidance for 2018 calls for balanced organic and inorganic growth with another significant increase in non-gaap net income per share, said Anthony Folger, CFO of Carbonite. The Company uses a variety of operational and financial metrics, including non-gaap financial measures, to evaluate its performance and financial condition. The accompanying financial data includes additional information regarding these metrics and a reconciliation of non-gaap financial information to GAAP. The presentation of non-gaap financial information should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. Fourth Quarter 2017 Results: Revenue for the fourth quarter was $61.7 million, an increase of 15% from $53.5 million in the fourth quarter of 2016. Non-GAAP revenue for the fourth quarter was $62.8 million, an increase of 17% from $53.9 million in the fourth quarter of 2016. 1 Bookings for the fourth quarter were $60.2 million, an increase of 11% from $54.0 million in the fourth quarter of 2016. 2 Gross margin for the fourth quarter was 72.8%, compared to 72.2% in the fourth quarter of 2016. Non-GAAP gross margin was 77.6% in the fourth quarter, compared to 74.0% in the fourth quarter of 2016. 3 Net loss for the fourth quarter was ($1.6) million, compared to net loss of ($0.7) million in the fourth quarter of 2016. Non-GAAP net income for the fourth quarter was $8.8 million, compared to non-gaap net income of $3.3 million in the fourth quarter of 2016. 4
Net loss per share for the fourth quarter was ($0.06) (basic and diluted), compared to net loss per share of ($0.02) (basic and diluted) in the fourth quarter of 2016. Non-GAAP net income per share was $0.31 (basic) and $0.30 (diluted) for the fourth quarter, compared to non-gaap net income per share of $0.12 (basic and diluted) in the fourth quarter of 2016. 4 Cash flow from operations for the fourth quarter was $13.9 million, compared to $9.8 million in the fourth quarter of 2016. Adjusted free cash flow for the fourth quarter was $9.7 million, compared to $6.9 million in the fourth quarter of 2016. 5 Full Year 2017 Results: Revenue for the full year was $239.5 million, an increase of 16% from $207.0 million in 2016. Non-GAAP revenue for the full year was $246.1 million, an increase of 18% from $209.3 million in 2016. 1 Bookings for the full year were $245.9 million, an increase of 17% from $209.3 million in 2016. 2 Gross margin for the full year was 70.7%, compared to 70.6% in 2016. Non-GAAP gross margin was 75.5% in the full year, compared to 72.6% in 2016. 3 Net loss for the full year was ($4.0 million), compared to a net loss of ($4.1 million) in 2016. Non-GAAP net income for the full year was $22.8 million, compared to non-gaap net income of $16.4 million in 2016. 4 Net loss per share for the full year was ($0.14) (basic and diluted), compared to a net loss per share of ($0.15) (basic and diluted) in 2016. Non-GAAP net income per share was $0.82 (basic) and $0.79 (diluted) for the full year, compared to non-gaap net income per share of $0.61 (basic) and $0.60 (diluted) in 2016. 4 Total cash and cash equivalents were $128.2 million as of December 31, 2017, compared to $59.2 million as of December 31, 2016. Cash flow from operations for the full year was $31.3 million, compared to $13.2 million in 2016. Adjusted free cash flow for the full year was $20.2 million, compared to $18.2 million in 2016. 5 1 Non-GAAP revenue excludes the impact of purchase accounting adjustments for significant acquisitions. 2 Bookings represent the aggregate dollar value of customer subscriptions and software arrangements, which may include multiple revenue elements, such as software licenses, hardware, professional services and post-contractual support, 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 and divestitures, net of foreign exchange during the same period. 3 Non-GAAP gross margin excludes the impact of purchase accounting adjustments on acquired deferred revenue, amortization expense on intangible assets, stock-based compensation expense, acquisition-related expense and intangible asset impairment charges. 4 Non-GAAP net income and non-gaap net income per share excludes the impact of purchase accounting adjustments on acquired deferred revenue, amortization expense on intangible assets, stock-based compensation expense, litigation-related expense, restructuring-related expense, acquisition-related expense, intangible asset impairment charges, non-cash convertible debt interest expense and the income tax effect of non-gaap adjustments. 5 Adjusted free cash flow is calculated by subtracting the cash paid for the purchase of property and equipment and adding the payments related to acquisitions, restructuring, litigation and the cash portion of the lease exit charge from net cash provided by operating activities. Business Outlook Based on the information available as of February 13, 2018, Carbonite expects the following for the first quarter and full year of 2018: First Quarter 2018: GAAP Revenue Non-GAAP Revenue Current Guidance (2/13/2018) $61.7 - $63.7 million $63.0 - $65.0 million Non-GAAP Net Income Per Share $0.20 - $0.24
Full Year 2018: Business Bookings Consumer Bookings Y/Y Growth GAAP Revenue Non-GAAP Revenue Current Guidance (2/13/2018) $223.8 - $234.8 million 5% - 15% growth $294.0 - $304.0 million $302.5 - $312.5 million Non-GAAP Net Income Per Share (Diluted) $1.45 - $1.55 Non-GAAP Gross Margin 76.0% - 77.0% Adjusted Free Cash Flow $32.0 - $38.0 million The guidance provided above reflects the estimated impact of ASC 606, which Carbonite is adopting in the first quarter of 2018. Carbonite s expectations of non-gaap net income per share for the first quarter and full year of 2018 excludes the impact of purchase accounting adjustments on acquired deferred revenue, amortization expense on intangible assets, stock-based compensation expense, litigation-related expense, restructuring-related expense, non-cash convertible debt interest expense, and the income tax effect of non-gaap adjustments. Non-GAAP net income per share assumes an effective tax rate of 11% for the full year of 2018. Non-GAAP net income per share assumes fully-diluted weighted average shares outstanding of approximately 29.7 million for the first quarter and 29.9 million for the full year of 2018. Conference Call and Webcast Information In conjunction with this announcement, Carbonite will host a conference call on Tuesday, February 13, 2018 at 5:30 p.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 1669107. Following the completion of the call, a recorded replay will be available on the Company s website, http://investor.carbonite.com, under Events & Presentations. Non-GAAP Financial Measures To supplement our consolidated financial statements presented in accordance with GAAP, this press release contains non-gaap financial measures, including bookings, non-gaap revenue, non-gaap gross margin, non-gaap net income and non-gaap net income per share, non-gaap operating expense and adjusted free cash flow. 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. The Company urges investors to review the reconciliation of its non-gaap financial measures to the comparable GAAP financial measures provided in the tables at the end of this press release, and not to rely on any single financial measure to evaluate the Company s business. With respect to our expectations under "Business Outlook" above, the Company has not reconciled non-gaap net income per share to net (loss) income per share in this press release because we do not provide guidance for stock-based compensation expense, litigation-related expense, acquisition-related expense, amortization expense on intangible assets, non-cash convertible debt interest expense, and the income tax effect of non-gaap adjustments as we are unable to quantify certain of these amounts that would be required to be included in the GAAP measure without unreasonable efforts. In addition, the Company believes such reconciliations would imply a degree of precision that would be confusing or misleading to investors.
Cautionary Language Concerning Forward-Looking Statements Certain matters discussed in this press release, including under Business Outlook, have "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements may generally be identified as such because the context of such statements will include words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "will," "would" or words of similar import. Similarly, statements that describe the Company's future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, our ability to complete the acquisition of Mozy, our ability to integrate Mozy into our operations and achieve the expected benefits of the acquisition, our ability to profitably attract new customers and retain existing customers, our dependence on the market for cloud backup services, our ability to manage growth, changes in economic or regulatory conditions or other trends affecting the Internet and the information technology industry, and those discussed in the section titled "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016 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 provides a robust Data Protection Platform for businesses, including backup, disaster recovery, high availability and workload migration technology. The Carbonite Data Protection Platform supports any size business, in locations around the world with secure and scalable global cloud infrastructure. To learn more visit www.carbonite.com. Investor Relations Contact: Jeremiah Sisitsky Carbonite 781-928-0713 investor.relations@carbonite.com Media Contacts: Sarah King Carbonite 617-421-5601 media@carbonite.com
Carbonite, Inc. Consolidated Statement of Operations (unaudited) (In thousands, except share and per share amounts) Three Months Ended December 31, Twelve Months Ended December 31, 2017 2016 2017 2016 Revenue $ 61,692 $ 53,488 $ 239,462 $ 206,986 Cost of revenue 16,811 14,859 70,067 60,937 Gross profit 44,881 38,629 169,395 146,049 Operating expenses: Research and development 12,125 8,026 46,160 33,298 General and administrative 9,586 10,464 43,331 41,332 Sales and marketing 21,568 20,278 90,922 73,347 Restructuring charges 1,047 22 1,047 856 Total operating expenses 44,326 38,790 181,460 148,833 Income (loss) from operations 555 (161) (12,065) (2,784) Interest (expense) income, net (2,219) (12) (6,866) (122) Other income (expense), net 123 72 1,252 190 Loss before income taxes (1,541) (101) (17,679) (2,716) Provision (benefit) for income taxes 73 569 (13,677) 1,383 Net loss $ (1,614) $ (670) $ (4,002) $ (4,099) Net loss per share: Basic $ (0.06) $ (0.02) $ (0.14) $ (0.15) Diluted $ (0.06) $ (0.02) $ (0.14) $ (0.15) Weighted-average shares outstanding: Basic 27,971,459 27,183,545 27,779,098 27,028,636 Diluted 27,971,459 27,183,545 27,779,098 27,028,636
Carbonite, Inc. Consolidated Balance Sheets (unaudited) (In thousands) December 31, 2017 December 31, 2016 Assets Current assets Cash and cash equivalents $ 128,231 $ 59,152 Trade accounts receivable, net 22,219 16,639 Prepaid expenses and other current assets 6,823 7,325 Restricted cash 135 Total current assets 157,273 83,251 Property and equipment, net 28,790 23,872 Other assets 804 157 Acquired intangible assets, net 44,994 13,751 Goodwill 80,958 23,728 Total assets $ 312,819 $ 144,759 Liabilities and Stockholders Equity Current liabilities Accounts payable $ 10,842 $ 5,819 Accrued expenses 21,675 19,768 Current portion of deferred revenue 100,241 86,311 Total current liabilities 132,758 111,898 Long-term debt 111,819 Deferred revenue, net of current portion 24,273 21,280 Other long-term liabilities 5,704 5,747 Total liabilities 274,554 138,925 Stockholders equity Common stock 301 285 Additional paid-in capital 233,343 177,931 Treasury stock, at cost (26,616) (10,657) Accumulated deficit (169,344) (165,042) Accumulated other comprehensive income 581 3,317 Total stockholders equity 38,265 5,834 Total liabilities and stockholders equity $ 312,819 $ 144,759
Carbonite, Inc. Consolidated Statement of Cash Flows (unaudited) (In thousands) Operating activities Twelve Months Ended December 31, 2017 2016 Net loss $ (4,002) $ (4,099) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 21,731 15,869 (Gain) loss on disposal of equipment (907) 748 Intangible asset impairment charges 352 Impairment of capitalized software 1,048 Stock-based compensation expense 12,742 8,900 Benefit for deferred income taxes (15,392) (15) Non-cash interest expense related to amortization of debt discount 4,434 Other non-cash items, net (533) 68 Changes in assets and liabilities, net of acquisition: Accounts receivable 1,786 (13,412) Prepaid expenses and other current assets 389 (1,547) Other assets (580) 17 Accounts payable 5,035 (3,345) Accrued expenses (995) 8,183 Other long-term liabilities 53 (586) Deferred revenue 6,169 2,384 Investing activities Net cash provided by operating activities 31,330 13,165 Purchases of property and equipment (17,351) (6,582) Proceeds from sale of property and equipment 955 13 Proceeds from maturities of marketable securities and derivatives 534 3,395 Purchases of derivatives (5,040) (1,476) Proceeds from sale of businesses 295 Payment for intangibles (1,250) Payment for acquisition, net of cash acquired (69,798) (11,625) Financing activities Net cash used in investing activities (91,655) (16,275) Proceeds from exercise of stock options 4,987 3,560 Proceeds from issuance of treasury stock under employee stock purchase plan 1,052 Proceeds from long-term borrowings, net of debt issuance costs 177,797 Payments on long-term borrowings (39,200) Repurchase of common stock (17,014) (4,964) Net cash provided by (used in) financing activities 127,622 (1,404) Effect of currency exchange rate changes on cash 1,782 (270) Net increase (decrease) in cash and cash equivalents 69,079 (4,784) Cash and cash equivalents, beginning of period 59,152 63,936 Cash and cash equivalents, end of period $ 128,231 $ 59,152
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 December 31, Twelve Months Ended December 31, 2017 2016 2017 2016 GAAP revenue $ 61,692 $ 53,488 $ 239,462 $ 206,986 Add: Fair value adjustment of acquired deferred revenue (1) 1,130 415 6,628 2,314 Non-GAAP revenue $ 62,822 $ 53,903 $ 246,090 $ 209,300 (1) Excludes the impact of purchase accounting adjustments for significant acquisitions. Reconciliation of GAAP Gross Margin to Non-GAAP Gross Margin Three Months Ended December 31, Twelve Months Ended December 31, 2017 2016 2017 2016 Gross profit $ 44,881 $ 38,629 $ 169,395 $ 146,049 Gross margin 72.8% 72.2% 70.7% 70.6% Add: Fair value adjustment of acquired deferred revenue 1,130 415 6,628 2,314 Amortization of intangibles 2,226 633 8,179 2,632 Stock-based compensation expense 274 206 1,061 806 Acquisition-related expense 92 401 251 Intangible asset impairment charges 127 127 Non-GAAP gross profit $ 48,730 $ 39,883 $ 185,791 $ 152,052 Non-GAAP gross margin 77.6% 74.0% 75.5% 72.6%
Calculation of Non-GAAP Net Income and Non-GAAP Net Income per Share Three Months Ended December 31, Twelve Months Ended December 31, 2017 2016 2017 2016 Net loss $ (1,614) $ (670) $ (4,002) $ (4,099) Add: Less: Fair value adjustment of acquired deferred revenue 1,130 415 6,628 2,314 Amortization of intangibles 2,783 932 10,271 3,870 Stock-based compensation expense 3,523 2,272 12,742 8,900 Litigation-related expense 181 374 1 Restructuring-related expense 1,047 22 1,047 852 Acquisition-related expense 430 657 6,794 5,464 Intangible asset impairment charges 352 352 Non-cash convertible debt interest expense 1,491 4,434 Income tax effect of non-gaap adjustments 566 318 15,807 876 Non-GAAP net income $ 8,757 $ 3,310 $ 22,833 $ 16,426 GAAP net loss per share: Basic $ (0.06) $ (0.02) $ (0.14) $ (0.15) Diluted $ (0.06) $ (0.02) $ (0.14) $ (0.15) Non-GAAP net income per share: Basic $ 0.31 $ 0.12 $ 0.82 $ 0.61 Diluted $ 0.30 $ 0.12 $ 0.79 $ 0.60 GAAP weighted-average shares outstanding: Basic 27,971,459 27,183,545 27,779,098 27,028,636 Diluted 27,971,459 27,183,545 27,779,098 27,028,636 Non-GAAP weighted-average shares outstanding: Basic 27,971,459 27,183,545 27,779,098 27,028,636 Diluted 29,322,013 28,286,618 29,079,105 27,491,064
Reconciliation of GAAP Operating Expense to Non-GAAP Operating Expense Three Months Ended December 31, Twelve Months Ended December 31, 2017 2016 2017 2016 Research and development $ 12,125 $ 8,026 $ 46,160 $ 33,298 Less: Stock-based compensation expense 665 79 1,969 869 Acquisition-related expense 77 40 1,249 349 Non-GAAP research and development $ 11,383 $ 7,907 $ 42,942 $ 32,080 General and administrative $ 9,586 $ 10,464 $ 43,331 $ 41,332 Less: Amortization of intangibles 123 62 469 262 Stock-based compensation expense 2,027 1,685 7,827 6,160 Litigation-related expense 181 374 1 Acquisition-related expense 145 617 4,448 4,748 Non-GAAP general and administrative $ 7,110 $ 8,100 $ 30,213 $ 30,161 Sales and marketing $ 21,568 $ 20,278 $ 90,922 $ 73,347 Less: Amortization of intangibles 434 237 1,623 976 Stock-based compensation expense 557 302 1,885 1,065 Acquisition-related expense 116 696 116 Intangible asset impairment charges 225 225 Non-GAAP sales and marketing $ 20,236 $ 19,739 $ 86,493 $ 71,190 Restructuring charges $ 1,047 $ 22 $ 1,047 $ 856 Less: Restructuring-related expense 1,047 22 1,047 851 Non-GAAP restructuring charges $ $ $ $ 5
Reconciliation of Revenue to Bookings Three Months Ended December 31, Twelve Months Ended December 31, 2017 2016 2017 2016 Revenue $ 61,692 $ 53,488 $ 239,462 $ 206,986 Add: Less: Deferred revenue ending balance 124,514 107,591 124,514 107,591 Deferred revenue divested 373 Impact of foreign exchange 404 240 Impact of foreign exchange 324 1,474 Beginning deferred revenue from acquisitions 9,420 6,830 Deferred revenue beginning balance 125,705 107,445 107,591 98,703 Change in deferred revenue balance (1,515) 550 6,402 2,298 Bookings $ 60,177 $ 54,038 $ 245,864 $ 209,284 Calculation of Adjusted Free Cash Flow Three Months Ended December 31, Twelve Months Ended December 31, 2017 2016 2017 2016 Net cash provided by operating activities $ 13,864 $ 9,801 $ 31,330 $ 13,165 Subtract: Purchases of property and equipment 5,407 2,867 17,351 6,582 Free cash flow 8,457 6,934 13,979 6,583 Add: Acquisition-related payments 864 8 5,707 9,989 Restructuring-related payments 359 359 341 Cash portion of lease exit charge (11) 343 Litigation-related payments 51 188 924 Adjusted free cash flow $ 9,731 $ 6,931 $ 20,233 $ 18,180
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c a rb o n ite.c o m 2 S a fe H a rb o rs ta te m e n t C e rta in m a te rs d is c u s s e d in th e s e s lid e s a n d a c c o m p a n y in g o ra l p re s e n ta tio n h a v e "fo rw a rd -lo o k in g s ta te m e n ts "in te n d e d to q u a lify fo rth e s a fe h a rb o rfro m lia b ility e s ta b lis h e d b y th e P riv a te S e c u ritie s L itig a tio n R e fo rm A c to f1 9 9 5.T h e s e fo rw a rd -lo o k in g s ta te m e n ts m a y g e n e ra ly b e id e n tifie d a s s u c h b e c a u s e th e c o n te x to fs u c h s ta te m e n ts w il in c lu d e w o rd s s u c h a s "a n tic ip a te,"b e lie v e,"c o u ld,"e s tim a te,"e x p e c t,"in te n d," "m a y,"p la n,"p o te n tia l,"p re d ic t,"p ro je c t,"s h o u ld,"w il,"w o u ld "o rw o rd s o fs im ila rim p o rt.s im ila rly,s ta te m e n ts th a td e s c rib e th e C o m p a n y 's fu tu re p la n s,o b je c tiv e s o rg o a ls a re a ls o fo rw a rd -lo o k in g s ta te m e n ts.s u c h fo rw a rd -lo o k in g s ta te m e n ts a re s u b je c to ris k s,u n c e rta in tie s a n d o th e rim p o rta n tfa c to rs th a tc o u ld c a u s e a c tu a l re s u lts a n d th e tim in g o fc e rta in e v e n ts to d ife rm a te ria ly fro m fu tu re re s u lts e x p re s s e d o r im p lie d b y s u c h fo rw a rd -lo o k in g s ta te m e n ts.f a c to rs th a tc o u ld c a u s e o rc o n trib u te to s u c h d ife re n c e s in c lu d e,b u ta re n o tlim ite d to,o u ra b ility to p ro fita b ly a tra c tn e w c u s to m e rs a n d re ta in e x is tin g c u s to m e rs,o u rd e p e n d e n c e o n th e m a rk e tfo rc lo u d b a c k u p s e rv ic e s,o u ra b ility to m a n a g e g ro w th,c h a n g e s in e c o n o m ic o re g u la to ry c o n d itio n s o ro th e rtre n d s a fe c tin g th e In te rn e ta n d th e in fo rm a tio n te c h n o lo g y in d u s try,a n d th o s e d is c u s s e d in th e s e c tio n title d "R is k F a c to rs "in o u ra n n u a l R e p o rto n F o rm 1 0 -K fo rth e fis c a l y e a re n d e d D e c e m b e r3 1,2 0 1 6 file d w ith th e S e c u ritie s a n d E x c h a n g e C o m m is s io n (th e "S E C "),w h ic h is a v a ila b le o n w w w.s e c.g o v,a n d e ls e w h e re in a n y s u b s e q u e n tp e rio d ic o rc u re n tre p o rts file d b y u s w ith th e S E C.E x c e p ta s re q u ire d b y a p p lic a b le la w,w e d o n o tu n d e rta k e a n y o b lig a tio n to u p d a te o u rfo rw a rd -lo o k in g s ta te m e n ts to re fle c tfu tu re e v e n ts,n e w in fo rm a tio n o rc irc u m s ta n c e s. T h is p re s e n ta tio n c o n ta in s n o n -G A A P fin a n c ia l m e a s u re s in c lu d in g,b u tn o tlim ite d to,b o o k in g s,n o n -G A A P R e v e n u e,n o n -G A A P G ro s s M a rg in, n o n -G A A P N e tin c o m e a n d n o n -G A A P N e tin c o m e P e rs h a re,a n d A d ju s te d F re e C a s h F lo w.a re c o n c ilia tio n to G A A P c a n b e fo u n d in th e fin a n c ia l s c h e d u le s in c lu d e d in o u rm o s tre c e n te a rn in g s p re s s re le a s e lo c a te d o n C a rb o n ite s w e b s ite,h tp :/in v e s to r.c a rb o n ite.c o m,in th e C o m p a n y s filin g s o rw ith th e S E C a tw w w.s e c.g o v.t h e p re s e n ta tio n o fn o n -G A A P fin a n c ia l in fo rm a tio n s h o u ld n o tb e c o n s id e re d in is o la tio n o ra s a s u b s titu te fo r,o r s u p e rio rto,th e fin a n c ia l in fo rm a tio n p re p a re d a n d p re s e n te d in a c c o rd a n c e w ith G A A P.
c a rb o n ite.c o m 3 F in a n c ia l R e s u lts C o n fe re n c e C a l D e ta ils Wh a t:c a rb o n ite Q 4 a n d F Y 2 0 1 7 F in a n c ia l R e s u lts C o n fe re n c e C a l Wh e n :T u e s d a y,f e b ru a ry 1 3,2 0 1 8 T im e :5 :3 0 p.m.e T L iv e C a l:8 7 7-3 0 3-1 3 9 3 (U.S.) 3 1 5-6 2 5-3 2 2 8 (In te rn a tio n a l) C o n fe re n c e ID :1 6 6 9 1 0 7 L iv e /R e c o rd e d We b c a s t:h tp :/in v e s to r.c a rb o n ite.c o m
c a rb o n ite.c o m 4 D e fin itio n s o fn o n -G A A P M e a s u re s B o o k in g s :B o o k in g s re p re s e n th e a g g re g a te d o la rv a lu e o fc u s to m e rs u b s c rip tio n s a n d s o ftw a re a ra n g e m e n ts,w h ic h m a y in c lu d e m u ltip le re v e n u e e le m e n ts,s u c h a s s o ftw a re lic e n s e s,h a rd w a re,p ro fe s s io n a l s e rv ic e s a n d p o s t-c o n tra c tu a l s u p p o rt,re c e iv e d d u rin g a p e rio d a n d a re c a lc u la te d a s re v e n u e re c o g n iz e d d u rin g a p a rtic u la rp e rio d p lu s th e c h a n g e in to ta l d e fe re d re v e n u e,e x c lu d in g d e fe re d re v e n u e re c o rd e d in c o n n e c tio n w ith a c q u is itio n s a n d d iv e s titu re s,n e to fo re ig n e x c h a n g e d u rin g th e s a m e p e rio d. N o n -G A A P re v e n u e :E x c lu d e s th e im p a c to fp u rc h a s e a c c o u n tin g a d ju s tm e n ts in c o n n e c tio n w ith a c q u is itio n s. N o n -G A A P g ro s s m a rg in :E x c lu d e s th e im p a c to fp u rc h a s e a c c o u n tin g a d ju s tm e n ts o n a c q u ire d d e fe re d re v e n u e,a m o rtiz a tio n e x p e n s e o n in ta n g ib le a s s e ts,s to c k -b a s e d c o m p e n s a tio n e x p e n s e,a c q u is itio n -re la te d e x p e n s e a n d in ta n g ib le a s s e tim p a irm e n tc h a rg e s. N o n -G A A P n e tin c o m e a n d n o n -G A A P n e tin c o m e p e rs h a re :N o n -G A A P n e tin c o m e a n d n o n -G A A P n e tin c o m e p e rs h a re e x c lu d e s th e im p a c to fp u rc h a s e a c c o u n tin g a d ju s tm e n ts o n a c q u ire d d e fe re d re v e n u e,a m o rtiz a tio n e x p e n s e o n in ta n g ib le a s s e ts,s to c k -b a s e d c o m p e n s a tio n e x p e n s e,litig a tio n -re la te d e x p e n s e,re s tru c tu rin g -re la te d e x p e n s e, a c q u is itio n -re la te d e x p e n s e,in ta n g ib le a s s e tim p a irm e n tc h a rg e s,n o n -c a s h c o n v e rtib le d e b tin te re s te x p e n s e a n d th e in c o m e ta x e fe c to fn o n -G A A P a d ju s tm e n ts. A d ju s te d F re e c a s h flo w :A d ju s te d fre e c a s h flo w is c a lc u la te d b y s u b tra c tin g th e c a s h p a id fo rth e p u rc h a s e o fp ro p e rty a n d e q u ip m e n ta n d a d d in g th e p a y m e n ts re la te d to a c q u is itio n s,re s tru c tu rin g,litig a tio n a n d th e c a s h p o rtio n o fth e le a s e e x itc h a rg e fro m n e tc a s h p ro v id e d b y o p e ra tin g a c tiv itie s. F o ra fu l re c o n c ilia tio n o fg A A P to n o n -G A A P,p le a s e v is ith e in v e s to re la tio n s p o rtio n o fth e C a rb o n ite w e b s ite in v e s to r.c a rb o n ite.c o m
c a rb o n ite.c o m 5 C a rb o n ite A n n o u n c e s A c q u is itio n o fm o z y M o z y is o n e o fth e le a d in g p ro v id e rs in o n lin e b a c k u p ~ 3 5,0 0 0 b u s in e s s c u s to m e rs ~ 1 0 0,0 0 0 c o n s u m e rs + 2,0 0 0 p a rtn e rs /re s e le rs C a p ita liz in g o n th e C a rb o n ite d a ta p ro te c tio n p la tfo rm P ro fita b ly a d d s n e w c u s to m e rs M e a n in g fu ly e x p a n d s th e p a rtn e rc h a n n e l C re a te s o p p o rtu n ity fo rc ro s s -s e l
c a rb o n ite.c o m 6 T ra n s a c tio n D e ta ils T h e D e a l A c q u irin g M o z y,in c.fro m a s u b s id ia ry o f D e l T e c h n o lo g ie s In c. P u rc h a s e P ric e $ 1 4 5.8 m ilio n in c a s h S o u rc e o ff u n d s F in a n c e d th ro u g h c a s h o n -h a n d a n d n e w $ 1 2 0 m ilio n re v o lv in g c re d itfa c ility T ra n s a c tio n C lo s in g E x p e c te d to c lo s e la te rin Q 1 2 0 1 8 S u b je c to c u s to m a ry c lo s in g c o n d itio n s a n d re g u la to ry a p p ro v a l
c a rb o n ite.c o m 7 C a rb o n ite s T ra n s fo rm a tio n 2 0 1 4 -T o d a y > 2 x $ 2 5 m > 4 0 % 6 2 0 B p s S o u rc e :S E C F ilin g s ;F o ra fu l re c o n c ilia tio n o fg A A P to n o n -G A A P,p le a s e v is ith e in v e s to re la tio n s p o rtio n o fth e C a rb o n ite w e b s ite in v e s to r.c a rb o n ite.c o m M o re th a n d o u b le d n o n -G A A P re v e n u e M o re th a n 4 0 % b u s in e s s b o o k in g s C A G R 6 2 0 B p s in c re a s e in n o n -G A A P G ro s s M a rg in ~ $ 2 5 m in s h a re re p u rc h a s e s
c a rb o n ite.c o m 8 H o u rs M in u te s S e c o n d s B a c k u p D is a s te re c o v e ry H ig h a v a ila b ility O u rtra n s fo rm a tio n to a d a ta p ro te c tio n p la tfo rm F ro m la p to p b a c k u p to c o m p le te d a ta p ro te c tio n fo ra n y IT e n v iro n m e n t C lo u d V irtu a l P h y s ic a l
c a rb o n ite.c o m 9 C a rb o n ite is b u ild in g th e d a ta p ro te c tio n p la tfo rm C o m p u te r P h y s ic a l s e rv e r V irtu a l s e rv e r C lo u d s e rv e r B a c k u p & A rc h iv in g Wo rk lo a d p o rta b ility C a rb o n ite E n d p o in t B a c k u p C a rb o n ite H y b rid B a c k u p C a rb o n ite C lo u d B a c k u p C a rb o n ite M o v e C a rb o n ite C lo u d M ig ra tio n C a rb o n ite M a ils to re C a rb o n ite E n d p o in t B a c k u p D R a s a S e rv ic e (D R a a S ) & H ig h a v a ila b ility C a rb o n ite A v a ila b ility C a rb o n ite D R a a S N o ta p p lic a b le
c a rb o n ite.c o m 1 0 2 0 1 8 :o n e s o lu tio n,e a s y to c o n s u m e & w o rld s b e s ts u p p o rt O n e s o lu tio n a c ro s s a l s y s te m s E x c e p tio n a l s u p p o rt b e fo re,d u rin g a n d a fte ra n o u ta g e F ro m p h y s ic a l to v irtu a l, le g a c y s y s te m s a n d c lo u d E a s y to c o n s u m e v ia s in g le A P Ia n d U X E a s y to c o n fig u re,o p e ra te, te s t,fa il o v e ra n d fa il b a c k 2 4 x 7 s u p p o rt,e n s u rin g te s ts s u c c e s s fu l,re c o v e ry s m o o th 2 0 1 7 G o ld S te v ie A w a rd s fo r C o n ta c tc e n te ro fth e y e a r a n d C u s to m e rs e rv ic e L e a d e ro fth e Y e a r
c a rb o n ite.c o m 1 1 C a rb o n ite R e c o v e r D is a s te r-r e c o v e ry -a s -a -S e rv ic e
c a rb o n ite.c o m 1 2 S u m m a ry Q 4 F in a n c ia l R e s u lts Q 4 2 0 1 7 O u tlo o k Q 4 2 0 1 7 R e s u lts G A A P R e v e n u e $ 6 1.5 M to $ 6 3.5 M $ 6 1.7 M (+ 1 5 % Y o Y ) N o n -G A A P R e v e n u e $ 6 3.0 M to $ 6 5.0 M $ 6 2.8 M (+ 1 7 % Y o Y ) G A A P N e tl o s s P e rs h a re N o tg u id e d $ (0.0 6 ) N o n -G A A P N e tin c o m e P e rs h a re (B a s ic /D ilu te d ) $ 0.2 7 to $ 0.3 1 $ 0.3 1 /$ 0.3 0 C o n s u m e rb o o k in g s Y o Y G ro w th N o tg u id e d $ 1 9.4 M (-4 % Y o Y ) B u s in e s s B o o k in g s N o tg u id e d $ 4 0.8 M (+ 2 0 % Y o Y ) N o n -G A A P G ro s s M a rg in N o tg u id e d 7 7.6 % A d ju s te d F re e C a s h F lo w N o tg u id e d $ 9.7 M *With re s p e c to e x p e c ta tio n s u n d e r Q 4 2 0 1 7 O u tlo o k "a b o v e,th e C o m p a n y h a s n o tre c o n c ile d n o n -G A A P n e tin c o m e p e rs h a re to n e tin c o m e (lo s s )p e rs h a re b e c a u s e w e d o n o tp ro v id e g u id a n c e fo rs to c k -b a s e d c o m p e n s a tio n e x p e n s e,litig a tio n -re la te d e x p e n s e, re s tru c tu rin g -re la te d e x p e n s e,a c q u is itio n -re la te d e x p e n s e,a m o rtiz a tio n e x p e n s e o n in ta n g ib le a s s e ts a n d th e in c o m e ta x e fe c to fn o n -G A A P a d ju s tm e n ts a s w e a re u n a b le to q u a n tify c e rta in o fth e s e a m o u n ts th a tw o u ld b e re q u ire d to b e in c lu d e d in th e G A A P m e a s u re w ith o u tu n re a s o n a b le e fo rts.in a d d itio n,th e C o m p a n y b e lie v e s s u c h re c o n c ilia tio n s w o u ld im p ly a d e g re e o fp re c is io n th a tw o u ld b e c o n fu s in g o rm is le a d in g to in v e s to rs. S o u rc e :S E C F ilin g s ;F o ra fu l re c o n c ilia tio n o fg A A P to n o n -G A A P,p le a s e v is ith e in v e s to re la tio n s p o rtio n o fth e C a rb o n ite w e b s ite in v e s to r.c a rb o n ite.c o m
c a rb o n ite.c o m 1 3 S u m m a ry F Y 2 0 1 7 F in a n c ia l R e s u lts F Y 2 0 1 7 O u tlo o k F Y 2 0 1 7 R e s u lts G A A P R e v e n u e $ 2 3 9.2 M to $ 2 4 1.2 M $ 2 3 9.5 M (+ 1 6 % Y o Y ) N o n -G A A P R e v e n u e $ 2 4 6.3 M to $ 2 4 8.3 M $ 2 4 6.1 M (+ 1 8 % Y o Y ) G A A P N e tl o s s P e rs h a re N o tg u id e d $ (0.1 4 ) N o n -G A A P N e tin c o m e P e rs h a re (B a s ic /D ilu te d ) $ 0.7 6 to $ 0.8 0 $ 0.8 2 /$ 0.7 9 C o n s u m e rb o o k in g s (1 0 %)to 0 % g ro w th $ 8 1.8 M (-4 % Y o Y ) B u s in e s s B o o k in g s $ 1 6 3.8 M to $ 1 6 8.8 M $ 1 6 4.1 M (+ 3 2 % Y o Y ) N o n -G A A P G ro s s M a rg in ~ 7 5.0 % 7 5.5 % A d ju s te d F re e C a s h F lo w $ 1 6.0 M to $ 2 0.0 M $ 2 0.2 M *With re s p e c to e x p e c ta tio n s u n d e r F Y 2 0 1 7 O u tlo o k "a b o v e,th e C o m p a n y h a s n o tre c o n c ile d n o n -G A A P n e tin c o m e p e rs h a re to n e tin c o m e (lo s s )p e rs h a re b e c a u s e w e d o n o tp ro v id e g u id a n c e fo rs to c k -b a s e d c o m p e n s a tio n e x p e n s e,litig a tio n -re la te d e x p e n s e, re s tru c tu rin g -re la te d e x p e n s e,a c q u is itio n -re la te d e x p e n s e,a m o rtiz a tio n e x p e n s e o n in ta n g ib le a s s e ts a n d th e in c o m e ta x e fe c to fn o n -G A A P a d ju s tm e n ts a s w e a re u n a b le to q u a n tify c e rta in o fth e s e a m o u n ts th a tw o u ld b e re q u ire d to b e in c lu d e d in th e G A A P m e a s u re w ith o u tu n re a s o n a b le e fo rts.in a d d itio n,th e C o m p a n y b e lie v e s s u c h re c o n c ilia tio n s w o u ld im p ly a d e g re e o fp re c is io n th a tw o u ld b e c o n fu s in g o rm is le a d in g to in v e s to rs. S o u rc e :S E C F ilin g s ;F o ra fu l re c o n c ilia tio n o fg A A P to n o n -G A A P,p le a s e v is ith e in v e s to re la tio n s p o rtio n o fth e C a rb o n ite w e b s ite in v e s to r.c a rb o n ite.c o m
c a rb o n ite.c o m 1 4 S u b s c rip tio n B u s in e s s B o o k in g s B o o k in g s G ro w th A n n u a l B o o k in g s ($ M ) A p p ro x im a te,m a y n o tfo o td u e to ro u n d in g.s o u rc e :S E C F ilin g s a n d c o m p a n y e s tim a te s ;F o ra fu l re c o n c ilia tio n o fg A A P to n o n -G A A P,p le a s e v is ith e in v e s to re la tio n s p o rtio n o fth e C a rb o n ite w e b s ite in v e s to r.c a rb o n ite.c o m Q u a rte rly B o o k in g s ($ M ) B u s in e s s B o o k in g s C o n s u m e rb o o k in g s + 1 1 % Q 4 1 7 Y o Y g ro w th -4 % + 2 0 % + 1 5 % + 1 7 % F Y 1 7 Y o Y g ro w th -4 % + 3 2 % $ 1 9 $ 3 2 $ 4 0 $ 5 5 $ 1 2 4 $ 1 6 4 $ 8 0 $ 8 4 $ 8 8 $ 9 0 $ 8 5 $ 8 2 $ 9 8 $ 1 1 6 $ 1 2 8 $ 1 4 5 $ 2 0 9 $ 2 4 6 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 $ 2 8.8 $ 3 3.9 $ 4 0.1 $ 4 3.0 $ 4 0.2 $ 4 0.8 $ 2 0.4 $ 2 0.1 $ 2 2.0 $ 2 0.9 $ 1 9.5 $ 1 9.4 $ 2 3.4 $ 2 6.1 $ 2 7.3 $ 2 9.3 $ 2 7.6 $ 3 0.0 $ 4 9.2 $ 5 4.0 $ 6 2.1 $ 6 3.9 $ 5 9.7 $ 6 0.2 Q 3 '1 6 Q 4 '1 6 Q 1 '1 7 Q 2 '1 7 Q 3 '1 7 Q 4 '1 7
c a rb o n ite.c o m 1 5 R e v e n u e G ro w th A n n u a l n o n -G A A P R e v e n u e ($ M ) S o u rc e :S E C F ilin g s ;F o ra fu l re c o n c ilia tio n o fg A A P to n o n -G A A P,p le a s e v is ith e in v e s to re la tio n s p o rtio n o fth e C a rb o n ite w e b s ite in v e s to r.c a rb o n ite.c o m Q u a rte rly n o n -G A A P R e v e n u e ($ M ) $ 8 4.0 $ 1 0 7.2 $ 1 2 2.6 $ 1 3 6.6 $ 2 0 9.3 $ 2 4 6.1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 $ 5 2.5 $ 5 3.9 $ 5 9.1 $ 6 1.1 $ 6 3.1 $ 6 2.8 Q 3 '1 6 Q 4 '1 6 Q 1 '1 7 Q 2 '1 7 Q 3 '1 7 Q 4 '1 7
c a rb o n ite.c o m 1 6 Im p ro v in g G ro s s M a rg in A n n u a l n o n -G A A P G ro s s M a rg in *Q u a rte rly n o n -G A A P G ro s s M a rg in * + 3 6 0 B p s + 9 3 0 B p s *A s a p e rc e n ta g e o fn o n -G A A P re v e n u e ;S o u rc e :S E C F ilin g s ;F o ra fu l re c o n c ilia tio n o fg A A P to n o n -G A A P,p le a s e v is ith e in v e s to re la tio n s p o rtio n o fth e C a rb o n ite w e b s ite in v e s to r.c a rb o n ite.c o m 6 6.2 % 6 8.4 % 6 9.3 % 7 3.1 % 7 2.6 % 7 5.5 % 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 7 2.2 % 7 4.0 % 7 3.8 % 7 4.1 % 7 6.3 % 7 7.6 % Q 3 '1 6 Q 4 '1 6 Q 1 '1 7 Q 2 '1 7 Q 3 '1 7 Q 4 '1 7
c a rb o n ite.c o m 1 7 D riv in g O p e ra tin g L e v e ra g e S a le s a n d M a rk e tin g *A s a p e rc e n ta g e o fn o n -G A A P re v e n u e ;S o u rc e :S E C F ilin g s ;F o ra fu l re c o n c ilia tio n o fg A A P to n o n -G A A P,p le a s e v is ith e in v e s to re la tio n s p o rtio n o fth e C a rb o n ite w e b s ite in v e s to r.c a rb o n ite.c o m R e s e a rc h a n d D e v e lo p m e n t* -4 9 0 B p s -1,4 6 0 B p s 4 9.7 % 4 2.9 % 3 9.6 % 3 8.1 % 3 4.0 % 3 5.1 % 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 2 2.3 % 1 8.6 % 1 8.6 % 1 9.5 % 1 5.3 % 1 7.4 % 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7
c a rb o n ite.c o m 1 8 2 0 1 8 E x p e c te d F in a n c ia l Im p a c t* M o z y F Y 2 0 1 8 E x p e c te d M o z y C o n trib u tio n B o o k in g s *$ 5 0.0 M to $ 5 5.0 M N o n -G A A P R e v e n u e $ 4 0.0 M to $ 4 5.0 M N o n -G A A P N e tin c o m e P e rs h a re (D ilu te d )~ $ 0.2 5 *With re s p e c to o u re x p e c ta tio n s a b o v e,th e C o m p a n y h a s n o tre c o n c ile d n o n -G A A P n e tin c o m e p e rs h a re to n e tin c o m e (lo s s )p e rs h a re b e c a u s e w e d o n o tp ro v id e g u id a n c e fo rs to c k -b a s e d c o m p e n s a tio n e x p e n s e,litig a tio n -re la te d e x p e n s e,re s tru c tu rin g -re la te d e x p e n s e,a c q u is itio n -re la te d e x p e n s e,a m o rtiz a tio n e x p e n s e o n in ta n g ib le a s s e ts,n o n -c a s h c o n v e rtib le d e b tin te re s te x p e n s e,a n d th e in c o m e ta x e fe c to fn o n -G A A P a d ju s tm e n ts a s w e a re u n a b le to q u a n tify c e rta in o fth e s e a m o u n ts th a tw o u ld b e re q u ire d to b e in c lu d e d in th e G A A P m e a s u re w ith o u tu n re a s o n a b le e fo rts.in a d d itio n,th e C o m p a n y b e lie v e s s u c h re c o n c ilia tio n s w o u ld im p ly a d e g re e o fp re c is io n th a tw o u ld b e c o n fu s in g o rm is le a d in g to in v e s to rs. S o u rc e :S E C F ilin g s ;F o ra fu l re c o n c ilia tio n o fg A A P to n o n -G A A P,p le a s e v is ith e in v e s to re la tio n s p o rtio n o fth e C a rb o n ite w e b s ite in v e s to r.c a rb o n ite.c o m *E x p e c ta p p ro x im a te ly 8 5 % o fb o o k in g s a re b u s in e s s b o o k in g s
c a rb o n ite.c o m 1 9 B u s in e s s O u tlo o k (a s o ff e b ru a ry 1 3,2 0 1 8 )* Q 1 2 0 1 8 O u tlo o k F Y 2 0 1 8 O u tlo o k G ro w th a t m id p o in t (Y o Y ) G A A P R e v e n u e $ 6 1.7 M to $ 6 3.7 M $ 2 9 4.0 M to $ 3 0 4.0 M + 2 5 % N o n -G A A P R e v e n u e $ 6 3.0 M to $ 6 5.0 M $ 3 0 2.5 M to $ 3 1 2.5 M + 2 5 % N o n -G A A P N e tin c o m e P e rs h a re (D ilu te d )$ 0.2 0 to $ 0.2 4 $ 1.4 5 to $ 1.5 5 + 9 0 % B u s in e s s B o o k in g s N o tg u id e d $ 2 2 3.8 M to $ 2 3 4.8 M + 4 0 % C o n s u m e rb o o k in g s Y o Y G ro w th N o tg u id e d 5 % to 1 5 % g ro w th + 1,0 0 0 B p s N o n -G A A P G ro s s M a rg in N o tg u id e d 7 6.0 % to 7 7.0 % + 1 0 0 B p s A d ju s te d F re e C a s h F lo w N o tg u id e d $ 3 2.0 M to $ 3 8.0 M + 7 3 % *With re s p e c to o u re x p e c ta tio n s u n d e r"b u s in e s s O u tlo o k "a b o v e,th e C o m p a n y h a s n o tre c o n c ile d n o n -G A A P n e tin c o m e p e rs h a re to n e tin c o m e (lo s s )p e rs h a re b e c a u s e w e d o n o tp ro v id e g u id a n c e fo rs to c k -b a s e d c o m p e n s a tio n e x p e n s e,litig a tio n -re la te d e x p e n s e, re s tru c tu rin g -re la te d e x p e n s e,a c q u is itio n -re la te d e x p e n s e,a m o rtiz a tio n e x p e n s e o n in ta n g ib le a s s e ts,n o n -c a s h c o n v e rtib le d e b tin te re s te x p e n s e,a n d th e in c o m e ta x e fe c to fn o n -G A A P a d ju s tm e n ts a s w e a re u n a b le to q u a n tify c e rta in o fth e s e a m o u n ts th a tw o u ld b e re q u ire d to b e in c lu d e d in th e G A A P m e a s u re w ith o u tu n re a s o n a b le e fo rts.in a d d itio n,th e C o m p a n y b e lie v e s s u c h re c o n c ilia tio n s w o u ld im p ly a d e g re e o fp re c is io n th a tw o u ld b e c o n fu s in g o rm is le a d in g to in v e s to rs. S o u rc e :S E C F ilin g s ;F o ra fu l re c o n c ilia tio n o fg A A P to n o n - G A A P,p le a s e v is ith e in v e s to re la tio n s p o rtio n o fth e C a rb o n ite w e b s ite in v e s to r.c a rb o n ite.c o m