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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 1, 2019


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)


Securities registered pursuant to Section 12(b) of the Act:

 

 

 

Title of each stock

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.001 per share

CBLK

The Nasdaq Global Select Market

 

 

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 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 1, 2019, Carbon Black, Inc. (the “Company”) issued a press release announcing its financial results for the fiscal quarter ended June 30, 2019. 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 1, 2019.

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 1, 2019

By:

/s/ STEPHEN WEBBER

 

 

Stephen Webber,

 

 

Executive Vice President and Chief Financial Officer

 

cblk_Ex99_1

Exhibit 99.1

Carbon Black Announces Second Quarter 2019 Financial Results

Total revenue of $60.9 million up 19% year-over-year

Cloud revenue of $22.9 million up 68% year-over-year

Cloud ARR surpasses $100 million, up 66% year-over-year

 

WALTHAM, Mass. – August 1, 2019 - Carbon Black, Inc. (NASDAQ: CBLK), a leader in cloud-native endpoint protection, today announced its financial results for the second quarter ended June 30, 2019.

“Carbon Black’s second quarter results demonstrated the company’s successful transition to a cloud first company powered by our leading, cloud-native endpoint protection platform (EPP), the Predictive Security Cloud® (PSC),” said Patrick Morley, President and Chief Executive Officer of Carbon Black. “We reached an important milestone in the quarter with cloud ARR exceeding $100 million, which reflects growing customer demand for a cloud EPP solution that can successfully protect against today’s increasingly sophisticated cyberattacks.”

 

Morley continued, “Our cloud EPP, which includes highly differentiated products like CB ThreatHunter and CB LiveOps™, is extending the boundaries of the EPP market.  Customer reaction to our expanded product portfolio remains very positive and gives us confidence Carbon Black can drive strong cloud growth for the foreseeable future.”

Second Quarter 2019 Financial Highlights

·

Revenue: Total revenue was $60.9 million in the second quarter fiscal 2019, an increase of 19% year-over-year. Subscription, license and support revenue was $58.6 million, an increase of 22% year-over-year, and services revenue was $2.2 million, a decrease of 28% year-over-year.

·

Gross Profit: Gross profit was $47.7 million in the second quarter fiscal 2019, representing a 78% gross margin, consistent with the year-ago period. Non-GAAP gross profit was $48.1 million, representing a 79% non-GAAP gross margin, consistent with the year-ago period.

·

Loss from Operations: Loss from operations was $15.2 million in the second quarter fiscal 2019, compared to $19.2 million in the year-ago period. Non-GAAP loss from operations was $10.3 million in the second quarter fiscal 2019, compared to $15.3 million in the year-ago period.

·

Net Loss: Net loss was $14.6 million in the second quarter fiscal 2019. Net loss attributable to common stockholders was $14.6 million, or $0.20 per share based on 72.4 million weighted-average shares outstanding, in the second quarter fiscal 2019. In the year-ago period, net loss was $25.3 million and net loss attributable to common stockholders was $184.7 million, or $4.13 per share based on 44.8 million weighted-average shares outstanding.  Non-GAAP net loss was $9.6 million, or $0.13 per share based on 72.4 million weighted-average shares outstanding. This compares to a non-GAAP net loss of $15.4 million, or $0.35 per share based on 44.8 million weighted-average shares outstanding, in the year-ago period.

·

Cash and Cash Flow: As of June 30, 2019, Carbon Black had $148.1 million in cash, cash equivalents and short-term investments. During the three months ended June 30, 2019, Carbon Black used ($13.8) million of cash in operations and ($1.4) million in capital expenditures and capitalized software development costs, leading to negative free cash flow of ($15.2) million, compared to negative free cash flow of ($17.3) 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 2019 and Recent Business Highlights

·

ARR, which we define as the annualized value of all active subscription contracts as of the end of a period, was $237.6 million at the end of the second quarter fiscal 2019, a 22% increase from the year-ago period.  The portion of ARR related to our cloud-based subscription contracts was $101.4 million, a 66% increase from the year-ago period.

·

Continued to grow our customer base, ending the quarter with 5,680 total customers, up 32% from the year-ago period, and 3,496 cloud customers, up 62% from the year-ago period. Growth was driven by demand for the CB Predictive Security Cloud and customer acquisition across a broad range of industries and geographies.

·

Announced the release of a third-generation cloud architecture, including plans for ‘Bring Your Own Key (BYOK)’ encryption capabilities.

·

Added Amazon Web Services (AWS) and container protection to the company’s cloud EPP.

·

Hosted our sold-out, annual user conference, CB Connect, in San Diego, attended by more than 600 customers, prospects and partners. 

·

Released a Global Incident Response Threat Report, collaborating with more than 40 leading incident response (IR) firms and detailing the latest attack trends seen during investigations.

·

Released a threat report detailing recent cyberattacks targeting the healthcare industry, “Healthcare Cyber Heists in 2019.”

 

Business Outlook

·

Based on information as of today, August 1, 2019, Carbon Black is issuing the following financial guidance for the third quarter and full year fiscal 2019:

 

 

 

 

Third Quarter Fiscal 2019

Full Year Fiscal 2019

Total Revenue

$ 61.3 million to $62.3 million

$ 243.0 million to $ 245.0 million

Non-GAAP Loss from Operations

($9.3) million to ($8.3) million

($45.0) million to ($43.0) million

Non-GAAP Net Loss per Share

($0.12) to ($0.10)

($0.61) to ($0.58)

 

 

Carbon Black’s forward-looking non-GAAP loss from operations and non-GAAP net loss per share exclude estimates for stock-based compensation expense and amortization of acquired intangibles. 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 1, 2019, at 5:00 p.m. (Eastern Time) to discuss its financial results, business outlook and other matters. A live webcast of the conference call will be 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 8478928. 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 leader in cloud endpoint protection dedicated to keeping the world safe from cyberattacks. The CB Predictive Security Cloud® (PSC) consolidates endpoint security and IT operations into an endpoint protection platform (EPP) that prevents advanced threats, provides actionable insight and enables businesses of all sizes to simplify operations. By analyzing billions of security events per day across the globe, Carbon Black has key insights into attackers’ behaviors, enabling customers to detect, respond to and stop emerging attacks.

More than 5,600 global customers, including approximately one third of the Fortune 100, trust Carbon Black to protect their organizations from cyberattacks. The company’s partner ecosystem features more than 500 MSSPs, VARs, distributors and technology integrations, as well as many of the world’s leading IR firms, who use Carbon Black’s technology in more than 500 breach investigations per year.

Carbon Black, CB Predictive Security Cloud and CB LiveOps are registered trademarks or trademarks of Carbon Black, Inc. in the United States and/or 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 2019, our predictions about the endpoint security market transition toward the cloud, our position to execute on our go-to-market strategy, our introduction of 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 our Annual Report on Form 10-K filed on March 8, 2019, 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.carbonblack.com/.

 

Investor Relations Contact

Brian Denyeau

ICR for Carbon Black

646-277-1251

investorrelations@carbonblack.com

 

Media Relations Contact

Ryan Murphy

Carbon Black

Director of Global Communications

917-693-2788

rmurphy@carbonblack.com 

CARBON BLACK, INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 

 

 

 

 

 

(Dollars in thousands, except share amounts)

June 30, 

2019

 

December 31,
2018

Assets:

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

$

58,855

 

$

67,868

Short-term investments

 

89,256

 

 

92,770

Accounts receivable, net of allowances of $180 and $300, as of June 30, 2019 and December 31, 2018, respectively

 

52,318

 

 

62,555

Prepaid expenses and other current assets

 

9,302

 

 

8,751

Deferred commissions, current portion

 

14,293

 

 

13,078

Total current assets

 

224,024

 

 

245,022

Deferred commissions, net of current portion

 

26,165

 

 

25,076

Property and equipment, net

 

12,963

 

 

14,370

Operating lease right-of-use assets

 

13,852

 

 

 —

Intangible assets, net

 

1,936

 

 

2,529

Goodwill

 

119,656

 

 

119,656

Deferred tax assets

 

483

 

 

483

Other long-term assets

 

558

 

 

601

Total assets

$

399,637

 

$

407,737

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

$

4,967

 

$

4,663

Accrued expenses

 

15,927

 

 

20,669

Deferred revenue

 

149,294

 

 

152,522

Deferred rent

 

 —

 

 

1,216

Operating lease short-term liability

 

5,316

 

 

 —

Total current liabilities

 

175,504

 

 

179,070

Deferred revenue, net of current portion

 

35,787

 

 

40,371

Deferred rent, net of current portion

 

 —

 

 

2,651

Operating lease long-term liability

 

12,039

 

 

 —

Deferred tax liability

 

49

 

 

49

Other long-term liabilities

 

24

 

 

42

Total liabilities

 

223,403

 

 

222,183

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

Common stock, $0.001 par value per share, 500,000,000 shares authorized:

 

 

 

 

 

73,392,066 and 69,738,599 shares issued, and 73,336,662 and 69,683,195 shares outstanding, as of June 30, 2019 and December 31, 2018, respectively

 

73

 

 

70

Treasury stock, at cost, 55,404 shares as of June 30, 2019 and December 31, 2018, respectively

 

(6)

 

 

(6)

Additional paid-in capital

 

747,928

 

 

723,051

Accumulated other comprehensive income (loss)

 

57

 

 

(49)

Accumulated deficit

 

(571,818)

 

 

(537,512)

Total stockholders’ equity

 

176,234

 

 

185,554

Total liabilities and stockholders' equity

$

399,637

 

$

407,737

 

CARBON BLACK, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 

 

Six Months Ended June 30, 

(In thousands, except share and per share amounts)

2019

    

2018

    

2019

    

2018

Revenue:

 

  

 

 

  

 

 

  

 

 

  

Subscription, license and support

$

58,631

 

$

47,891

 

$

114,925

 

$

93,282

Services

 

2,226

 

 

3,101

 

 

4,488

 

 

6,144

Total revenue

 

60,857

 

 

50,992

 

 

119,413

 

 

99,426

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

Subscription, license and support

 

11,291

 

 

8,051

 

 

21,793

 

 

15,263

Services

 

1,879

 

 

3,053

 

 

4,402

 

 

6,056

Total cost of revenue

 

13,170

 

 

11,104

 

 

26,195

 

 

21,319

Gross profit

 

47,687

 

 

39,888

 

 

93,218

 

 

78,107

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

35,571

 

 

35,161

 

 

74,981

 

 

65,839

Research and development

 

19,250

 

 

16,084

 

 

37,627

 

 

31,006

General and administrative

 

8,108

 

 

7,850

 

 

16,196

 

 

18,276

Total operating expenses

 

62,929

 

 

59,095

 

 

128,804

 

 

115,121

Loss from operations

 

(15,242)

 

 

(19,207)

 

 

(35,586)

 

 

(37,014)

Other income (expense), net

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

841

 

 

439

 

 

1,700

 

 

507

Interest expense

 

(38)

 

 

(28)

 

 

(69)

 

 

(51)

Change in fair value of warrant liability

 

 —

 

 

(5,957)

 

 

 —

 

 

(8,838)

Other income (expense), net

 

(109)

 

 

(494)

 

 

(214)

 

 

(374)

Total other income (expense), net

 

694

 

 

(6,040)

 

 

1,417

 

 

(8,756)

Loss before income taxes

 

(14,548)

 

 

(25,247)

 

 

(34,169)

 

 

(45,770)

Provision for income taxes

 

71

 

 

34

 

 

137

 

 

105

Net loss

 

(14,619)

 

 

(25,281)

 

 

(34,306)

 

 

(45,875)

Accretion of preferred stock to redemption value

 

 —

 

 

(159,453)

 

 

 —

 

 

(199,492)

Net loss attributable to common stockholders

$

(14,619)

 

$

(184,734)

 

$

(34,306)

 

$

(245,367)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

$

(0.20)

 

$

(4.13)

 

$

(0.48)

 

$

(8.73)

Weighted-average common shares outstanding—basic and diluted

 

72,375,825

 

 

44,759,435

 

 

71,430,435

 

 

28,104,372

 

CARBON BLACK, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 

 

Six Months Ended June 30, 

(In thousands)

2019

 

2018

 

2019

 

2018

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

(14,619)

 

$

(25,281)

 

$

(34,306)

 

$

(45,875)

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

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization expense

 

2,039

 

 

1,970

 

 

4,163

 

 

3,875

Stock-based compensation expense

 

4,709

 

 

3,487

 

 

8,913

 

 

5,876

Provisions for doubtful accounts

 

(16)

 

 

99

 

 

(57)

 

 

118

Non-cash interest expense

 

24

 

 

13

 

 

40

 

 

22

Change in fair value of warrant liability

 

 —

 

 

5,957

 

 

 —

 

 

8,838

Deferred income taxes

 

 —

 

 

 —

 

 

 —

 

 

 4

Other non-cash income

 

(351)

 

 

 —

 

 

(734)

 

 

 —

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

(8,432)

 

 

(6,931)

 

 

10,294

 

 

17,100

Prepaid expenses and other assets

 

(109)

 

 

(432)

 

 

(1,002)

 

 

(2,293)

Deferred commissions

 

(1,381)

 

 

(1,468)

 

 

(2,304)

 

 

(1,962)

Accounts payable

 

16

 

 

1,762

 

 

252

 

 

1,787

Accrued expenses

 

2,721

 

 

(468)

 

 

(4,761)

 

 

(2,773)

Deferred revenue

 

1,874

 

 

7,275

 

 

(7,812)

 

 

572

Deferred rent

 

 —

 

 

105

 

 

 —

 

 

23

Operating leases right-of-use assets

 

1,080

 

 

 —

 

 

2,168

 

 

 —

Operating leases liability

 

(1,330)

 

 

 —

 

 

(2,532)

 

 

 —

Other long-term liabilities

 

(5)

 

 

 —

 

 

(18)

 

 

(1)

Net cash used in operating activities

 

(13,780)

 

 

(13,912)

 

 

(27,696)

 

 

(14,689)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

Purchases of short-term investments

 

(63,774)

 

 

 —

 

 

(79,671)

 

 

 —

Maturities of short-term investments

 

55,325

 

 

 —

 

 

84,025

 

 

 —

Purchases of property and equipment

 

(566)

 

 

(2,702)

 

 

(1,143)

 

 

(4,197)

Capitalization of internal-use software costs

 

(809)

 

 

(698)

 

 

(969)

 

 

(991)

Net cash provided by (used in) investing activities

 

(9,824)

 

 

(3,400)

 

 

2,242

 

 

(5,188)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

Proceeds from exercise of stock options

 

9,054

 

 

1,666

 

 

15,600

 

 

2,731

Payments of deferred financing costs

 

 —

 

 

 —

 

 

(47)

 

 

(47)

Taxes paid related to net share settlement of equity awards

 

(112)

 

 

 —

 

 

(463)

 

 

 —

Proceeds from employee stock purchase plan

 

637

 

 

 —

 

 

1,351

 

 

 —

Proceeds from initial public offering, net of offering costs

 

 —

 

 

160,457

 

 

 —

 

 

159,617

Net cash provided by financing activities

 

9,579

 

 

162,123

 

 

16,441

 

 

162,301

Net increase (decrease) in cash and cash equivalents

 

(14,025)

 

 

144,811

 

 

(9,013)

 

 

142,424

Cash and cash equivalents at beginning of period

 

72,880

 

 

33,686

 

 

67,868

 

 

36,073

Cash and cash equivalents at end of period

$

58,855

 

$

178,497

 

$

58,855

 

$

178,497

 

 

CARBON BLACK, INC.

RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES

(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 

 

Six Months Ended June 30, 

 

2019

 

2018

 

2019

 

2018

(In thousands, except share and per share amounts)

Amount

 

% of Revenue

 

Amount

 

% of Revenue

 

Amount

 

% of Revenue

 

Amount

 

% of Revenue

GAAP total revenue

$

60,857

 

100.0

%

 

$

50,992

 

100.0

%

 

$

119,413

 

100.0

%

 

$

99,426

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of cost of revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP cost of subscription, license and support

$

11,291

 

18.6

%

 

$

8,051

 

15.8

%

 

$

21,793

 

18.3

%

 

$

15,263

 

15.4

%

Less: Stock-based compensation

 

(165)

 

(0.3)

 

 

 

(137)

 

(0.3)

 

 

 

(332)

 

(0.3)

 

 

 

(273)

 

(0.3)

 

Less: Amortization of acquired intangibles

 

(230)

 

(0.4)

 

 

 

(330)

 

(0.6)

 

 

 

(505)

 

(0.4)

 

 

 

(660)

 

(0.7)

 

Non-GAAP cost of subscription, license and support

$

10,896

 

17.9

 

 

$

7,584

 

14.9

 

 

$

20,956

 

17.5

 

 

$

14,330

 

14.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP cost of services

$

1,879

 

3.1

 

 

$

3,053

 

6.0

 

 

$

4,402

 

3.7

 

 

$

6,056

 

6.1

 

Less: Stock-based compensation

 

(51)

 

(0.1)

 

 

 

(73)

 

(0.1)

 

 

 

(115)

 

(0.1)

 

 

 

(130)

 

(0.1)

 

Non-GAAP cost of services

$

1,828

 

3.0

%

 

$

2,980

 

5.8

%

 

$

4,287

 

3.6

%

 

$

5,926

 

6.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of gross profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP gross profit

$

47,687

 

78.4

%

 

$

39,888

 

78.2

%

 

$

93,218

 

78.1

%

 

$

78,107

 

78.6

%

Plus: Stock-based compensation

 

216

 

0.4

 

 

 

210

 

0.4

 

 

 

447

 

0.4

 

 

 

403

 

0.4

 

Plus: Amortization of acquired intangibles

 

230

 

0.4

 

 

 

330

 

0.6

 

 

 

505

 

0.4

 

 

 

660

 

0.7

 

Non-GAAP gross profit

$

48,133

 

79.1

%

 

$

40,428

 

79.3

%

 

$

94,170

 

78.9

%

 

$

79,170

 

79.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP sales and marketing

$

35,571

 

58.5

%

 

$

35,161

 

69.0

%

 

$

74,981

 

62.8

%

 

$

65,839

 

66.2

%

Less: Stock-based compensation

 

(2,193)

 

(3.6)

 

 

 

(1,228)

 

(2.4)

 

 

 

(4,031)

 

(3.4)

 

 

 

(2,164)

 

(2.2)

 

Less: Amortization of acquired intangibles

 

 -

 

 -

 

 

 

(22)

 

 -

 

 

 

(10)

 

(0.0)

 

 

 

(44)

 

(0.0)

 

Non-GAAP sales and marketing

$

33,378

 

54.8

 

 

$

33,911

 

66.5

 

 

$

70,940

 

59.4

 

 

$

63,631

 

64.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP research and development

$

19,250

 

31.6

 

 

$

16,084

 

31.5

 

 

$

37,627

 

31.5

 

 

$

31,006

 

31.2

 

Less: Stock-based compensation

 

(1,256)

 

(2.1)

 

 

 

(894)

 

(1.8)

 

 

 

(2,300)

 

(1.9)

 

 

 

(1,458)

 

(1.5)

 

Less: Amortization of acquired intangibles

 

(38)

 

(0.1)

 

 

 

(39)

 

(0.1)

 

 

 

(78)

 

(0.1)

 

 

 

(78)

 

(0.1)

 

Non-GAAP research and development

$

17,956

 

29.5

 

 

$

15,151

 

29.7

 

 

$

35,249

 

29.5

 

 

$

29,470

 

29.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP general and administrative

$

8,108

 

13.3

 

 

$

7,850

 

15.4

 

 

$

16,196

 

13.6

 

 

$

18,276

 

18.4

 

Less: Stock-based compensation

 

(1,044)

 

(1.7)

 

 

 

(1,155)

 

(2.3)

 

 

 

(2,135)

 

(1.8)

 

 

 

(1,851)

 

(1.9)

 

Less: Legal settlement

 

 -

 

 -

 

 

 

 -

 

 -

 

 

 

 -

 

 -

 

 

 

(3,900)

 

(3.9)

 

Non-GAAP general and administrative

$

7,064

 

11.6

%

 

$

6,695

 

13.1

%

 

$

14,061

 

11.8

%

 

$

12,525

 

12.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of loss from operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP loss from operations

$

(15,242)

 

(25.0)

%

 

$

(19,207)

 

(37.7)

%

 

$

(35,586)

 

(29.8)

%

 

$

(37,014)

 

(37.2)

%

Plus: Stock-based compensation

 

4,709

 

7.7

 

 

 

3,487

 

6.8

 

 

 

8,913

 

7.5

 

 

 

5,876

 

5.9

 

Plus: Legal settlement

 

 -

 

 -

 

 

 

 -

 

 -

 

 

 

 -

 

 -

 

 

 

3,900

 

3.9

 

Plus: Amortization of acquired intangibles

 

268

 

0.4

 

 

 

391

 

0.8

 

 

 

593

 

0.5

 

 

 

782

 

0.8

 

Non-GAAP loss from operations

$

(10,265)

 

(16.9)

%

 

$

(15,329)

 

(30.1)

%

 

$

(26,080)

 

(21.8)

%

 

$

(26,456)

 

(26.6)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CARBON BLACK, INC.

RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES (CONTINUED)

(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 

 

Six Months Ended June 30, 

 

2019

 

2018

 

2019

 

2018

(In thousands, except share and per share amounts)

Amount

 

% of Revenue

 

Amount

 

% of Revenue

 

Amount

 

% of Revenue

 

Amount

 

% of Revenue

Reconciliation of net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net loss attributable to common stockholders

$

(14,619)

 

(24.0)

%

 

$

(184,734)

 

(362.3)

%

 

$

(34,306)

 

(28.7)

%

 

$

(245,367)

 

(246.8)

%

Plus: Accretion of preferred stock to redemption value

 

 -

 

 -

 

 

 

159,453

 

312.7

 

 

 

 -

 

 -

 

 

 

199,492

 

200.6

 

GAAP net loss

 

(14,619)

 

(24.0)

 

 

 

(25,281)

 

(49.6)

 

 

 

(34,306)

 

(28.7)

 

 

 

(45,875)

 

(46.1)

 

Plus: Stock-based compensation

 

4,709

 

7.7

 

 

 

3,487

 

6.8

 

 

 

8,913

 

7.5

 

 

 

5,876

 

5.9

 

Plus: Legal settlement

 

 -

 

 -

 

 

 

 -

 

 -

 

 

 

 -

 

 -

 

 

 

3,900

 

3.9

 

Plus: Amortization of acquired intangibles

 

268

 

0.4

 

 

 

391

 

0.8

 

 

 

593

 

0.5

 

 

 

782

 

0.8

 

Plus: Change in fair value of warrant liability

 

 -

 

 -

 

 

 

5,957

 

11.7

 

 

 

 -

 

 -

 

 

 

8,838

 

8.9

 

Non-GAAP net loss

$

(9,642)

 

(15.8)

%

 

$