Carbonite revenues soar but profits are elusive

Cloud backup storage service provider Carbonite has experienced a sudden CEO change.

Mohamad Ali is leaving the company to become CEO of the International Data Group (IDG). Chairman Steve Munford has been named interim CEO and exec chairman and the hunt is on for a new CEO.

Carbinite reported Q2 2019revenues of $121.5m, 56.4 per cent up on a year ago, boosted by the Webroot security business, bought for $618.5m in February. The company lost $11.3m (-$5.5m.)

Munford’s said the company’s “security software business performed well during the quarter, however, we continued to experience challenges in parts of our data protection business. We remain committed to capitalizing on the opportunity of combining data protection and security, while we improve the effectiveness of our go-to-market efforts and deliver on our profitability targets.”

William Blair analyst Jason Ader said “organic Carbonite sales [fell[ short due to continued execution issues in the SMB backup business”.

The chart below shows that Carbonite profitability has been challenged for quite a few quarters.

See the Webroot effect in the latest quarter’s revenues.
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