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| 8-K/A - 8-K/A - Carbonite Inc | d303461d8ka.htm |
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Carbonite, Inc | Company Confidential
FEBRUARY 2012
David Friend, CEO
Exhibit 99.1
Wednesday, February 22, 2012 |
 2
©
Carbonite, Inc | Company Confidential
Safe Harbor Statement
Cautionary Language Concerning Forward-Looking Statements
These slides and the accompanying oral presentation contain
"forward-looking statements" within the meaning of the Securities Act of
1933 and the Securities Exchange Act of 1934, as amended by the Private Securities
Litigation Reform Act of 1995. These forward-looking statements
represent the Company’s views as of the date that they were first made based on the current intent,
belief or expectations, estimates, forecasts, assumptions and projections of the
Company and members of our management team. Words
such
as
“expect,”
“anticipate,”
“should,”
“believe,”
“hope,”
“target,”
“project,”
“goals,”
“estimate,”
“potential,”
“predict,”
“may,”
“will,”
“might,”
“could,”
“intend,”
and any variations of these terms or the negative of these terms and similar
expressions are intended to identify these forward-looking statements.
Those statements include, but are not limited to, statements regarding guidance on our
future financial results and other projections or measures of future performance,
and our expectations concerning market opportunities and our ability to
capitalize on them. Forward-looking statements are subject to a number of risks and uncertainties, many of which
involve factors or circumstances that are beyond the Company’s control. The
Company’s actual results could differ materially from those stated or
implied in forward-looking statements due to a number of factors, including, but not limited to, the Company’s ability to
profitably attract new customers and retain existing customers, the Company’s
dependence on the market for online computer backup services, the
Company’s ability to manage growth, and changes in economic or regulatory conditions or other trends affecting the
Internet and the information technology industry. These and other important risk
factors are discussed or referenced in our Quarterly Report
on
Form
10-Q
filed
with
the
Securities
and
Exchange
Commission
November
10,
2011,
which
is
available
on
www.sec.gov,
under the heading “Risk Factors”
and elsewhere, and any subsequent periodic or current reports filed by us with the
SEC. The Company
anticipates
that
subsequent
events
and
developments
will
cause
its
views
to
change.
Except
as
required
by
applicable
law
or regulation, the Company does not undertake any obligation to update our
forward-looking statements to reflect future events or circumstances.
|
 ©
Carbonite, Inc | Company Confidential
BUSINESS OVERVIEW
Wednesday, February 22, 2012 |
 The
Carbonite story Our vision:
“If
we
can
make
it
simple
enough
and inexpensive
enough,
everyone will buy it.”
Carbonite was founded on one simple idea:
Every computer should be backed up, and online backup
is the best way to do it.
The sales pitch is simple:
“How would you feel if you woke up tomorrow, and
everything was gone?”
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Carbonite, Inc | Company Confidential |
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Carbonite, Inc | Company Confidential
At the center of three important
trends:
Cloud
Life on your computer
Always-connected mobile
Clear brand category leader
Highly predictable SaaS
subscription revenue
Compelling customer economics
Significant operating leverage
Over 1 billion PCs worldwide
1
1. Gartner, Mar 2011
2. Bookings during a period is defined as revenue recognized during the
period plus change in deferred revenue. See appendix for a reconciliation
of bookings to revenue for the periods presented
Investment highlights |
 Large and
rapidly growing market Every device that creates or stores data needs
backup 1. Source: IDC September 2011 report titled “Worldwide PC
2011-2015 forecast” 2. Source: IDC October 2010 report titled
“Worldwide mini notebook 2010-2014 forecast and analysis” 3.
Source: IDC February 2012 report titled “Worldwide and U.S. media tablet 2011-2015 forecast”
4. Source: IDC December 2011 report titled “Worldwide smartphone 2011-2015
forecast and analysis” |
 Why people
hate backing up In an always-connected world, we believe online backup is
best Limited capacity
Time consuming. Doesn’t “just happen.”
Clumsy. Wires, hardware.
If the house burns down, the backup is gone too.
Unreliable. Easy to lose or break. Obsolescence.
No cloud access!
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Carbonite, Inc | Company Confidential |
 Wind to
our backs 1. From OECD website, information was accessed on April 30,
2011 at www.oecd.org/sti/ict/broadband 2. According to a study done by
DrPeering International in August 2010 3. Source: IDC report titled
“WW enterprise storage systems 2010-2014 forecast update: December 2010”
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Carbonite, Inc | Company Confidential |
 Keys to
Carbonite’s success Trusted & Secure
Easy to use
Affordable
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Carbonite, Inc | Company Confidential |
 Easy to
use Our disruptive Idea:
Unlimited online backup for a flat price.
Sign up with just an email
address and password.
Nothing
to
choose.
Never
run
out
of
space.
No
scheduling.
It’s
continuous.
Just
works
in
the
background.
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Carbonite, Inc | Company Confidential
Low cost is key to market leadership
94% disk
utilization
Proprietary
Carbonite
File System
Low
overhead
300+ million
files backed
up per day
~1
petabyte
every
two weeks
~50
petabytes
today
Highly
scalable
High
reliability
& density |
 Trusted
brand 12
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Carbonite, Inc | Company Confidential
Trusted spokespersons
Talk radio hosts key to early trust-building
Glenn Beck
Rachel Maddow
Joe Scarborough
Charles Osgood
Jimmy Kimmel
Ed Shultz
Randi Rhodes
Kim Komando
Rush Limbaugh
Laura Ingraham
Colin Cowherd
Dr. Laura |
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Carbonite, Inc | Company Confidential
We leverage a wide range of marketing programs:
Direct marketing expertise |
 Leading
brand awareness Consumers associate online backup with Carbonite
Global consumer brand with registered trademarks in the U.S. and
over 30 other countries including countries in the European Union
Source: Millward Brown Brand Tracking Study, December 2011
Data depicts % of total mentions among people asked to name specific companies in
response to the question: “What service providers of online backup have you heard of?”
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Carbonite, Inc | Company Confidential
There’s no warning when you lose your computer files…
that’s why you need Carbonite!
New awareness-driving advertising campaign |
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Carbonite, Inc | Company Confidential
There’s no warning when you lose your computer files…
that’s why you need Carbonite!
New awareness-driving advertising campaign |
 High
return on marketing investments Source: Carbonite management
1 Represents annual retention rate excluding renewal activity related to
third-party distributor sales, which are being deliberately phased out. Represented 8% of revenue in 2010.
Annual
retention
rate
is
the
percentage
of
customers
on
the
last
day
of
the
prior
period
who
remain
customers
on
the
last
day
of
the
current
period.
Retention
rates
including
third-party distributor sales renewals were 79%, 83% and 82% respectively for
2009, 2010 and 2011 2 Average customer life = 1/(1-r)-1 where r
= retention rate 82.6%
84.7%
85.6%
80%
81%
82%
83%
84%
85%
86%
87%
2009
2010
2011
Annual Retention Rate
1
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Carbonite, Inc | Company Confidential |
 New
exciting initiatives Carbonite
Personal Cloud
Carbonite for
Small Business
Thrilled Customer
Initiative
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Carbonite, Inc | Company Confidential |
 Small
business |
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Carbonite, Inc | Company Confidential
Carbonite business dashboard |
 Being away from your computer no longer means being away from your files
Personal cloud
Anywhere, anytime access to your files
Smartphones
Home Computers
Office Computers
Tablet Computers
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Carbonite, Inc | Company Confidential
•
We used to think cost.
Now we think opportunity.
Turn every customer into an evangelist
Turn every call into a sales opportunity
~50% our customers use customer support
•
New support center opened in
Lewiston, ME
Much higher customer satisfaction
Expect to save us money
Fewer calls to solve problem
Shorter calls |
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Carbonite, Inc | Company Confidential
Customers love us
96% agree
“Carbonite is easy”
1
83% say they would recommend Carbonite
2
31% buy without free trial
3
Users love Carbonite:
1. Carbonite customer surveys
2. Carbonite customer surveys
3. Based on 1H 2011, excluding potential subscribers through third-party
distributors |
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Carbonite, Inc | Company Confidential
Competitive landscape
Direct competitors
Mozy
Antivirus companies
e.g. Norton
Smaller players
Carriers
e.g. Verizon
Indirect competitors
Cloud services
Apple iCloud,
Amazon Cloud Drive, Dropbox,
Microsoft Windows Live, etc
Cloud storage
Amazon S3
Issues for direct competitors
Not unlimited
Not easy to use
Not trusted for backup
Issues for indirect competitors
Not really backup. Sharing focus.
Not Unlimited. Price/GB high.
Not universal. E.g., Apple only |
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Carbonite, Inc | Company Confidential
Staying ahead of competition
Scale: Takes years to design, test, and deploy
large-scale backup-focused infrastructure
software and hardware
Technology: Requires specialized
technology. There are no off-the-shelf
solutions
Brand: Building a trusted brand is essential
and takes time and money
Focus: Backup and restore is all we do
Well positioned to continue to stay ahead of competition:
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Carbonite, Inc | Company Confidential
Multiple avenues for future growth |
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Carbonite, Inc | Company Confidential
Management
Experience
David Friend
Co-founder and CEO
Co-founded Computer Pictures, Pilot Software,
Faxnet, Sonexis
Jeffry Flowers
Co-founder and Chief Architect
Co-founded 4 prior companies with David Friend
Andrew Keenan
CFO
Vovici, CGI
Swami Kumaresan
EVP, Sales and Marketing
Broadview, Fletcher-Spaght
Pete Lamson
SVP, Small Business
NameMedia, Monster
Tom Murray
SVP,
Marketing TomTom, P&G, Duracell, Gillette
Management team |
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Carbonite, Inc | Company Confidential
FINANCIAL OVERVIEW
Wednesday, February 22, 2012 |
 Rapid
growth
in
bookings,
subscribers
and
revenue
Highly
scalable
subscription-based
model
with
strong
visibility
High
retention
rate
Expanding
margins
with
significant
operating
leverage
Enormous
addressable
market
opportunity
Financial highlights
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Carbonite, Inc | Company Confidential |
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Carbonite, Inc | Company Confidential
Consistent bookings growth
Highly predictable subscription-based model with consistent historical
growth in bookings
$14.1
$32.9
$54.1
$80.9
$0
$15
$30
$45
$60
$75
$90
2008
2009
2010
2011
($mm)
Source: Carbonite SEC Filings
Note: Bookings during a period is defined as revenue recognized during the period
plus change in deferred revenue. See appendix for a reconciliation of
bookings to revenue for the periods presented |
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Carbonite, Inc | Company Confidential
Rapid revenue growth
Consecutive growth since launch –
22 quarters of rapid revenue growth
$0
$4
$8
$12
$16
$20
Q1
'09
Q2
'09
Q3
'09
Q4
'09
Q1
'10
Q2
'10
Q3
'10
Q4
'10
Q1
'11
Q2
'11
Q3
'11
Q4
'11
($mm)
Source: Carbonite SEC Filings |
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Carbonite, Inc | Company Confidential
Increasing revenue per subscriber
Consistent growth in revenue per subscriber, with further upside
potential from the newly launched Home and Business offerings
Source: Carbonite SEC Filings
Note: Calculated as revenue per quarter divided by average subscribers during that
quarter $11.18
$11.33
$11.79
$11.84
$12.25
$12.50
$12.70
$12.88
$14.50
$10.58
$13.35
$13.98
$10.00
$11.00
$12.00
$13.00
$14.00
$15.00
Q1 '09
Q2 '09
Q3 '09
Q4 '09
Q1 '10
Q2 '10
Q3 '10
Q4 '10
Q1 '11
Q2 '11
Q3 '11
Q4 '11
Price increase and release of second
generation business products
Release of first generation
business product
Price increase
ARPU
Release of two new
consumer products
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Carbonite, Inc | Company Confidential
Strong customer retention
Consistently high customer retention rates
Strong customer growth with high retention rate is key to business model
Source: Carbonite SEC Filings
Note: Annual retention rate is the percentage of customers on the last day of the
prior period who remain customers on the last day of the current period.
Channel sales being deliberately phased out. Represented 8% of revenue in
2010 84%
84%
83%
83%
84%
83%
84%
85%
85%
85%
86%
82%
86%
81%
80%
79%
79%
81%
80%
82%
83%
83%
83%
81%
60%
65%
70%
75%
80%
85%
90%
Q1 '09
Q2 '09
Q3 '09
Q4 '09
Q1 '10
Q2 '10
Q3 '10
Q4 '10
Q1 '11
Q2 '11
Q3 '11
Q4 '11
Average: 84%
Average: 81%
34 |
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Carbonite, Inc | Company Confidential
$0
$10
$20
$30
$40
2008
2009
2010
2011
$21.0
$23.4
$29.0
$34.6
$0
$25
$50
$75
$100
2008
2009
2010
2011
$78.0
$48.2
$42.8
$34.3
Business model with declining costs per subscriber leading to
expanding margin profile:
Gross profit
per subscriber¹
Sales & mktg. expense
per subscriber¹
Source: Carbonite SEC Filings
1. Adjusted for stock-based compensation, amortization of intangibles and
patent litigation expenses $mm
$mm
Improving
margins
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Carbonite, Inc | Company Confidential
Strong balance sheet
Cash and short-term investments
$72.5
Working capital (deficit)
$18.8
Total assets
$99.6
Deferred revenue, including current portion
$59.7
Total liabilities
$72.0
Total stockholders’
equity (deficit)
$27.6
Source: Carbonite SEC Filings
$ in millions
As of December 31, 2011
($mm)
36 |
 ©
Carbonite, Inc | Company Confidential
Investment highlights
•
Enormous world-wide market opportunity
•
“Category killer”
with established brand leadership
•
Personal cloud important market opportunity
•
Proprietary technology & scale
•
Strong competitive advantages
•
Proven direct marketing expertise
•
Multiple avenues for sustained growth
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Carbonite, Inc | Company Confidential
Appendix
38 |
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Carbonite, Inc | Company Confidential
Non-GAAP reconciliation
Source: Carbonite SEC Filings
1. Excludes $586k from acquisitions
$ in thousands
2008
2009
2010
2011
Revenue
$8,202
$19,114
$38,563
$60,512
Plus: Change in deferred revenue
5,867
13,743
15,578
20,388
(1)
Bookings
$14,069
$32,857
$54,141
$80,900
$ in thousands
2008
2009
2010
2011
GAAP Loss from Operations
$(17,852)
$(19,602)
$(25,896)
$(23,554)
Add: Stock-based Compensation
203
390
542
1,445
Add: Amortization of Intangibles
0
0
0
155
Plus: Patent Litigation Expenses
0
0
39
966
Non-GAAP Loss from Operations
$(17,649)
$(19,212)
$(25,315)
$(20,988)
Plus: D&A Less Amort. Of Intangibles
$1,481
$2,977
5,060
7,715
Adjusted EBITDA
$(16,168)
$(16,235)
$(20,255)
$(13,273)
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