Commvault Announces Fiscal 2024 First Quarter Financial Results

TINTON FALLS, N.J., Aug. 1, 2023 /PRNewswire/ -- Commvault [Nasdaq: CVLT] today announced its financial results for the fiscal first quarter ended June 30, 2023.

"We're off to a solid start to our fiscal year, highlighted by accelerated subscription revenue momentum and continued operating discipline," said Sanjay Mirchandani, President and CEO. "We're excited about the opportunity ahead and remain committed to helping our customers manage the shifting demands of an ever-changing data protection market."

Fiscal 2024 First Quarter Highlights -

• Total revenues were $198.2 million, flat year over year
• Total ARR¹ grew to $686 million, up 15% year over year
• Subscription revenue was $97.3 million, up 11% year over year
• Subscription ARR¹ grew to $500 million, up 32% year over year
• Income from operations (EBIT) was $18.5 million, an operating margin of 9.3%
• Non-GAAP EBIT² was $43.5 million, an operating margin of 22.0%
• Operating cash flow increased 74% year over year to $39.0 million, with free cash flow² of $37.9 million
• First quarter share repurchases were $51 million, or approximately 779,000 shares of common stock

Financial Outlook for Second Quarter and Full Year Fiscal 2024 -

We are providing the following guidance for the second quarter of fiscal year 2024:

• Total revenues are expected to be between $193 million and $197 million
• Subscription revenues are expected to be between $95 million and $99 million
• Non-GAAP operating margin² is expected to be approximately 20.0%

We are reconfirming the following guidance for the full fiscal year 2024:

• Total ARR¹ is expected to grow 13% year over year
• Total revenues are expected to be between $805 million and $815 million
• Subscription revenues are expected to be between $420 million and $430 million
• Non-GAAP operating margin² is expected to grow between 50 to 100 basis points year over year
• Free cash flow² is expected to be approximately $170 million

The above statements are based on the incorporation of actual first quarter results and current targets. These statements are forward looking and made pursuant to the safe harbor provisions discussed in detail below. We do not undertake any obligation to update these forward-looking statements. Actual results may differ materially from anticipated results.

Conference Call Information

Commvault will host a conference call today, August 1, 2023 at 8:30 a.m. Eastern Time (5:30 a.m. Pacific Time) to discuss quarterly results. The live webcast and call dial-in numbers can be accessed by registering under the "Events" section of Commvault's website. An archived webcast of this conference call will also be available following the call.

About Commvault

Commvault (NASDAQ: CVLT) is a global leader in cloud data protection. Our industry-leading platform redefines the next generation of data protection as the only solution with comprehensive data protection, proactive data defense, advanced ransomware protection, and a single view across all your data. This lets you secure, defend, and recover your data, applications, and production workloads – on-premises, in the cloud, over SaaS, or spread across hybrid and multi-cloud environments. The result is early warning of attacks, active defense to reduce the impact of intrusion, and rapid, accurate recovery of your data. Simply put, Commvault is data, protected. For over 25 years, more than 100,000 organizations have relied on Commvault to keep their data secure and ready to drive business growth. Learn more at www.commvault.com or follow us @Commvault.

¹ Annualized Recurring Revenue (ARR) is defined as the annualized recurring value of all active contracts at the end of a reporting period. It includes the following contract types: subscription (including term licenses, SaaS and utility software), maintenance contracts related to perpetual licenses, other extended maintenance contracts (enterprise support), and managed services. It excludes any element of the arrangement that is not expected to recur, primarily perpetual licenses and most professional services. Subscription ARR includes only term licenses, SaaS and utility software arrangements. Contracts are annualized by dividing the total contract value by the number of days in the contract term, then multiplying by 365.

ARR should be viewed independently of GAAP revenue, deferred revenue and unbilled revenue and is not intended to be combined with or to replace those items. ARR is not a forecast of future revenue. Management believes that reviewing this metric, in addition to GAAP results, helps investors and financial analysts understand the value of Commvault's recurring revenue streams versus prior periods.

² A reconciliation of GAAP to non-GAAP results has been provided in Financial Statement Table IV included in this press release. An explanation of these measures is also included below under the heading "Use of Non-GAAP Financial Measures."

Safe Harbor Statement

This press release may contain forward-looking statements, including statements regarding financial projections, which are subject to risks and uncertainties, such as competitive factors, difficulties and delays inherent in the development, manufacturing, marketing and sale of software products and related services, general economic conditions, outcome of litigation and others. For a discussion of these and other risks and uncertainties affecting Commvault's business, see "Item IA. Risk Factors" in our annual report on Form 10-K and "Item 1A. Risk Factors" in our most recent quarterly report on Form 10-Q. Statements regarding Commvault's beliefs, plans, expectations or intentions regarding the future are forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. All such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from anticipated results. Commvault does not undertake to update its forward-looking statements.

Revenue Overview
($ in thousands)

Constant Currency
($ in thousands)

The constant currency impact is calculated using the average foreign exchange rates from the prior year period and applying these rates to foreign-denominated revenues in the current corresponding period. Commvault analyzes revenue growth on a constant currency basis in order to provide a comparable framework for assessing how the business performed excluding the effect of foreign currency fluctuations. The non-GAAP financial measures presented in this press release should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP.

Revenue by Geography¹
($ in thousands)

¹ Our Americas region includes the United States, Canada, and Latin America. Our International region primarily includes Europe, Middle East, Africa, Australia, India, Southeast Asia, and China.

Income from Operations (EBIT)

• Income from operations (EBIT) was $18.5 million, a 9.3% operating margin
• Non-GAAP EBIT² was $43.5 million, a 22.0% operating margin

GAAP and Non-GAAP Net Income²

• GAAP net income was $12.6 million, or $0.28 per diluted share
• Non-GAAP net income² was $32.5 million, or $0.72 per diluted share

Cash Summary and Share Repurchases

• Cash flow from operations was $39.0 million in the first quarter
• As of June 30, 2023, ending cash and cash equivalents was approximately $274.6 million
• During the first quarter, Commvault repurchased $51.0 million, or 779,000 shares, of common stock at an average share price of approximately $65.54 per share

¹ An explanation of ARR and subscription ARR is included in footnote 1 on page 2.

² A reconciliation of GAAP to non-GAAP results has been provided in Financial Statement Table IV included in this press release. An explanation of these measures is also included below under the heading "Use of Non-GAAP Financial Measures."