Cybersecurity firm, Carbon Black (CBLK 12.68,
-3.80, -23.09%), is trading significantly lower after the company beat fourth
quarter estimates but guided first quarter and fiscal 2019 revenue well below
Carbon Black reported a smaller than expected fourth quarter net loss as revenue grew 27% to $56.9 mln, above the company's $55.3-55.8 mln guidance range. Subscription, license and support revenue grew 31%. Fourth quarter cloud revenue grew 102% to $18.8 mln.
However, the company guided first quarter revenue 3% below estimates at the midpoint and fiscal 2019 revenue 6% below estimates at the midpoint.
The company forecast only 15% revenue growth for the year, down from 30% in 2018.
Management said recent product launches slowed deal momentum in the fourth quarter. Meanwhile, the company is dealing with some sales execution issues. Soft guidance is not the result of a change in the competitive environment, according to the company.
Chief Executive Patrick Morely said, "We introduced a significant number of innovative cloud products onto the Predictive Security Cloud during 2018. In 2019 we will focus on refining our demand generation and sales and channel enablement capabilities to sell our expanded cloud security platform. We expect this will have a near-term impact on growth and believe it is essential to maximizing the long-term market opportunity for the company."
Carbon Black announced a number of new products last year as it transitions to a cloud-first company. The company's big data and analytics platform, the CB Predictive Security Cloud (PSC), consolidates endpoint security and IT operations into an extensible cloud platform that prevents advanced threats, provides actionable insight and enables businesses of all sizes to simplify operations.
Management said the introduction of CB LiveOps and CB ThreatHunter caused companies to pause their existing sales cycles to explore the additional functionality.
Management also said it is realigning its go to market strategy as sales execution has been lacking. The company hired sales former Akamai Chief Marketing Officer Brad Rinklin as its CMO last month.
JPMorgan downgraded the stock to Neutral this morning.
With a market cap just under $900 mln, Carbon Black trades at less than 4x fiscal 2019 sales estimates. That makes it one of the cheapest publicly-traded security firms, just behind Symantec (SYMC), FireEye (FEYE) and SecureWorks (SCWX).