Exhibit 99.1

Carbon Black Announces Third Quarter 2018 Financial Results

Third Quarter 2018 Total Revenue of $53.4 million, up 29% Year-over-Year

Third Quarter 2018 Recurring Revenue of $49.3 million, up 34% Year-over-Year

Third Quarter 2018 Cloud Revenue of $16.1 million, up 126% Year-over-Year

Ended the quarter with 4,625 total customers, including 2,450 cloud customers

Waltham, Mass. – October 25, 2018 - Carbon Black, Inc. (NASDAQ: CBLK), a leader in next-generation endpoint security delivered via the cloud, today announced its financial results for the third quarter ended September 30, 2018.

“Carbon Black delivered solid third quarter results, highlighted by 34% recurring revenue growth and 126% growth in cloud revenue,” said Patrick Morley, President and Chief Executive Officer of Carbon Black. “Our growing portfolio of products available on the Cb Predictive Security Cloud™, which is now up to 5, has established Carbon Black as a leading cloud endpoint security platform. Customers are choosing the PSC to help protect them from an increasing number of sophisticated cyber threats, while simplifying their security operations.”

Morley continued, “We are particularly excited by the recent introduction of Cb ThreatHunter, our new incident response and threat hunting solution available on the Predictive Security Cloud. Based on the capabilities of our industry leading Cb Response offering, Cb ThreatHunter leverages and extends our deep EDR expertise and intellectual property to the PSC. We believe the breadth and efficacy of the Predictive Security Cloud provide a number of growth opportunities for the company.”

Third Quarter 2018 Financial Highlights

·

Revenue: Total revenue was $53.4 million in the third quarter fiscal 2018, an increase of 29% year-over-year. Subscription, license and support revenue was $50.8 million, an increase of 32% year-over-year, and services revenue was $2.6 million, a decrease of 17% year-over-year.

·

Gross Profit: Gross profit was $41.5 million in the third quarter fiscal 2018, representing a 78% gross margin, up from 76% in the year-ago period. Non-GAAP gross profit was $42.1 million, representing a 79% non-GAAP gross margin.

·

Loss from Operations: Loss from operations was ($18.1) million in the third quarter fiscal 2018, compared to ($13.7) million in the year-ago period. Non-GAAP loss from operations was ($14.1) million in the third quarter fiscal 2018, compared to ($11.0) million in the year-ago period.

·

Net Loss: Net loss was ($17.6) million in the third quarter fiscal 2018. Net loss attributable to common stockholders was ($17.6) million, or ($0.26) per share based on 67.8 million weighted-average shares outstanding, in the third quarter fiscal 2018. In the year ago period, net loss was ($13.6) million and net loss attributable to common stockholders was ($21.0) million, or ($1.99) per share based on 10.6 million weighted-average shares outstanding.  Non-GAAP net loss was ($13.6) million, or ($0.20) per share based on 67.8 million weighted-average shares outstanding. This compares to ($10.9) million, or ($1.03) per share based on 10.6 million weighted-average shares outstanding, in the year-ago period.

·

Cash and Cash Flow: As of September 30, 2018, Carbon Black had $163.8 million in cash, cash equivalents and short-term investments. During the three months ended September 30, 2018, Carbon Black used ($13.4) million of cash in operations and ($2.1) million in capital expenditures and capitalized software development costs, leading to negative free cash flow of ($15.4) million, compared to free cash flow of $11,000 in the year-ago period.

A reconciliation of each of recurring revenue, 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.”

Third Quarter 2018 and Recent Business Highlights

·

Continued to grow our customer base, ending the quarter with 4,625 total customers, up from 3,335 in the year-ago period and from 4,308 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.

·

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 2,450 at the end of the third quarter, compared to 1,170 in the year-ago period and 2,157 at the end of the previous quarter.

·

Introduced Cb ThreatHunter, the 5th product built on the Predictive Security Cloud platform. Cb ThreatHunter builds off the industry leading incident response tools of Cb Response and extends that capability to the cloud with new functionality like more powerful search, enhanced threat intel matching and elastic cloud scalability. Cb ThreatHunter leverages our patented technology that uniquely captures unfiltered endpoint data. By continuously recording and centrally storing collected endpoint device data, Cb ThreatHunter provides security teams with greater visibility into potential threats across their environments.


 

·

Hosted Cb Connect, Carbon Black’s annual user conference, in New York City. With almost triple the attendees of 2017, Cb Connect has established itself as one of the premier conferences for next-generation security practitioners.  Customer reaction to our newly introduced products, CB LiveOps and Cb ThreatHunter, further validated the significant opportunity to leverage the Predictive Security Cloud to address multiple critical security challenges through a single agent and single platform.

·

Appointed Thomas Hansen Chief Operating Officer.  In this newly created role, Hansen, formerly our Chief Revenue Officer, will continue to lead Carbon Black’s global sales organization, as well as our marketing and business development functions.

Business Outlook

Based on information as of today, October 25, 2018, Carbon Black is issuing the following financial guidance for the fourth quarter and full year fiscal 2018:

 

 

 

 

 

 

    

Fourth Quarter Fiscal 2018

    

Full Year Fiscal 2018

Total Revenue

 

$55.3 million to $ 55.8 million

 

$208.1 million to $ 208.6 million

Non-GAAP Loss from Operations

 

($16.8) million to ($16.3) million

 

($57.2) million to ($56.7) million

Non-GAAP Net Loss per Share

 

($0.25) to ($0.24)

 

($1.21) to ($1.20)

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, October 25, 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 5095686. 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 delivered via the cloud. Leveraging its big data and analytics cloud platform – the Cb Predictive Security Cloud – Carbon Black consolidates prevention, detection, response, threat hunting and managed services into a single platform with a single agent and single console, making it easier for organizations to consolidate security stacks and achieve better protection. 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) enabling customers to defend against the most advanced threats. More than 4,600 global customers, including approximately one-third of the Fortune 100, trust Carbon Black to keep their organizations safe.

Carbon Black, Cb Predictive Security Cloud, Cb LiveOps, and Cb ThreatHunter 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 fourth 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: recurring revenue, 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. Recurring revenue is defined as subscription, license and support revenue (which includes revenue related to support for perpetual licenses) less perpetual license revenue. 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 recurring revenue, 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)

 

 

 

 

 

 

 

 

    

September 30, 2018

    

December 31, 2017

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

69,099

 

$

36,073

Short-term investments

 

 

94,666

 

 

 —

Accounts receivable, net

 

 

51,582

 

 

60,850

Prepaid expenses and other current assets

 

 

8,967

 

 

6,040

Deferred commissions, current portion

 

 

11,801

 

 

9,551

Total current assets

 

 

236,115

 

 

112,514

Deferred commissions, net of current portion

 

 

23,171

 

 

20,404

Property and equipment, net

 

 

14,792

 

 

12,459

Intangible assets, net

 

 

2,919

 

 

4,092

Goodwill

 

 

119,656

 

 

119,656

Other long-term assets

 

 

531

 

 

2,436

Total assets

 

$

397,184

 

$

271,561

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

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

3,502

 

$

2,481

Accrued expenses

 

 

19,596

 

 

18,846

Deferred revenue, current portion

 

 

138,515

 

 

130,165

Deferred rent

 

 

1,176

 

 

944

Total current liabilities

 

 

162,789

 

 

152,436

Deferred revenue, net of current portion

 

 

38,316

 

 

38,535

Warrant liability

 

 

 —

 

 

2,766

Deferred rent, net of current portion

 

 

2,774

 

 

3,114

Deferred tax liability

 

 

37

 

 

33

Other long-term liabilities

 

 

42

 

 

42

Total liabilities

 

 

203,958

 

 

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

 

 

712,156

 

 

13,429

Accumulated other comprehensive loss

 

 

(30)

 

 

 —

Accumulated deficit

 

 

(518,962)

 

 

(273,513)

Total stockholders’ equity (deficit)

 

 

193,226

 

 

(260,079)

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

 

$

397,184

 

$

271,561

 


 

CARBON BLACK, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

    

2018

    

2017

    

2018

    

2017

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Subscription, license and support

 

$

50,824

 

$

38,381

 

$

144,106

 

$

107,135

Services

 

 

2,591

 

 

3,128

 

 

8,735

 

 

9,010

Total revenue

 

 

53,415

 

 

41,509

 

 

152,841

 

 

116,145

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Subscription, license and support - Cost of

 

 

9,015

 

 

6,842

 

 

24,278

 

 

17,417

Services

 

 

2,890

 

 

2,943

 

 

8,946

 

 

8,360

Total cost of revenue

 

 

11,905

 

 

9,785

 

 

33,224

 

 

25,777

Gross profit

 

 

41,510

 

 

31,724

 

 

119,617

 

 

90,368

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

35,818

 

 

25,988

 

 

101,657

 

 

75,078

Research and development

 

 

16,189

 

 

13,675

 

 

47,195

 

 

37,794

General and administrative

 

 

7,563

 

 

5,717

 

 

25,838

 

 

16,060

Total operating expenses

 

 

59,570

 

 

45,380

 

 

174,690

 

 

128,932

Loss from operations

 

 

(18,060)

 

 

(13,656)

 

 

(55,073)

 

 

(38,564)

Interest income, net

 

 

737

 

 

22

 

 

1,192

 

 

 5

Change in fair value of warrant liability

 

 

 —

 

 

(45)

 

 

(8,838)

 

 

79

Other income (expense), net

 

 

(173)

 

 

102

 

 

(547)

 

 

215

Loss before income taxes

 

 

(17,496)

 

 

(13,577)

 

 

(63,266)

 

 

(38,265)

Provision for income taxes

 

 

136

 

 

22

 

 

241

 

 

108

Net loss

 

 

(17,632)

 

 

(13,599)

 

 

(63,507)

 

 

(38,373)

Accretion of preferred stock to redemption value

 

 

 —

 

 

(7,427)

 

 

(199,492)

 

 

(15,751)

Net loss attributable to common stockholders

 

$

(17,632)

 

$

(21,026)

 

$

(262,999)

 

$

(54,124)

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

(0.26)

 

$

(1.99)

 

$

(6.34)

 

$

(5.27)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding—basic and diluted

 

 

67,837,240

 

 

10,587,153

 

 

41,494,203

 

 

10,263,962

 


 

CARBON BLACK, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

    

2018

    

2017

    

2018

    

2017

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(17,632)

 

$

(13,599)

 

$

(63,507)

 

$

(38,373)

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

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization expense

 

 

2,006

 

 

1,807

 

 

5,881

 

 

5,204

Stock-based compensation expense

 

 

3,594

 

 

2,282

 

 

9,470

 

 

6,649

Provisions for doubtful accounts

 

 

22

 

 

19

 

 

140

 

 

(159)

Non-cash interest expense

 

 

12

 

 

 7

 

 

34

 

 

15

Change in fair value of warrant liability

 

 

 —

 

 

45

 

 

8,838

 

 

(79)

Deferred income taxes

 

 

 —

 

 

 —

 

 

 4

 

 

 —

Other non-cash income

 

 

(115)

 

 

 —

 

 

(115)

 

 

 —

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(7,973)

 

 

(2,428)

 

 

9,127

 

 

(2,517)

Prepaid expenses and other assets

 

 

(626)

 

 

(196)

 

 

(2,657)

 

 

(1,916)

Deferred commissions

 

 

(3,055)

 

 

(2,013)

 

 

(5,017)

 

 

(4,122)

Accounts payable

 

 

(551)

 

 

(105)

 

 

1,236

 

 

1,136

Accrued expenses

 

 

3,524

 

 

1,849

 

 

751

 

 

(1,686)

Deferred revenue

 

 

7,559

 

 

13,813

 

 

8,131

 

 

23,711

Deferred rent

 

 

(132)

 

 

(126)

 

 

(109)

 

 

(200)

Other long-term liabilities

 

 

 —

 

 

(4)

 

 

(263)

 

 

(59)

Net cash provided by (used in) operating activities

 

 

(13,367)

 

 

1,351

 

 

(28,056)

 

 

(12,396)

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

Purchases of short-term investments

 

 

(94,581)

 

 

 —

 

 

(94,581)

 

 

 —

Purchases of property and equipment

 

 

(1,157)

 

 

(1,104)

 

 

(5,354)

 

 

(4,228)

Capitalization of internal-use software costs

 

 

(910)

 

 

(236)

 

 

(1,901)

 

 

(714)

Net cash used in investing activities

 

 

(96,648)

 

 

(1,340)

 

 

(101,836)

 

 

(4,942)

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from exercise of stock options

 

 

617

 

 

620

 

 

3,348

 

 

2,349

Repayments of line of credit

 

 

 —

 

 

 —

 

 

 —

 

 

(5,500)

Proceeds from initial public offering, net of offering costs

 

 

 —

 

 

 —

 

 

159,617

 

 

 —

Payments of deferred financing costs

 

 

 —

 

 

 —

 

 

(47)

 

 

(84)

Net cash provided by (used in) financing activities

 

 

617

 

 

620

 

 

162,918

 

 

(3,235)

Net increase (decrease) in cash and cash equivalents

 

 

(109,398)

 

 

631

 

 

33,026

 

 

(20,573)

Cash and cash equivalents at beginning of period

 

 

178,497

 

 

30,299

 

 

36,073

 

 

51,503

Cash and cash equivalents at end of period

 

$

69,099

 

$

30,930

 

$

69,099

 

$

30,930

 


 

CARBON BLACK, INC.

UNAUDITED RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES

(In thousands, except share and per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

 

2018

 

2017

 

2018

 

2017

 

 

    

Amount

    

% of Revenue

 

Amount

    

% of Revenue

 

Amount

    

% of Revenue

 

Amount

    

% of Revenue

 

GAAP total revenue

 

$

53,415

 

100

%  

$

41,509

 

100

%  

$

152,841

 

100

%  

$

116,145

 

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of cost of revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP cost of subscription, license and support

 

$

9,015

 

16.9

%  

$

6,842

 

16.5

%  

$

24,278

 

15.9

%  

$

17,417

 

15.0

%

Less: Stock-based compensation

 

 

(156)

 

(0.3)

%  

 

(113)

 

(0.3)

%  

 

(429)

 

(0.3)

%  

 

(272)

 

(0.2)

%

Less: Amortization of acquired intangibles

 

 

(330)

 

(0.6)

%  

 

(330)

 

(0.8)

%  

 

(990)

 

(0.6)

%  

 

(990)

 

(0.9)

%

Non-GAAP cost of subscription, license and support

 

$

8,529

 

16.0

%  

$

6,399

 

15.4

%  

$

22,859

 

15.0

%  

$

16,155

 

13.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP cost of services

 

$

2,890

 

5.4

%  

$

2,943

 

7.1

%  

$

8,946

 

5.9

%  

$

8,360

 

7.2

%

Less: Stock-based compensation

 

 

(82)

 

(0.2)

%  

 

(56)

 

(0.1)

%  

 

(212)

 

(0.1)

%  

 

(167)

 

(0.1)

%

Non-GAAP cost of services

 

$

2,808

 

5.3

%  

$

2,887

 

7.0

%  

$

8,734

 

5.7

%  

$

8,193

 

7.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of gross profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP gross profit

 

$

41,510

 

77.7

%  

$

31,724

 

76.4

%  

$

119,617

 

78.3

%  

$

90,368

 

77.8

%

Plus: Stock-based compensation

 

 

238

 

0.4

%  

 

169

 

0.4

%  

 

641

 

0.4

%  

 

439

 

0.4

%

Plus: Amortization of acquired intangibles

 

 

330

 

0.6

%  

 

330

 

0.8

%  

 

990

 

0.6

%  

 

990

 

0.9

%

Non-GAAP gross profit

 

$

42,078

 

78.8

%  

$

32,223

 

77.6

%  

$

121,248

 

79.3

%  

$

91,797

 

79.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP sales and marketing

 

$

35,818

 

67.1

%  

$

25,988

 

62.6

%  

$

101,657

 

66.5

%  

$

75,078

 

64.6

%

Less: Stock-based compensation

 

 

(1,541)

 

(2.9)

%  

 

(805)

 

(1.9)

%  

 

(3,705)

 

(2.4)

%  

 

(2,422)

 

(2.1)

%

Less: Amortization of acquired intangibles

 

 

(22)

 

 —

%  

 

(22)

 

(0.1)

%  

 

(66)

 

 —

%  

 

(66)

 

(0.1)

%

Non-GAAP sales and marketing

 

$

34,255

 

64.1

%  

$

25,161

 

60.6

%  

$

97,886

 

64.0

%  

$

72,590

 

62.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP research and development

 

$

16,189

 

30.3

%  

$

13,675

 

32.9

%  

$

47,195

 

30.9

%  

$

37,794

 

32.5

%

Less: Stock-based compensation

 

 

(748)

 

(1.4)

%  

 

(656)

 

(1.6)

%  

 

(2,206)

 

(1.4)

%  

 

(1,926)

 

(1.7)

%

Less: Amortization of acquired intangibles

 

 

(39)

 

(0.1)

%  

 

(39)

 

(0.1)

%  

 

(117)

 

(0.1)

%  

 

(117)

 

(0.1)

%

Non-GAAP research and development

 

$

15,402

 

28.8

%  

$

12,980

 

31.3

%  

$

44,872

 

29.4

%  

$

35,751

 

30.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP general and administrative

 

$

7,563

 

14.2

%  

$

5,717

 

13.8

%  

$

25,838

 

16.9

%  

$

16,060

 

13.8

%

Less: Stock-based compensation

 

 

(1,067)

 

(2.0)

%  

 

(652)

 

(1.6)

%  

 

(2,918)

 

(1.9)

%  

 

(1,862)

 

(1.6)

%

Less: Legal settlement

 

 

 —

 

 —

%  

 

 —

 

 —

%  

 

(3,900)

 

(2.6)

%  

 

 —

 

 —

%

Non-GAAP general and administrative

 

$

6,496

 

12.2

%  

$

5,065

 

12.2

%  

$

19,020

 

12.4

%  

$

14,198

 

12.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of loss from operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP loss from operations

 

$

(18,060)

 

(33.8)

%  

$

(13,656)

 

(32.9)

%  

$

(55,073)

 

(36.0)

%  

$

(38,564)

 

(33.2)

%

Plus: Stock-based compensation

 

 

3,594

 

6.7

%  

 

2,282

 

5.5

%  

 

9,470

 

6.2

%  

 

6,649

 

5.7

%

Plus: Legal settlement

 

 

 —

 

 —

%  

 

 —

 

 —

%  

 

3,900

 

2.6

%  

 

 —

 

 —

%

Plus: Amortization of acquired intangibles

 

 

391

 

0.7

%  

 

391

 

0.9

%  

 

1,173

 

0.8

%  

 

1,173

 

1.0

%

Non-GAAP loss from operations

 

$

(14,075)

 

(26.4)

%  

$

(10,983)

 

(26.5)

%  

$

(40,530)

 

(26.5)

%  

$

(30,742)

 

(26.5)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net loss attributable to common stockholders

 

$

(17,632)

 

(33.0)

%  

$

(21,026)

 

(50.7)

%  

$

(262,999)

 

(172.1)

 

$

(54,124)

 

(46.6)

 

Plus: Accretion of preferred stock to redemption value

 

 

 —

 

 —

%  

 

7,427

 

17.9

%  

 

199,492

 

130.5

 

 

15,751

 

13.6

 

GAAP net loss

 

 

(17,632)

 

(33.0)

%  

 

(13,599)

 

(32.8)

%  

 

(63,507)

 

(41.6)

 

 

(38,373)

 

(33.0)

 

Plus: Stock-based compensation

 

 

3,594

 

6.7

%  

 

2,282

 

5.5

%  

 

9,470

 

6.2

 

 

6,649

 

5.7

 

Plus: Legal settlement

 

 

 —

 

 —

%  

 

 —

 

 —

%  

 

3,900

 

2.6

 

 

 —

 

 —

 

Plus: Amortization of acquired intangibles

 

 

391

 

0.7

%  

 

391

 

0.9

%  

 

1,173

 

0.8

 

 

1,173

 

1.0

 

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

 

 

 —

 

 —

%  

 

45

 

0.1

%  

 

8,838

 

5.8

 

 

(79)

 

(0.1)

 

Non-GAAP net loss

 

$

(13,647)

 

(25.5)

%  

$

(10,881)

 

(26.2)

%  

$

(40,126)

 

(26.3)

 

$

(30,630)

 

(26.4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of net loss per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share attributable to common stockholders,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

basic and diluted

 

$

(0.26)

 

 

 

$

(1.99)

 

 

 

$

(6.34)

 

 

 

$

(5.27)

 

 

 

Plus: Accretion of preferred stock to redemption value

 

 

 —

 

 

 

 

0.70

 

 

 

 

4.81

 

 

 

 

1.53

 

 

 

Plus: Stock-based compensation

 

 

0.05

 

 

 

 

0.22

 

 

 

 

0.23

 

 

 

 

0.65

 

 

 

Plus: Legal settlement

 

 

 —

 

 

 

 

 —

 

 

 

 

0.09

 

 

 

 

 —

 

 

 

Plus: Amortization of acquired intangibles

 

 

0.01

 

 

 

 

0.04

 

 

 

 

0.03

 

 

 

 

0.11

 

 

 

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

 

 

 —

 

 

 

 

 —

 

 

 

 

0.21

 

 

 

 

(0.01)

 

 

 

Non-GAAP net loss per share, basic and diluted

 

$

(0.20)

 

 

 

$

(1.03)

 

 

 

$

(0.97)

 

 

 

$

(2.98)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

67,837,240

 

 

 

 

10,587,153

 

 

 

 

41,494,203

 

 

 

 

10,263,962

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Computation of free cash flow

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash used in operating activities

 

$

(13,367)

 

 

 

$

1,351

 

 

 

$

(28,056)

 

 

 

$

(12,396)

 

 

 

Less: Purchases of property and equipment

 

 

(1,157)

 

 

 

 

(1,104)

 

 

 

 

(5,354)

 

 

 

 

(4,228)

 

 

 

Less: Capitalization of internal-use software costs

 

 

(910)

 

 

 

 

(236)

 

 

 

 

(1,901)

 

 

 

 

(714)

 

 

 

Free cash flow

 

$

(15,434)

 

 

 

$

11

 

 

 

$

(35,311)

 

 

 

$

(17,338)