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cblk_Current_Folio_8-K

 

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): August 7, 2018 


CARBON BLACK,  INC.

(Exact name of registrant as specified in its charter)


Delaware

001-38478

55-0810166

 

 

 

(State or other jurisdiction
of incorporation)

(Commission
File Number)

(IRS Employer
Identification No.)

 

1100 Winter Street

 

 

Waltham, MA

 

02451

(Address of principal executive offices)

 

(Zip Code)

(617) 393-7400

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)


 

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 CFR 230.425)

        Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

        Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

        Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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 2.02           Results of Operations and Financial Condition.

On August 7, 2018, Carbon Black, Inc. (the “Company”) issued a press release announcing its financial results for the fiscal quarter ended June 30, 2018. The Company’s press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information included in this Current Report on Form 8-K and the exhibit attached hereto shall not be deemed “filed” for 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, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

Item 9.01       Financial Statements and Exhibits.

(d)        Exhibits

 

Exhibit
No.

   

Description

 

 

 

 

 

99.1

 

Press Release of Carbon Black, Inc., dated August 7, 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.

 

Carbon Black, Inc.

 

 

 

 

 

 

Dated: August 7, 2018

By:

/s/ Mark P. Sullivan

 

 

Mark P. Sullivan

 

 

Executive Vice President and Chief Financial Officer

 


cblk_Ex99_1

Exhibit 99.1

Carbon Black Announces Second Quarter 2018 Financial Results

Second Quarter 2018 Total Revenue of $51.0 million, up 32% Year-over-Year

Second Quarter 2018 Cloud Revenue of $13.7 million, up 146% Year-over-Year

Ended the quarter with 4,308 total customers, including 2,157 cloud customers

Waltham, Mass. – August 7, 2018 - Carbon Black, Inc. (NASDAQ: CBLK), a leader in next-generation endpoint security, today announced its financial results for the second quarter ended June 30, 2018.

“Carbon Black performed well in the second quarter, highlighted by 34% ARR growth and 146% growth in cloud revenue,” said Patrick Morley, President and Chief Executive Officer of Carbon Black. “We are benefiting from growing market awareness and adoption of the Predictive Security Cloud™ and its flagship product, Cb Defense. Customers are increasingly turning to Carbon Black to replace their ineffective legacy antivirus products and to better protect their data and operations from a growing array of advanced cyber threats.”

Morley continued, “The recent announcement of Cb LiveOps™ is an important extension of the Predictive Security Cloud and demonstrates our ability to provide additional customer value from a single console and single agent. Our growing product portfolio and highly differentiated technology position Carbon Black to deliver continued strong growth and generate value for shareholders.”

Second Quarter 2018 Financial Highlights

·

Revenue: Total revenue was $51.0 million in the second quarter fiscal 2018, an increase of 32% year-over-year. Subscription, license and support revenue was $47.9 million, an increase of 34% year-over-year, and services revenue was $3.1 million, an increase of 5% year-over-year.

·

Gross Profit: Gross profit was $39.9 million in the second quarter fiscal 2018, representing a 78.2% gross margin, consistent with the year-ago period. Non-GAAP gross profit was $40.4 million, representing a 79.3% non-GAAP gross margin.

·

Loss from Operations: Loss from operations was ($19.2) million in the second quarter fiscal 2018, compared to ($12.4) million in the year-ago period. Non-GAAP loss from operations was ($15.3) million in the second quarter fiscal 2018, compared to ($9.9) million in the year-ago period.

·

Net Loss: Net loss was ($25.3) million in the second quarter fiscal 2018. Net loss attributable to common stockholders was ($184.7) million, or ($4.13) per share based on 44.8 million weighted-average shares outstanding, in the second quarter fiscal 2018. Net loss attributable to common stockholders includes ($159.5) million of accretion of preferred stock to redemption value. In the year ago period, net loss was ($12.3) million and net loss attributable to common stockholders was ($9.0) million, or ($0.88) per share based on 10.3 million weighted-average shares outstanding. Non-GAAP net loss was ($15.4) million, or ($0.35) per share based on 44.8 million weighted-average shares outstanding. This compares to ($9.8) million, or ($0.95) per share based on 10.3 million weighted-average shares outstanding, in the year-ago period.

·

Cash and Cash Flow: As of June 30, 2018, Carbon Black had $178.5 million in cash and cash equivalents. During the three months ended June 30, 2018, Carbon Black used ($13.9) million of cash in operations and ($3.4) million in capital expenditures and capitalized software development costs, leading to negative free cash flow of ($17.3) million, compared to negative free cash flow of ($9.3) million in the year-ago period.

A reconciliation of each of non-GAAP gross profit, non-GAAP gross margin, non-GAAP loss from operations, non-GAAP net loss, non-GAAP net loss per share and free cash flow to the most directly comparable GAAP measure has been provided in the tables at the end of this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

Second Quarter 2018 and Recent Business Highlights

·

Continued to grow its customer base, ending the quarter with 4,308 total customers, up from 3,044 in the year-ago period and from 4,006 at the end of the previous quarter. Growth was driven by strong demand across the entire product portfolio and customer acquisition across a broad range of industries. New customers, for example, included a leading global real estate company, one of the world’s largest consumer electronics companies, a major Middle Eastern utility, a leading European airline as well as a major European bank.

·

Continued traction with our cloud products, providing powerful customer validation of the Predictive Security Cloud platform. Growth of customers who licensed at least one cloud product increased to 2,157 at the end of the second quarter, compared to 893 in the year-ago period and 1,870 at the end of the previous quarter.


 

·

Announced the release of Cb LiveOps, the latest offering built on the Predictive Security Cloud platform. Cb LiveOps extends core functionality of osquery to empower organizations to ask questions of all endpoints, take actions to remediate identified issues in real time, and simplify operational reporting. With Cb LiveOps on the Predictive Security Cloud, Carbon Black is giving customers a consolidated and comprehensive, cloud-delivered security stack, one that bridges security and IT operations.

Business Outlook

Based on information as of today, August 7, 2018, Carbon Black is issuing the following financial guidance for the third quarter and full year fiscal 2018:

 

 

 

 

 

 

    

Third Quarter Fiscal 2018

    

Full Year Fiscal 2018

Total Revenue

 

$52.3 million to $ 52.8 million

 

$206.3 million to $ 207.3 million

Non-GAAP Loss from Operations

 

($17.0) million to ($16.5) million

 

($60.5) million to ($59.5) million

Non-GAAP Net Loss per Share

 

($0.26) to ($0.25)

 

($1.28) to ($1.26)

 

Carbon Black’s forward-looking non-GAAP loss from operations and non-GAAP net loss per share exclude estimates for stock-based compensation expense, amortization of acquired intangibles, legal settlement amount, change in fair value of warrant liability and accretion of preferred stock to redemption value. Reconciliation of non-GAAP loss from operations and non-GAAP net loss per share guidance to the most directly comparable GAAP measures is not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity and low visibility with respect to the charges excluded from these non-GAAP measures, particularly with respect to stock-based compensation expense. Stock-based compensation expense is directly impacted by unpredictable fluctuations in our stock price and by future hiring, turnover and retention needs, all of which are difficult to predict and subject to change. We expect the variability of the above charges to have a significant, and potentially unpredictable, impact on our future GAAP loss from operations and GAAP net loss per share.

Conference Call Information

Carbon Black will host a conference call today, August 7, 2018, at 5:00 p.m. (Eastern Time) to discuss its financial results and business outlook. A live webcast of the conference call will be available on available on the “Events” page of the Carbon Black investor relations website at https://investors.carbonblack.com/. To access the call by phone, dial (866) 394-4596 (domestic) or (210) 874-7849 (international). A replay of this conference call will be available for a limited time at (855) 859-2056 (domestic) or (404) 537-3406 (international) with passcode 1679678. A replay of the webcast will also be available for a limited time at https://investors.carbonblack.com/.

About Carbon Black

Carbon Black (NASDAQ: CBLK) is a leading provider of next-generation endpoint security. Carbon Black serves more than 4,300 customers globally, including 35 of the Fortune 100. As a cybersecurity innovator, Carbon Black has pioneered multiple endpoint security categories, including application control, endpoint detection and response (EDR), and next-generation antivirus (NGAV). Leveraging its big data and analytics cloud platform – the Predictive Security Cloud – Carbon Black solutions enable customers to defend against the most advanced cyber threats, including malware, ransomware, and non-malware attacks. Deployed via the cloud, on premise, or as a managed service, customers use Carbon Black solutions to lock down critical systems, hunt threats, and replace legacy antivirus.

Carbon Black, Predictive Security Cloud and Cb LiveOps are registered trademarks or trademarks of Carbon Black, Inc. in the United States and other jurisdictions.

Forward-Looking Statements

This press release includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements concerning our financial guidance for the third quarter and full year fiscal 2018, our position to execute on our go-to-market strategy, our introduction of future product enhancements and the potential advantages of those enhancements, and our ability to expand our leadership position and drive revenue growth. These forward-looking statements include, but are not limited to, plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts and statements identified by words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “will,” “would” or the negative or plural of these words or similar expressions or variations. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and are subject to a variety of assumptions, uncertainties, risks and factors that are 


 

beyond our control including, without limitation: our history of losses; failure (or the perceived failure) of our products to detect cyber attacks; our investments in new products and our ability to introduce new features, services or enhancements; the intense competition that we face in our market; our ability to effectively expand our sales and marketing organization; our ability to add new customers or increase sales to our existing customers; our ability to maintain, protect, enforce and enhance our intellectual property; the growth in the market for next-generation endpoint security solutions and adjacent security markets and our ability to penetrate those markets; our ability to manage our growth effectively and successfully recruit additional highly-qualified personnel; the price volatility of our common stock; and other risks detailed under the caption “Risk Factors” in the final prospectus for our initial public offering filed on May 4, 2018 pursuant to Rule 424(b) of the Securities Act of 1933, as amended, with the Securities and Exchange Commission (“SEC”), as updated by our subsequently filed quarterly reports on Form 10-Q and our other SEC filings. Except as required by law, we undertake no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events, changes in expectations or otherwise.

Non-GAAP Financial Measures

This press release includes the following financial measures defined as non-GAAP financial measures by the SEC: non-GAAP gross profit, non-GAAP gross margin, non-GAAP loss from operations, non-GAAP net loss, non-GAAP net loss per share and free cash flow. Non-GAAP gross profit, non-GAAP gross margin, non-GAAP loss from operations and non-GAAP net loss exclude stock-based compensation expense, amortization of acquired intangibles, legal settlement amount, and, in the case of non-GAAP net loss, change in fair value of warrant liability and accretion of preferred stock to redemption value. Non-GAAP net loss per share is calculated by dividing non-GAAP net loss by the weighted-average shares used to compute net loss per share attributable to common stockholders, basic and diluted. Carbon Black uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to GAAP measures, in evaluating Carbon Black’s ongoing operational performance. Carbon Black 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 its financial results with other companies in Carbon Black’s industry, many of which present similar non-GAAP financial measures to investors.

 

Free cash flow represents net cash used in operating activities less capital expenditures and capitalized software development costs, if any. Carbon Black uses free cash flow to understand and evaluate its liquidity and to generate future operating plans. The exclusion of capital expenditures and amounts capitalized for software development facilitates comparisons of Carbon Black’s liquidity on a period-to-period basis and excludes items that it does not consider to be indicative of its liquidity. Carbon Black believes that free cash flow is a measure of liquidity that provides useful information to investors in understanding and evaluating the strength of its liquidity and future ability to generate cash that can be used for strategic opportunities or investing in its business.

 

Non-GAAP financial measures have limitations as an analytical tool and should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. In particular, other companies may report non-GAAP gross profit, non-GAAP gross margin, non-GAAP loss from operations, non-GAAP net loss, non-GAAP net loss per share, free cash flow or similarly titled measures but calculate them differently, which reduces their usefulness as comparative measures. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures, as presented below. This earnings press release and any future releases containing such non-GAAP reconciliations can also be found on the Investor Relations page of Carbon Black’s website at http://investors.cabonblack.com/.

 

Investor Relations Contact

Brian Denyeau

ICR for Carbon Black

646-277-1251

investorrelations@carbonblack.com

Media Relations Contact

Ryan Murphy

Carbon Black

Senior PR Manager

917-693-2788

rmurphy@carbonblack.com

 


 

CARBON BLACK, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

 

 

 

 

 

 

 

 

    

June 30, 2018

    

December 31, 2017

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

178,497 

 

$

36,073 

Accounts receivable, net

 

 

43,631 

 

 

60,850 

Prepaid expenses and other current assets

 

 

8,488 

 

 

6,040 

Deferred commissions, current portion

 

 

10,093 

 

 

9,551 

Total current assets

 

 

240,709 

 

 

112,514 

Deferred commissions, net of current portion

 

 

21,825 

 

 

20,404 

Property and equipment, net

 

 

14,514 

 

 

12,459 

Intangible assets, net

 

 

3,310 

 

 

4,092 

Goodwill

 

 

119,656 

 

 

119,656 

Other long-term assets

 

 

395 

 

 

2,436 

Total assets

 

$

400,409 

 

$

271,561 

Liabilities, Redeemable Convertible and Convertible Preferred Stock and Stockholders' Equity (Deficit)

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

4,228 

 

$

2,481 

Accrued expenses

 

 

16,073 

 

 

18,846 

Deferred revenue, current portion

 

 

129,927 

 

 

130,165 

Deferred rent

 

 

1,147 

 

 

944 

Total current liabilities

 

 

151,375 

 

 

152,436 

Deferred revenue, net of current portion

 

 

39,344 

 

 

38,535 

Warrant liability

 

 

— 

 

 

2,766 

Deferred rent, net of current portion

 

 

2,934 

 

 

3,114 

Deferred tax liability

 

 

37 

 

 

33 

Other long-term liabilities

 

 

42 

 

 

42 

Total liabilities

 

 

193,732 

 

 

196,926 

Redeemable convertible preferred stock

 

 

— 

 

 

333,204 

Series A convertible preferred stock

 

 

— 

 

 

1,510 

Stockholders’ equity (deficit):

 

 

 

 

 

 

Common stock

 

 

68 

 

 

11 

Treasury stock, at cost

 

 

(6)  

 

 

(6)

Additional paid-in capital

 

 

707,945 

 

 

13,429 

Accumulated deficit

 

 

(501,330)

 

 

(273,513)

Total stockholders’ equity (deficit)

 

 

206,677 

 

 

(260,079)

Total liabilities, redeemable convertible and convertible preferred stock and stockholders’ equity (deficit)

 

$

400,409 

 

$

271,561 

 


 

CARBON BLACK, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except share and per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

    

2018

    

2017

    

2018

    

2017

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Subscription, license and support

 

$

47,891 

 

$

35,749 

 

$

93,282 

 

$

68,754 

Services

 

 

3,101 

 

 

2,942 

 

 

6,144 

 

 

5,882 

Total revenue

 

 

50,992 

 

 

38,691 

 

 

99,426 

 

 

74,636 

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Subscription, license and support

 

 

8,051 

 

 

5,744 

 

 

15,263 

 

 

10,575 

Services

 

 

3,053 

 

 

2,647 

 

 

6,056 

 

 

5,417 

Total cost of revenue

 

 

11,104 

 

 

8,391 

 

 

21,319 

 

 

15,992 

Gross profit

 

 

39,888 

 

 

30,300 

 

 

78,107 

 

 

58,644 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

35,161 

 

 

24,731 

 

 

65,839 

 

 

49,090 

Research and development

 

 

16,084 

 

 

12,572 

 

 

31,006 

 

 

24,119 

General and administrative

 

 

7,850 

 

 

5,414 

 

 

18,276 

 

 

10,343 

Total operating expenses

 

 

59,095 

 

 

42,717 

 

 

115,121 

 

 

83,552 

Loss from operations

 

 

(19,207)

 

 

(12,417)

 

 

(37,014)

 

 

(24,908)

Interest income (expense), net

 

 

411 

 

 

14 

 

 

456 

 

 

(17)

Change in fair value of warrant liability

 

 

(5,957)

 

 

(2)

 

 

(8,838)

 

 

124 

Other income (expense), net

 

 

(494)

 

 

139 

 

 

(374)

 

 

113 

Loss before income taxes

 

 

(25,247)

 

 

(12,266)

 

 

(45,770)

 

 

(24,688)

Provision for income taxes

 

 

34 

 

 

69 

 

 

105 

 

 

86 

Net loss and comprehensive loss

 

 

(25,281)

 

 

(12,335)

 

 

(45,875)

 

 

(24,774)

Accretion of preferred stock to redemption value

 

 

(159,453)

 

 

3,323 

 

 

(199,492)

 

 

(8,324)

Net loss attributable to common stockholders

 

$

(184,734)

 

$

(9,012)

 

$

(245,367)

 

$

(33,098)

Net loss per share attributable to common stockholders- basic and diluted

 

$

(4.13)

 

$

(0.88)

 

$

(8.73)

 

$

(3.27)

Weighted-average common shares outstanding-basic and diluted

 

 

44,759,435 

 

 

10,255,078 

 

 

28,104,372 

 

 

10,116,021 

 


 

CARBON BLACK, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

    

2018

    

2017

    

2018

    

2017

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(25,281)

 

$

(12,335)

 

$

(45,875)

 

$

(24,774)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization expense

 

 

1,970 

 

 

1,739 

 

 

3,875 

 

 

3,397 

Stock-based compensation expense

 

 

3,487 

 

 

2,160 

 

 

5,876 

 

 

4,367 

Provisions for doubtful accounts

 

 

99 

 

 

(23)  

 

 

118 

 

 

(178)

Non-cash interest expense

 

 

13 

 

 

 

 

22 

 

 

Change in fair value of warrant liability

 

 

5,957 

 

 

 

 

8,838 

 

 

(124)

Deferred income taxes

 

 

— 

 

 

— 

 

 

 

 

— 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(6,931)

 

 

(14,403)

 

 

17,100 

 

 

(89)

Prepaid expenses and other assets

 

 

(432)

 

 

749 

 

 

(2,293)

 

 

(1,720)

Deferred commissions

 

 

(1,468)

 

 

(1,955)

 

 

(1,962)

 

 

(2,109)

Accounts payable

 

 

1,762 

 

 

191 

 

 

1,787 

 

 

1,241 

Accrued expenses

 

 

(468)

 

 

2,525 

 

 

(2,773)

 

 

(3,535)

Deferred revenue

 

 

7,275 

 

 

14,494 

 

 

572 

 

 

9,898 

Deferred rent

 

 

105 

 

 

132 

 

 

23 

 

 

(74)

Other long-term liabilities

 

 

— 

 

 

12 

 

 

(1)  

 

 

(55)

Net cash used in operating activities

 

 

(13,912)

 

 

(6,705)

 

 

(14,689)

 

 

(13,747)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(2,702)

 

 

(2,296)

 

 

(4,197)

 

 

(3,124)

Capitalization of internal-use software costs

 

 

(698)

 

 

(274)

 

 

(991)

 

 

(478)

Net cash used in investing activities

 

 

(3,400)

 

 

(2,570)

 

 

(5,188)

 

 

(3,602)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from exercise of stock options

 

 

1,666 

 

 

1,172 

 

 

2,731 

 

 

1,729 

Repayments of line of credit

 

 

— 

 

 

(5,500)

 

 

— 

 

 

(5,500)

Proceeds from initial public offering, net of offering costs

 

 

160,457 

 

 

— 

 

 

159,617 

 

 

— 

Payments of deferred financing costs

 

 

— 

 

 

(6)

 

 

(47)

 

 

(84)

Net cash provided by (used in) financing activities

 

 

162,123 

 

 

(4,334)

 

 

162,301 

 

 

(3,855)

Net increase (decrease) in cash and cash equivalents

 

 

144,811 

 

 

(13,609)

 

 

142,424 

 

 

(21,204)

Cash and cash equivalents at beginning of period

 

 

33,686 

 

 

43,908 

 

 

36,073 

 

 

51,503 

Cash and cash equivalents at end of period

 

$

178,497 

 

$

30,299 

 

$

178,497 

 

$

30,299 

 

 


 

CARBON BLACK, INC.

UNAUDITED RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES

(In thousands, except share and per share amounts)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

 

2018

 

2017

 

2018

 

2017

 

 

    

Amount

    

% of Revenue

    

Amount

    

% of Revenue

    

Amount

    

% of Revenue

    

Amount

    

% of Revenue

 

GAAP total revenue

 

$

50,992 

 

100.0

$

38,691 

 

100.0

$

99,426 

 

100.0

$

74,636 

 

100

%

Reconciliation of cost of revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP cost of subscription, license and support

 

$

8,051 

 

15.8

$

5,744 

 

14.8

$

15,263 

 

15.4

$

10,575 

 

14.2

%

Less: Stock-based compensation

 

 

(137)

 

-0.3

 

(85)

 

-0.2

 

(273)

 

-0.3

 

(160)

 

-0.2

%

Less: Amortization of acquired intangibles

 

 

(330)

 

-0.6

 

(330)

 

-0.9

 

(660)

 

-0.7

 

(660)

 

-0.9

%

Non-GAAP cost of subscription, license and support

 

$

7,584 

 

14.9

$

5,329 

 

13.8

$

14,330 

 

14.4

$

9,755 

 

13.1

%

GAAP cost of services

 

$

3,053 

 

6.0

$

2,647 

 

6.8

$

6,056 

 

6.1

$

5,417 

 

7.3

%

Less: Stock-based compensation

 

 

(73) 

 

-0.1

 

(57)

 

-0.1

 

(130)

 

-0.1

 

(111)

 

-0.1

%

Non-GAAP cost of services

 

$

2,980 

 

5.8

$

2,590 

 

6.7

$

5,926 

 

6.0

$

5,306 

 

7.1

%

Reconciliation of gross profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP gross profit

 

$

39,888 

 

78.2

$

30,300 

 

78.3

$

78,107 

 

78.6

$

58,644 

 

78.6

%

Plus: Stock-based compensation

 

 

210 

 

0.4

 

142 

 

0.4

 

403 

 

0.4

 

271 

 

0.4

%

Plus: Amortization of acquired intangibles

 

 

330 

 

0.6

 

330 

 

0.9

 

660 

 

0.7

 

660 

 

0.9

%

Non-GAAP gross profit

 

$

40,428 

 

79.3

$

30,772 

 

79.5

$

79,170 

 

79.6

$

59,575 

 

79.8

%

Reconciliation of operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP sales and marketing

 

$

35,161 

 

69.0

$

24,731 

 

63.9

$

65,839 

 

66.2

$

49,090 

 

65.8

%

Less: Stock-based compensation

 

 

(1,228)

 

-2.4

 

(744)

 

-1.9

 

(2,164)

 

-2.2

 

(1,617)

 

-2.2

%

Less: Amortization of acquired intangibles

 

 

(22) 

 

0.0

 

(22)

 

-0.1

 

(44)

 

0.0

 

(44) 

 

-0.1

%

Non-GAAP sales and marketing

 

$

33,911 

 

66.5

$

23,965 

 

61.9

$

63,631 

 

64.0

$

47,429 

 

63.5

%

GAAP research and development

 

$

16,084 

 

31.5

$

12,572 

 

32.5

$

31,006 

 

31.2

$

24,119 

 

32.3

%

Less: Stock-based compensation

 

 

(894)

 

-1.8

 

(651)

 

-1.7

 

(1,458)

 

-1.5

 

(1,270)

 

-1.7

%

Less: Amortization of acquired intangibles

 

 

(39)

 

-0.1

 

(39)

 

-0.1

 

(78) 

 

-0.1

 

(78)

 

-0.1

%

Non-GAAP research and development

 

$

15,151 

 

29.7

$

11,882 

 

30.7

$

29,470 

 

29.6

$

22,771 

 

30.5

%

GAAP general and administrative

 

$

7,850 

 

15.4

$

5,414 

 

14.0

$

18,276 

 

18.4

$

10,343 

 

13.9

%

Less: Stock-based compensation

 

 

(1,155)

 

-2.3

 

(623)

 

-1.6

 

(1,851)

 

-1.9

 

(1,209)

 

-1.6

%

Less: Legal settlement

 

 

— 

 

0.0

 

— 

 

0.0

 

(3,900)

 

-3.9

 

— 

 

0.0

%

Non-GAAP general and administrative

 

$

6,695 

 

13.1

$

4,791 

 

12.4

$

12,525 

 

12.6

$

9,134 

 

12.2

%

Reconciliation of loss from operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP loss from operations

 

$

(19,207)

 

-37.7

$

(12,417)

 

-32.1

$

(37,014)

 

-37.2

$

(24,908)

 

-33.4

%

Plus: Stock-based compensation

 

 

3,487 

 

6.8

 

2,160 

 

5.6

 

5,876 

 

5.9

 

4,367 

 

5.9

%

Plus: Legal settlement

 

 

— 

 

0.0

 

— 

 

0.0

 

3,900 

 

3.9

 

— 

 

0.0

%

Plus: Amortization of acquired intangibles

 

 

391 

 

0.8

 

391 

 

1.0

 

782 

 

0.8

 

782 

 

1.0

%

Non-GAAP loss from operations

 

$

(15,329)

 

-30.1

$

(9,866)

 

-25.5

$

(26,456)

 

-26.6

$

(19,759)

 

-26.5

%

Reconciliation of net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net loss attributable to common stockholders

 

$

(184,734)

 

-381.4

$

(9,012)

 

-23.3

$

(245,367)

 

-246.8

$

(33,098)

 

-44.3

%

Plus (Less): Accretion of preferred stock to redemption value

 

 

159,453 

 

329.2

 

(3,323)

 

-8.6

 

199,492 

 

200.6

 

8,324 

 

11.2

%

GAAP net loss

 

 

(25,281)

 

-52.2

 

(12,335)

 

-31.9

 

(45,875)

 

-46.1

 

(24,774)

 

-33.2

%

Plus: Stock-based compensation

 

 

3,487 

 

7.2

 

2,160 

 

5.6

 

5,876 

 

5.9

 

4,367 

 

5.9

%

Plus: Legal settlement

 

 

— 

 

0.0

 

— 

 

0.0

 

3,900 

 

3.9

 

— 

 

0.0

%

Plus: Amortization of acquired intangibles

 

 

391 

 

0.8

 

391 

 

1.0

 

782 

 

0.8

 

782 

 

1.0

%

Plus (Less): Change in fair value of warrant liability

 

 

5,957 

 

12.3

 

 

0.0

 

8,838 

 

8.9

 

(124)

 

-0.2

%

Non-GAAP net loss

 

$

(15,446)

 

-31.9

$

(9,782)

 

-25.3

$

(26,479)

 

-26.6

$

(19,749)

 

-26.5

%

Reconciliation of net loss per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share attributable to common stockholders,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

basic and diluted

 

$

(4.13)

 

 

 

$

(0.88)

 

 

 

$

(8.73)

 

 

 

$

(3.27)

 

 

 

Plus (Less): Accretion of preferred stock to redemption value

 

 

3.56 

 

 

 

 

(0.32)

 

 

 

 

7.10 

 

 

 

 

0.82 

 

 

 

Plus: Stock-based compensation

 

 

0.08 

 

 

 

 

0.21 

 

 

 

 

0.21 

 

 

 

 

0.43 

 

 

 

Plus: Legal settlement

 

 

— 

 

 

 

 

— 

 

 

 

 

0.14 

 

 

 

 

— 

 

 

 

Plus: Amortization of acquired intangibles

 

 

0.01 

 

 

 

 

0.04 

 

 

 

 

0.03 

 

 

 

 

0.08 

 

 

 

Plus (Less): Change in fair value of warrant liability

 

 

0.13 

 

 

 

 

0.00 

 

 

 

 

0.31 

 

 

 

 

(0.01)

 

 

 

Non-GAAP net loss per share, basic and diluted

 

$

(0.35)

 

 

 

$

(0.95)

 

 

 

$

(0.94)

 

 

 

$

(1.95)

 

 

 

Weighted average shares used in GAAP and non-GAAP net loss per share, basic and diluted

 

 

45,759,435 

 

 

 

 

10,255,078 

 

 

 

 

28,104,372 

 

 

 

 

10,116,021 

 

 

 

Computation of free cash flow

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash used in operating activities

 

$

(13,912)

 

 

 

$

(6,705)

 

 

 

$

(14,689)

 

 

 

$

(13,747)

 

 

 

Less: Purchases of property and equipment

 

 

(2,702)

 

 

 

 

(2,296)

 

 

 

 

(4,197)

 

 

 

 

(3,124)

 

 

 

Less: Capitalization of internal-use software costs

 

 

(698)

 

 

 

 

(274)

 

 

 

 

(991)

 

 

 

 

(478)

 

 

 

Free cash flow

 

$

(17,312)

 

 

 

$

(9,275)

 

 

 

$

(19,877)

 

 

 

$

(17,349)