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Why Carbon Black Shares Soared Today

By Evan Niu, CFA - May 3, 2019 at 12:26PM

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The cloud-based cybersecurity company beat on revenue and provided an upbeat forecast.

What happened

Shares of Carbon Black (CBLK) have soared today, up by 15% as of 11:30 a.m. EDT, after the company reported first-quarter earnings results. Revenue beat the consensus estimate and the cloud-based cybersecurity specialist guided second-quarter revenue above expectations as well.

So what

Revenue in the first quarter jumped 21% to $58.6 million, ahead of the $57.1 million that analysts were expecting. Non-GAAP gross margin contracted slightly to 79%, and Carbon Black reported a non-GAAP operating loss of $15.8 million. All told, the company posted a non-GAAP net loss of $15.2 million, or $0.22 per share, which was right on target for how much the Street thought it would lose on an adjusted basis.

Green stock chart going up

Image source: Getty Images.

"Carbon Black began 2019 with solid first quarter results highlighted by 24% total [annual recurring revenue] growth and 80% growth in cloud revenue," CEO Patrick Morley said in a statement. "We entered 2019 as a cloud-first company with a focused go-to-market strategy that leverages the powerful capabilities of our cloud platform, the CB Predictive Security Cloud (PSC), to protect customers from today's advanced cyberattacks."

Now what

In terms of outlook, Carbon Black is forecasting second-quarter revenue of $59 million to $60 million, compared to the consensus estimate of $58.4 million. That should result in a non-GAAP operating loss of $11.6 million to $12.6 million, with a non-GAAP net loss per share of $0.16 to $0.18. Analysts are modeling for the company to lose $0.17 per share.

Carbon Black also modestly raised its full-year forecast. Revenue in 2019 is expected to be $241 million to $244 million, increasing the low end of the guidance issued in February by $1 million. Non-GAAP operating loss outlook for the year was unchanged at $43 million to $45 million, but non-GAAP net loss per share is now expected to be $0.60 to $0.63, slightly better than the previous outlook of $0.61 to $0.64 per share in adjusted losses.

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