Before discussing the acquisition in more detail, here is a closer look at CARB's quarterly results. On the positive side, EPS of $0.30 beat expectations by a penny. This runs its streak to 13 consecutive quarters of topping analysts' EPS expectations. Also, on a year/year basis, EPS surged by 150%. Boosting the earnings growth was a sharp improvement in gross margin, coming in at 77.6% vs. 74.0% in the year ago quarter. CARB credits the jump in gross margin to strong operating efficiency as it has removed costs out of the business. Looking ahead, management sees further opportunities to take expense out, particularly in areas such as data consolidation projects, in the back office, and in G&A.
On the topline, the results weren't as impressive. Revenue grew 15% to $61.7 million, slightly missing the $63.9 million Capital IQ consensus. The 15% growth was also a down-tick from last quarter's 19% mark. In terms of bookings, that metric came in at $60.2 million, up 11% year/year. During the conference call, management commented that its consumer business continues to show signs of stabilizing, demonstrated by better customer retention. However, on the net new side, it noted that there is still some lumpiness in the legacy perpetual license area, which was evident in Q4.
Turning to guidance, the results again were mixed. For Q1, it guided for EPS of $0.20-$0.24 vs. the $0.22 consensus with revenue again coming up short at $61.7-$63.7 million vs. the $65.02 million expectation. The guidance for FY18, though, looks better. Specifically, it is projecting EPS of $1.45-$1.55, well ahead of the $1.01 consensus, on revenue of $294-$304 million, also much higher than the $267.8 million expectation. This strong guidance is mainly attributable to the aforementioned acquisition.
On that topic, CARB simultaneously announced that it acquired Mozy for $145.8 million in cash, which will be funded with cash on hand and new financing commitments from a $120 million revolving credit instrument. Mozy is a direct competitor of CARB, so, right off the bat the acquisition eliminates a major competitor. Mozy is also a substantial player in the industry with 35,000 business customers, 100,000 consumer subscribers, and more than 2,000 resellers and partners.
Regarding the financial implications of this deal, CARB is expecting Mozy to contribute $50-$55 million of bookings (85% from business offerings), non-GAAP revenue of $40-$45 million, and about $0.25/share in non-GAAP EPS for 2018. These estimates are included in CARB's 2018 guidance.
To conclude, the Mozy acquisition looks to be transformative for CARB, and, based on its rather choppy financial results, a shot in the arm was needed. The newly combined CARB and Mozy will clearly be the leader in the data back-up and protection industry. Now the onus will be on management to streamline the combined business, effectively cross-sell the products, to find overlaps in the cost structure, and to do a good job in managing and communicating expectations to analysts and investors.