Carbonite : Reports Record Revenue for Second Quarter of 2014

BOSTON, MA - July 29, 2014 - Carbonite, Inc. (NASDAQ: CARB), a leading provider of hybrid backup and recovery solutions for businesses, today announced financial results for the second quarter June 30,
2014.
Second Quarter 2014 Results:

 Revenue for the second quarter was $30.3 million, an increase of 16% from $26.2 million in the second quarter of 2013.

 Bookings for the second quarter were $30.6 million, an increase of 12% from $27.4 million in the second quarter of 2013.

 Net loss for the second quarter was ($2.5) million, compared to a net loss of ($2.3) million in the second quarter of 2013. Non-GAAP net loss for the second quarter was ($0.7) million, compared to non-GAAP net loss of ($0.4) million in the second quarter of 2013.1

 Net loss for the second quarter was ($0.09) per share (basic and diluted), compared to a net loss of ($0.09) per share (basic and diluted) in the second quarter of 2013. Non-GAAP net loss was ($0.03) per share (basic and diluted) for the second quarter, compared to non-GAAP net loss of ($0.02) per share (basic and diluted), in the second quarter of 2013.

 Gross margin for the second quarter was 67.9%, compared to 67.7% in the second quarter of

2013. Non-GAAP gross margin was 68.7% in the second quarter, compared to 68.8% in the second quarter of 2013. 2

 Total cash and investments were $72.4 million as of June 30, 2014, compared to $58.5 million as of June 30, 2013.

 Cash flow from operations for the second quarter was $3.3 million, compared to $3.4 million in the second quarter of 2013. Non-GAAP free cash flow for the second quarter was $1.5 million, compared to $1.2 million in the second quarter of 2013.3

"The second quarter of 2014 was an exciting quarter for Carbonite with strong sales of our Carbonite Server Backup product and the production release of the Carbonite HT10 appliance," said David Friend, President and CEO. "These hybrid solutions are designed to be just right for small businesses - priced affordably, easy-to-use, and a feature set that meets the needs of SMBs. Carbonite's hybrid approach to backup is just the first step in supporting the business continuity needs of small businesses."

1 Non-GAAP net earnings and earnings per share, net loss and net loss per share excludes amortization expense on intangible assets, stock-based compensation expense, lease exit charges and patent litigation expense.

2 Non-GAAP gross margin excludes amortization expense on intangible assets and stock-based compensation expense.

3 Non-GAAP free cash flow is calculated by adding the cash portion of our planned corporate headquarters relocation and subtracting cash paid for the purchase of property and equipment from net cash provided by operating activities.

An explanation of non-GAAP measures is provided under the heading "Non-GAAP Financial Measures" below and reconciliation to the most comparable GAAP measure is provided in the tables at the end of this press release.

For the third quarter of 2014, revenues are expected to be in the range of $31.2-$31.4 million and non- GAAP net earnings/(loss) per share to be in the range of ($0.01)-$0.01.
For the full year of 2014, revenues are expected to be in the range of $122.4-$123.0 million and non- GAAP net loss per share to be in the range of ($0.06)-($0.02).
Carbonite's expectations of non-GAAP net loss per share for the quarter and full year excludes stock- based compensation expense, patent litigation expense, amortization expense on intangible assets and assumes a tax rate of 0% and weighted average shares outstanding of approximately 26.6 million.

Carbonite will host a conference call on Tuesday, July 29, 2014 at 8:30 a.m. Eastern Daylight Time to review the results of business operations. This call will be webcast live in the investor relations section of
the Company's website at http://investor.carbonite.com.
Following the completion of the call, a recorded replay will be available on the company's website, http://investor.carbonite.com, under "Events & Presentations" through December 31, 2014.

This press release contains non-GAAP financial measures including bookings, non-GAAP gross margin, non-GAAP net loss and non-GAAP net loss per share, non-GAAP net earnings and non-GAAP net earnings per share and free cash flow. Bookings represent the aggregate dollar value of customer subscriptions received during a period and are calculated as revenue recognized during the period plus the change in total deferred revenue during the same period. Non-GAAP gross margin, non-GAAP net loss and non- GAAP net loss per share, non-GAAP net earnings and non-GAAP net earnings per share exclude amortization expenses on intangible assets, stock-based compensation expenses, patent litigation expenses and lease exit charges. Non-GAAP free cash flow is calculated by adding the cash portion of our planned corporate headquarters relocation and subtracting cash paid for the purchase of property and equipment from net cash provided by operating activities.
The Company believes that these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to the Company's financial condition and results of operations. The Company's management uses these non-GAAP measures to compare the Company's performance to that of prior periods and uses these measures in financial reports prepared for management and the Company's board of directors. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in
evaluating ongoing operating results and trends and in comparing the Company's financial measures with other software-as-a-service companies, many of which present similar non-GAAP financial measures to investors.
The Company does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant items that are required by GAAP to be recorded in the Company's financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management. In order to compensate for these limitations, management presents its non-GAAP financial measures in connection with its GAAP results. The Company urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures, which it includes in press releases announcing quarterly financial results, including this press release, and not to rely on any single financial measure to evaluate the Company's business.

This press release contains "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 of this press release 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," 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 Annual Report on Form 10-K for the fiscal year ended December 31, 2013 filed with the Securities and Exchange Commission, 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, we do not undertake any obligation to update our forward-looking statements to reflect future events or circumstances.

Carbonite (Nasdaq:CARB) is a leading provider of hybrid backup and recovery solutions for businesses. Carbonite offers a comprehensive suite of affordable services for data protection, recovery and anywhere, anytime access. More than 1.5 million customers, including 50,000 small businesses, trust Carbonite's secure, easy-to-use cloud backup solutions and award-winning U.S.-based customer support. For more information, please visit Carbonite.com, connect with us on Twitter @carbonite or visit our Facebook

page.

Emily Walt
Carbonite
617-927-1972 investor.relations@carbonite.com

617-421-5687
media@carbonite.com

Carbonite, Inc.

Condensed Consolidated Statement of Operations (unaudited) (In thousands, except per share data)

Three Months Ended Six Months Ended

June 30, June 30,

2014 2013 2014 2013

Carbonite, Inc.

Condensed Consolidated Balance Sheets (unaudited) (In thousands)

Current assets

June 30, December 31,

2014 2013

Total assets

$ 114,959 $

109,161

Current liabilities

Stockholders' equity

T

Carbonite, Inc.

Condensed Consolidated Statement of Cash Flows (unaudited) (In thousands)

Six Months Ended

June 30,

2014 2013

Net loss

Adjustments to reconcile net loss to net cash provided by operating activities:

$ (3,518) $

(9,736)

Depreciation and amortization 6,296 6,319

Amortization (accretion) of premium (discount) on marketable securities (12) (8) Stock-based compensation expense 2,854 2,484

Provision for reserves on accounts receivable 53 10

Non-cash restructuring charge - 173

Changes in assets and liabilities, net of acquisition:

Carbonite, Inc.

Reconciliation of GAAP to Non-GAAP Measures (unaudited) (In thousands, except share and per share amounts)

Calculation of Bookings

Less :

Three Months Ended Six Months Ended, June 30, June 30,

2014 2013 2014 2013

Calculation of Non-GAAP Net Income (Loss) and Non-GAAP Net Income (Loss) per Share

Three Months Ended Six Months Ended

June 30, June 30,

2014 2013 2014 2013

Net loss

$ (2,536) $

(2,317) $

(3,518) $

(9,736)

Add:

Amortization of intangibles 226 214 459 478

Stock-based compensation expense 1,597 1,165 2,853 2,484

Patent litigation expense 6 400 23 1,583

Lease exit charge - 107 - 107

Non-GAAP net income (loss)

$ (707) $

(431) $

(183) $

(5,084)

Weighted-average shares outstanding:

Basic and diluted 26,768,786 26,014,409 26,676,485 25,951,899

Net income (loss) per share: Basic and diluted

$ (0.03) $

(0.02) $

(0.01) $

(0.20)

Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit

Three Months Ended Six Months Ended

June 30, June 30,

2014 2013 2014 2013

Reconciliation of GAAP Operating Expense to Non-GAAP Operating Expense

Three Months Ended Six Months Ended

June 30, June 30,

7/6/1905 2013 2014 2013

Research and development

Less:

$ 6,153 $

4,901 $

11,575 $

10,377

Stock-based compensation expense 504 162 763 398

Non-GAAP research and development

$ 5,649 $

4,739 $

10,812 $

9,979

Restructuring charges

Less:

$ 5 $

126 $

8 $ 272

Lease exit charge - 107 - 107

Non-GAAP restructuring charges

$ 5 $

19 $

8 $ 165

Calculation of Free Cash Flow

Subtract:

Three Months Ended Six Months Ended

June 30, June 30,

2014 2013 2014 2013

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