They didn't say they were profitable - they said they were cash-flow positive. And if you look at the cash flow statement in the S-1, they were indeed cash-flow positive in 2019.

It looks like much of the difference comes down to stock-based compensation. This doesn't cost the company any cash, but under GAAP, it has to be recorded as an expense. (IANAA, so take what I say with a grain of salt).

Being cash-flow positive does not necessarily imply being profitable. The one is a day-to-day indication on whether or not you are able to make ends meet without outside funding, the other one is the basis on which you will pay - or not - taxes. It is absolutely possible to be cash-flow positive but not yet profitable, especially while growing.

There are many reasons why cash-flow and profitability can be out of step with each other, for instance, you might have capital expenditures that are going to influence future years' books, you might have an interest carrying bank loan, you may have invested money into acquiring users whose lifetime value is larger than the cost to acquire them but you haven't broken even on that yet, it's possible to have the reverse and so on.

Accounting for all this - and doing so properly - is not as easy as it may seem to be for an outsider or someone who is used to just sell their own hours, where you can immediately see the difference between income and costs and label that profits.

And even there the situation can get more complex, for instance, if work is done in one year but the invoice is sent in the next. Profit wise you are booking that money in the year the work was done, even if the actual cash only lands in the next. Pre-paid services are even more complicated (here you typically partition a chunk of the income month-by-month until the total amount is accounted for).

If you examine the financial statements you will see that they were Cash Flow positive in 2019 (but not in 2020).

It’s also important to note that being cash flow positive is not the same as being GAAP/IFRS profitable (Net Income).

Ahhh yes, Crashplan, the company that purposefully locked everyone out of their backups when they shut down their personal backup service.

I had a drive fail and I thought I was OK...and then I discovered that my Crashplan backup archives on my own server were unreadable after they shut down Crashplan personal backup services.

I couldn't even install the client, either - they silently updated the client to have a logic time bomb and refuse to install.

It's also not a really bad profit margin. $54M in revenue, $6M in net losses. It's not hard to see how they can right the ship -- perhaps they have scaled up enough to stop needing to spend so much, or they'll just continue to gain economies of scale.