For example, the U.S.-based Financial Accounting Standards Board (“FASB”) is currently working together with the International Accounting Standards Board (“IASB”) on several projects to further align accounting principles and facilitate more comparable financial reporting between companies who are required to follow U.S. Generally Accepted Accounting Principles (“GAAP”) under SEC regulations and those who are required to follow IFRS outside of the U.S. These efforts by the FASB and IASB may result in different accounting principles under GAAP that may result in materially different financial results for us.

Risks ~~from investing in growth opportunities could impact~~Related to our ~~business.~~

We may invest in growth opportunities, such as high-value market segments of enterprise computing, managed services and cloud computing. Even though we believe cloud computing, in its various forms, represents a long term industry trend in the way that applications are delivered, data is stored and information is retrieved, there can be no assurance that our investment in cloud, and related managed services and infrastructure management will be validated in the marketplace. Similarly, there is no assurance that our investments in high-value market segments will drive revenue growth or market share gains. Customer adoption rates and viable economic models are less certain in high-value and rapidly-growing segments, and new product and services offerings may unfavorably impact demand for our other products or services.

~~Risks Relating to Ownership of Our~~ Common Stock

~~The price~~Certain provisions of our ~~common stock may be highly volatile~~certificate of formation and ~~may decline regardless~~our amended and restated bylaws or Delaware law could prevent or delay a potential acquisition of control of our ~~operating performance.~~

~~The market price of our common stock~~Company, which could ~~be subject to significant fluctuations in response to:~~

~~variations in our quarterly or annual operating results;~~

~~changes in financial estimates, treatment of our tax assets or liabilities or investment recommendations by securities analysts following our business or our competitors;~~

~~the public’s response to our press releases, rumors, our other public announcements and our filings with the SEC;~~

~~changes in accounting standards, policies, guidance or interpretations or principles;~~

~~sales of common stock by our directors, officers and significant stockholders;~~

~~announcements of technological innovations or enhanced or new products by us or our competitors;~~

~~our failure to achieve operating results consistent with securities analysts’ projections;~~

~~the operating and stock price performance of other companies that investors may deem comparable to us;~~

~~broad market and industry factors; and~~

~~other events or factors, including those resulting from war, incidents of terrorism or responses to such events.~~

The market prices of software companies have been extremely volatile. Stock prices of many software companies have often fluctuated in a manner unrelated or disproportionate to the operating performance of such companies. In the past, following periods of market volatility, stockholders have often instituted securities class action litigation. Securities litigation could have a substantial cost and divert resources and the attention of management from our business.

~~Future sales of our common stock, or the perception that such future sales may occur, may cause our stock price to decline and impair our ability to obtain capital through future stock offerings.~~

A substantial number of shares of our common stock are available for sale into the public market. The occurrence of such sales, or the perception that such sales could occur, could materially and adversely affect our stock price and could impair our ability to obtain capital through an offering of equity securities.

Certain provisions in our charter documents and agreements and Delaware law, as well as our stockholder rights plan, may inhibit potential acquisition bids for Commvault and prevent changes in our management.

~~Our certificate of incorporation and bylaws contain provisions that could depress~~decrease the trading price of our common ~~stock by acting to discourage, delay or prevent a change of control of our company or changes in management that our stockholders might deem advantageous. Specific provisions in our~~stock.

Our certificate of ~~incorporation include:~~

~~our ability~~formation, amended and restated bylaws and the laws in the State of Delaware contain provisions that are intended to ~~issue preferred stock with terms that the Board of Directors may determine, without stockholder approval;~~

~~a classified board in which only a third of the total board members will be elected at each annual stockholder meeting;~~

~~advance notice requirements for stockholder proposals~~deter coercive takeover practices and ~~nominations; and~~

~~limitations on convening stockholder meetings.~~

~~In addition~~inadequate takeover bids by making such practices or bids unacceptably expensive to the ~~provision described above, on November 13, 2008,~~prospective acquirer and to encourage prospective acquirers to negotiate with our Board of Directors ~~adopted~~rather than to attempt a stockholders rights plan and declared a dividend distribution of one Right for each outstanding share of our common stock to shareholders of record on November 24, 2008. Each Right, when exercisable, entitles the registered holder to purchase from us one one-thousandth of a share of Series A Junior Participating Preferred Stock, par value $0.01 per share, at a purchase price of $80 per one one-thousandth of a share, subject to adjustment. The Rights may discourage a third-party from making an unsolicited proposal to acquire us, as exercise of the Rights would cause substantial dilution to such third-party attempting to acquire us.

As a result of the provisions in our certificate of incorporation and our stockholder rights plan, the price investors may be willing to pay in the future for shares of our common stock may be limited.

~~Also, we are subject to Section 203 of the~~hostile takeover. Delaware ~~General Corporation Law, which~~law also imposes ~~certain~~ restrictions on mergers and other business combinations between us and any holder of 15% or more of our outstanding common stock. ~~Further, certain~~

We believe that these provisions protect our shareholders from coercive or otherwise unfair takeover tactics by effectively requiring those who seek to obtain control of the Company to negotiate with our ~~employment agreements~~Board of Directors and ~~incentive plans provide for vesting~~by providing our Board of ~~stock options and/or payments~~Directors with more time to ~~be made to the employees thereunder~~assess any acquisition of control. However, these provisions could apply even if ~~their employment is terminated in connection with a change~~an acquisition of control ~~which~~of the Company may be considered beneficial by some shareholders and could ~~discourage,~~ delay or prevent ~~a merger or~~an acquisition ~~at a premium price.~~

~~We do~~of control that our Board of Directors determines is not ~~expect to pay any dividends~~ in the ~~foreseeable future.~~

~~We do not anticipate paying any cash dividends to holders~~best interests of our common stock in the foreseeable future. Consequently, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment. Investors seeking cash dividends should not purchaseCompany and our ~~common stock.~~shareholders.

Although we believe we currently have adequate internal control over financial reporting, we are required to assess our internal control over financial reporting on an annual basis, and any future adverse results from such assessment could result in a loss of investor confidence in our financial reports and have an adverse effect on our stock price.

Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 (“SOX 404”), and the rules and regulations promulgated by the SEC to implement SOX 404, we are required to furnish a report in our Form 10-K regarding the effectiveness of our internal control over financial reporting. The report’s assessment of our internal control over financial reporting as of the end of our fiscal year must include disclosure of any material weaknesses in our internal control over financial reporting identified by management. Management’s assessment of internal control over financial reporting requires management to make subjective judgments and some of our judgments will be in areasManagement has assessed that ~~may be open to interpretation.~~

~~Although we currently believe~~ our internal control over financial reporting is effective ~~the~~and lacks any material weaknesses. Such assessment is made through subjective judgment of our management that may be open to interpretation. The effectiveness of our internal ~~controls~~control in the future ~~periods~~ is subject to the risk that ~~our~~such internal controls may become ~~inadequate or may not operate effectively.~~inadequate. In the future, ~~years,~~ if we fail to timely complete this assessment, or if our independent auditors ~~cannot timely attest,~~are unable to express an opinion on the effectiveness of our internal controls, there may be a loss of public confidence ~~in our internal controls,~~financial reporting, the market price of our stock could decline and we could be subject to regulatory sanctions or investigations by the ~~NASDAQ~~Nasdaq Stock Market, the ~~Securities and Exchange Commission~~SEC or other regulatory authorities, which would require additional financial and management resources. ~~In addition, any~~Any failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm our operating results or cause us to fail to timely meet our regulatory reporting obligations.

~~During~~We may experience a decline in revenues or volatility in our quarterly operating results, which may adversely affect the market price of our common stock.

We cannot predict our future quarterly revenues or operating results with certainty because of many factors outside of our control. A significant revenue or profit decline, lowered forecasts or volatility in our operating results could cause the market price of our common stock to decline substantially. Factors that could affect our revenues and operating results include the following:

•the unpredictability of the timing and magnitude of orders for our solutions, particularly transactions greater than $100,000 in recent fiscal years, a majority of our quarterly revenues were earned and recorded near the end of each quarter;

•the possibility that our customers may cancel, defer or limit purchases as a result of reduced information technology budgets;

•the possibility that our customers may defer purchases of our solutions in anticipation of new solutions or updates from us or our competitors;

•the ability of our OEMs and resellers to meet their sales objectives;

•market acceptance of our new solutions and enhancements;

•our ability to control expenses;

•changes in our pricing, packaging and distribution terms or those of our competitors; and

•the demands on our management, sales force and customer services infrastructure as a result of the introduction of new solutions or updates.

Our expense levels are relatively fixed and are based, in part, on our expectations of future revenues. If revenue levels fall below our expectations and we are profitable at the time, our net income would decrease because only a small portion of our expenses varies with our revenues. Therefore, any significant decline in revenues for any period could have an immediate adverse impact on our results of operations for that period. We believe that period-to-period comparisons of our results of operations should not be relied upon as an indication of future performance. Our results of operations could be below expectations of public market analysts and investors in future periods which would likely cause the market price of our common stock to decline.

The price of our common stock may be highly volatile and may decline regardless of our operating performance.

The market price of our common stock could be subject to significant fluctuations in response to:

•variations in our quarterly or annual operating results;

•changes in financial estimates, treatment of our tax assets or liabilities or investment recommendations by securities analysts following our business or our competitors;

•the public’s response to our press releases, rumors, our other public announcements and our filings with the SEC;

•changes in accounting standards, policies, guidance or interpretations or principles;

•sales of common stock by our directors, officers and significant stockholders;

•announcements of technological innovations or enhanced or new products by us or our competitors;

•our failure to achieve operating results consistent with securities analysts’ projections;

•the operating and stock price performance of other companies that investors may deem comparable to us;

•broad market and industry factors; and

•other events or factors, including those resulting from war, incidents of terrorism or responses to such events.

The market prices of data management solutions companies have been extremely volatile. Stock prices of many of those companies have often fluctuated in a manner unrelated or disproportionate to their operating performance. In the past, ~~several years, our organizational structure has increased in complexity due to compliance with tax regulations~~following periods of market volatility, stockholders have often instituted securities class action litigation. Securities litigation could have a substantial cost and tax accounting requirements and other regulatory and compliance requirements, including compliance with anti-corruption and anti-bribery laws such as the U.S. Foreign Corrupt Practices Act (the “FCPA”)divert resources and the ~~UK Bribery Act~~attention of ~~2010 (the “UK Bribery Act”). Further, we have expanded~~management from our ~~presence~~business.

General Risks

Our business could be materially and adversely affected as a result of natural disasters, terrorism or other catastrophic events.

Any economic failure or other material disruption caused by war or natural disasters, including fires, floods, hurricanes, earthquakes, and tornadoes; power loss or shortages; environmental disasters; telecommunications or business information systems failures or similar events could also adversely affect our ability to conduct business. If such disruptions result in cancellations of customer orders or contribute to a general decrease in economic activity or corporate spending on IT, or impair our ability to meet our customer demands, our operating results and financial condition could be materially adversely affected.

Our business may be adversely affected by the ~~Asia-Pacific region, where business practices can differ from those in other regions~~impact of the ~~world~~war in Ukraine and ~~can create internal control risks. We provide business practices training~~a widespread outbreak of contagious diseases, including the COVID-19 pandemic and its variants. These events may cause us or our customers to temporarily suspend operations and could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could affect demand for our ~~employees worldwide. Overall, the combination of increased structural complexity~~solutions, our ability to collect against existing trade receivables and ~~the ever-increasing regulatory complexity make it more critical for us to attract and retain qualified and technically competent employees.~~

our operating results.



Item 1B.			Unresolved Staff Comments

None.



Item 2.			Properties

Our principal administrative, sales, marketing, customer support and research and development facility is located at our owned corporate headquarters in Tinton Falls, New Jersey.

In addition, we have offices in the United States in California ~~Colorado, Florida, Georgia, Illinois, Massachusetts, Minnesota, New York, Oregon, Texas,~~ and ~~Virginia;~~Texas; and outside the United States in Kanata, Ontario; Toronto, Ontario; Reading, United Kingdom; Oberhausen, Germany; Utrecht, Netherlands; Milan, Italy; Stockholm, Sweden; Zurich, Switzerland; Istanbul, Turkey; Paris, France; Madrid, Spain; Dubai,Australia, Austria, Belgium, Brazil, Canada, China, Denmark, France, Germany, Hong Kong, India, Israel, Italy, Japan, Netherlands, Poland, Russia, Saudi Arabia, Singapore, South Africa, South Korea, Spain, Sweden, Switzerland, Taiwan, United Arab Emirates; Moscow, Russia; Warsaw, Poland; Johannesburg, South Africa; Riyadh, Saudi Arabia; Tel Aviv, Israel; Beijing, China; Shanghai, China; Guangzhou, China; Chengdu, China; Hong Kong; Sydney, Australia; Melbourne, Australia; Canberra, Australia; Auckland, New Zealand; Tokyo, Japan; Singapore; Mexico City, Mexico; Kuala Lumpar, Malaysia; Bangkok, Thailand; Sao Paulo, Brazil; Seoul, South Korea; Mumbai, India; New Delhi, India; Bangalore, India;Emirates, and ~~Hyderabad, India.~~United Kingdom.



Item 3.			Legal Proceedings

From time to time, we ~~are subject to claims~~may become involved in legal proceedings arising in the ~~normal~~ordinary course of ~~our~~ business. ~~Except as discussed below, we~~We do not believe that we are currently party to any pending legal action that could reasonably be expected to have a material adverse effect on our business or operating results.

On September 10, 2014, a purported class action complaint was filed in the United States District Court for the District of New Jersey against the Company, our Chief Executive Officer and our Chief Financial Officer. The case is captioned In re Commvault Systems, Inc. Securities Litigation (Master File No. 3:14-cv-05628-MAS-LHG). The suit alleges that we made materially false and misleading statements, or failed to disclose material facts, regarding our financial results, business, operations and prospects in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The suit asserts claims covering an alleged class period from May 7, 2013 through April 24, 2014. It is purportedly brought on behalf of purchasers of our common stock during that period, and seeks compensatory damages, costs and expenses, as well as equitable or other relief. Lead plaintiff, the Arkansas Teachers Retirement System, was appointed on January 12, 2015, and on March 18, 2015, an amended complaint was filed by the plaintiffs. On December 17, 2015, the defendant’s motion to dismiss the case was granted and the case dismissed; however, the plaintiffs were permitted to re-file their claim, which they did on February 5, 2016. Defendants filed another motion to dismiss on April 5, 2016, which remains pending with the court. Due to the inherent uncertainties of litigation, we cannot accurately predict the ultimate outcome of this matter. We are unable at this time to determine whether the outcome of the litigation will have a material impact on our results of operations, financial condition or cash flows.



Item 4.			Mine Safety Disclosures

Not ~~Applicable~~Applicable.

PART II



Item 5.			Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market for our Common Stock

Our common stock is listed and traded on The ~~NASDAQ~~Nasdaq Global Market under the symbol ~~“CVLT.” The following table sets forth, for the periods indicated, the high and the low closing sales prices of our common stock, as reported on The NASDAQ Global Market.~~

Common Stock
2016 2015
High Low High Low
First Quarter $ 47.46
$ 42.41
$ 70.80
$ 46.07
Second Quarter $ 41.31
$ 33.96
$ 55.83
$ 47.13
Third Quarter $ 42.91
$ 34.54
$ 54.03
$ 42.88
Fourth Quarter $ 43.17
$ 30.41
$ 51.55
$ 43.45

~~On April 29, 2016, the last reported sale price of our common stock as reported on The NASDAQ Global Market was $43.77 per share.~~“CVLT”.

Stockholders

As of ~~April 29, 2016,~~May 3, 2022, there were approximately 5545 holders of our common stock. The number of record holders does not represent the actual number of beneficial owners of shares of our common stock because shares are frequently held in street name by securities dealers and others for the benefit of individual owners who have the right to vote their shares.

Dividend Policy

We have never paid cash dividends on our common stock, and we intend to retain our future earnings, if any, to fund the growth of our business. We therefore do not anticipate paying any cash dividends on our common stock in the foreseeable future. Our future decisions concerning the payment of dividends on our common stock will depend upon our results of operations, financial condition and capital expenditure plans, as well as any other factors that the Board of Directors, in its sole discretion, may consider relevant.

Stock Performance Graph

The graph set forth below compares the cumulative total stockholder return on our common stock between March 31, ~~2011~~2017 and March 31, ~~2016,~~2022, with the cumulative total return of (i) The ~~NASDAQ~~Nasdaq Computer Index and (ii) The ~~NASDAQ~~Nasdaq Composite Index, over the same period. This graph assumes the investment of $100,000 on March 31, ~~2011~~2017 in our common stock, The ~~NASDAQ~~Nasdaq Composite Index and The ~~NASDAQ~~Nasdaq Computer Index, and assumes the reinvestment of dividends, if any. The graph assumes the initial value of our common stock on March 31, ~~2011~~2017 was the closing sales price of ~~$39.88~~$50.80 per share.

The comparisons shown in the graph below are based upon historical data. The stock price performance shown in the graph below is not necessarily indicative of, nor is it intended to forecast, the future performance of our common stock. Information used in the graph was obtained from ~~NASDAQ,~~Nasdaq, a source we believe to be reliable, but we are not responsible for any errors or omissions in such information.

The performance graph shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of Commvault under the Securities Act or the Exchange Act.


	3/31/2017	3/31/2018	3/31/2019	3/31/2020	3/31/2021	3/31/2022
Commvault	100.0	112.6	127.4	79.7	127.0	130.6
Nasdaq Composite Index	100.0	119.5	130.7	130.3	224.1	240.5
Nasdaq Computer Index	100.0	126.0	140.5	157.6	276.4	332.1

3/31/2011 3/30/2012 3/28/2013 3/31/2014 3/31/2015 3/31/2016
Commvault 100.0
124.5
205.6
162.9
109.6
108.2
NASDAQ Composite Index 100.0
111.2
117.5
151.0
176.2
175.1
NASDAQ Computer Index 100.0
119.3
111.0
145.5
174.0
184.1

Issuer Purchases of Equity Securities

During the three months ended March 31, ~~2016,~~2022, we repurchased ~~$56.9~~$39.8 million of common stock, ~~(1.6~~or approximately 0.6 million ~~shares).~~shares, under our repurchase program. During the year ended March 31, ~~2016,~~2022, we repurchased ~~$91.5~~$305.2 million of common stock, ~~(2.6~~or approximately 4.3 million ~~shares),~~shares, under our ~~share~~ repurchase program. As


Period	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced programs	Approximate dollar value of shares that may yet be purchased under the program
January 1-31, 2022	277,900	$	68.15	277,900	*
February 1-28, 2022	144,900	65.16		144,900	*
March 1-31, 2022	178,000	64.29		178,000	*
Three months ended March 31, 2022	600,800	$	66.29	600,800

*During the fourth quarter of ~~May 6, 2016, there is $93.1 million remaining in the~~fiscal 2022 we completed a share repurchase program ~~which expires on March 31, 2017.~~that was commenced in January 2021. On April 21, 2022 the Board of Directors approved a new share repurchase program of $250.0 million. The Board's authorization has no expiration date.

Period Total number of shares purchased as part of publicly announced programs Average price paid per share Total of Purchases Approximate dollar value of shares that may yet be purchased under the program
January 2016 476,967
$ 31.13
$ 14,847,884
$ 135,152,116

February 2016 1,120,688
$ 37.52
$ 42,049,402
$ 93,102,714

March 2016 —
$ —
—
$ 93,102,714

Three months ended March 31, 2016 1,597,655
$ 35.61
$ 56,897,286



Item 6.			~~Selected Financial Data~~[Reserved]

The following selected financial data should be read in conjunction with our financial statements and related notes, “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Annual Report on Form 10-K. The selected statements of operations and the selected balance sheet data are derived from our audited financial statements. The historical results presented below are not necessarily indicative of the results to be expected in any future period.

Year Ended March 31,
2016 2015 2014 2013 2012
(In thousands, except per share data)
Statement of Operations Data:
Revenues:
Software $ 258,793
$ 283,254
$ 294,411
$ 251,508
$ 201,800
Services 336,333
324,289
291,929
244,342
204,839
Total revenues 595,126
607,543
586,340
495,850
406,639
Cost of revenues:
Software 2,385
2,442
2,588
2,863
2,747
Services 80,327
79,626
71,713
62,089
50,660
Total cost of revenues 82,712
82,068
74,301
64,952
53,407
Gross margin 512,414
525,475
512,039
430,898
353,232
Operating expenses:
Sales and marketing 352,669
335,980
283,304
247,696
219,025
Research and development 69,287
64,143
55,134
47,356
39,936
General and administrative 78,848
78,063
67,106
50,119
40,619
Depreciation and amortization 9,611
8,505
6,075
4,832
4,353
Total operating expenses 510,415
486,691
411,619
350,003
303,933

Income from operations 1,999
38,784
100,420
80,895
49,299
Interest expense (933 ) (665 ) —
—
(57 )
Interest income 862
773
890
1,059
750
Equity in loss of affiliate (83 ) —
—
—
—
Income before income taxes 1,845
38,892
101,310
81,954
49,992
Income tax expense 1,709
13,242
37,246
28,745
18,052
Net income $ 136
$ 25,650
$ 64,064
$ 53,209
$ 31,940
Net income per common share:
Basic $ 0.00
$ 0.56
$ 1.36
$ 1.17
$ 0.72
Diluted $ 0.00
$ 0.54
$ 1.29
$ 1.10
$ 0.68
Weighted average shares used in computing per share amounts:
Basic 45,159
45,464
46,976
45,463
44,089
Diluted 46,489
47,222
49,642
48,330
47,201

As of March 31,
2016 2015 2014 2013 2012
(In thousands)
Balance Sheet Data:
Cash and cash equivalents $ 288,107
$ 337,673
$ 457,733
$ 433,964
$ 297,088
Short-term investments 99,072
49,936
24,976
1,948
3,146
Working capital 252,413
267,480
387,004
343,094
222,301
Total assets 714,573
713,466
755,384
604,854
432,688
Deferred revenue 244,866
229,735
209,575
184,270
147,373
Total stockholders’ equity 396,268
407,010
462,578
354,017
229,984



Item 7.			Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis along with our consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10-K. The statements in this discussion regarding our expectations of our future performance, liquidity and capital resources, and other non-historical statements are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described under “Risk Factors” and elsewhere in this Annual Report on Form 10-K. Our actual results may differ materially from those contained in or implied by any forward-looking statements.

Overview

~~We are~~Incorporated in Delaware in 1996, Commvault Systems, Inc. is a ~~leading provider of~~global data ~~and information~~ management ~~software applications and related services. Our software platform is an~~company offering customers enterprise level, ~~integrated~~intelligent data ~~and information management solution, built from the ground up on~~services via a single platform and unified code base.

We believe in solving hard problems for our customers by enabling our customers to accelerate their digital transformation in today's ever-evolving workforce. Our ~~platform contains software functionality~~product portfolio includes intuitive tools and powerful machine learning technology that ~~that works together seamlessly, sharing~~drives automation, reduces complexity, reigns in data fragmentation, and accelerates a ~~single code and common function set to deliver Data Protection - Backup & Recovery; Cloud and Infrastructure Management; and Retention and Compliance across physical, virtual and~~customer’s cloud ~~environments. All software~~journey. Our product functionality share the same back-end technologies to deliver the benefits of a holistic approach to protecting, managing, and ~~accessing~~securing data. Our ~~software addresses~~products address many aspects of data management ~~in the enterprise, while providing scalability and control of data and information. Key features of our software platform include:~~

~~Data protection solutions supporting all major operating systems, applications, and databases on virtual and physical servers, NAS shares, cloud-based infrastructures, and mobile devices;~~

~~Management through a single console; view, manage, and access all functions and all data and information across the enterprise;~~

~~Multiple protection methods including backup and archive, snapshot management, replication, and content indexing for eDiscovery;~~

~~Efficient storage management using deduplication for disk, tape and cloud;~~

~~Integration with the industry's top storage arrays to automate the creation of indexed, application-aware hardware snapshot copies across multi-vendor storage environments;~~

~~Complete virtual infrastructure management supporting multiple hypervisors, including VMware and Hyper-V;~~

~~Security capabilities to limit access to critical data, provide granular management capabilities, and provide single sign on access for Active Directory users;~~

~~Policy based data management, allowing users to manage data based on business needs and not physical location; and~~

~~An end-user experience that allows them to protect, find and recover their own data using common tools such as web browsers, Microsoft Outlook and File Explorer.~~

~~Our software enables our customers to simply and cost effectively protect and manage their enterprise data throughout its lifecycle,~~ from the mobile worker to the remote office, to the data center, covering the leading operating systems, relational databases, virtualized environments and applications. In addition to addressing today’s data and information management challenges, our customers can realize lower capital costs through more efficient use of their enterprise-wide storage infrastructure assets. This includes the automated movement of data from higher cost to lower cost storage devices throughout its lifecycle, and through sharing and better utilization of storage resources across the enterprise. We can also provide our customers with reduced operating costs through a variety of methods, including fast application deployment, reduced training time, lower cost of storage media consumables, proactive monitoring and analysis, and lower administrative overhead. We also provide our customers with a broad range of professional services that are delivered by our worldwide support and field operations. As of March 31, 2016 we had licensed our software applications to over 22,500 registered customers.

~~History and Background~~

In early 2000, we launched Commvault Galaxy for backup and recovery, a storage industry award winner. In the years since, Commvault has forged numerous alliances with top software application and hardware vendors, such as HP, Hitachi Data Systems, Microsoft, Network Appliance, Fujitsu, Novell and Oracle, to enhance capabilities and to create a premiere suite of data and information management solutions. In 2002, we launched our single-platform technology that provides the foundation of our information management approach to storing, managing, and accessing data. In addition to Data Protection - Backup & Recovery, the subsequent release of our other software application technologies has increased our addressable market. Each software technology can be used individually or in combination with other technologies from our single platform suite.

Our software licenses typically provide for a perpetual right to use our software and are sold on a per terabyte capacity basis, on a per-copy basis, as site licenses or as a solution set. During the fiscal year ended March 31, 2016, approximately 73% of software license revenue was sold on a capacity basis. Capacity based software licenses provide our customers with unlimited licenses of specified software products based on a defined level of terabytes of data under management. As a result, when we sell our platform through a capacity license, certain of the various Commvault functionalities are bundled into one capacity based price. We anticipate that capacity based licenses will continue to account for the majority of our software license revenue for the near future. Site licenses give the customer the additional right to deploy the software on a limited basis during a specified term. Our primary solution sets in our software suite include virtual machine backup, recovery and cloud management; endpoint data protection; and email archive. These solution sets can be individually deployed or combined as part of a comprehensive data protection and ~~information management solution. Our solution sets are generally sold~~security, to data governance, transformation and insights, while providing scalability. We believe our technology and professional services provide the broadest set of capabilities in the industry, which enables customers to efficiently and cost-effectively scale their data on a per unit basis such as per virtual machine for our virtual machine backup, recovery and cloud management solution set; per mailbox for our email archive solution set and per user for our endpoint data protection solution set.premise or in the cloud.

Historically, an insignificant amount of our revenue has been sold under subscription, or term based, license arrangements. In these arrangements, the customer generally has the right to use the software on either a capacity basis or per-copy or per-unit basis over a designated period of time. Revenue in these arrangements is recognized ratably over the term of the agreement. Over the next several years we expect revenue from these types of arrangements to become a more significant portion of our total revenue.

Industry

The industry in which we currently operate continues to go through accelerating changes as the result of compounding data growth and the introduction of new technologies. We are continuing to pursue an aggressive product development program in both data and information management solutions. Our data management solutions include not only traditional backup, but also new innovations in de-duplication, data movement, virtualization, snap-based backups and enterprise reporting. Our information management innovations are primarily in the areas of archiving, eDiscovery, records management, governance, operational reporting and compliance. We remain focused on both the data and information management trends in the marketplace and, in fact, a material portion of our existing research and development expenses are utilized toward the development of such new technologies discussed above. While we ~~are~~feel confident in our ability to meet these changing industry demands with our Commvault suite and potential future releases, the development, release and timing of any features or functionality remain at our sole discretion and our solutions or other technologies may not be widely adopted.

Given the nature of the industry in which we operate, our software applications are subject to obsolescence. ~~As noted above, we~~We continually develop and introduce updates to our existing software applications in order to keep pace with evolving industry technologies. In addition, we must address evolving industry standards, changing customer requirements and competitive software applications that may render our existing software applications obsolete.

For each of our software applications, we provide full support for the current generally available release and one prior release. When we declare a product release obsolete, a customer notice is delivered twelve months prior to the effective date of obsolescence announcing continuation of full product support for the first six months. We provide an additional six months of extended assistance support in which we only provide existing workarounds or fixes that do not require additional development activity. We do not have existing plans to make any of our software products permanently obsolete.

Sources of Revenues

We derive a significant portion of our total revenues from sales of licenses of our software ~~applications.~~applications and related appliance products. We do not customize our software or products for a specific end-user customer. We sell our software applications and products to end-user customers both directly through our sales force and indirectly through our global network of value-added reseller partners, systems integrators, corporate resellers and original equipment manufacturers. Our software and products revenue was ~~43%~~46% of our total revenues for fiscal ~~2016, 47% for~~2022, 45% in fiscal ~~2015~~2021 and ~~50% for~~41% in fiscal ~~2014.~~2020.

During fiscal 2022, we continued to focus on subscription and other recurring revenue arrangements and began generating revenue from the renewals of subscription licenses sold in prior years. Any of our licensing models (capacity, instance based, etc.) can be sold via a subscription arrangement. In these arrangements the customer has the right to use the software over a designated period of time. The capacity of the license is fixed and the customer has made an unconditional commitment to pay. Software revenue in these arrangements is generally recognized when the software is delivered. During the fiscal year ended March 31, 2022, approximately 69% of software license revenue was sold under a subscription model. Software license revenue sold under a subscription model was 59% and 41% in the fiscal years ended March 31, 2021 and 2020, respectively. We also sell to some customers, primarily managed service providers, via utility, or pay-as-you-go models. In these arrangements actual usage is regularly measured and billed. Revenue in these utility arrangements is recognized as the software is used.

In recent fiscal years, including the periods presented, we generated ~~approximately three-quarters~~an average of 80% of our software and products revenue from our existing customer base and approximately ~~one-quarter~~20% of our software and products revenue from new customers. In addition, our total software and products revenue in any particular period is, to a certain extent, dependent upon our ability to generate revenues from large customer software and products deals, which we refer to as ~~enterprise software~~larger deal transactions. ~~Enterprise software~~Larger deal transactions (transactions greater than $0.1 ~~million)~~million of software and product revenue) represented approximately ~~53%~~72% of our software and products revenue in fiscal ~~2016, 56% for~~2022,69% in fiscal ~~2015~~2021 and ~~57% for~~65% in fiscal ~~2014.~~2020.

Software and products revenue generated through indirect distribution channels ~~was 86%~~accounted for approximately 90% of total software and products revenue in recent fiscal ~~2016, 82% in fiscal 2015~~years. Software and ~~87% in fiscal 2014. Software~~products revenue generated through direct distribution channels ~~was 14%~~accounted for approximately 10% of total software and products revenue in recent fiscal 2016, 18% in fiscal 2015 and 13% in fiscal 2014. The dollar value of software revenue generated through indirect distribution channels decreased approximately $11.4 million, or 5%, in fiscal 2016 compared to fiscal 2015. The dollar value of software revenue generated through direct distribution decreased $13.1 million, or 26%, in fiscal 2016 compared to fiscal 2015. The decrease in the dollar value of software revenue growth generated through our direct sales force

compared to our indirect distribution channels in fiscal 2016 is primarily the result of a decrease in software revenue from several large enterprise transactions which were conducted through our direct sales force in fiscal 2015.years. Deals initiated by our direct sales force are sometimes transacted through indirect channels based on end-user customer requirements, which are not always in our control and can cause this overall percentage split to vary from fiscal year to fiscal year. As such, there may be fluctuations in the dollars and percentage of software and products revenue generated through our direct distribution channels from time to time. We believe that the growth of our software and products revenue, derived from both our indirect channel partners and direct sales force, are key attributes to our long-term growth strategy. We ~~will~~intend to continue to invest in both our channel relationships and direct sales force in the future, but we continue to expect more revenue to be generated through indirect distribution channels over the long term. The failure of our indirect distribution channels or our direct sales force to effectively sell our software applications could have a material adverse effect on our revenues and results of operations.

~~Our primary original equipment manufacturer agreement is with Hitachi Data Systems (HDS) and allows them to market, sell and support our software applications and services on~~We have a stand-alone basis and/or incorporate our software applications into their own hardware products. Our OEM partners, including HDS, have no obligation to recommend or offer our software applications exclusively or at all, and they have no minimum sales requirements and can terminate our relationship at any time. Sales through our original equipment manufacturer agreements accounted for 15% of our total revenues for fiscal 2016 and fiscal 2015.

~~We also have~~ non-exclusive distribution ~~agreements~~agreement covering our North American commercial markets and our U.S. Federal Government market with Arrow Enterprise Computing Solutions, Inc. ~~(“Arrow”~~("Arrow"), a subsidiary of Arrow Electronics, Inc.~~, and Avnet Technology Solutions (“Avnet”), a subsidiary of Avnet, Inc.~~ Pursuant to ~~these~~this distribution ~~agreements, these distributors’~~agreement, Arrow's primary role is to enable a more efficient and effective distribution channel for our products and services by managing our reseller partners and leveraging their own industry experience. We generated approximately ~~38%~~37% of our total revenues through Arrow in fiscal ~~2016,~~2022, approximately 36% of our total revenues in fiscal ~~2015~~2021 and approximately ~~31%~~37% of our total revenues in fiscal ~~2014.~~2020. If Arrow ~~or Avnet were~~was to discontinue or reduce the sales of our products or if our agreement with Arrow ~~or Avnet~~ was terminated, and if we were unable to take back the management of our reseller channel or find another North American distributor to replace Arrow, ~~or Avnet,~~ then it could have a material adverse effect on our future business.

Our services revenue was ~~57%~~54% of our total revenues for fiscal ~~2016, 53% for~~2022, 55% in fiscal ~~2015~~2021 and ~~50% for~~59% in fiscal ~~2014.~~2020. Our services revenue is made up of fees from the delivery of customer support and other professional services, which are typically sold in connection with the sale of our software applications. Customer support agreements provide technical support and unspecified software updates on a when-and-if-available basis for an annual fee based on licenses purchased and the level of service subscribed. Other professional services include consulting, assessment and design services, implementation and post-deployment services and training, all of which to date have predominantly been sold in connection with the sale of software applications. Metallic, our software-as-a-service solution, allows customers to use hosted software over the contract period without taking possession of the software. Revenue related to Metallic is generally recognized ratably over the contract term as services revenue.

Most of our customer support agreements related to perpetual licenses are for a ~~one year~~one-year term. As the end of the annual period approaches, we pursue the renewal of the agreement with the customer. Historically, maintenance renewals have represented a significant portion of our total revenue. Because of this characteristic of our business, if our customers choose not to renew their maintenance and support agreements with us on beneficial terms, or at all, our business, operating results and financial condition could be harmed. In addition, we are currently going through a re-alignment of our maintenance pricing to be more competitive in the market and make it easier for our customers to do business with Commvault. This maintenance pricing re-alignment will phase in over the next 12 months and is primarily focused on the mid- to lower-end of the market (non-enterprise customers) which impacts approximately a quarter of our existing maintenance revenue dollar base. If we are not successful with our maintenance pricing re-alignment strategy, our business and financial performance might also be adversely impacted.

The gross margin of our services revenue was ~~76.1%~~76% for fiscal ~~2016, and 75.4%~~2022, 79% for fiscal ~~2015~~2021 and 78% for fiscal ~~2014.~~2020. Overall, our services revenue has lower gross margins than our software and products revenue. The gross margin of our software and products revenue was ~~99.1%~~96% for fiscal ~~2016,~~2022, 92% for fiscal ~~2015~~2021 and 90% for fiscal ~~2014. An~~2020. The increase in ~~the~~gross margin percentage of ~~total~~software and products is a result of reduced sales of hardware associated with our appliance as well as reduced software royalties associated with sales of HyperScale appliances and software. With the launch of HyperScale X in the second half of fiscal 2021, we typically sell software to a third party that sells an integrated appliance to end user customers. As a result, our hardware revenues ~~represented by services revenue may adversely affect our overall gross margins.~~and cost of sales have been decreasing.

Description of Costs and Expenses

Our cost of revenues is as follows:

•Cost of Software and Products Revenue, consists primarily of the cost of third-party royalties and other costs such as media, manuals, translation and distribution ~~costs;~~costs, and

hardware associated with our appliances; and

•Cost of Services Revenue, consists primarily of salary and employee benefit costs in providing customer support and other professional ~~services.~~

services as well as third-party hosting fees.

Our operating expenses are as ~~follows~~follows:

•Sales and Marketing, consists primarily of salaries, commissions, employee benefits, stock-based compensation and other direct and indirect business expenses, including travel and related expenses, sales promotion expenses, public relations expenses and costs for marketing materials and other marketing events (such as trade shows and advertising);

•Research and Development, which is primarily the expense of developing new software applications and modifying existing software applications, consists principally of salaries, stock-based compensation and benefits for research and development personnel and related expenses; contract labor expense and consulting fees as well as other expenses associated with the design, certification and testing of our software applications; and legal costs associated with the patent registration of such software applications;

•General and Administrative, consists primarily of salaries, stock-based compensation and benefits for our executive, accounting, human resources, legal, information systems and other administrative personnel. Also included in this category are other general corporate expenses, such as outside legal and accounting services, compliance costs and insurance; and

•Depreciation and Amortization, consists of depreciation expense primarily for our owned ~~Corporate Campus Headquarters~~corporate campus headquarters location, ~~and~~ computer equipment we use for information services and in our development and test ~~labs.~~

labs and amortization of intangible assets.

Foreign Currency Exchange Rates’ Impact on Results of Operations

Sales outside the United States were approximately ~~42%~~48% of our total revenue for both fiscal ~~2016, 43%~~2022 and fiscal 2021 and 49% for fiscal ~~2015 and fiscal 2014.~~2020. The income statements of our non-U.S. operations are translated into U.S. dollars at the average exchange rates for each applicable month in a period. To the extent the U.S. dollar weakens against foreign currencies, the translation of these foreign currency denominated transactions generally results in increased revenue, operating expenses and income from operations for our non-U.S. operations. Similarly, our revenue, operating expenses and net income will generally decrease for our non-U.S. operations if the U.S. dollar strengthens against foreign currencies.

Using the average foreign currency exchange rates from fiscal ~~2015,~~2021, our software and products revenue would have been ~~higher~~lower by ~~$12.4~~$0.1 million, our services revenue would have been ~~higher~~lower by ~~$16.3~~$2.5 million, our cost of sales would have been ~~higher~~lower by ~~$4.2~~$0.3 million and our operating expenses would have been ~~higher~~lower by ~~$17.3~~$1.6 million from non-U.S. operations for fiscal ~~2016.~~

Using the average foreign currency exchange rates from fiscal 2014, our software revenue would have been higher by $7.1 million, our services revenue would have been higher by $5.7 million, our cost of sales would have been higher by $1.2 million and our operating expenses would have been higher by $5.7 million from non-U.S. operations for fiscal 2015.2022.

In addition, we are exposed to risks of foreign currency fluctuation primarily from cash balances, accounts receivables and intercompany accounts denominated in foreign currencies and are subject to the resulting transaction gains and losses, which are recorded as a component of general and administrative expenses. Net foreign currency transaction losses in fiscal 2022 were not significant. We recognized net foreign currency transaction ~~gains~~losses of ~~$0.2~~$1.9 million in fiscal ~~2016, $0.1~~2021 and gains of $0.4 million in fiscal ~~2015, and $0.3 million in fiscal 2014.~~2020.

Critical Accounting Policies

In presenting our consolidated financial statements in conformity with U.S. generally accepted accounting principles, we are required to make estimates and judgments that affect the amounts reported therein. Some of the estimates and assumptions we are required to make relate to matters that are inherently uncertain as they pertain to future events. We base these estimates on historical experience and on various other assumptions that we believe to be reasonable and appropriate. Actual results may differ significantly from these estimates. The following is a description of our accounting policies that we believe require subjective and complex judgments, which could potentially have a material effect on our reported financial condition or results of operations.

Revenue Recognition

We account for revenue in accordance with ASC 606, Revenue from Contracts with Customers. Our revenue recognition ~~policy is based on complex rules that~~policies require us to make significant judgments and estimates. In applying our revenue recognition policy, we must determine which portions of our revenue are recognized currently (generally software and products revenue) and which portions must be deferred and recognized in future periods (generally services revenue). We analyze various factors including, but not limited to, the ~~sales~~selling price of undelivered services when sold on a stand-alone basis, our pricing policies, the credit-worthiness of our customers, ~~and resellers, accounts receivable aging data~~ and contractual terms and conditions in helping us to make such judgments about revenue recognition. Changes in judgment on any of these factors could materially impact the timing and amount of revenue recognized in a given period.

~~Currently, we~~We derive ~~revenues~~revenue from two primary sources: software ~~licenses~~and products, and services. Software and products revenue includes our software and integrated appliances that combine our software with hardware. Services include customer support (software updates and technical support), consulting, assessment and design services, installation services, customer education and ~~training. A typical sales arrangement includes both of these sources.~~

For sales arrangements involving multiple elements, we recognize revenue using the residual method. Under the residual method, we allocate and defer revenue for the undelivered elements based on fair value and recognize the difference between the total arrangement fee and the amount deferred for the undelivered elements as revenue. The determination of fair value of the undelivered elements in multiple-element arrangements is based on the price charged when such elements are sold separately,Commvault software-as-a-service, which is ~~commonly referred~~branded as Metallic.

We sell both perpetual and term-based licenses of our software. We refer to ~~as vendor-specific objective evidence (“VSOE”).~~

~~Our~~our term-based software licenses ~~typically provide for a perpetual right to use~~as subscription arrangements. We do not customize our software and installation services are ~~sold on a per-copy basis, on a per terabyte capacity basis~~not required. The software is delivered before related services are provided and is functional without professional services, updates and technical support. We have concluded that our software licenses (both perpetual and subscription) are functional intellectual property that is distinct as ~~a solution set or as site licenses. Software licenses sold on a capacity basis provide~~ the ~~customer with unlimited licenses of specified software products based on a defined level of terabytes of data under management. Site licenses give the customer the additional right to deploy~~user can benefit from the software on ~~a limited basis during a specified term. Our solution sets are generally sold on a per unit basis such~~its own. Software revenue for both perpetual and subscription licenses is typically recognized when the software is delivered and/or made available for download as ~~per virtual machine for our virtual machine backup, recovery~~this is the point the user of the software can direct the use of, and ~~cloud management solution set; per mailbox for our email archive solution set, and per user for our endpoint data protection solution set.~~obtain substantially all of the remaining benefits from the functional intellectual property. We do not recognize software revenue through direct sales channels upon receipt of a purchase order or other persuasive evidence and when the other three basic revenue recognition criteria are met as described in the revenue recognition section in Note 2 of our “~~Notes to Consolidated Financial Statements.”~~ We recognize software revenue through all indirect sales channels on a sell-through model. A sell-through model requires that we recognize revenue when the basic revenue recognition criteria are met and these channels complete the sale of our software productsrelated to the ~~end-user. Revenue from~~renewal of subscription software licenses ~~sold through an original equipment manufacturer partner is recognized upon~~earlier than the ~~receipt~~beginning of ~~a royalty report or purchase order from that original equipment manufacturer partner.~~the new subscription period.

Services revenue includes revenue from customer support and other professional services. Customer support includes software updates on a when-and-if-available basis, telephone support, integrated web-based support and bug fixes or patches. Commvault sells its customer support contracts as a percentage of net software purchases the support is related to. Customer support revenue is recognized ratably over the term of the customer support agreement, which is typically one year. To determine the price for the customer support element when sold separately, we primarily use historical renewal rates. Historical renewal rates are supported by a rolling 12-month VSOE analysis in which we segregateThe term of our customer support renewal contracts into different classes based on specific criteria including, but not limited to, dollar amount of software purchased, level of customer support being provided and distribution channel. The purpose of such an analysissubscription arrangements is ~~to determine if the customer support element that is deferred at the time of a software sale is consistent with how it is sold on a stand-alone renewal basis.~~typically three years.

Our other professional services include consulting; implementation and post deployment services; and education services. Other professional services provided by us are not mandatory and can also be performed by the customer or a third-party. In addition to a signed purchase order, our consulting, assessment and design services, ~~and~~ installation services ~~are, in some cases, evidenced by a Statement of Work, which defines the specific scope of the~~and customer education. Customer education services to be performed when sold and performed on a stand-alone basis or included in multiple-element sales arrangements. Revenues from consulting, assessment and design services and installation services are based upon a daily, weekly or monthly rate and are recognized when the services are completed. Training includesinclude courses taught by our instructors or third-party ~~contractors either at one of our facilities or at the customer’s site. Training fees are recognized as revenue after the training course has been provided. Based on our analysis of such~~contractors. Revenue related to other professional services and customer education services is typically recognized as the services are performed.

Commvault software-as-a-service, which is branded as Metallic, allows customers to use hosted software over the contract period without taking possession of the software. Revenue related to Metallic is generally recognized ratably over the contract term as services revenue.

Most of our contracts with customers contain multiple performance obligations. For these contracts, we account for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. Standalone selling prices of software and appliances are typically estimated using the residual approach. Standalone selling prices of services are typically estimated based on observable transactions when these services are sold on a ~~stand-alone basis, we have concluded we have established VSOE for such other professional services when sold in connection with a multiple-element sales arrangement.~~standalone basis.

In summary, we have analyzed all of the undelivered elements included in our multiple-element sales arrangements and determined that we have VSOE of fair value to allocate revenues to services. Our analysis of the undelivered elements has provided us with results that are consistent with the estimates and assumptions used to determine the timing and amount of revenue recognized in our multiple-element sales arrangements. Accordingly, assuming all basic revenue recognition criteria are met, software revenue is recognized upon delivery of the software license using the residual method. We are not likely to materially change our pricing and discounting practices in the future.

Our ~~sales arrangements generally do not~~typical performance obligations include ~~acceptance clauses. However, if an arrangement does include an acceptance clause, we defer~~ the revenue for such an arrangement and recognize it upon acceptance. Acceptance occurs upon the earliest of receipt of a written customer acceptance, waiver of customer acceptance or expiration of the acceptance period.following:

~~Stock-Based Compensation~~

~~As of March 31, 2016, we maintain two stock incentive plans, which are described more fully in Note 8 of our~~ ~~“Notes to Consolidated Financial Statements~~.” We account for our stock incentive plans based on the grant date fair value recognition provisions in accordance with ASC 718. Compensation for share-based payment awards is generally recognized on a straight-line basis over the requisite service period of the awards, which is generally the vesting period. However, awards granted to senior executives that include market or performance conditions are recognized using the accelerated method.

We estimated the fair value of stock options granted using the Black-Scholes formula. The fair value of restricted stock units awarded is determined based on the number of shares granted and the closing price of our common stock on the date of grant. We expect in the future that we will no longer grant stock options and all awards will be granted as restricted stock units.

We incorporate our historical data into the expected term calculation for stock options granted. As a result, our calculation of expected term includes a combination of actual exercise data and an assumption on when the remaining outstanding options with similar characteristics will be exercised based on our historical data. In determining expected life, we separate employees into groups that have historically exhibited similar behavior with regard to option exercises. Expected volatility is calculated based on a blended approach that includes the implied volatility of our traded options with a remaining maturity greater than six months and the historical realized volatility of our common stock. The risk-free interest rate is determined by reference to U.S. Treasury yield curve rates with a remaining term that is approximately the expected life assumed at the date of grant. Forfeitures are estimated based on our historical analysis of actual stock option forfeitures. The assumptions used in the Black-Scholes option-pricing model in the fiscal years ended March 31, 2016 and 2015 are as follows:

Year Ended March 31,
2016 2015
Dividend yield None None
Expected volatility 39% - 43% 41% - 47%
Weighted average expected volatility 41% 46%
Risk-free interest rates 1.29% - 1.75% 1.22% - 2.18%
Weighted average expected life (in years) 4.6 5.7

The weighted average fair value of stock options granted was $15.20 per option during the year ended March 31, 2016 and $20.16 per option during the year ended March 31, 2015. In addition, the weighted average fair value of restricted stock units awarded was $37.27 per share during the year ended March 31, 2016 and $46.62 per share during the year ended March 31, 2015.

In October 2015, we granted 133,000 market performance stock units to certain executives. The vesting of these awards is contingent upon meeting certain total shareholder return (TSR) levels as compared to a market index over the next three years. The awards vest in 3 annual tranches and have a maximum potential to vest at 200% (266,000 shares) based on TSR performance. The related stock-based compensation expense is determined based on the estimated fair value of the underlying shares on the date of grant and is recognized using the accelerated method over the vesting term. The estimated fair value was calculated using a Monte Carlo simulation model. The fair value of the awards granted in October was $42.69.

As of March 31, 2016, there was approximately $105.5 million of unrecognized stock-based compensation expense related to all of the Company's employee stock plans, net of estimated forfeitures, that is expected to be recognized over a weighted average period of 2.15 years. The intrinsic value of the options outstanding as of March 31, 2016 was $53.2 million, of which $52.8 million related to vested options and $0.4 million related to unvested options. We anticipate that future grants under our stock incentive plans will include restricted stock units.


Performance Obligation	When Performance Obligation is Typically Satisfied	When Payment is Typically Due	How Standalone Selling Price is Typically Estimated
Software and Products Revenue
Software Licenses	Upon shipment or made available for download (point in time)	Within 90 days of shipment except for certain subscription licenses which are paid for over time	Residual approach
Customer Support Revenue
Software Updates	Ratably over the course of the support contract (over time)	At the beginning of the contract period	Observable in renewal transactions
Customer Support	Ratably over the course of the support contract (over time)	At the beginning of the contract period	Observable in renewal transactions
Other Services Revenue
Other Professional Services (except for education services)	As work is performed (over time)	Within 90 days of services being performed	Observable in transactions without multiple performance obligations
Education Services	When the class is taught (point in time)	Within 90 days of services being performed	Observable in transactions without multiple performance obligations
Software-as-a-service (Metallic)	Ratably over the course of the contract (over time)	Annual or monthly payments	Observable in transactions without multiple performance obligations

Accounting for Income Taxes

~~As part of the process of preparing our financial statements, we are required to estimate our~~Under ASC 740, deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts. Valuation allowances are established when, in ~~each of the jurisdictions in which we operate. This process involves estimating~~ our ~~actual current~~judgment, it is more likely than not that deferred tax ~~exposure, including~~assets will not be realized. In assessing the need for a valuation allowance, we weigh the available positive and negative evidence, including historical levels of pre-tax income, legislative developments, expectations and risks associated with estimates of future pre-tax income, and prudent and feasible tax ~~audits, and assessing temporary differences resulting from different treatment~~planning strategies. We believe that it is more likely than not that we will not realize the benefits of ~~items for tax and accounting purposes. These differences result in~~our gross deferred tax assets and ~~liabilities. As~~therefore have recorded a valuation allowance to reduce the carrying value of ~~March 31, 2016, we had net~~these gross deferred tax assets, net of ~~approximately $50.0 million, which were primarily related~~the impact of the reversal of taxable temporary differences, to ~~stock-based compensation, deferred revenue and tax credits. We assess~~zero. The valuation allowance is material to our financial statements. In the ~~likelihood that~~future, changes to our estimates regarding the realizability of our gross deferred tax assets will be recovered from future taxable income, and to the extent that we believe recovery is not likely, we establish a valuation allowance. During the year ended March 31, 2016, we increased the valuation allowance by $1.4 million againstcould materially impact our ~~deferred tax assets which now totals $2.8 million. All~~results of the valuation allowance we have recorded at March 31, 2016 is related to New Jersey state research tax credits due to uncertainties related to the ability to utilize such state research tax credits before they expire. We based our valuation allowance on our estimates of taxable income by legal entity and the period over which our state research tax credits will be recoverable.

At March 31, 2016, we have federal and state research tax credit ("R&D") carryforwards of approximately $3.4 million and $3.9 million, respectively. The federal research tax credit carryforwards expire from 2025 through 2036, and the state research tax credit carryforwards expire from 2016 through 2023. At March 31, 2016, we have federal Alternative Minimum Tax credit carryforwards of $1.1 million.

As of March 31, 2016, we had unrecognized tax benefits of $2.0 million, all of which, if recognized, would favorably affect the effective tax rate. In addition, we have accrued interest and penalties of $0.3 million related to the unrecognized tax benefits. Interest and penalties, if any, related to unrecognized tax benefits are recorded in income tax expense.operations.

We conduct business globally and as a result, file income tax returns in the United States and in various state and foreign jurisdictions. In the normal course of business, we are subject to examination by taxing authorities throughout the world, including such major jurisdictions as the United States, Australia, Canada, Germany, Netherlands and United Kingdom. ~~The following table summarizes~~

Goodwill

We test goodwill for impairment at least annually, on January 1, by performing a quantitative assessment of whether the ~~tax years~~fair value of each reporting unit or asset exceeds its carrying amount. We have one reporting unit. Goodwill is tested at this reporting unit level. This requires us to assess and make judgments regarding a variety of factors which impact the fair value of the reporting unit or asset being tested, including business plans, anticipated future cash flows, economic projections and other market data. Because there are inherent uncertainties involved in these factors, significant differences between these estimates and actual results could result in future impairment charges and could materially impact our future financial results. During the ~~major tax jurisdictions~~fourth quarter of 2022, we completed the annual impairment test for goodwill and determined that ~~remain subject to income tax examinations by tax authorities~~it had not been impaired as of ~~March 31, 2016. The years subject to income tax examination in our foreign jurisdictions cover~~ the ~~maximum time period with respect to these jurisdictions. Due to NOL carryforwards, in some cases the tax years continue to remain subject to examination with respect to such NOLs.~~test date, January 1, 2022.



~~Tax Jurisdiction~~	~~Years Subject to Income~~ ~~Tax Examination~~
~~U.S. Federal~~	~~2013 - Present~~
~~New Jersey~~	~~2012 - Present~~
~~Foreign jurisdictions~~	~~2011 - Present~~

~~Software Development Costs~~

Research and development expenditures are charged to operations as incurred. Based on our software development process, technological feasibility is established upon completion of a working model, which also requires certification and extensive testing. Costs incurred by us between completion of the working model and the point at which the product is ready for general release are immaterial.

Results of Operations

The following table sets forth each of our sources of revenues and costs of revenues for the specified periods as a percentage of our total revenues for those periods (due to rounding numbers in column may not sum to totals):

Year Ended March 31,
2016 2015 2014
Revenues:
Software 43 % 47 % 50 %
Services 57 % 53 % 50 %
Total revenues 100 % 100 % 100 %
Cost of revenues:
Software — % — % — %
Services 13 % 13 % 12 %
Total cost of revenues 14 % 14 % 13 %
Gross margin 86 % 86 % 87 %

Fiscal year ended March 31, ~~2016~~2022 compared to fiscal year ended March 31, ~~2015~~2021

Revenues (in millions)

- Total revenues ~~decreased $12.4~~increased $46.1 million, or ~~2%, from $607.5 million in fiscal 2015 to $595.1 million in fiscal 2016.~~6%

- Software ~~Revenue.~~ ~~Software revenue decreased $24.5 million, or 9%, from $283.3 million in fiscal 2015 to $258.8 million in fiscal 2016. Software~~and products revenue represented ~~43%~~46% of our total revenues in fiscal ~~2016 compared to 47%~~2022 and 45% of our total revenues in fiscal ~~2015.~~2021. Software and products revenue increased $29.6 million, or 9%, primarily due to the following:

~~The overall decrease~~

•Increase of $30.0 million, or 13%, in larger deal transactions (deals greater than $0.1 million in software ~~revenue was primarily driven by a decline~~and products revenue);

•Increase of 19% in the number of ~~enterprise software~~larger deal transactions ~~(transactions greater than $0.1 million), which decreased~~partially offset by ~~$22.8 million, or 14% in fiscal 2016 compared to fiscal 2015. Enterprise software transactions represented approximately 53% and 56%~~a decrease of ~~our software revenue in fiscal 2016 and fiscal 2015, respectively. The decrease in enterprise software transactions is due to a 10% decrease in the number of transactions of this type and a~~ 4% ~~decrease~~ in the average dollar amount of such ~~transactions.~~ transactions;

•The average dollar amount of ~~enterprise~~larger deal transactions was approximately ~~$268,000~~$320 thousand in fiscal ~~2016~~2022 and approximately ~~$281,000~~$335 thousand in fiscal ~~2015. Software~~2021;

•Larger deal transactions represented approximately 72% of our software and products revenue ~~derived from~~in fiscal 2022 and 69% of our software and products revenue in fiscal 2021; and

•The increase in larger deal transaction revenue was partially offset by a decrease of $0.3 million in transactions less than $0.1 ~~million decreased $1.6 million, or 1%,~~million.

- Services revenue represented 54% of our total revenues in fiscal ~~2016 compared~~2022 and 55% of our total revenues in fiscal 2021. Services revenue increased $16.5 million, primarily due to ~~fiscal 2015.~~an increase in professional services and software-as-a-service revenue, partially offset by a decline in customer support revenue.

We track software and products revenue on a geographic basis. The geographic regions that are tracked are the Americas (United States, Canada, Latin America), EMEA (Europe, Middle East, Africa) and ~~APAC~~APJ (Australia, ~~New Zealand,~~Japan, Southeast Asia, China). Americas, EMEA and ~~APAC~~APJ represented ~~60%~~59%, ~~29%~~30% and 11% of total software and products revenue, respectively, for the fiscal year ended March 31, ~~2016.~~2022. The year over year ~~decline~~increase of ~~Software Revenue~~software and products revenue was 15% and 2% in the Americas and in EMEA, respectively, and ~~APAC~~declined 2% in APJ.

▪The increase in Americas software and products revenue was ~~11%, 1% and 11%, respectively.~~

~~Software revenue for~~primarily due to a 15% increase from larger deal transactions. This was the ~~fiscal year ended March 31, 2016~~result of an increase in the ~~Americas was impacted by lower productivity in our Americas sales organization which resulted in a decline in both enterprise~~number of transactions ~~and non-enterprise transactions during fiscal 2016~~ compared to ~~fiscal 2015. The~~the prior year partially offset by a decrease in ~~enterprise transactions was~~average deal size.

▪EMEA software and products revenue increased primarily as a result of a ~~decline~~13% increase in ~~the number of enterprise transactions. The decline~~larger deal revenue driven by an increase in ~~EMEA software~~average deal size.

▪APJ revenue ~~was the result of changes in foreign exchange rates as the U.S. dollar strengthened significantly against the Euro and British pound sterling. Using average foreign exchange rates~~ from ~~fiscal 2015, fiscal 2016 EMEA software revenue increased 8%~~deals less than $0.1 million decreased 5% compared to ~~an actual reported EMEA software revenue decline of 1%. APAC software revenue was also impacted by~~ the strengthening of the U.S. dollar. Using average foreign exchange rates from fiscal 2015, fiscal 2016 APAC software revenue decreased 1% compared to an actual reported APAC software revenue decrease of 11%. APAC software revenue was also adversely impactedprior year partially offset by a ~~decline~~1% increase in ~~enterprise~~larger deal transactions.

Our software and products revenue in EMEA and ~~APAC~~APJ is subject to changes in foreign exchange rates as more fully discussed above in the “Foreign Currency Exchange Rates’ Impact on Results of Operations” section.

Software revenue derived from our indirect distribution channel (resellers and original equipment manufacturers) decreased $11.4 million, or 5% in fiscal 2016 compared to fiscal 2015, and software revenue through our direct sales force decreased $13.1 million, or 26% in fiscal 2016 compared to fiscal 2015. For additional discussion on software revenue derived from our direct sales force see the ~~“Sources of Revenue”~~ ~~section.~~

~~Services Revenue.~~ Services revenue increased $12.0 million, or 4%, from $324.3 million in fiscal 2015 to $336.3 million in fiscal 2016. Services revenue represented 57% of our total revenues in fiscal 2016 compared to 53% in fiscal 2015. The net increase in services revenue is due to a $15.2 million increase in revenue from customer support agreements as a result of software sales to new customers and renewal agreements with our installed software base.

Cost of Revenues and Gross Margin ($ in millions)

- Total cost of revenues increased ~~$0.6~~$4.5 million ~~or 1%, from $82.1 million in fiscal 2015 to $82.7 million in fiscal 2016. Total cost of revenues~~and represented ~~14%~~15% of our total revenues in both fiscal ~~2016~~2022 and fiscal ~~2015.~~2021.

~~Cost of Software Revenue.~~- Cost of software and products revenue ~~was $2.4~~decreased $13.2 million ~~in both fiscal 2016~~ and ~~2015, representing approximately 1%~~represented 4% of software ~~revenue.~~and products revenue in fiscal 2022 compared to 8% in fiscal 2021. The decrease was the result of reduced sales of hardware associated with our appliances as well as reduced software royalties associated with sales of HyperScale appliances and software. Our appliances are now typically sold by third parties that integrate our software with hardware.

~~Cost of Services Revenue.~~- Cost of services revenue increased ~~$0.7~~$17.6 million ~~or 1%, from $79.6 million in fiscal 2015 to $80.3 million in fiscal 2016. Cost of services revenue~~and represented 24% ~~and 25%~~ of our services revenue in fiscal ~~2016 and fiscal 2015, respectively.~~

~~Operating Expenses~~

~~Sales and Marketing.~~ ~~Sales and marketing expenses increased $16.7 million, or 5%, from $336.0 million~~2022 compared to 21% in fiscal ~~2015 to $352.7 million in fiscal 2016.~~2021. The increase ~~is primarily due~~in cost of services revenue related to ~~a $16.3 million~~an increase in the cost of infrastructure related to our software-as-a-service offerings, as well as an increase in employee compensation and related expenses ~~attributable~~compared to the ~~expansion of our sales force from the~~ prior ~~year.~~year due to temporary pay cuts enacted in 2021.

Operating Expenses ($ in millions)

- Sales and marketing ~~expenses as a percentage of total revenues~~expenses: increased ~~to 59% in fiscal 2016 compared to 55% in fiscal 2015,~~$9.7 million, or 3%, primarily due to ~~higher~~an increase in employee compensation ~~costs as a percentage of total revenues related to our field~~and sales ~~teams.~~commissions associated with increased revenue.

~~Research and Development.~~

- Research and development ~~expenses~~expenses: increased ~~$5.1~~$20.2 million, or 8%15%, ~~from $64.1 million in fiscal 2015 to $69.3 million in fiscal 2016. The increase is primarily due to~~as a ~~$4.8 million~~result of an increase in employee compensation and related expenses attributable to the expansion of our engineering ~~group from the~~group.

•Increase in employee compensation, including an increase in stock-based compensation of $9.0 million compared to prior year. ~~Research and development expenses as a percentage of total revenues increased to 12% in fiscal 2016 compared to 11% in fiscal 2015.~~

•Investing in research and development has been a priority for Commvault, and we anticipate continued spending related to the development of our data ~~and information~~ management software applications.

~~General and Administrative.~~

- General and administrative ~~expenses~~expenses: increased ~~$0.8~~$10.8 million, or 1%12%, ~~from $78.1~~primarily due to the following:

•Increase in employee compensation and related expenses compared to prior year. Stock-based compensation increased $9.3 million compared to the prior year.

•Increase in legal expenses for costs related to intellectual property matters partially offset by $7.9 million of settlement gains netted against related legal expenses.

- Restructuring: Our restructuring plan is intended to increase efficiency in our sales, marketing and distribution functions as well as reduce costs across all functional areas. Restructuring expenses were $6.2 million and $23.5 million for the years ended March 31, 2022 and 2021, respectively. These restructuring charges relate primarily to severance and related costs associated with headcount reductions. These charges include $1.7 million in fiscal ~~2015 to $78.8~~2022 and $2.7 million in fiscal ~~2016. This increase is primarily~~2021 of stock-based compensation related to modifications of existing awards granted to certain employees included in the restructuring. We cannot guarantee the restructuring program will achieve its intended result. Risks associated with this restructuring program also include additional unexpected costs, adverse effects on employee morale and the failure to meet operational and growth targets due to ~~a $4.5 million increase in employee and related compensation due~~the loss of key employees, any of which may impair our ability to ~~higher headcount which is partially offset by a $3.6 million decline in expenses related to~~achieve anticipated results of operations or otherwise harm our move to a new corporate headquarters in fiscal 2015. General and administrative expenses in fiscal 2016 also includes $0.2 million of net foreign currency transaction gains compared to $0.1 million of net foreign currency transaction gains recognized in general and administrative expenses in fiscal 2015. General and administrative expenses as a percentage of total revenues was 13% in both fiscal 2016 and fiscal 2015.business.

- Depreciation and ~~Amortization.~~ ~~Depreciation expense increased $1.1~~amortization expense: decreased $5.0 million, from ~~$8.5~~$14.6 million in fiscal ~~2015~~2021 to ~~$9.6~~$9.7 million in fiscal ~~2016. The increase in depreciation expense is~~2022, driven by the ~~result~~elimination of ~~the move~~amortization of intangible assets related to ~~our new corporate campus headquarters~~Hedvig due to

their impairment in the ~~third~~second quarter of fiscal ~~2015.~~2021. Current year amortization of intangible assets related to TrapX is $0.2 million.

Interest Income

Interest income decreased $0.3 million, from $1.0 million in fiscal 2021 to $0.7 million in fiscal 2022 primarily as a result of declines in market interest rates and the amount of invested funds.

Interest Expense

Interest expense of $0.9 million in fiscal 2016 was related to the amortization of debt issuance costs and commitment fees related to our Revolving Credit Facility. If we were to borrow against the facility in the future we would incur additional interest expense.

~~Interest Income~~

~~Interest income~~ increased $0.1 million ~~from $0.8 million~~as a result of entering into a revolving credit facility in fiscal ~~2015 to $0.9 million in fiscal 2016.~~

2022.

Income Tax Expense

Income tax expense was ~~$1.7~~$9.8 million in fiscal ~~2016~~2022 compared to ~~$13.2~~expense of $9.7 million in fiscal ~~2015.~~2021. The ~~decline in~~ income tax expense isfor the result of a decline in income before taxes. The effective tax rate in fiscal 2016 was 93% as compared to 34% in fiscal 2015. In fiscal 2016, the effective tax rate is higher than the statutory rate due to the amount of unfavorable permanent differences and an increase to the valuation allowance for New Jersey research tax credits. The Company increased the valuation allowance $1.4 million in fiscal 2016 due to lower estimates of forecasted New Jersey taxable income in the periods prior to the research tax credits expiration.

In fiscal 2015, the effective tax rate is lower than the statutory rate due to the impact of domestic production deduction, foreign tax credits and release of reserves, partially offset by state income taxes and permanent differences in both the United States and foreign jurisdictions.

~~Fiscal~~ year ended March 31, ~~2015 compared~~2022 relates primarily to ~~fiscal year ended March 31, 2014~~current foreign taxes.

~~Revenues~~

~~Total revenues increased $21.2 million, or 4%, from $586.3 million in fiscal 2014 to $607.5 million in fiscal 2015.~~

~~Software Revenue.~~ Software revenue decreased $11.2 million, or 4%, from $294.4 million in fiscal 2014 to $283.3 million in fiscal 2015. Software revenue represented 47% of our total revenues in fiscal 2015 compared to 50% in fiscal 2014.

The overall decrease in software revenue was primarily driven by a decline in the number of enterprise software transactions (transactions greater than $0.1 million), which decreased by $9.3 million, or 6% in fiscal 2015 compared to fiscal 2014. Enterprise software transactions represented approximately 56% and 57% of our software revenue in fiscal 2015 and fiscal 2014, respectively. The decrease in enterprise software transactions is due to a 9% decrease in the number of transactions of this type partially offset by a 3% increase in the average dollar amount of such transactions. The average dollar amount of enterprise transactions was approximately $281,000 in fiscal 2015 and approximately $272,000 in fiscal 2014. Software revenue derived from transactions less than $0.1 million decreased $1.8 million, or 1%, in fiscal 2015 compared to fiscal 2014.

We track software revenue on a geographic basis. The geographic regions that are tracked are the Americas (United States, Canada, Latin America), EMEA (Europe, Middle East, Africa) and APAC (Australia, New Zealand, Southeast Asia, China). Americas, EMEA and APAC represented 61%, 27% and 12% of total software revenue, respectively, for the fiscal year ended March 31, 2015. The year over year growth (decline) of Software Revenue in the Americas, EMEA and APAC was (6%), (4%) and 9%, respectively, resulting in consolidated Software Revenue decline of 4%.

Software revenue growth for the fiscal year ended March 31, 2015 in the Americas was impacted by lower productivity in our Americas sales organization which resulted in a decline in both enterprise transactions and non-enterprise transactions during fiscal 2015 compared to fiscal 2014. The decrease in enterprise transactions was a result of a decline in the number of enterprise transactions partially offset by a modest increase the average dollar amount of enterprise transactions. The decline in EMEA software revenue was primarily the result of changes in foreign exchange rates as the U.S. dollar strengthened significantly against the Euro and British pound sterling. Using average foreign exchange rates from fiscal 2014, fiscal 2015 EMEA software revenue increased 2% compared to an actual reported EMEA software revenue decline of 4%. APAC software revenue growth was positively impacted by a year over year increase in enterprise transaction revenue due to a significant increase in the average dollar value of such transactions. The overall increase in APAC software revenue was also partially offset by a strengthening of the U.S. dollar. Using average foreign exchange rates from fiscal 2014, fiscal 2015 APAC software revenue increased 13% compared to an actual reported APAC software revenue increase of 9%. Our software revenue in EMEA and APAC is subject to changes in foreign exchange rates as more fully discussed above in the section.

Software revenue derived from our indirect distribution channel (resellers and original equipment manufacturers) decreased $23.1 million, or 9% in fiscal 2015 compared to fiscal 2014, and software revenue through our direct sales force increased $12.0 million, or 32% in fiscal 2015 compared to fiscal 2014. For additional discussion on software revenue derived from our direct sales force see the section.

Services Revenue. Services revenue increased $32.4 million, or 11%, from $291.9 million in fiscal 2014 to $324.3 million in fiscal 2015. Services revenue represented 53% of our total revenues in fiscal 2015 compared to 50% in fiscal 2014. The increase in services revenue is primarily due to a $32.2 million increase in revenue from customer support agreements as a result of software sales to new customers and renewal agreements with our installed software base.

~~Cost of Revenues~~

Total cost of revenues increased $7.8 million, or 10%, from $74.3 million in fiscal 2014 to $82.1 million in fiscal 2015. Total cost of revenues represented 14% and 13% of our total revenues in fiscal 2015 and fiscal 2014, respectively.

~~Cost of Software Revenue.~~ Cost of software revenue decreased approximately $0.1 million from $2.6 million in fiscal 2014 to $2.4 million in fiscal 2015. Cost of software revenue represented 1% of our total software revenue in both fiscal 2015 and fiscal 2014.

~~Cost of Services Revenue.~~ Cost of services revenue increased $7.9 million, or 11%, from $71.7 million in fiscal 2014 to $79.6 million in fiscal 2015. Cost of services revenue represented 25% of our services revenue in both fiscal 2015 and fiscal 2014.

~~Operating Expenses~~

~~Sales and Marketing.~~ Sales and marketing expenses increased $52.7 million, or 19%, from $283.3 million in fiscal 2014 to $336.0 million in fiscal 2015. The increase is primarily due to a $36.2 million increase in employee compensation and related expenses attributable to the expansion of our sales force from the prior year. The increase in sales and marketing expenses also includes a $6.0 million increase in stock-based compensation expenses and a $3.3 million increase in advertising and marketing related expenses as we continue to build brand awareness for our Simpana products. Sales and marketing expenses as a percentage of total revenues increased to 55% in fiscal 2015compared to 48% in fiscal 2014, primarily due to higher compensation costs as a percentage of total revenues related to our field sales teams.

~~Research and Development.~~ Research and development expenses increased $9.0 million, or 16%, from $55.1 million in fiscal 2014 to $64.1 million in fiscal 2015. The increase is primarily due to higher compensation and related expenses resulting from the expansion of our engineering group totaling approximately $7.6 million. The increase in research and development also includes a $1.4 million increase in stock-based compensation expenses. Research and development expenses as a percentage of total revenues increased to 11% in fiscal 2015 compared to 9% in fiscal 2014. Investing in research and development has been a priority for CommVault, and we anticipate continued spending related to the development of our data and information management software applications.

~~General and Administrative.~~ General and administrative expenses increased $11.0 million, or 16%, from $67.1 million in fiscal 2014 to $78.1 million in fiscal 2015. This increase is primarily due to expenses of $3.6 million associated with the move of our corporate headquarters, a $2.6 million increase in employee and related compensation due to higher headcount, and a $2.6 million increase in stock-based compensation expenses. General and administrative expenses in fiscal 2015 also includes $0.1 million of net foreign currency transaction gains compared to $0.3 million of net foreign currency transaction gains recognized in general and administrative expenses in fiscal 2014. General and administrative expenses as a percentage of total revenues increased to 13% in fiscal 2015 compared to 11% in fiscal 2014.

~~Depreciation and Amortization.~~ Depreciation expense increased $2.4 million, from $6.1 million in fiscal 2014 to $8.5 million in fiscal 2015. The increase in depreciation expense is the result of the move to our new corporate campus headquarters. We expect depreciation expenses associated with our new headquarters to total approximately $4.5 million on an annual basis. During the fiscal 2015, we recorded $0.6 million of accelerated depreciation for leasehold improvements associated with our previous headquarters location.

~~Interest Expense~~

Interest expense was $0.7 million in fiscal 2015, relating to the amortization of debt issuance costs and commitment fees related to our Revolving Credit Facility. If we were to borrow against the facility in the future we would incur additional interest expense.

~~Interest Income~~

Interest income decreased $0.1 million, from $0.9 million in fiscal 2014 to $0.8 million in fiscal 2015. The decrease in interest income is primarily due to decreased yield on our investment portfolio.

~~Income Tax Expense~~

Income tax expense was $13.2 million in fiscal 2015 compared to $37.2 million in fiscal 2014. The effective tax rate in fiscal 2015 was 34% as compared to 37% in fiscal 2014. In fiscal 2015, the effective tax rate is lower than the statutory rate due to the impact of domestic production deduction, foreign tax credits and release of reserves, partially offset by state income taxes and permanent differences in both the United States and foreign jurisdictions.

In fiscal 2014, the effective tax rate approximated the statutory rate but was benefited by the impact of domestic production deduction, foreign tax credits and release of reserves, which were offset by state income taxes and permanent differences in both the United States and foreign jurisdictions. Additionally, the research and development credit expired on December 31, 2013; therefore, the effective tax rate only reflects nine months of a benefit.

Liquidity and Capital Resources

As of March 31, ~~2016,~~2022, our cash ~~and cash equivalents~~ balance ~~of $288.1 million primarily consisted of money market funds. In addition, we have approximately $99.1 million of short-term investments invested in U.S. Treasury Bills at March 31, 2016.~~was $267.5 million. In recent fiscal years, our principal source of liquidity has been cash provided by operations.

~~As of March 31, 2016, the~~ The amount of cash and cash equivalents held outside of the United States by our foreign legal entities was approximately ~~$144.9~~$184.0 million. These balances are dispersed across many international locations around the world. We believe that such dispersion meets the current and anticipated future liquidity needs of our foreign legal entities. ~~In addition, it is our intention to indefinitely reinvest undistributed earnings of our foreign legal entities. In the event~~If we ~~needed~~need to repatriate funds from outside of the United States, such repatriation would likely be subject to restrictions by local laws and/or tax consequences including foreign withholding ~~taxes or U.S. income~~ taxes. ~~It is not currently practical to estimate the legal restrictions or tax liability that would arise from such repatriations.~~

On ~~June 30, 2014,~~December 13, 2021, we entered into a five-year ~~$250~~$100 million senior secured revolving credit facility (the “Credit Facility”). with J.P. Morgan. The Credit Facility is available for share repurchases, general corporate purposes, and letters of credit. The Credit Facility contains financial maintenance covenants including a leverage ratio and interest coverage ratio. The Credit Facility also contains certain customary events of default which would permit the ~~lenders~~lender to, among other things, declare all loans then outstanding to be immediately due and payable if such default is not cured within applicable grace periods. The Credit Facility also limits our ability to incur certain additional indebtedness, create or permit liens on assets, make acquisitions, make investments, loans or advances, sell or transfer assets, pay dividends or distributions, and engage in certain transactions with foreign affiliates. Outstanding borrowings under the Credit Facility accrue interest at an annual rate equal to ~~London Interbank Offered~~Secured Overnight Financing Rate plus ~~1.50%~~1.25% subject to increases based on ~~the Company's~~our actual leverage. The unused balance on the Credit Facility is also subject to a 0.25% annual interest charge subject to increases based on ~~the Company's~~our actual leverage. As of March 31, ~~2016,~~2022, there were no borrowings under the Credit Facility and we ~~believe we are~~were in compliance with all covenants.

During the year ended March 31, ~~2016,~~2022, we repurchased ~~$91.5~~$305.2 million of common stock, ~~(2.6~~or approximately 4.3 million ~~shares)~~shares, under our share repurchase program. ~~In fiscal 2016, we bought back approximately 6%~~This program commenced in January of ~~our common stock that~~2021 and was ~~outstanding at~~completed on March 31, 2022. On April 21, 2022 the ~~beginning of the fiscal year. Our future stock repurchase activity is subject to the business judgment of our management and~~ Board of Directors taking into consideration our historical and projected results of operations, financial condition, cash flows and other anticipated capital requirements or investment alternatives. Our stock repurchase program reduces the dilutive impact on our common shares outstanding associated with stock option exercises and our previous public and private stock offerings through the repurchase of common stock we believe is undervalued. As of May 6, 2016, there is $93.1 million remaining in theapproved a new share repurchase program ~~which expires on March 31, 2017.~~of $250.0 million. The Board's authorization has no expiration date. Our stock repurchase program has been funded by our existing cash and cash equivalent balances as well as cash flows provided by our operations.

~~Our summarized annual~~ The following chart summarizes the cash ~~flow information is as follows (in thousands):~~

Year Ended March 31,
2016 2015 2014
Net cash provided by operating activities $ 84,413
$ 123,847
$ 119,137
Net cash used in investing activities (62,189 ) (90,041 ) (90,158 )
Net cash used in financing activities (69,970 ) (133,640 ) (4,078 )
Effects of exchange rate — changes in cash (1,820 ) (20,226 ) (1,132 )
Net increase (decrease) in cash and cash equivalents $ (49,566 ) $ (120,060 ) $ 23,769

Net cash provided by operating activities was $84.4 million in fiscal 2016, $123.8 million in fiscal 2015 and $119.1 million in fiscal 2014. In fiscal 2016, cash generated by operating activities was primarily due to net income adjusted for impact of non-cash charges and increases in deferred services revenue as a result of customer support agreements from new customers and renewal agreements with our installed customer base. In both fiscal 2015 and fiscal 2014, cash generated by operating activities was primarily due to net income adjusted for the impact of non-cash charges; an increase in deferred services revenue; and an increase in accrued liabilities. These increases were partially offset by an increase in accounts receivable due to higher revenues and timing of cash receipts.

~~Net cash used in investing activities was $62.2 million in fiscal 2016, $90.0 million in fiscal 2015 and~~ ~~$90.2 million~~ in fiscal 2014. In fiscal 2016, cash used in investing activities was primarily related to $49.1 million of net purchases of short-term investments of U.S. Treasury Bills, $6.3 million of capital expenditures as we continue to invest in and enhance our global infrastructure and a $4.7 million investment in Laitek, Inc (Laitek). Laitek develops solutions for acquiring, processing and presenting scientific and medical image information. We have an option to acquire the remaining ownership of Laitek at a fixed price for the next two years. In fiscal 2015, cash used in investing activities was due to the purchase of property and equipment in the amounts of $59.3 million for purchases relating to our corporate campus headquarters and $5.8 million of capital expenditures as we continue to invest in and enhance our global infrastructure. We also made net purchases of short-term investments of U.S. Treasury Bills of $25.0 million. In fiscal 2014, cash used in investing activities was due to the purchase of property and equipment in the amounts of $62.2 million for purchases relating to our corporate campus headquarters and $4.9 million of capital expenditures. We also made net purchases of short-term investments of $23.0 million.

Net cash used in financing activities was $70.0 million in fiscal 2016, $133.6 million in fiscal 2015 and $4.1 million in fiscal 2014. The cash used in financing activities in fiscal 2016 was primarily due to $91.5 million used to repurchase shares of our common stock under our repurchase program, partially offset by $14.8 million of proceeds from the exercise of stock options and the employee stock purchase plan and $6.7 million of excess tax benefits related to employee stock-based compensation. The cash used in financing activities in fiscal 2015 was due to $155.1 million used to repurchase shares of our common stock under our repurchase program, partially offset by $17.7 million of proceeds from the exercise of stock options and the employee stock purchase plan and $5.1 million of excess tax benefits related to employee stock-based compensation. The cash used in financing activities in fiscal 2014 was due to $50.0 million used to repurchase shares of our common stock under our repurchase program, partially offset by $28.3 million of excess tax benefits related to employee stock-based compensation and $17.6 million of proceeds from the exercise of stock options.stock:

A summary of the cash used for the stock repurchase program consists of the following:


	Year Ended March 31,
	2022		2021		2020		2019		2018
Cash used for repurchases (in thousands)	$	305,239	$	95,259	$	77,198	$	132,697	$	112,218
Shares repurchased (in thousands)	4,307		1,643		1,701		2,115		2,098
Average price per share	$	70.87	$	57.97	$	45.37	$	62.74	$	53.49

Our summarized annual cash flow information is as follows (in thousands):


	Year Ended March 31,
	2022		2021		2020
Net cash provided by operating activities	$	177,180	$	123,955	$	88,464
Net cash provided by (used in) investing activities	(24,444)		35,469		(74,005)
Net cash used in financing activities	(276,088)		(74,738)		(39,403)
Effects of exchange rate — changes in cash	(6,378)		16,469		(6,966)
Net increase (decrease) in cash and cash equivalents	$	(129,730)	$	101,155	$	(31,910)

- Net cash provided by operating activities was impacted by:

•Fiscal 2022: net income adjusted for the impact of non-cash charges, increases in deferred revenue and accrued expenses, partially offset by increases in accounts receivable and deferred commissions.

•Fiscal 2021: net loss adjusted for the impact of non-cash charges, including the impairment of intangible assets, and increases in deferred revenue and accrued expenses, partially offset by increases in accounts receivable and deferred commissions.

•Fiscal 2020: net loss adjusted for the impact of non-cash charges and decreases in accounts receivable.

- Net cash provided by or used in investing activities was impacted by:

•Fiscal 2022: $16.9 million used for the acquisition of TrapX, $3.9 million of capital expenditures and $4.1 million for the purchase of equity securities partially offset by proceeds of $0.5 million related to the sale of an equity investment.

•Fiscal 2021: $43.6 million of proceeds of short-term investments of U.S. Treasury bills, partially offset by $8.1 million of capital expenditures.

Year Ended March 31,
2016 2015 2014
Cash used for repurchases (in thousands) $ 91,477
$ 155,125
$ 50,030
Shares repurchased (in thousands) 2,563
3,171
775
Average price per share $ 35.69
$ 48.92
$ 64.54
•Fiscal 2020: $157.5 million used for the acquisition of Hedvig and $3.2 million of capital expenditures, partially offset by $86.7 million of net proceeds of short-term investments of U.S. Treasury Bills.

- Net cash used in financing activities was impacted by:

•Fiscal 2022: $305.2 million used to repurchase shares of our common stock under our repurchase program, $0.6 million of debt issuance costs paid partially offset by $29.7 million of proceeds from the exercise of stock options and the employee stock purchase plan.

•Fiscal 2021: $95.3 million used to repurchase shares of our common stock under our repurchase program, partially offset by $20.5 million of proceeds from the exercise of stock options and the employee stock purchase plan.

•Fiscal 2020: $77.2 million used to repurchase shares of our common stock under our repurchase program, partially offset by $37.8 million of proceeds from the exercise of stock options and the employee stock purchase plan.

Working capital decreased ~~$15.1~~$144.4 million from ~~$267.5~~$234.4 million as of March 31, ~~2015~~2021 to ~~$252.4~~$90.0 million as of March 31, ~~2016.~~2022. The decrease in working capital is primarily due to a $10.7 million increase in short-term deferred revenue. The increase in deferred revenue is primarily due to higher deferred services revenue from customer support agreements from software sales to new customers and renewal agreements with our installed software base.cash used for share repurchases during the fiscal year.

We believe that our existing cash, cash equivalents and our cash from operations will be sufficient to meet our anticipated cash needs for working capital, capital expenditures and potential stock repurchases for at least the next 12 months. We may seek additional funding through public or private financings or other arrangements during this period. Adequate funds may not be available when needed or may not be available on terms favorable to us, or at all. If additional funds are raised by issuing equity securities, dilution to existing stockholders will result. If we raise additional funds by obtaining loans from third parties, ~~including borrowing under our revolving credit facility,~~ the terms of those financing arrangements may include negative covenants or other restrictions on our business that could impair our operational flexibility, and would also require us to fund additional interest expense. If funding is insufficient at any time in the future, we may be unable to develop or enhance our products or services, take advantage of business opportunities or respond to competitive pressures, any of which could have a material adverse effect on our business, financial condition and results of operations.

Summary Disclosures about Contractual Obligations and Commercial Commitments

Our material capital commitments consist of obligations under facilities and operating leases. Some of these leases have free or escalating rent payment provisions. ~~We recognize rent expense under leases~~Refer to Notes 2 and 15 of the notes to the consolidated financial statements for further discussion on a straight-line basis. We anticipate that we will experience an increase in our capital expenditures and lease commitments as a result of our anticipated growth in operations, infrastructure, personnel and resources devoted to building our brand name.

~~The following table summarizes our obligations as of March 31, 2016 (dollars in thousands):~~

Payments Due by Period
Total
Less Than
1 Year
2-3 Years 4-5 Years
More
Than 5
Years
Operating lease obligations $ 33,902
$ 8,540
$ 12,886
$ 8,848
$ 3,628
Purchase obligations 13,708
11,591
2,075
42
—
Total $ 47,610
$ 20,131
$ 14,961
$ 8,890
$ 3,628

We generally do not enter into binding purchase obligations. The purchase obligations above relate primarily to marketing and software development services, IT infrastructure costs and costs associated with the construction of our corporate campus headquarters. The contractual obligations table above excludes unrecognized tax benefits, plus related interest and penalties totaling $2.2 million because we cannot reasonably estimate in which future periods these amounts will ultimately be settled. The $2.2 million is classified as long-term in our Consolidated Balance Sheet as of March 31, 2016 as none of these obligations are anticipated to be paid within one year from April 1, 2016.operating leases.

We have certain software royalty commitments associated with the shipment and licensing of certain products. Royalty expense is generally based on a fixed cost per unit shipped or a fixed fee for unlimited units shipped over a designated period. Royalty expense, included in cost of software and products revenues, was ~~$1.9~~$11.2 million in fiscal ~~2016~~2022 and ~~$1.8~~$16.3 million in fiscal ~~2015.~~2021.

We offer a 90-day limited product warranty for our software. To date, costs relating to this product warranty have not been material.

Off-Balance Sheet Arrangements

As of March 31, ~~2016 and 2015, other than our operating leases,~~2022, we dodid not have off-balance sheet financing arrangements, including any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities.

Indemnifications

Certain of our software licensing agreements contain certain provisions that indemnify our customers from any claim, suit or proceeding arising from alleged or actual intellectual property infringement. These provisions continue in perpetuity along with our software licensing agreements. We have never incurred a liability relating to one of these indemnification provisions in the past and we believe that the likelihood of any future payout relating to these provisions is remote. Therefore, we have not recorded a liability during any period related to these indemnification provisions.

Impact of Recently Issued Accounting Standards

~~Deferred Taxes~~

~~In November 2015,~~See Note 2 of the Financial Accounting Standards Board ("FASB") issued new accounting guidance regarding balance sheet classification of deferred taxes. The guidance requires companies to classify all deferred tax assets and liabilities as noncurrent on the balance sheet instead of separating deferred taxes into current and noncurrent. The Company has elected to early adopt the guidance on a retrospective basis. The adoption had an effect on the Consolidated Balance sheet as of March 31, 2015 and no effect on the Consolidated Statement of Income, Comprehensive Income (Loss), Cash Flow, or Statement of Stockholder’s Equity.

~~The following table summarizes the Company's As Reported and As Adjusted changes~~notes to the ~~Consolidated Balance Sheet at March 31, 2015 (in thousands).~~

March 31,
2015
As Reported As Adjusted
Current assets:
Deferred tax assets, net $ 16,142
$ —
Total Current Assets $ 541,551
$ 525,409

Deferred tax assets, net $ 24,903
$ 41,045

~~Revenue Recognition~~

~~In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)" (ASU 2014-09) and has since modified the standard with ASU 2015-14, "Deferral~~consolidated financial statements for a discussion of the Effective Date." These standards replace existing revenue recognition rules with a comprehensive revenue measurement and recognition standard and expanded disclosure requirements. The new standard becomes effective for our fiscal 2019 with early adoption permitted in fiscal 2018. We are still in the process of determining the impact of the standard on our financial statements and the timing of our adoption. The FASB allows two adoption methods under the new standard. Under one method, a company will apply the rules to contracts in all reporting periods presented. We currently believe we will apply this method of adoption. While we continue to evaluate the impact of the new standard, we believe the standard may require us to implement new revenue recognition processes, which will change our internal controls over revenue recognition.recently issued accounting standards.

~~Leases~~

In February 2016, the FASB issued ASU 2016-02 “Leases (Topic 842)” (“ASU 2016-02”). Under ASU 2016-02, a lessee will recognize in the balance sheet a liability to make lease payments (the lease liability) and a right-to-use asset representing its right to use the underlying asset for the lease term. The amendments of this ASU are effective for our fiscal 2020, with early adoption permitted. An entity will be required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. We are currently assessing the impact the adoption of ASU 2016-02 will have on our financial statements.

~~Stock-based Compensation~~

In March 2016, the FASB issued ASU 2016-09, "Improvements to Employee Share-Based Payment Accounting," which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The Company is required to adopt the new guidance in fiscal 2018 with early adoption permitted. We are currently assessing the impact the adoption of ASU 2016-09 will have on the financial statements.



Item 7A.			Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Risk

As of March 31, 2016, our cash, cash equivalent and short-term investment balances consisted primarily of money market funds and U.S. Treasury Bills. Due to the short-term nature of these investments, we are not subject to any material interest rate risk on these balances.None.

Foreign Currency Risk

Economic Exposure

As a global company, we face exposure to adverse movements in foreign currency exchange rates. Our international sales are generally denominated in foreign currencies and this revenue could be materially affected by currency fluctuations. Approximately ~~42%~~48% of our sales were outside the United States in both fiscal ~~2016~~2022 and ~~43% were outside the United States in~~ fiscal ~~2015.~~2021. Our primary exposures are to fluctuations in exchange rates for the U.S. dollar versus the Euro, and to a lesser extent, the Australian dollar, British pound sterling, Canadian dollar, Chinese yuan, Indian rupee, Korean won and Singapore dollar. Changes in currency exchange rates could adversely affect our reported revenues and require us to reduce our prices to remain competitive in foreign markets, which could also have a material adverse effect on our results of operations. Historically, we have periodically reviewed and revised the pricing of our products available to our customers in foreign countries and we have not maintained excess cash balances in foreign accounts.

We estimate that a 10% change in all foreign exchange rates would impact our reported operating profit by approximately ~~$4.5~~$11.8 million annually. This sensitivity analysis disregards the possibilities that rates can move in opposite directions and that losses from one geographic area may be offset by gains from another geographic area.

Transaction Exposure

Our exposure to foreign currency transaction gains and losses is primarily the result of certain net receivables due from our foreign subsidiaries and customers being denominated in currencies other than the functional currency of the subsidiary. Our foreign subsidiaries conduct their businesses in local currency and we generally do not maintain excess U.S. dollar cash balances in foreign accounts.

Foreign currency transaction gains and losses are recorded in ~~“General~~General and administrative ~~expenses”~~expenses in the Consolidated Statements of ~~Income.~~Operation. Net foreign currency transaction activity in fiscal 2022 was not significant. We recognized net foreign currency transaction losses of $1.9 million and gains of ~~$0.2 million, $0.1 million and $0.3~~$0.4 million in fiscal ~~2016, fiscal 2015,~~2021 and fiscal ~~2014~~2020, respectively. ~~The net foreign currency transaction gains and losses recorded in “General and administrative expenses” include settlement gains and losses on forward contracts disclosed below.~~

To date, we have selectively hedged our exposure to foreign currency transaction gains and losses on the balance sheet through the use of forward contracts, which were not designated as hedging instruments. The duration of forward contracts utilized for hedging our balance sheet exposure is generally one to three months. As of March 31, 2016 and March 31, 2015, we did not have any forward contracts outstanding. We recorded net realized losses in general and administrative expenses of less than $0.1 million in fiscal 2016 and net realized gains of less than of $0.1 million in fiscal 2015 and net realized losses of $0.1 million in fiscal 2014. In the future, we may enter into additional foreign currency based hedging contracts to reduce our exposure to significant fluctuations in currency exchange rates on the balance sheet.



Item 8.			Financial Statements and Supplementary Data

Commvault Systems, Inc.

Consolidated Financial Statements

Fiscal Years Ended March 31, ~~2016, 2015~~2022, 2021 and ~~2014~~2020

Index to Consolidated Financial Statements




	Page
Report of Independent Registered Public Accounting Firm (PCAOB ID 42)		5038
Consolidated Balance Sheets as of March 31, ~~2016~~2022 and ~~2015~~2021		5140
Consolidated Statements of ~~Income~~Operations for the years ended March 31, ~~2016, 2015~~2022, 2021 and ~~2014~~2020		5241
Consolidated Statements of Comprehensive Income ~~(Loss)~~(Loss ) for the years ended March 31, ~~2016, 2015~~2022, 2021 and ~~2014~~2020		5342
Consolidated Statements of Stockholders’ Equity for the years ended March 31, ~~2016, 2015~~2022, 2021 and ~~2014~~2020		5443
Consolidated Statements of Cash Flows for the years ended March 31, ~~2016, 2015~~2022, 2021 and ~~2014~~2020		5544
Notes to Consolidated Financial Statements		5645

Report of Independent Registered Public Accounting Firm

~~The~~To the Board of Directors and Stockholders of

Commvault Systems, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Commvault Systems, Inc. (the Company) as of March 31, ~~2016~~2022 and ~~2015, and~~2021, the related consolidated statements of ~~income,~~operations, comprehensive income (loss), ~~shareholders'~~stockholders' equity and cash flows for each of the three years in the period ended March 31, ~~2016. Our audits also included~~2022, and the related notes (collectively referred to as the “consolidated financial statement schedule listed in the Index at Item 15. These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

~~We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States)~~statements”). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements ~~referred to above~~ present fairly, in all material respects, the ~~consolidated~~ financial position of ~~Commvault Systems, Inc.~~the Company at March 31, ~~2016~~2022 and ~~2015,~~2021, and the ~~consolidated~~ results of ~~their~~its operations and ~~their~~its cash flows for each of the three years in the period ended March 31, ~~2016,~~2022, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects in the information set forth therein.

As discussed in Note 2 to the consolidated financial statements, Commvault Systems, Inc. changed the classification of all deferred tax assets and liabilities to noncurrent on the consolidated balance sheet as a result of the adoption of the amendments to the FASB Accounting Standards Codification resulting from Accounting Standards Update No. 2015-17, "Balance Sheet Classification of Deferred Taxes,” effective December 31, 2015.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), ~~Commvault Systems, Inc.’s~~the Company’s internal control over financial reporting as of March 31, ~~2016,~~2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated May 6, ~~2016~~2022 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.


						Accounting for Revenue Recognition
Description of the Matter						As described in Note 3 to the consolidated financial statements, the Company derives revenues from two primary sources: software and services. Most of the Company’s contracts with customers contain multiple performance obligations which are accounted for separately if they are distinct. The transaction price is allocated to separate performance obligations on a relative standalone selling price basis. Auditing the identification of performance obligations in a software contract requires significant judgment as it relates to the evaluation of the contractual terms of the arrangement.
How We Addressed the Matter in Our Audit						We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s revenue recognition process, including the evaluation of the contractual terms of the revenue arrangements. To test the amount of revenue recognized, we performed audit procedures that included, among others, testing a sample of revenue transactions during the year and evaluating the identification of performance obligations based on analysis of the contractual terms and independent confirmations of the terms and conditions of the contract directly with customers.

We have served as the Company’s auditor since 1998.

/s/ Ernst & Young LLP

~~MetroPark,~~Iselin, New Jersey

May 6, ~~2016~~2022

Commvault Systems, Inc.

Consolidated Balance Sheets

(In thousands, except per share data)


	March 31,
	2022		2021
ASSETS
Current assets:
Cash and cash equivalents	$	267,507	$	397,237


Trade accounts receivable, net	194,238		188,126
Other current assets	22,336		22,237
Total current assets	484,081		607,600
Property and equipment, net	106,513		112,779
Operating lease assets	14,921		20,778
Deferred commissions cost	52,974		38,444
Intangible assets, net	3,542		—
Goodwill	127,780		112,435
Other assets	26,269		12,137
Total assets	$	816,080	$	904,173

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	432	$	374
Accrued liabilities	121,837		112,148
Current portion of operating lease liabilities	4,778		7,469
Deferred revenue	267,017		253,211
Total current liabilities	394,064		373,202
Deferred revenue, less current portion	150,180		119,231
Deferred tax liabilities, net	808		761
Long-term operating lease liabilities	11,270		15,419
Other liabilities	3,929		1,526
Commitments and contingencies (Note 8)	0		0
Stockholders’ equity:
Preferred stock, $0.01 par value: 50,000 shares authorized, no shares issued and outstanding	—		—
Common stock, $0.01 par value, 250,000 shares authorized, 44,511 shares and 46,482 shares issued and outstanding at March 31, 2022 and 2021, respectively	443		463
Additional paid-in capital	1,165,948		1,069,695
Accumulated deficit	(898,699)		(665,774)
Accumulated other comprehensive loss	(11,863)		(10,350)
Total stockholders’ equity	255,829		394,034
Total liabilities and stockholders’ equity	$	816,080	$	904,173

See accompanying notes to consolidated financial statements

March 31,
2016 2015
ASSETS
Current assets:
Cash and cash equivalents $ 288,107
$ 337,673
Short-term investments 99,072
49,936
Trade accounts receivable, less allowance for doubtful accounts of $315 and $104 at March 31, 2016 and 2015, respectively 113,429
117,716
Prepaid expenses and other current assets 16,769
20,084
Total current assets 517,377
525,409
Deferred tax assets, net 49,976
41,045
Property and equipment, net 135,904
140,208
Equity method investment 4,579
—
Other assets 6,737
6,804
Total assets $ 714,573
$ 713,466

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable $ 309
$ 860
Accrued liabilities 69,678
72,757
Deferred revenue 194,977
184,312
Total current liabilities 264,964
257,929
Deferred revenue, less current portion 49,889
45,423
Other liabilities 3,452
3,104
Commitments and contingencies (Note 5)

Stockholders’ equity:
Preferred stock, $0.01 par value: 50,000 shares authorized, no shares issued and outstanding at March 31, 2016 and 2015 —
—
Common stock, $0.01 par value, 250,000 shares authorized, 44,134 shares and 45,122 shares issued and outstanding at March 31, 2016 and 2015, respectively 440
451
Additional paid-in capital 602,999
539,565
Accumulated deficit (197,962 ) (125,502 )
Accumulated other comprehensive loss (9,209 ) (7,504 )
Total stockholders’ equity 396,268
407,010
Total liabilities and stockholders’ equity $ 714,573
$ 713,466

Commvault Systems, Inc.

Consolidated Statements of ~~Income~~Operations

(In thousands, except per share data)


	Year Ended March 31,
	2022		2021		2020
Revenues:
Software and products	$	356,487	$	326,843	$	275,308
Services	413,104		396,629		395,577
Total revenues	769,591		723,472		670,885
Cost of revenues:
Software and products	14,057		27,218		28,082
Services	99,802		82,155		88,996
Total cost of revenues	113,859		109,373		117,078
Gross margin	655,732		614,099		553,807
Operating expenses:
Sales and marketing	341,644		331,948		335,785
Research and development	153,615		133,401		110,020
General and administrative	103,049		92,214		92,130
Restructuring	6,192		23,471		21,348
Depreciation and amortization	9,666		14,628		15,815
Impairment of intangible assets	—		40,700		—
Net change in contingent consideration	—		—		(3,783)
Total operating expenses	614,166		636,362		571,315
Income (loss) from operations	41,566		(22,263)		(17,508)
Interest income	656		1,028		4,962
Interest expense	(109)		—		—
Other income, net	1,301		—		—
Income (loss) before income taxes	43,414		(21,235)		(12,546)
Income tax expense (benefit)	9,790		9,719		(6,901)
Net income (loss)	$	33,624	$	(30,954)	$	(5,645)
Net income (loss) per common share:
Basic	$	0.74	$	(0.66)	$	(0.12)
Diluted	$	0.71	$	(0.66)	$	(0.12)
Weighted average common shares outstanding:
Basic	45,443		46,652		45,793
Diluted	47,220		46,652		45,793

See accompanying notes to consolidated financial statements

Year Ended March 31,
2016 2015 2014
Revenues:
Software $ 258,793
$ 283,254
$ 294,411
Services 336,333
324,289
291,929
Total revenues 595,126
607,543
586,340
Cost of revenues:
Software 2,385
2,442
2,588
Services 80,327
79,626
71,713
Total cost of revenues 82,712
82,068
74,301
Gross margin 512,414
525,475
512,039
Operating expenses:
Sales and marketing 352,669
335,980
283,304
Research and development 69,287
64,143
55,134
General and administrative 78,848
78,063
67,106
Depreciation and amortization 9,611
8,505
6,075
Total operating expenses 510,415
486,691
411,619

Income from operations 1,999
38,784
100,420
Interest expense (933 ) (665 ) —
Interest income 862
773
890
Equity in loss of affiliate (83 ) —
—
Income before income taxes 1,845
38,892
101,310
Income tax expense 1,709
13,242
37,246
Net income $ 136
$ 25,650
$ 64,064
Net income per common share:
Basic $ 0.00
$ 0.56
$ 1.36
Diluted $ 0.00
$ 0.54
$ 1.29
Weighted average common shares outstanding:
Basic 45,159
45,464
46,976
Diluted 46,489
47,222
49,642

Commvault Systems, Inc.

Consolidated Statements of Comprehensive Income (Loss)

(In ~~thousands, except per share data)~~thousands)


	Year Ended March 31,
	2022		2021		2020
Net income (loss)	$	33,624	$	(30,954)	$	(5,645)
Other comprehensive income (loss):
Foreign currency translation adjustment	(1,513)		3,073		(1,855)
Comprehensive income (loss)	$	32,111	$	(27,881)	(7,500)

See accompanying notes to consolidated financial statements

Year Ended March 31,
2016 2015 2014
Net income $ 136
$ 25,650
$ 64,064
Other comprehensive loss:
Foreign currency translation adjustment (1,705 ) (6,587 ) (628 )
Comprehensive income (loss) $ (1,569 ) $ 19,063
63,436

Commvault Systems, Inc.

Consolidated Statements of Stockholders’ Equity

(In thousands)


	Common Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total
	Shares	Amount
Balance at March 31, 2019	45,582	$	454	$	887,907	$	(485,490)	$	(11,568)	$	391,303
Stock-based compensation				65,888						65,888
Share issuances related to business combinations				1,616						1,616
Share issuance related to stock-based compensation	2,131	21		37,774						37,795
Repurchase of common stock	(1,702)	(17)		(14,526)		(62,655)				(77,198)
Net loss						(5,645)				(5,645)
Other comprehensive loss								(1,855)		(1,855)
Balance at March 31, 2020	46,011	458		978,659		(553,790)		(13,423)		411,904
Cumulative effect of adoption of ASU 2016-13						(84)				(84)
Stock-based compensation				84,833						84,833
Share issuance related to stock-based compensation	2,115	21		20,500						20,521
Repurchase of common stock	(1,644)	(16)		(14,297)		(80,946)				(95,259)
Net loss						(30,954)				(30,954)
Other comprehensive income								3,073		3,073
Balance at March 31, 2021	46,482	463		1,069,695		(665,774)		(10,350)		394,034
Stock-based compensation				105,163						105,163
Share issuance related to stock-based compensation	2,336	23		29,737						29,760
Repurchase of common stock	(4,307)	(43)		(38,647)		(266,549)				(305,239)
Net income						33,624				33,624
Other comprehensive loss								(1,513)		(1,513)
Balance at March 31, 2022	44,511	$	443	$	1,165,948	$	(898,699)	$	(11,863)	$	255,829

See accompanying notes to consolidated financial statements

Common Stock
Additional
Paid-In
Capital

Accumulated
Deficit

Accumulated
Other
Comprehensive
Loss
Total
Shares Amount
Balance at March 31, 2013 46,397
$ 464
$ 391,772
$ (37,930 ) $ (289 ) $ 354,017
Stock-based compensation 49,124
49,124
Tax benefits relating to share-based payments 28,416
28,416
Share issuances related to stock-based compensation 1,472
15
17,600
17,615
Repurchase of common stock (775 ) (8 ) (5,829 ) (44,193 ) (50,030 )
Net income 64,064
64,064
Other comprehensive loss (628 ) (628 )
Balance at March 31, 2014 47,094
471
481,083
(18,059 ) (917 ) 462,578
Stock-based compensation 60,663
60,663
Tax benefits relating to share-based payments 2,141
2,141
Share issuances related to stock-based compensation 1,199
12
17,678
17,690
Repurchase of common stock (3,171 ) (32 ) (22,000 ) (133,093 ) (155,125 )
Net income 25,650
25,650
Other comprehensive loss (6,587 ) (6,587 )
Balance at March 31, 2015 45,122
451
539,565
(125,502 ) (7,504 ) 407,010
Stock-based compensation 64,196
64,196
Tax benefits relating to share-based payments 3,265
3,265
Share issuances related to stock-based compensation 1,575
15
14,828
14,843
Repurchase of common stock (2,563 ) (26 ) (18,855 ) (72,596 ) (91,477 )
Net income 136
136
Other comprehensive loss (1,705 ) (1,705 )
Balance at March 31, 2016 44,134
$ 440
$ 602,999
$ (197,962 ) $ (9,209 ) $ 396,268

Commvault Systems, Inc.

Consolidated Statements of Cash Flows

(In thousands)


	Year Ended March 31,
	2022		2021		2020
Cash flows from operating activities
Net income (loss)	$	33,624	$	(30,954)	$	(5,645)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	10,950		15,878		17,065
Noncash stock-based compensation	105,163		84,833		65,888
Noncash change in fair value of equity securities	(301)		—		—
Noncash change in contingent consideration	—		—		(3,783)
Impairment of intangible assets	—		40,700		—

Deferred income taxes	49		(92)		(1,783)

Amortization of deferred commissions cost	18,339		18,318		17,717
Impairment of operating lease assets	—		1,684		2,761
Changes in operating assets and liabilities:
Trade accounts receivable	(20,371)		(34,622)		26,096
Operating lease assets and liabilities, net	(925)		(1,157)		(1,226)
Other current assets and Other assets	3,732		11,887		(1,246)
Deferred commissions cost	(33,512)		(24,095)		(16,063)
Accounts payable	60		49		(2,474)
Accrued liabilities	10,400		10,660		(1,997)
Deferred revenue	48,295		31,740		(6,230)
Other liabilities	1,677		(874)		(616)
Net cash provided by operating activities	177,180		123,955		88,464
Cash flows from investing activities
Purchase of short-term investments	—		—		(43,645)
Proceeds from maturity of short-term investments	—		43,645		130,338
Purchase of property and equipment	(3,911)		(8,176)		(3,203)
Purchase of equity securities	(4,139)		—		—
Business combination, net of cash acquired	(16,894)		—		(157,495)
Other	500		—		—
Net cash provided by (used in) investing activities	(24,444)		35,469		(74,005)
Cash flows from financing activities
Repurchase of common stock	(305,239)		(95,259)		(77,198)
Proceeds from stock-based compensation plans	29,760		20,521		37,795
Debt issuance costs	(609)		—		—
Net cash used in financing activities	(276,088)		(74,738)		(39,403)
Effects of exchange rate — changes in cash	(6,378)		16,469		(6,966)
Net increase (decrease) in cash, cash equivalents and restricted cash	(129,730)		101,155		(31,910)
Cash, cash equivalents and restricted cash at beginning of year	397,237		296,082		327,992
Cash, cash equivalents and restricted cash at end of year	$	267,507	$	397,237	$	296,082

Supplemental disclosures of cash flow information
Interest paid	$	13	$	—	$	—
Income taxes paid	$	(1,493)	$	2,959	$	6,002

See accompanying notes to consolidated financial statements

Year Ended March 31,
2016 2015 2014
Cash flows from operating activities
Net income $ 136
$ 25,650
$ 64,064
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 11,179
9,046
6,207
Noncash stock-based compensation 64,196
60,663
49,124
Excess tax benefits from stock-based compensation (6,664 ) (5,057 ) (28,337 )
Deferred income taxes (9,332 ) 4,072
(6,430 )
Equity in loss of affiliate 83
—
—
Changes in operating assets and liabilities:
Trade accounts receivable 3,879
(6,581 ) (33,482 )
Prepaid expenses and other current assets 3,414
(11,907 ) 3,948
Other assets (571 ) 1,229
(160 )
Accounts payable (454 ) (267 ) (2,695 )
Accrued liabilities 1,972
13,221
43,187
Deferred revenue 16,317
35,818
25,156
Other liabilities 258
(2,040 ) (1,445 )
Net cash provided by operating activities 84,413
123,847
119,137
Cash flows from investing activities
Purchase of short-term investments (99,071 ) (68,933 ) (28,976 )
Proceeds from maturity of short-term investments 49,935
43,973
5,948
Purchase of equity method investment (4,662 ) —
—
Purchases for corporate campus headquarters (2,111 ) (59,297 ) (62,214 )
Purchase of property and equipment (6,280 ) (5,784 ) (4,916 )
Net cash used in investing activities (62,189 ) (90,041 ) (90,158 )
Cash flows from financing activities
Repurchase of common stock (91,477 ) (155,125 ) (50,030 )
Debt issuance costs —
(1,262 ) —
Proceeds from the exercise of stock options and the Employee Stock Purchase Plan 14,843
17,690
17,615
Excess tax benefits from stock-based compensation 6,664
5,057
28,337
Net cash used in financing activities (69,970 ) (133,640 ) (4,078 )
Effects of exchange rate — changes in cash (1,820 ) (20,226 ) (1,132 )
Net increase (decrease) in cash and cash equivalents (49,566 ) (120,060 ) 23,769
Cash and cash equivalents at beginning of year 337,673
457,733
433,964
Cash and cash equivalents at end of year $ 288,107
$ 337,673
$ 457,733

Supplemental disclosures of cash flow information
Interest paid $ 635
$ 475
$ —
Income taxes paid, net $ 1,989
$ 15,590
$ 12,442
Purchases for corporate campus headquarters in accounts payable and accrued liabilities $ —
$ 2,111
$ 6,805

Commvault Systems, Inc.

Notes to Consolidated Financial Statements

(In thousands, except per share data)

1. Nature of Business

Commvault Systems, Inc. and its subsidiaries ~~(“Commvault”~~("Commvault," "we," "us," or ~~the “Company”~~"our") is a ~~leading~~ provider of data protection and information management software applications and ~~related services. The Company develops, markets~~products. We develop, market and ~~sells~~sell a suite of software applications and services, ~~primarily in North America, Europe, Australia and Asia,~~globally, that provides ~~its~~our customers with data protection solutions supporting all major operating systems, applications, and databases on virtual and physical servers, NAS shares, cloud-based infrastructures, and mobile devices; management through a single console; multiple protection methods including backup and archive, snapshot management, replication, and content indexing for eDiscovery; efficient storage management using deduplication for disk, tape and cloud; integration with the industry's top storage arrays; complete virtual infrastructure management supporting multiple hypervisors; security capabilities to limit access to critical data; policy based data management; and an end-user experience that allows them to protect, find and recover their own data using common tools such as web browsers, Microsoft Outlook and File Explorer. The Companysolutions. We also ~~provides its~~provide our customers with a broad range of professional and customer support ~~services.~~services, including data management-as-a-service, branded as Metallic.

2. Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements include the accounts of ~~the Company.~~Commvault. All intercompany transactions and balances have been ~~eliminated.~~eliminated in consolidation.

Use of Estimates

The preparation of financial statements and related disclosures in conformity with U.S. ~~GAAP~~generally accepted accounting principles ("U.S. GAAP") requires management to make judgments and estimates that affect the amounts reported in ~~the Company’s~~our consolidated financial statements and the accompanying notes. ~~The Company bases its~~We base our estimates and judgments on historical experience and on various other assumptions that ~~it believes~~we believe are reasonable under the circumstances. The amounts of assets and liabilities reported in ~~the Company’s~~our balance sheets and the amounts of revenues and expenses reported for each of ~~its~~the periods presented are affected by estimates and assumptions, which are used for, but not limited to, the accounting for revenue recognition, ~~allowance for doubtful accounts,~~ income taxes and related reserves, ~~stock-based compensation~~deferred commissions, purchased intangible assets and ~~accounting for research and development costs.~~goodwill. Actual results could differ from those estimates.

Revenue ~~Recognition~~

~~The Company derives revenues~~We account for revenue in accordance with Accounting Standards Codification ("ASC") Topic 606, Revenue from two primary sources: software licenses and services. Services include customer support, consulting, assessment and design services, installation services and training. A typical sales arrangement includes both licenses and services.

Contracts with Customers ("ASC 606"). For ~~sales arrangements involving multiple elements, the Company recognizes~~a further discussion of our accounting policies related to revenue, using the residual method. Under the residual method, the Company allocates and defers revenue for the undelivered elements based on fair value and recognizes the difference between the total arrangement fee and the amount deferred for the undelivered elements as revenue. The determination of fair valuesee Note 3 of the ~~undelivered elements~~consolidated financial statements.

Shipping and Handling Costs

Shipping and handling costs are included in ~~multiple-element arrangements is~~cost of revenues for all periods presented.

Sales Tax

We record revenue net of sales tax.

Accounting for Stock-Based Compensation

Restricted stock units without a market condition are measured based on the ~~price charged when such elements~~fair market values of the underlying stock on the date of grant. We recognize stock-based compensation expense using the straight-line method for all stock awards that do not include a market or performance condition. Awards that include a market or performance condition are ~~sold separately, which is commonly referred to as vendor-specific objective-evidence, or VSOE.~~expensed using the accelerated method.

Software Development Costs

The ~~Company’s~~costs for the development of new products and substantial enhancements to existing products are expensed as incurred until technological feasibility has been established, at which time any additional costs would be capitalized in accordance with the accounting guidance for software. Because our current process for developing software ~~licenses typically provide~~is essentially completed concurrently with the establishment of technological feasibility, which occurs upon the completion of a working model, no costs have been capitalized for ~~a perpetual right to use~~any of the Company’s software and are sold on a per terabyte basis, on a per-copy basis, as site licenses or as a solution set. Software licenses sold on a capacity basis provide the customer with unlimited licenses of specified software products based on a defined level of terabytes of data under management. Site licenses give the customer the additional right to deploy the software on a limited basis during a specified term. Solution sets are generally sold on a per unit basis such as per virtual machine for our virtual machine backup, recovery and cloud management solution set; per mailbox for our email archive solution set and per user for our endpoint data protection solution set.periods presented.

Commvault Systems, Inc.

Notes to Consolidated Financial Statements — (Continued)

(In thousands, except per share data)

Advertising Costs

We expense advertising costs as incurred. Advertising expenses were $9,572, $9,560, and $5,579 for the years ended March 31, 2022, 2021 and 2020, respectively.

Accounting for Income Taxes

We account for income taxes in accordance with ASC Topic 740, Income Taxes ("ASC 740"). The ~~Company recognizes software revenue through direct sales channels upon receipt of a purchase order or other persuasive evidence~~provision for income taxes and ~~when all other basic revenue recognition criteria~~effective tax rates are ~~met as described below. The Company recognizes software revenue through all indirect sales channels~~calculated by legal entity and jurisdiction and are based on a ~~sell-through model. A sell-through model requires that the Company recognize revenue when the basic revenue recognition criteria are met as described below and these channels complete the sale~~number of the Company’s software products to the end-user. Revenue from software licenses sold through an original equipment manufacturer partner is recognized upon the receipt of a royalty report or purchase order from that original equipment manufacturer partner.

Services revenue includes revenue from customer support and other professional services. Customer support includes software updates on a when-and-if-available basis, telephone support, integrated web-based support and bug fixes or patches. Customer support revenue is recognized ratably over the term of the customer support agreement, which is typically one year. To determine the price for the customer support element when sold separately, the Company primarily uses historical renewal rates. Historical renewal rates are supported by performing an analysis in which the Company segregates its customer support renewal contracts into different classes based on specific criteriafactors, including ~~but not limited to, the dollar amount of the software purchased,~~ the level of ~~customer support being provided~~pre-tax earnings, income tax planning strategies, differences between tax laws and accounting rules, statutory tax rates and credits, uncertain tax positions and valuation allowances. We use significant judgment and estimates in evaluating tax positions. The effective tax rate in a given financial statement period may be materially impacted by changes in the ~~distribution channel. As~~mix and level of earnings by taxing jurisdiction.

Under ASC 740, deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts. Valuation allowances are established when, in our judgment, it is more likely than not that deferred tax assets will not be realized. In assessing the need for a ~~result~~valuation allowance, we weigh the available positive and negative evidence, including historical levels of ~~this analysis,~~pre-tax income, legislative developments, expectations and risks associated with estimates of future pre-tax income, and prudent and feasible tax planning strategies.

Foreign Currency Translation

The functional currencies of our foreign operations are deemed to be the ~~Company has concluded that it has established VSOE~~local country’s currency. Assets and liabilities of our international subsidiaries are translated at their respective period-end exchange rates, and revenues and expenses are translated at average currency exchange rates for the ~~different classes~~period. The resulting balance sheet translation adjustments are included in Other comprehensive income (loss) and are reflected as a separate component of ~~customer support when~~Stockholders’ equity.

Foreign currency transaction gains and losses are recorded in General and administrative expenses in the ~~support is sold as part~~Consolidated Statements of ~~a multiple-element sales arrangement. The Company’s determination~~Operations. These gains and losses relate primarily to receivables and payables that are not denominated in the functional currency of ~~fair value for customer support has~~the subsidiary they relate to. Net foreign currency transaction losses were not ~~changed~~significant for the ~~periods presented.~~

~~The Company’s other professional services include consulting services, implementation~~year ended March 31, 2022. We recognized net foreign currency transaction losses of $1,918 and ~~post-deployment services~~gains of $355 in the years ended March 31, 2021 and education services. Other professional services provided by the Company are not mandatory and can also be performed by the customer or a third-party. In addition to a signed purchase order, the Company’s consulting services and implementation and post-deployment services are, in some cases, evidenced by a Statement of Work, which defines the specific scope of such services to be performed when sold and performed on a stand-alone basis or included in multiple-element sales arrangements. Revenues from consulting services and implementation and post-deployment services are based upon a daily or weekly rate and are recognized when the services are completed. Education services include courses taught by the Company’s instructors or third-party contractors either at one of the Company’s facilities or at the customer’s site. Education services fees are recognized as revenue after the course has been provided. Based on the Company’s analysis of such other professional services transactions sold on a stand-alone basis, the Company has concluded it has established VSOE for such other professional services when sold in connection with a multiple-element sales arrangement. The Company generally performs its other professional services within 90 days of entering into an agreement. The Company’s determination of fair value for other professional services has not changed for the periods presented.

The Company has analyzed all of the undelivered elements included in its multiple-element sales arrangements and determined that VSOE of fair value exists to allocate revenues to services. Accordingly, assuming all basic revenue recognition criteria are met, software revenue is recognized upon delivery of the software license using the residual method.

~~The Company considers the four basic revenue recognition criteria for each of the elements as follows:~~

~~Persuasive evidence of an arrangement with the customer exists.~~ The Company’s customary practice is to require a purchase order and, in some cases, a written contract signed by both the customer and the Company, or other persuasive evidence that an arrangement exists prior to recognizing revenue related to an arrangement.

~~Delivery or performance has occurred.~~ The Company’s software applications are either physically or electronically delivered to customers with standard transfer terms such as FOB shipping point. Software and/or software license keys for add-on orders or software updates are typically delivered in an electronic format. If products that are essential to the functionality of the delivered software in an arrangement have not been delivered, the Company does not consider delivery to have occurred. Services revenue is recognized when the services are completed, except for customer support, which is recognized ratably over the term of the customer support agreement, which is typically one year.

~~Vendor’s fee is fixed or determinable.~~ The fee customers pay for software applications, customer support and other professional services is negotiated at the outset of a sales arrangement. The fees are therefore considered to be fixed or determinable at the inception of the arrangement. The Company evaluates instances when extended payment terms are granted to determine if revenue should be deferred until payment becomes due.

~~Commvault Systems, Inc.~~

~~Notes to Consolidated Financial Statements — (Continued)~~

~~(In thousands, except per share data)~~

~~Collection is probable.~~ Probability of collection is assessed on a customer-by-customer basis. Each new customer undergoes a credit review process to evaluate its financial position and ability to pay. If the Company determines from the outset of an arrangement that collection is not probable based upon the review process, revenue is recognized at the earlier of when cash is collected or when sufficient credit becomes available, assuming all of the other basic revenue recognition criteria are met.

The Company’s sales arrangements generally do not include acceptance clauses. However, if an arrangement does include an acceptance clause, revenue for such an arrangement is deferred and recognized upon acceptance. Acceptance occurs upon the earliest of receipt of a written customer acceptance, waiver of customer acceptance or expiration of the acceptance period.2020, respectively.

Net Income (Loss) per Common Share

Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares during the period. Diluted net income (loss) per share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the incremental common shares issuable upon the exercise of stock options, vesting of restricted stock units and shares to be purchased under the Employee Stock Purchase Plan. The dilutive effect of such potential common shares is reflected in diluted earnings per share by application of the treasury stock method.

~~The following table sets forth the computation of basic and diluted net income per common share:~~

Year Ended March 31,
2016 2015 2014
Net income $ 136
$ 25,650
$ 64,064
Basic net income per common share:
Basic weighted average shares outstanding 45,159
45,464
46,976
Basic net income per common share $ 0.00
$ 0.56
$ 1.36
Diluted net income per common share:
Basic weighted average shares outstanding 45,159
45,464
46,976
Dilutive effect of stock options, restricted stock units, and employee stock purchase plan 1,330
1,758
2,666
Diluted weighted average shares outstanding 46,489
47,222
49,642
Diluted net income per common share $ 0.00
$ 0.54
$ 1.29

The following table summarizes the potential outstanding common stock equivalents of the Company at the end of each period, which have been excluded from the computation of diluted net income per common share, as its effect is anti-dilutive.

Year Ended March 31,
2016 2015 2014
Stock options, restricted stock units, and shares under the employee stock purchase plan 4,183
3,136
964

~~Software Development Costs~~

Research and development expenditures are charged to operations as incurred. Based on the Company’s software development process, technological feasibility is established upon completion of a working model, which also requires certification and extensive testing. Costs incurred by the Company between completion of the working model and the point at which the product is ready for general release are immaterial.

Commvault Systems, Inc.

Notes to Consolidated Financial Statements — (Continued)

(In thousands, except per share data)

The following table sets forth the reconciliation of basic and diluted common share:

~~Accounts Receivable~~


	Year Ended March 31,
	2022		2021		2020
Net income (loss)	$	33,624	$	(30,954)	$	(5,645)
Basic net income (loss) per common share:
Basic weighted average shares outstanding	45,443		46,652		45,793
Basic net income per common share	$	0.74	$	(0.66)	$	(0.12)
Diluted net income (loss) per common share:
Basic weighted-average shares outstanding	45,443		46,652		45,793
Dilutive effect of stock options, restricted stock units, and employee stock purchase plan (1)	1,777		—		—
Diluted weighted-average shares outstanding	47,220		46,652		45,793

(1) The fiscal 2021 and ~~Allowance for Doubtful Accounts~~

~~Accounts receivable consist of amounts due to the Company from normal business activities. The Company maintains an allowance for estimated losses resulting~~2020 shares have been excluded from the inability of its customers to make required payments. The Company estimates uncollectible amounts based upon historical bad debts, evaluation of current customer receivable balances, age of customer receivable balances, the customer’s financial condition and current economic trends.diluted weighted-average shares outstanding calculation as we were in a net loss position; therefore, these shares would have been anti-dilutive.

~~Accounting for Income Taxes~~

As part of the process of preparing financial statements, the Company is required to estimate its income taxes in each of the jurisdictions in which it operates. This process involves estimating actual current tax exposure, including assessing the risks associated with tax audits, and assessing temporary differences resulting from different treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities. As of March 31, 2016, the Company had net deferred tax assets of approximately $49,976, which were primarily related to stock-based compensation, deferred revenue, and tax credits. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income, and to the extent that the Company believes recovery is not likely, the Company establishes a valuation allowance. As of March 31, 2016, the Company maintains a valuation allowance related to its deferred tax assets totaling $2,772 primarily related to the uncertainty of the Company’s ability to utilize New Jersey state research tax credits before expiration. The Company based its valuation allowance on its estimates of taxable income and the period over which its state research tax credits will be recoverable.

The ~~calculation~~following table summarizes our potential outstanding common stock equivalents at the end of each period, which have been excluded from the ~~Company’s tax liabilities involves dealing with uncertainties in the application~~computation of ~~complex tax regulations in each of its tax jurisdictions. The number of years with open tax audits varies depending on the tax jurisdiction. A number of years may lapse before a particular matter~~diluted net income (loss) per common share, as their effect is audited and finally resolved. The Company applies the guidance issued to address the accounting for uncertain tax positions. This guidance clarifies the accounting for income taxes, by prescribing a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements as well as provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition.anti-dilutive.

As of March 31, 2016, the Company had unrecognized tax benefits of $1,794, all of which, if recognized, would favorably affect the effective tax rate. In addition, the Company had accrued interest and penalties of $452 related to the unrecognized tax benefits. Interest and penalties, if any, related to unrecognized tax benefits are recorded in income tax expense. Components of the reserve are classified as either current or long-term in the Consolidated Balance Sheet based on when we expect each of the items to be settled. However, unrecognized tax benefits which are related to a Deferred Tax Asset recorded in the Consolidated Balance Sheet are presented as a reduction against the related Deferred Tax Asset.


	Year Ended March 31,
	2022	2021	2020
Stock options, restricted stock units, and shares under the employee stock purchase plan	505	5,024	4,933

Cash, ~~and~~ Cash Equivalents and Restricted Cash

~~The Company considers~~We consider all highly liquid investments purchased with maturities of three months or less at the date of purchase to be cash ~~equivalents. As of March 31, 2016,~~equivalents, primarily in the ~~Company’s cash and cash equivalents balance consisted primarily~~form of money market funds.

Trade and Other Receivables

~~Short-term Investments~~

~~Short-term investments consist~~Trade and other receivables are primarily comprised of ~~investments with maturities of twelve months or less~~trade receivables that ~~do not meet the criteria to be cash equivalents. The company determines classification of the investment as trading, available-for-sale or held-to-maturity~~are recorded at the ~~time~~invoice amount, net of ~~purchase and reevaluates classification whenever changes~~an allowance for doubtful accounts, which is not material. Unbilled receivables represent amounts for which revenue has been recognized but which have not yet been invoiced to the customer. The current portion of unbilled receivables is included in circumstances indicate changes in classification may be necessary. The Company’s current short-term investments are classified as held-to-maturity. Held-to-maturity investments consist of securities that the Company has the intent and ability to retain until maturity. Held-to-maturity investments are initially recorded at cost and adjusted for the amortization of discounts from the date of purchase through maturity. Income related to investments is recorded as interest income inTrade accounts receivable on the Consolidated ~~Statement~~Balance Sheets. Long-term unbilled receivables are included in Other assets. The allowance for doubtful accounts was $705 as of ~~Income. Cash inflows~~March 31, 2022 and ~~outflows~~$483 as of March 31, 2021. For the years ended March 31, 2022, 2021 and 2020, bad debt expense was immaterial.

Historically, we have not experienced material losses related to the ~~sale, maturity~~inability to collect receivables from our customers. While there is presently no indication that we will not collect material amounts of accounts receivable as of March 31, 2022, we continue to closely monitor the impact of COVID-19 and ~~purchase~~the war in Ukraine on our customers. In these current economic conditions, payment from our customers may be delayed or receivables may become uncollectible. The inability to collect receivables could have a material impact on our results of ~~investments are classified as investing activities in the Company’s Consolidated Statements of Cash Flows.~~operations.

Concentration of Credit Risk

~~The Company grants~~We grant credit to customers in a wide variety of industries worldwide and generally ~~does~~do not require collateral. Credit losses relating to these customers have been minimal.

Sales through our distribution agreement with Arrow Enterprise Computing Solutions, Inc. ("Arrow") totaled approximately 37%, 36% and 37% of total revenues for the years ended March 31, 2022, 2021 and 2020,

Commvault Systems, Inc.

Notes to Consolidated Financial Statements — (Continued)

(In thousands, except per share data)

Sales through the Company’s distribution agreement with Arrow Enterprise Computing Solutions, Inc. (“Arrow”) totaled approximately 38%, 36% and 31% of total revenues for the years ended March 31, 2016, 2015 and 2014, respectively. Arrow accounted for approximately ~~43%~~30% and ~~41%~~33% of total accounts receivable as of March 31, ~~2016~~2022 and ~~2015,~~2021, respectively.

The Company has an original equipment manufacturer agreement with Hitachi Data Systems (“HDS”) for them to market, sell and support our software applications and services on a stand-alone basis and/or incorporate our software applications into their own hardware products. HDS accounted for 11% and ~~10%~~ ~~of total revenues for the year ended March 31, 2016 and March 31, 2015, respectively.~~

Fair Value of Financial Instruments

The carrying amounts of ~~the Company’s~~our cash, ~~and~~ cash equivalents, accounts receivable, ~~and~~ accounts payable and accrued expenses approximate their fair values due to the short-term maturity of these instruments. ~~As of~~ ~~March 31, 2016~~ ~~and 2015, the Company’s short-term investments balance consisted of U.S. Treasury Bills.~~

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for such asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value should maximize the use of observable inputs and minimize the use of unobservable inputs. To measure fair value, ~~the Company uses~~we use the following fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable:

Level 1 — ~~Quoted~~Observable inputs such as quoted prices in active markets for identical assets or ~~liabilities.~~liabilities;

Level 2 — Inputs other than Level 1, that are observable for the asset or liability, either directly or ~~indirectly, such as quoted prices for similar assets~~indirectly; and liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data by correlation or other means.

Level 3 — Unobservable inputs that are supported by little or no market activity and that ~~are significant~~require the reporting entity to ~~the fair value of the~~develop its own assumptions.

There were no financial assets or ~~liabilities.~~

~~The following table summarizes the composition of the Company’s financial assets~~liabilities measured at fair value on a recurring basis atfor the years ended March 31, ~~2016 and~~2022 or 2021.

Equity Securities Accounted for at Net Asset Value

We held equity interests in private equity funds of $4,237 as of March 31, ~~2015:~~2022, which are accounted for under the net asset value practical expedient as permitted under ASC 820, Fair Value Measurement. These investments are included in Other assets in the accompanying Consolidated Balance Sheets. The net asset values of these investments are determined using quarterly capital statements from the funds, which are based on our contributions to the funds, allocation of profit and loss and changes in fair value of the underlying fund investments. Changes in fair value as reported on the capital statements are recorded through profit and loss as non-operating income or expense. These private equity funds focus on making investments in key technology sectors, principally by investing in companies at expansion capital and growth equity stages. We have total unfunded commitments in private equity funds of $6,889 as of March 31, 2022. We did not own interests in any of these funds prior to fiscal year 2022.

Leases

March 31, 2016 Level 1 Level 2 Level 3 Total
Cash equivalents $ 95,735
—
—
$ 95,735
Short-term investments —
$ 99,215
—
$ 99,215

March 31, 2015 Level 1 Level 2 Level 3 Total
Cash equivalents $ 204,939
—
—
$ 204,939
Short-term investments —
$ 49,955
—
$ 49,955
We account for leases in accordance with ASC 842, Leases. For a further discussion of our accounting policies related to leases, see Note 15 of the consolidated financial statements.

Property and Equipment

Property and equipment are stated at cost, less accumulated depreciation and amortization. Land is not depreciated. ~~The Company provides~~We provide for depreciation on a straight-line basis over the estimated useful lives of the assets. The depreciable assets that comprise ~~the Company's~~our owned headquarters are classified as Buildings and are being depreciated over lives ranging from ten to sixty years. Computer and related equipment is generally depreciated over eighteen months to three years and furniture and fixtures are generally depreciated over three to twelve years. Leasehold improvements are amortized over the shorter of the useful life of the improvement or the term of the related lease. Expenditures for routine maintenance and repairs are charged against operations. Major replacements, improvements and additions are capitalized.

Commvault Systems, Inc.

Notes to Consolidated Financial Statements — (Continued)

(In thousands, except per share data)

Goodwill and Intangible Assets

~~Asset Retirement Obligation~~

~~A liability~~Goodwill is recorded when the consideration paid for an acquisition exceeds the fair value of ~~an asset retirement obligation~~net tangible and ~~corresponding increase to the~~intangible assets acquired. The carrying value of goodwill is tested for impairment on an annual basis on January 1, or more often if an event occurs or circumstances change that would more likely than not reduce the ~~related leasehold improvements are recorded at~~fair value of its carrying amount. For the ~~time leasehold improvements are acquired.~~purpose of impairment testing, we have a single reporting unit. The ~~Company maintains certain office space for~~impairment test consists of comparing the fair value of the reporting unit with its carrying amount that includes goodwill. If the carrying amount of the reporting unit exceeds the fair value of the reporting unit, an impairment loss would be recognized to reduce the carrying amount to its fair value.

Our finite lived purchased intangible asset, developed technology, was valued using the replacement cost method and is being amortized on a straight-line basis over its economic life of three years as we believed this method most closely reflects the pattern in which the ~~lease agreement requires that the Company return the office space to its original condition upon vacating the premises. Accordingly, the balance~~economic benefits of the assets will be consumed. Impairment losses are recognized if the carrying amount of an intangible asset ~~retirement obligation was $1,071 as of March 31, 2016~~is both not recoverable and ~~$687 as of March 31, 2015.~~exceeds its fair value.

Long-Lived Assets

~~The Company reviews its~~We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. To determine the recoverability of ~~its~~our long-lived assets, ~~the Company evaluates~~we evaluate the estimated future undiscounted cash flows that are directly associated with, and that are expected to arise as a direct result of, the use and eventual disposition of the long-lived asset. If the estimated future undiscounted cash flows demonstrate that recoverability is not probable, an impairment loss would be recognized. An impairment loss would be calculated based on the excess carrying amount of the long-lived asset over the long-lived asset’s fair value. The fair value would be determined based on valuation techniques such as a comparison to fair values of similar assets. ~~There were no impairment charges~~

Deferred Commissions Cost

Sales commissions, bonuses, and related payroll taxes earned by our employees are considered incremental and recoverable costs of obtaining a contract with a customer. Our typical contracts include performance obligations related to software licenses, software updates, customer support and other services, including software-as-a-service offerings. In these contracts, incremental costs of obtaining a contract are allocated to the performance obligations based on the relative estimated standalone selling prices and then recognized ~~during~~on a systematic basis that is consistent with the transfer of the goods or services to which the asset relates. We do not pay commissions on annual renewals of contracts for software updates and customer support for perpetual licenses. The costs allocated to software and products are expensed at the time of sale, when revenue for the functional software license or appliance is recognized. The costs allocated to software updates and customer support for perpetual licenses are amortized ratably over a period of approximately five years, the expected period of benefit of the asset capitalized. We currently estimate a period of five years is appropriate based on consideration of historical average customer life and the estimated useful life of the underlying software or appliance sold as part of the transaction.

Beginning in fiscal 2022, we modified the terms of our commission plans, and as a result, the commission paid on the renewal of a term-based, or subscription software license, was not commensurate with the commission paid on the initial purchase. As a result, the cost of commissions allocated to software updates and customer support on the initial transaction are now amortized over a period of approximately five years, consistent with the accounting for these costs associated with perpetual licenses. The costs of commissions allocated to software updates and support for the renewal of term-based software licenses is limited to the contractual period of the arrangement, as we pay a commensurate renewal commission upon the next renewal of the subscription license and related updates and support. This change in commission plans also resulted in a change in the estimate of the amortization period of our existing Deferred commissions cost associated with term licenses. This change in amortization period resulted in an approximate $3,575 reduction in Sales and marketing expense, than if the change in estimate did not occur, for the year ended March 31, ~~2016, 2015~~2022.

The costs related to professional services are amortized over the period the related professional services are provided and ~~2014.~~

~~Equity Method Investment~~

~~In fiscal 2016, the Company acquired a 34% ownership~~revenue is recognized. Amortization expense related to these costs is included in ~~Laitek, Inc. ("Laitek"). The Company also has an option to acquire the remaining ownership of Laitek at a fixed price until December 2017. Laitek develops solutions for acquiring, processing~~Sales and ~~presenting scientific and medical image information. The Company uses the equity method to account for its investment. In the event that management identifies an other than temporary decline~~marketing expenses in the ~~estimated fair value~~accompanying Consolidated Statements of ~~an equity method investment~~Operations.

Commvault Systems, Inc.

Notes to an amount below its carrying value, such investment is written down to its estimated fair value. The Company also has development and original equipment manufacturing agreements with Laitek to jointly develop healthcare related software products. Certain employees of Laitek were also provided restricted stock units in exchange for consultative services provided to the Company. The awards are included in the information in Note 8.Consolidated Financial Statements — (Continued)

(In thousands, except per share data)

Deferred Revenue

Deferred revenues represent amounts collected from, or invoiced to, customers in excess of revenues recognized. This results primarily from the billing of annual customer support agreements, and billings for other professional services fees that have not yet been performed by ~~the Company and receipt of license fees that are deferred due to one or more of the revenue recognition criteria not being met.~~us. The value of deferred revenues will increase or decrease based on the timing of invoices and recognition of revenue. ~~The Company expenses internal direct and incremental costs related to contract acquisition and origination as incurred.~~

~~Deferred revenue consists of the following:~~

March 31,
2016 2015
Current:
Deferred software revenue $ 1,578
$ 1,305
Deferred services revenue 193,399
183,007
194,977
184,312
Non-current:
Deferred services revenue 49,889
45,423
Total Deferred Revenue $ 244,866
$ 229,735

~~Commvault Systems, Inc.~~

~~Notes to Consolidated Financial Statements — (Continued)~~

~~(In thousands, except per share data)~~

~~Accounting for Stock-Based Compensation~~

The Company utilizes the Black-Scholes pricing model to determine the fair value of non-qualified stock options on the dates of grant. Restricted stock units without a market condition are measured based on the fair market values of the underlying stock on the date of grant. The Company recognizes stock-based compensation using the straight-line method for all stock awards that don't include a market or performance condition.

In fiscal 2016, the Company granted certain executive officers and other senior employees performance stock units that vest over three years based upon the Company's stock performance versus the Russell 3000 Index. The performance of the stock versus the index is a market condition performance criteria so the Company used a Monte Carlo simulation model to determine the fair value of the restricted stock units. Expense related to stock based compensation that includes market or performance conditions is recognized using the accelerated method.

Share Repurchases

~~The Company considers~~We consider all shares repurchased as canceled shares restored to the status of authorized but unissued shares on the trade date. The aggregate purchase price of the shares of ~~the Company’s~~our common stock repurchased is reflected as a reduction to Stockholders’ ~~Equity. The Company accounts~~equity. We account for shares repurchased as an adjustment to common stock (at par value) with the excess repurchase price allocated between Additional ~~Paid-in Capital~~paid-in capital and Accumulated ~~Deficit.~~

~~Sales Tax~~

~~The Company records revenue net of sales tax.~~

~~Advertising Costs~~

~~The Company expenses advertising costs as incurred. Advertising expenses were $5,083, $5,401, and $6,174 for the years ended March 31, 2016, 2015 and 2014, respectively.~~

~~Shipping and Handling Costs~~

~~Shipping and handling costs are included in cost of revenues for all periods presented.~~

~~Foreign Currency Translation~~

The functional currencies of the Company’s foreign operations are deemed to be the local country’s currency. Assets and liabilities of the Company’s international subsidiaries are translated at their respective period-end exchange rates, and revenues and expenses are translated at average currency exchange rates for the period. The resulting balance sheet translation adjustments are included in Other Comprehensive Loss and are reflected as a separate component of Stockholders’ Equity.

Foreign currency transaction gains and losses are recorded in “General and administrative expenses” in the Consolidated Statements of Income. The Company recognized net foreign currency transaction gains of $195, $127 and $324 in the years ended March 31, 2016, 2015, and 2014, respectively. The net foreign currency transaction gains recorded in “General and administrative expenses” include settlement gains and losses on forward contracts disclosed below.

To date, the Company has selectively hedged its exposure to foreign currency transaction gains and losses on the balance sheet through the use of forward contracts, which were not designated as hedging instruments. The duration of forward contracts utilized for hedging the Company’s balance sheet exposure is generally one month to three months. As of March 31, 2016 and March 31, 2015, the Company did not have any forward contracts outstanding. The Company recorded net realized losses in general and administrative expenses of $53 in fiscal 2016, gains of $33 in fiscal 2015 and losses of $82 in fiscal 2014 related to the settlement of a forward exchange contracts. In the future, the Company may enter into additional foreign currency-based hedging contracts to reduce its exposure to significant fluctuations in currency exchange rates on the balance sheet.deficit.

Comprehensive Income (Loss)

Comprehensive income (loss) is defined to include all changes in equity, except those resulting from investments by stockholders and distribution to stockholders.

Recently Adopted Accounting Standards


Standard	Description	Effective Date	Effect on the Consolidated Financial Statements (or Other Significant Matters)
ASU No. 2019-12 (Topic 740), Income Taxes	In December 2019, the Financial Accounting Standards Board ("FASB") issued a new standard to simplify the accounting for income taxes. The guidance eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences related to changes in ownership of equity method investments and foreign subsidiaries. The guidance also simplifies aspects of accounting for franchise taxes and enacted changes in tax laws or rates, and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill.	We adopted this standard as of April 1, 2021.	The standard did not have a significant impact on our financial statements.
ASU No. 2021-08 (Topic 805), Business Combinations	In October 2021, the FASB issued a new standard to improve the accounting for acquired revenue contracts with customers in a business combination. The new guidance requires companies to apply revenue guidance under ASC Topic 606 to recognize and measure contract assets and contract liabilities acquired in a business combination on the acquisition date.	We elected to early adopt effective January 1, 2022.	The standard did not have a significant impact in our consolidated financial statements, including accounting policies, processes and systems.

Commvault Systems, Inc.

Notes to Consolidated Financial Statements — (Continued)

(In thousands, except per share data)

3. Revenue

~~Recently Issued Accounting Standards~~We derive revenues from 2 primary sources: software and products, and services. Software and products revenue includes our software and integrated appliances that combine our software with hardware. Services include customer support (software updates and technical support), consulting, assessment and design services, installation services, customer education and Commvault software-as-a-service, which is branded as Metallic.

~~Deferred Taxes~~

~~In November 2015,~~We sell both perpetual and term-based licenses of our software. We refer to our term-based software licenses as subscription arrangements. We do not customize our software and installation services are not required. The software is delivered before related services are provided and is functional without professional services, updates and technical support. We have concluded that our software licenses (both perpetual and subscription) are functional intellectual property that is distinct as the ~~Financial Accounting Standards Board ("FASB") issued new accounting guidance regarding balance sheet classification~~user can benefit from the software on its own. Software revenue for both perpetual and subscription licenses is typically recognized when the software is delivered and/or made available for download as this is the point the user of ~~deferred taxes. The guidance requires companies to classify~~the software can direct the use of, and obtain substantially all ~~deferred tax assets and liabilities as noncurrent on~~of the ~~balance sheet instead of separating deferred taxes into current and noncurrent. The Company has elected to early adopt~~remaining benefits from the guidance on a retrospective basis. The adoption had an effect on the Consolidated Balance sheet as of March 31, 2015 and no effect on the Consolidated Statement of Income, Comprehensive Income (Loss), Cash Flow, or Statement of Stockholder’s Equity.

~~The following table summarizes the Company's As Reported and As Adjusted changes~~functional intellectual property. We do not recognize software revenue related to the ~~Consolidated Balance Sheet at March 31, 2015.~~

March 31,
2015
As Reported As Adjusted
Current assets:
Deferred tax assets, net $ 16,142
$ —
Total Current Assets $ 541,551
$ 525,409

Deferred tax assets, net $ 24,903
$ 41,045

~~Revenue Recognition~~

In May 2014, the FASB issued Accounting Standards Update ("ASU") No. 2014-09, "Revenue from Contracts with Customers (Topic 606)" (ASU 2014-09) and has since modified the standard with ASU 2015-14, "Deferralrenewal of the Effective Date." These standards replace existing revenue recognition rules with a comprehensive revenue measurement and recognition standard and expanded disclosure requirements. The new standard becomes effective for the Company's fiscal 2019 with early adoption permitted in fiscal 2018. The Company is in the process of determining the impact of the standard on the financial statements and the timing of adoption. The FASB allows two adoption methods under the new standard. Under one method, a company will apply the rules to contracts in all reporting periods presented. The Company currently believes it will apply this method of adoption.

~~Leases~~

In February 2016, the FASB issued ASU 2016-02 “Leases (Topic 842)” (“ASU 2016-02”). Under ASU 2016-02, a lessee will recognize in the balance sheet a liability to make lease payments (the lease liability) and a right-to-use asset representing its right to use the underlying asset for the lease term. The amendments of this ASU are effective for the Company's fiscal 2020, with early adoption permitted. A company will be required to recognize and measure leases atsubscription software licenses earlier than the beginning of the ~~earliest period presented using~~new subscription period.

We also sell appliances that integrate our software with hardware and address a ~~modified retrospective approach. The Company~~wide-range of business needs and use cases, ranging from support for remote or branch offices with limited IT staff up to large corporate data centers. Revenue related to appliances is ~~currently assessing the impact the adoption of ASU 2016-02 will have on the financial statements.~~

~~Stock-based Compensation~~

~~In March 2016, the FASB issued ASU 2016-09, "Improvements to Employee Share-Based Payment Accounting," which simplifies several aspects~~recognized when control of the ~~accounting~~appliances passes to the customer; typically upon delivery. In the second half of fiscal 2021 we began transitioning to a software only model in which we typically sell software to a third party, which assembles an integrated appliance that is sold to end user customers. As a result, the revenue and costs associated with hardware have declined from recent fiscal years.

Our other professional services include consulting, assessment and design services, installation services and customer education. Customer education services include courses taught by our instructors or third-party contractors. Revenue related to other professional services and customer education services is typically recognized as the services are performed.

Most of our contracts with customers contain multiple performance obligations. For these contracts, we account for ~~employee share-based payment~~individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. Standalone selling prices of software and appliances are typically estimated using the residual approach. Standalone selling prices of services are typically estimated based on observable transactions including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The Company is required to adopt the new guidance in fiscal 2018 with early adoption permitted. The Company is currently assessing the impact the adoption of ASU 2016-09 will havewhen these services are sold on ~~the financial statements.~~a standalone basis.

Commvault Systems, Inc.

Notes to Consolidated Financial Statements — (Continued)

(In thousands, except per share data)

Our typical performance obligations include the following:

~~3. Property and Equipment~~


Performance Obligation	When Performance Obligation is Typically Satisfied	When Payment is Typically Due	How Standalone Selling Price is Typically Estimated
Software and Products Revenue
Software Licenses	Upon shipment or made available for download (point in time)	Within 90 days of shipment except for certain subscription licenses which are paid for over time	Residual approach
Customer Support Revenue
Software Updates	Ratably over the course of the support contract (over time)	At the beginning of the contract period	Observable in renewal transactions
Customer Support	Ratably over the course of the support contract (over time)	At the beginning of the contract period	Observable in renewal transactions
Other Services Revenue
Other Professional Services (except for education services)	As work is performed (over time)	Within 90 days of services being performed	Observable in transactions without multiple performance obligations
Education Services	When the class is taught (point in time)	Within 90 days of services being performed	Observable in transactions without multiple performance obligations
Software-as-a-service (Metallic)	Ratably over the course of the contract (over time)	Annual or monthly payments	Observable in transactions without multiple performance obligations

~~Property and equipment consist~~

Disaggregation of Revenue

We disaggregate revenue from contracts with customers into the nature of the ~~following:~~products and services and geographical regions. The geographic regions that are tracked are the Americas (United States, Canada, Latin America), EMEA (Europe, Middle East, Africa) and APJ (Australia, New Zealand, Southeast Asia, China). We operate in 1 segment.


	Year Ended March 31, 2022
	Americas		EMEA		APJ		Total
Software and Products Revenue	$	215,264	$	103,749	$	37,474	$	356,487
Customer Support Revenue	202,867		104,524		39,724		347,115
Other Services Revenue	39,764		19,068		7,157		65,989
Total Revenue	$	457,895	$	227,341	$	84,355	$	769,591


	Year Ended March 31, 2021
	Americas		EMEA		APJ		Total
Software and Products Revenue	$	187,027	$	101,673	$	38,143	$	326,843
Customer Support Revenue	215,831		100,620		41,330		357,781
Other Services Revenue	21,264		12,138		5,446		38,848
Total Revenue	$	424,122	$	214,431	$	84,919	$	723,472

March 31,
2016 2015
Land $ 9,445
$ 9,445
Buildings 103,193
102,880
Computers, servers and other equipment 33,120
33,914
Furniture and fixtures 14,458
14,399
Leasehold improvements 6,948
4,621
Purchased software 1,279
2,463
Construction in process 165
619
168,608
168,341
Less: Accumulated depreciation and amortization (32,704 ) (28,133 )
$ 135,904
$ 140,208

~~The Company recorded depreciation and amortization expense of $10,927, $8,856, and $6,207 for the years ended March 31, 2016, 2015 and 2014, respectively.~~

~~4. Accrued Liabilities~~

~~Accrued liabilities consist of the following:~~

March 31,
2016 2015
Compensation and related payroll taxes $ 36,789
$ 38,518
Other 32,889
34,239
$ 69,678
$ 72,757

~~5. Commitments and Contingencies~~

~~Leases~~

The Company leases various office facilities under non-cancelable leases, which expire on various dates through April 2022. Future minimum lease payments under all operating leases at March 31, 2016 are as follows:

Year Ending March 31,
2017 $ 8,540
2018 6,815
2019 6,071
2020 4,973
2021 and thereafter 7,503
$ 33,902

~~Rent expenses were $9,856, $10,845, and $11,405 for the years ended March 31, 2016, 2015 and 2014, respectively.~~

Rent expense is calculated by amortizing total rental payments (net of any rental abatements, allowances and other rental concessions), on a straight-line basis, over the lease term. Accordingly, rent expense charged to operations differs from rent paid resulting in the Company recording deferred rent.

Commvault Systems, Inc.

Notes to Consolidated Financial Statements — (Continued)

(In thousands, except per share data)


	Year Ended March 31, 2020
	Americas		EMEA		APJ		Total
Software and Products Revenue	$	141,856	$	95,356	$	38,096	$	275,308
Customer Support Revenue	230,226		88,965		40,939		360,130
Other Services Revenue	18,778		10,459		6,210		35,447
Total Revenue	$	390,860	$	194,780	$	85,245	$	670,885

Information about Contract Balances

Amounts collected in advance of services being provided are accounted for as deferred revenue. Nearly all of our deferred revenue balance is related to services revenue, primarily customer support contracts and software-as-a-service contracts.

In some arrangements we allow customers to pay for term-based software licenses and products over the term of the software license. Amounts recognized as revenue in excess of amounts billed are recorded as unbilled receivables. Unbilled receivables, which are anticipated to be invoiced in the next twelve months, are included in Accounts Receivable on the Consolidated Balance Sheets. Long-term unbilled receivables are included in Other assets. The opening and closing balances of our Accounts receivable, Unbilled receivables and Deferred revenues are as follows:


	Accounts Receivable		Unbilled Receivable (current)		Unbilled Receivable (long-term)		Deferred Revenue (current)		Deferred Revenue (long-term)
Opening Balance as of March 31, 2021	$	168,985	$	19,141	$	7,463	$	253,211	$	119,231
Increase/(decrease), net	8,197		(2,085)		6,833		13,806		30,949
Ending Balance as of March 31, 2022	$	177,182	$	17,056	$	14,296	$	267,017	$	150,180

The net increase in accounts receivable (inclusive of unbilled receivables) is a result of an increase in software and products revenue relative to the prior year. The increase in deferred revenue is primarily the result of an increase in deferred revenue associated with software-as-a-service contracts that are billed upfront and recognized ratably over the contract period.

The amount of revenue recognized in the period that was included in the opening deferred revenue balance was approximately $254,100 for the year ended March 31, 2022. The vast majority of this revenue consists of customer support arrangements. The amount of revenue recognized from performance obligations satisfied in prior periods was not material.

Remaining Performance Obligations

In addition to the amounts included in deferred revenue as of March 31, 2022, approximately $83,500 of revenue may be recognized from remaining performance obligations, of which approximately $21,250 was related to software and products. We expect most of the software and products revenue to be recognized in the first half of fiscal 2022. The majority of the services revenue is related to other professional services which may be recognized over the next twelve months but is contingent upon a number of factors, including customers’ needs and schedules.

Commvault Systems, Inc.

Notes to Consolidated Financial Statements — (Continued)

(In thousands, except per share data)

4. Business Combination

On January 31, 2022, we completed the acquisition of TrapX Security ("TrapX"), an Israeli-based cyber deception technology company, acquiring 100% of the equity interest for a purchase price of $18,653, paid in cash. The primary reason for the business combination is to expand the security features of our software-as-a-service offerings. The technology was valued using the replacement method. The following table summarizes the purchase price allocation as of the date of acquisition:


Assets acquired and liabilities assumed:
Cash	$	1,759
Trade accounts receivable	700
Developed technology	3,750
Pre-acquisition tax contingencies	(736)
Accrued expenses	(523)
Deferred revenue	(1,642)
Total identifiable net assets acquired and liabilities assumed	3,308
Goodwill	15,345
Total purchase price	$	18,653

Actual and Unaudited Pro Forma Information

We completed the acquisition for TrapX on January 31, 2022, and accordingly, TrapX's operations for the period from January 31, 2022 to March 31, 2022 are included in our Consolidated Statements of Operations. TrapX contributed revenues of approximately $535 and estimated net loss of $948 for the period from the completion of acquisition through March 31, 2022.

The following unaudited pro forma results of operations have been prepared using the acquisition method of accounting to give effect to the TrapX acquisition as though it occurred on April 1, 2020. The pro forma amounts reflect certain adjustments, such as expenses related to the noncash amortization of intangible assets. The fiscal 2022 supplemental pro forma net income was adjusted to exclude $1,379 of acquisition-related costs incurred in fiscal 2022. The fiscal 2021 supplemental pro forma net loss was adjusted to include these charges. In addition to estimated operating expenses, both periods include noncash amortization expenses related to intangible assets as if the acquisition had taken place on April 1, 2020.

The unaudited pro forma financial information is presented for illustrative purposes only, is based on a purchase price allocation, and is not necessarily indicative of the results of operations that would have actually been reported had the acquisition occurred on April 1, 2020, nor is it necessarily indicative of the future results of operations of the combined company.


	Unaudited
	Year Ended March 31,
	2022		2021
Revenue	$	774,161	$	729,120
Net income (loss)	$	33,104	$	(37,601)

Commvault Systems, Inc.

Notes to Consolidated Financial Statements — (Continued)

(In thousands, except per share data)

5. Goodwill and Intangible Assets, Net

Goodwill

Goodwill represents the residual purchase price paid in a business combination after the fair value of all identified assets and liabilities have been recorded. It includes the estimated value of potential expansion with new customers, the opportunity to further develop sales relationships with new customers and intangible assets that do not qualify for separate recognition. Goodwill is not amortized. None of the goodwill recorded is expected to be deductible for income tax purposes.

There were no impairments to the carrying amount of goodwill during either fiscal year ended March 31, 2022 or 2021.

Goodwill balances are as follows:


	2022		2021
Opening balance	$	112,435	$	112,435
Additions	15,345		—
Ending balance	$	127,780	$	112,435

Intangible assets, net

Intangible assets are recorded at cost and amortized over their estimated useful lives.


	March 31, 2022
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value		Remaining Useful Life (in months)
Developed technology	$	3,750	$	(208)	$	3,542	34


	March 31, 2021
	Gross Carrying Amount		Accumulated Amortization		Impairment Charge		Net Carrying Value
Developed technology	$	49,000	$	(9,800)	$	(39,200)	$	—
Customer relationships	3,000		(1,500)		(1,500)		—
Total intangible assets	$	52,000	$	(11,300)	$	(40,700)	$	—

Amortization expense from acquired intangible assets was $208 for the fiscal year ended March 31, 2022 and $5,650 for the fiscal year ended 2021. During the second quarter of fiscal year 2021 we identified an indicator of impairment and concluded that the carrying values of the developed technology and customer relationships acquired in connection with the Hedvig transaction were not recoverable on an undiscounted basis. As a result, we remeasured the fair value of these assets and concluded their value was de minimis. We recorded a $40,700 impairment charge in the accompanying Consolidated Statements of Operations for the year ended March 31, 2021. These non-recurring fair value measurements were categorized as Level 3, as significant unobservable inputs were used in the valuation analysis. Key assumptions used in the valuation include forecasts of revenue and expenses over an extended period, the useful life of the asset, tax rates, and estimated costs of debt and equity capital to discount the projected cash flows. Certain of these assumptions involve significant judgment and are based on management’s estimate of current and forecasted market conditions.

Commvault Systems, Inc.

Notes to Consolidated Financial Statements — (Continued)

(In thousands, except per share data)

Estimated future amortization expense of intangible assets with finite lives as of March 31, 2022 is as follows:


Year ending March 31,
2023	$	1,250
2024	1,250
2025	1,042
Total	$	3,542

6. Property and Equipment

Property and equipment consist of the following:


	March 31,
	2022		2021
Land	$	9,445	$	9,445
Buildings	103,244		103,244
Computers, servers and other equipment	45,557		42,117
Furniture and fixtures	15,031		14,689
Leasehold improvements	9,349		8,089
Purchased software	2,016		1,955
Construction in process	2,119		4,304
	186,761		183,843
Less: Accumulated depreciation and amortization	(80,248)		(71,064)
	$	106,513	$	112,779

We recorded depreciation and amortization expense of $10,708, $10,228, and $11,415 for the years ended 2022, 2021 and 2020, respectively. Approximately $1,250 of depreciation expense is allocated to our cost of goods sold for the years ended 2022, 2021 and 2020.

7. Accrued Liabilities

Accrued liabilities consist of the following:


	March 31,
	2022		2021
Compensation and related payroll taxes	$	73,409	$	69,890
Other	48,428		42,258
	$	121,837	$	112,148

8. Commitments and Contingencies

Purchase Commitments

~~The Company,~~We, in the normal course of business, ~~enters~~enter into various purchase commitments for goods or services. Total non-cancellable purchase commitments as of March 31, ~~2016 are approximately $11,591 for fiscal 2017, $1,721 for fiscal 2018, $354 for fiscal 2019 and $42 for fiscal 2020, totaling $13,708 for all periods through fiscal 2020. These purchase commitments~~2022, which relate primarily ~~result from contracts for the acquisition of IT infrastructure,~~to marketing and ~~software development~~IT services ~~and the construction of the Company’s corporate campus headquarters.~~are as follows:

~~The Company has~~


	2023		2024		2025		2025 and beyond		Total
Purchase commitments	$	19,693	$	4,969	$	7,976	$	215	$	32,853

Commvault Systems, Inc.

Notes to Consolidated Financial Statements — (Continued)

(In thousands, except per share data)

We have certain software royalty commitments associated with the shipment and licensing of certain products. Royalty expense is generally based on a fixed cost per unit shipped or a fixed fee for unlimited units shipped over a designated period. Royalty expense, included in ~~cost~~Cost of software and products revenues, was ~~$1,933 in fiscal 2016, $1,768 in fiscal 2015 and $1,350 in fiscal 2014.~~as follows:


	Year Ended March 31,
	2022		2021		2020
Royalty expense	$	11,188	$	16,256	$	12,545

Warranties and Indemnifications

~~The Company offers~~We typically offer a 90-day limited product warranty for ~~its~~our software. To date, costs related to this product warranty have not been ~~material.~~significant.

~~The Company provides~~We provide certain provisions within ~~its~~our software licensing agreements to indemnify ~~its~~our customers from any claim, suit or proceeding arising from alleged or actual intellectual property infringement. These provisions continue in perpetuity, along with ~~the Company’s~~our software licensing agreements. ~~The Company has~~We have never incurred a liability relating to one of these indemnification provisions, and management believes that the likelihood of any future payout relating to these provisions is remote. Therefore, ~~the Company has~~we have not recorded a liability during any period for these indemnification provisions.

Legal Proceedings

During fiscal 2022, we entered into settlement agreements resulting in a $7,900 gain which resolved certain legal matters. The settlement amounts are recorded in General and administrative expenses net against related legal expenses.

~~In the normal course~~We do not believe that we are currently party to any pending legal action that could reasonably be expected to have a material adverse effect on our business or operating results.

9. Capitalization

Common Stock

We have 44,511 and 46,482 shares of ~~its business, the Company may be involved in various claims, negotiations and legal actions. As of~~common stock, par value $0.01, outstanding at March 31, ~~2016, the Company is not aware~~2022 and March 31, 2021, respectively.

During fiscal 2022, we repurchased $305,239 of ~~any asserted or unasserted claims, negotiations and legal actions for which a loss is considered reasonably possible of occurring and would require disclosure under the guidance.~~

On September 10, 2014, a purported class action complaint was filed in the United States District Court for the District of New Jersey against the Company, its Chief Executive Officer and its Chief Financial Officer. The case is captioned In re Commvault Systems, Inc. Securities Litigation (Master File No. 3:14-cv-05628-MAS-LHG). The suit alleges that the Company made materially false and misleading statements, or failed to disclose material facts, regarding the Company's financial results, business, operations and prospects in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The suit asserts claims covering an alleged class period from May 7, 2013 through April 24, 2014. It is purportedly brought on behalf of purchasers of the Company's common stock, ~~during that period,~~or approximately 4,307 shares, under our share repurchase program. This program commenced in January 2021 and ~~seeks compensatory damages, costs~~ended on March 31, 2022. Our share repurchase program has been funded by our existing cash and ~~expenses,~~cash equivalent balances as well as ~~equitable or other relief. Lead plaintiff,~~cash flows provided by our operations.

Subsequent Event

On April 21, 2022 the ~~Arkansas Teachers Retirement System, was appointed on January 12, 2015, and on~~Board of Directors approved a new share repurchase program of $250,000. The Board's authorization has no expiration date.

Shares Reserved for Issuance

At March ~~18, 2015, an amended complaint was filed by~~31, 2022, we have reserved 5,354 shares in connection with our Stock Plans discussed in Note 10 of the plaintiffs. On December 17, 2015, the defendant’s motion to dismiss the case was granted and the case dismissed; however, the plaintiffs were permitted to re-file their claim, which they did on February 5, 2016. Defendants filed another motion to dismiss on April 5, 2016, which remains pending with the court. Duenotes to the inherent uncertainties of litigation, the Company cannot accurately predict the ultimate outcome of this matter. The Company are unable at this time to determine whether the outcome of the litigation will have a material impact on our results of operations,consolidated financial ~~condition or cash flows. As of March 31, 2016 the Company has not recorded a reserve for this matter.~~statements.

~~6. Revolving Credit Facility~~

On June 30, 2014, the Company entered into a five-year $250,000 revolving credit facility (the “Credit Facility”). The Credit Facility is available for share repurchases, general corporate purposes, and letters of credit. The Credit Facility contains financial maintenance covenants including a leverage ratio and interest coverage ratio. The Credit Facility also contains certain customary events of default which would permit the lenders to, among other things, declare all loans then outstanding to be immediately due and payable if such default is not cured within applicable grace periods. The Credit Facility also limits the Company's ability to incur certain additional indebtedness, create or permit liens on assets, make acquisitions, make investments, loans or advances, sell or transfer assets, pay dividends or distributions, and engage in certain transactions with foreign affiliates. Outstanding borrowings under the Credit Facility accrue interest at an annual rate equal to London Interbank

Commvault Systems, Inc.

Notes to Consolidated Financial Statements — (Continued)

(In thousands, except per share data)

10. Stock Plans

~~Offered Rate plus 1.50% subject~~We maintain the Omnibus Incentive Plan (the “2016 Incentive Plan”) for granting awards to ~~increases based on~~employees. On August 19, 2021, our shareholders approved an amendment to the ~~Company's actual leverage.~~2016 Incentive Plan to increase the maximum number of shares of common stock that may be delivered under plan to 10,050, an increase of 2,000 shares. The ~~unused balance on the Credit Facility is also subject to~~2016 Incentive Plan authorizes a ~~0.25% annual interest charge subject to increases based on the Company's actual leverage.~~broad range of awards including stock options, stock appreciation rights, full value awards (including restricted stock, restricted stock units, performance shares or units and other stock-based awards) and cash-based awards. As of March 31, ~~2016, there were no borrowings under the Credit Facility and the Company was in compliance with all covenants.~~

The Company has deferred the expense related to debt issuance costs, which are classified as Other Assets, and will amortize the costs into interest expense over the term of the Credit Facility. Unamortized amounts at March 31, 2016 were $820 and $1,072 as of March 31, 2015. The amortization of debt issuance costs was $252 for year ended March 31, 2016 and $190 for the year ended March 31, 2015. Amortization of debt issuances costs is included in Interest expense.

~~7. Capitalization~~

As of March 31, 2016 and 2015, the Company had 250,000 shares of common stock and 50,000 shares of preferred stock authorized. As of March 31, 2016 and 2015 there were no shares of preferred stock outstanding.

On November 13, 2008, the Board of Directors of the Company adopted a Rights Plan and declared a dividend distribution of one Right for each outstanding share of common stock to shareholders of record on November 24, 2008. Each Right, when exercisable, entitles the registered holder to purchase one one-thousandth of a share of Series A Junior Participating Preferred Stock, par value $0.01 per share, at a purchase price of eighty dollars per one one thousandth of a share, subject to adjustment. Of the 50,000 shares of preferred stock authorized under the Company’s certificate of incorporation, 150 have been designated as Series A Junior Participating Preferred.

The Rights will become exercisable following the tenth business day after (i) a person or group announces the acquisition of 15% or more of the Company’s common stock or (ii) commencement of a tender or exchange offer, the consummation of which would result in ownership by the person or group of 15% or more of the Company’s common stock. The Company is also entitled to redeem the Rights at $0.001 per right under certain circumstances. The Rights expire on November 14, 2018, if not exercised or redeemed.

~~Common Stock~~

~~The Company had 44,134 and 45,122 shares of common stock, par value $0.01, outstanding at March 31, 2016 and March 31, 2015, respectively.~~

During fiscal 2016, the Company repurchased $91,477 of common stock, or 2,563 shares, under its share repurchase program. As of March 31, 2016, $93,102 remained in the current stock repurchase authorization which expires on March 31, 2017.

~~Shares Reserved for Issuance~~

~~The Company has reserved 10,793 shares in connection with its Stock Plans discussed in Note 8 at March 31, 2016.~~

~~8. Stock Plans~~

~~As of March 31, 2016, the Company maintains two stock incentive plans, the 1996 Stock Option Plan (the “Plan”) and the 2006 Long-Term Stock Incentive Plan (the “LTIP”).~~

Under the Plan, the Company may grant non-qualified stock options to purchase 11,705 shares of common stock to certain officers and employees. Stock options are granted at the discretion of the Board and expire 10 years from the date of the grant. At March 31, 2016, there were 572 options available for future grant under the Plan.

The LTIP permits the grant of incentive stock options, non-qualified stock options, restricted stock awards, restricted stock units, stock appreciation rights, performance stock awards and stock unit awards based on, or related to, shares of the Company’s common stock. On each April 1, the number of shares available for issuance under the LTIP is increased, if applicable, such that the total number of shares available for awards under the LTIP as of any April 1 is equal to 5% of the number of outstanding shares of the Company’s common stock on that April 1. As of March 31, 2016,2022, approximately ~~1,058~~2,090 shares were available for future issuance under the ~~LTIP.~~2016 Incentive Plan.

As of March 31, ~~2016, the Company has~~2022, we have granted non-qualified stock options, ~~and~~ restricted stock units and performance stock awards under ~~its~~our stock incentive plans. Historically, most equity awards granted by ~~the Company~~us under ~~its~~our stock incentive plans generally vest quarterly over a ~~four-year~~three-year period, except that the ~~shares that would otherwise vest quarterly over the first twelve months do not vest until~~

~~Commvault Systems, Inc.~~

~~Notes to Consolidated Financial Statements — (Continued)~~

~~(In thousands, except per share data)~~

~~the first anniversary of the grant. Beginning in October of 2015, the Company began granting its equity awards with a three-year vest period, and retained the practice that~~ shares that would otherwise vest quarterly over the first twelve months do not vest until the first anniversary of the grant. ~~However, from time to time the company grants equity awards that vest between one and three years. The Company anticipates~~We anticipate that future grants under ~~its~~our stock incentive plans will be restricted stock units and ~~does~~performance stock awards and do not anticipate that itwe will grant stock options.

As of March 31, ~~2016,~~2022, there was approximately ~~$105,498~~$146,077 of unrecognized stock-based compensation expense related to all of ~~the Company's~~our employee stock plans ~~net of estimated forfeitures,~~ that is expected to be recognized over a ~~weighted average~~weighted-average period of ~~2.15~~1.74 years. To the extent the actual forfeiture rate is different from what ~~the Company has~~we have anticipated, stock-based compensation related to these awards will be different from ~~the Company’s~~our expectations.

Restricted stock unit activity is as follows:


Non-Vested Restricted Stock Units	Number of Awards	Weighted- Average Grant Date Fair Value
Non-vested as of March 31, 2021	3,451	$	44.90
Granted	1,958	69.77
Vested	(1,743)	45.90
Forfeited	(356)	52.93
Non-vested as of March 31, 2022	3,310	$	58.16

The ~~Company estimated the~~total fair value of the restricted stock ~~options granted using~~units that vested during the ~~Black-Scholes formula. The Company’s calculation of expected term includes a combination of actual exercise data~~years ended March 31, 2022, 2021 and an assumption on when the remaining outstanding options with similar characteristics would be exercised based on the Company’s historical data. In determining expected life, the Company separates employees into groups that have historically exhibited similar behavior with regard to option exercises. Expected volatility is calculated based on a blended approach that included the implied volatility of the Company’s traded options with a remaining maturity greater than six months2020 was $122,259, $72,544 and the historical realized volatility of the Company’s common stock. The risk-free interest rate is determined by reference to U.S. Treasury yield curve rates with a remaining term that is approximately the expected life assumed at the date of grant. Forfeitures are estimated based on the Company’s historical analysis of actual stock option forfeitures.$48,221, respectively.

The ~~assumptions used in~~following summarizes the ~~Black-Scholes option-pricing model are as follows:~~activity for our stock incentive plans from March 31, 2021 to March 31, 2022:

Year Ended March 31,
2016 2015 2014
Dividend yield None None None
Expected volatility 39% - 43% 41% - 47% 42% - 47%
Weighted average expected volatility 41% 46% 45%
Risk-free interest rates 1.29% - 1.75% 1.22% - 2.18% 0.70% - 2.11%
Weighted average expected life (in years) 4.6 5.7 6.9


Options	Number of Options	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding at March 31, 2021	1,357	$	62.06
Options granted	—	—
Options exercised	(406)	46.56
Options forfeited	—	—
Options expired	(34)	86.25
Outstanding at March 31, 2022	917	$	68.03	1.46	$	7,070

Exercisable at March 31, 2022	917	$	68.03	1.46	$	7,070

Commvault Systems, Inc.

Notes to Consolidated Financial Statements — (Continued)

(In thousands, except per share data)

~~The following summarizes the activity for the Company’s two stock incentive plans from March 31, 2013 to March 31, 2016:~~

Options Number of
Options Weighted-
Average
Exercise Price Weighted-
Average
Remaining
Contractual
Term (Years) Aggregate
Intrinsic
Value
Outstanding at March 31, 2013 6,439
$ 28.31

Options granted 1,035
85.91

Options exercised (999 ) 17.62

Options forfeited (87 ) 50.05

Options expired —
—

Outstanding at March 31, 2014 6,388
39.03

Options granted 1,155
46.08

Options exercised (504 ) 19.44

Options forfeited (159 ) 65.93

Options expired (27 ) 68.84

Outstanding at March 31, 2015 6,853
40.91

Options granted 148
41.84

Options exercised (764 ) 8.80

Options forfeited (172 ) 59.79

Options expired (126 ) 61.81

Outstanding at March 31, 2016 5,939
$ 44.07
5.63 $ 53,192
Vested or expected to vest at March 31, 2016 5,867
$ 43.96
5.60 $ 53,161
Exercisable at March 31, 2016 4,613
$ 40.25
4.94 $ 52,814

~~The weighted average fair value of stock options granted was $15.20 per share, $20.16 per share, and $41.70 per share during the years ended March 31, 2016, 2015 and 2014, respectively.~~ The total intrinsic value of options exercised was ~~$23,391, $15,069,~~$12,704, $4,306, and ~~$59,509~~$13,428 in the years ended March 31, ~~2016, 2015~~2022, 2021 and ~~2014,~~2020, respectively. ~~The Company’s~~Our policy is to issue new shares upon exercise of options as ~~the Company does~~we do not hold shares in treasury.

~~The following table summarizes information on stock options outstanding under the Plan and LTIP at March 31, 2016:~~

Range of Exercise Prices Options
Outstanding at
March 31,
2016 Weighted-Average Options
Exercisable at
March 31,
2016 Weighted-
Average
Exercise Price
Remaining
Contractual Life Exercise Price
$11.12 - 13.81 918
2.31 $ 12.38
918
$ 12.38
15.88 - 26.83 1,122
3.52 23.17
1,122
23.17
27.02 - 41.31 192
6.99 36.29
107
34.34
41.55 723
5.51 41.55
723
41.55
43.30 - 45.39 90
8.94 44.39
5
44.31
45.44 794
8.45 45.44
254
45.44
45.84 - 55.58 292
7.78 49.76
173
50.50
56.57 692
6.28 56.57
564
56.57
58.25 - 86.64 351
7.02 76.75
308
77.43
87.20 765
7.34 87.20
439
87.20
$11.12 - 87.20 5,939
5.63 $ 44.07
4,613
$ 40.25

~~Commvault Systems, Inc.~~

~~Notes to Consolidated Financial Statements — (Continued)~~

~~(In thousands, except per share data)~~

~~Restricted stock unit activity is as follows:~~

Non-Vested Restricted Stock Units Number
of
Awards Weighted
Average
Grant Date
Fair Value
Non-vested as of March 31, 2013 1,198
$ 46.45
Granted 562
84.66
Vested (473 ) 42.11
Forfeited (85 ) 53.57
Non-vested as of March 31, 2014 1,202
65.63
Granted 815
46.62
Vested (491 ) 59.22
Forfeited (114 ) 63.70
Non-vested as of March 31, 2015 1,412
56.82
Granted 1,543
37.27
Vested (547 ) 38.38
Forfeited (196 ) 49.24
Non-vested as of March 31, 2016 2,212
$ 43.43

~~The total fair value of the restricted stock units that vested during the years ended March 31, 2016, 2015 and 2014 was $20,981, $24,592 and $37,584, respectively.~~

The following table presents the stock-based compensation expense included in ~~cost~~Cost of services revenue, ~~sales~~Sales and marketing, ~~research~~Research and development, ~~and general~~General and administrative and Restructuring expenses for the years ended March 31, ~~2016, 2015~~2022, 2021 and ~~2014.~~2020.

Year Ended March 31,
2016 2015 2014
Cost of services revenue $ 3,106
$ 2,930
$ 1,428
Sales and marketing 28,557
26,853
20,813
Research and development 6,722
5,908
4,512
General and administrative 25,811
24,972
22,371
Stock-based compensation expense $ 64,196
$ 60,663
$ 49,124

The Company recognized a tax benefit related to stock-based compensation of $17,010 in the year ended March 31, 2016, $18,570 in the year ended March 31, 2015 and $15,940 in the year ended March 31, 2014.


	Year Ended March 31,
	2022		2021		2020
Cost of services revenue	$	4,474	$	3,317	$	2,604
Sales and marketing	37,431		35,577		31,779
Research and development	33,870		24,823		14,594
General and administrative	27,679		18,369		15,158
Restructuring	1,709		2,747		1,753
Stock-based compensation expense	$	105,163	$	84,833	$	65,888

Performance Based Awards

~~On March 31, 2015, the Company’s CEO was~~

In May 2021, we granted 48105 performance stock ~~options (“PSO”~~units ("PSUs") to certain executives and ~~24 performance restricted stock units (“PSU”).~~in June 2021, we granted an additional 14 PSUs to certain executives for a total of 119 PSUs for fiscal 2022. Vesting of these awards ~~was~~is contingent upon ~~the Company~~i) us meeting certain ~~company-wide~~ revenue and non-GAAP ~~operating margin~~ performance goals (performance-based) in fiscal ~~2016 in addition to the Company's~~2022 and ii) our customary service periods. The awards vest over three years. These awards generally have potential to vest at 200% based on actual fiscal 2022 performance. The related stock-based compensation expense is determined based on the value of the underlying shares on the date of grant and is recognized over the vesting term using the accelerated method. During ~~the interim~~each financial ~~periods,~~period, management ~~estimated~~estimates the probable number of ~~PSO’s and PSU’s~~PSUs that would vest until the ultimate achievement of the performance goals ~~was~~is known. Based on ~~the Company's financial~~our results, the ~~CEO~~PSUs granted in May 2021, will be eligible to vest at approximately 150% and the PSUs granted in ~~24 options and 5 PSU's if all time based service requirements are met.~~June 2021 will be eligible to vest at 200%. The awards are included in the ~~tables above.~~restricted stock unit table.

~~Commvault Systems, Inc.~~

~~Notes to Consolidated Financial Statements — (Continued)~~

~~(In thousands, except per share data)~~

There were no performance based stock units granted during fiscal 2021.

Awards with a Market Condition

In ~~October 2015, the Company~~fiscal 2022, we granted ~~133~~105 market performance stock units to certain executives. The vesting of these awards is contingent upon ~~the Company~~us meeting certain total shareholder return ~~(TSR)~~("TSR") levels as compared to athe Russell 3000 market index over the ~~next~~ three ~~years.~~years subsequent to grant date. The awards vest in ~~three~~3 annual tranches and have a maximum potential to vest at 200% ~~(266 shares)~~and a minimum of 0% based on TSR performance. The related stock-based compensation expense is determined based on the estimated fair value of the underlying shares on the date of grant and is recognized using the accelerated method over the vesting term. The estimated fair value was calculated using a Monte Carlo simulation model. The fair value of the awards granted ~~in October~~during the year was ~~$42.69.~~$87.74 per share, which approximated the market value of a share of stock at the time of grant. The awards are included in the restricted stock unit table above.

In fiscal 2021, we granted 299 market performance stock units to certain executives. The vesting of these awards is contingent upon us meeting certain total shareholder return ("TSR") levels as compared to the Russell 3000 market index over the three years subsequent to grant date. The awards vest in 3 annual tranches and have a maximum potential to vest at 200% and a minimum of 0% based on TSR performance. The related stock-based compensation expense is determined based on the estimated fair value of the underlying shares on the date of grant and is recognized using the accelerated method over the vesting term. The estimated fair value was calculated using a Monte Carlo simulation model. The fair value of the awards granted during the year was $36.76 per share, which approximated the market value of a share of stock at the time of grant. The awards are included in the restricted stock unit table above.

Commvault Systems, Inc.

Notes to Consolidated Financial Statements — (Continued)

(In thousands, except per share data)

Employee Stock Purchase Plan

The Employee Stock Purchase Plan (the “Purchase Plan”) is a shareholder approved plan under which substantially all employees may purchase ~~the Company’s~~our common stock through payroll deductions at a price equal to 85% of the lower of the fair market values of the stock as of the beginning or the end of six-month offering periods. An employee’s payroll deductions under the Purchase Plan are limited to 10% of the employee’s salary and employees may not purchase more than $25 of stock during any calendar year. Employees purchased ~~263~~187 shares in exchange for ~~$8,116~~$10,816 of proceeds in fiscal ~~2016~~2022 and ~~204~~272 shares in exchange for ~~$7,906~~$9,812 of proceeds in fiscal ~~2015.~~2021. The Purchase Plan is considered compensatory and the fair value of the discount and look back provision are estimated using the Black-Scholes formula and recognized over the ~~six month~~six-month withholding period prior to purchase. The total expense associated with the Purchase Plan for fiscal ~~2016, 2015~~2022, 2021 and ~~2014~~2020 was ~~$2,418, $2,960~~$3,341, $3,417 and ~~$395,~~$2,939, respectively. As of March 31, ~~2016,~~2022, there was approximately ~~$1,019~~$1,448 of unrecognized cost related to the current purchase period of our ~~Employee Stock~~ Purchase Plan.

11. Income Taxes

Global Intangible Low-Tax Income ("GILTI")

The Tax Cuts and Jobs Act (the "Act") was enacted on December 22, 2017. The Act subjects a U.S. shareholder to tax on Global Intangible Low-Taxed Income ("GILTI") earned by certain foreign subsidiaries. The FASB Staff Q&A, Topic 740, No. 5, Accounting for GILTI, states that an entity can make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or to provide for the tax expense related to GILTI in the year the tax is incurred as a period expense only. The Company has elected to account for GILTI in the year the tax is incurred, and has recorded an estimate of GILTI as a component of the tax provision for the fiscal years ending March 31, 2022, 2021 and 2020.

The components of income (loss) before income taxes were as follows:


	Year Ended March 31,								Year Ended March 31,
	2016			2015		2014			2022		2021		2020
Domestic	$	(6,869	)	$	28,048	$	89,946	Domestic	$	25,905	$	(28,628)	$	(16,670)
Foreign	8,714			10,844		11,364		Foreign	17,509		7,393		4,124
	$	1,845		$	38,892	$	101,310		$	43,414	$	(21,235)	$	(12,546)

The components of income tax expense (benefit) were as follows:


	Year Ended March 31,
	2022		2021		2020
Current:
Federal	$	284	$	3,399	$	(10,071)
State	361		196		(613)
Foreign	9,096		6,215		5,566
Deferred:
Federal	28		(113)		284
State	—		—		—
Foreign	21		22		(2,067)
	$	9,790	$	9,719	$	(6,901)

Year Ended March 31,
2016 2015 2014
Current:
Federal $ 4,983
$ 1,777
$ 34,406
State 1,076
2,533
4,063
Foreign 4,982
4,791
5,207
Deferred:
Federal (9,171 ) 4,237
(5,453 )
State 324
(24 ) (616 )
Foreign (485 ) (72 ) (361 )
$ 1,709
$ 13,242
$ 37,246

Commvault Systems, Inc.

Notes to Consolidated Financial Statements — (Continued)

(In thousands, except per share data)

A reconciliation of the statutory tax rates and the effective tax rates for the years ended March 31, ~~2016, 2015~~2022, 2021 and ~~2014~~2020 are as follows:


	Year Ended March 31,
	2022		2021		2020
Statutory federal income tax expense (benefit) rate	21.0	%	(21.0)	%	(21.0)	%
State and local income tax expense, net of federal income tax effect	0.8	%	0.9	%	(4.9)	%
Foreign earnings taxed at different rates	6.2	%	10.0	%	12.3	%
U.S. tax on Global Intangible Low-Taxed Income	0.5	%	1.8	%	14.5	%
Domestic permanent differences including acquisition items	3.6	%	1.7	%	7.7	%
Foreign tax credits	(5.3)	%	(7.8)	%	(19.3)	%
Research credits	(28.3)	%	(68.6)	%	(32.9)	%
Tax reserves	2.6	%	(0.1)	%	(0.6)	%
Valuation allowance	18.3	%	74.4	%	64.0	%
Enacted tax law changes	0.3	%	—	%	10.6	%
Stock-based compensation	(1.6)	%	36.3	%	(43.1)	%
CARES Act Impact	—	%	15.0	%	(82.1)	%
Reduction of NOL for carryback	—	%	—	%	59.2	%
Other differences, net	4.5	%	3.2	%	(19.4)	%
Effective income tax expense (benefit)	22.6	%	45.8	%	(55.0)	%

The significant components of our deferred tax assets and liabilities are as follows:


	March 31,
	2022		2021
Deferred tax assets:
Net operating losses	$	12,937	$	12,586
Equity investment	948		1,193
Stock-based compensation	15,726		16,280
Deferred revenue	19,125		14,879
Tax credits	50,587		39,062
Accrued expenses	2,148		3,568
Allowance for doubtful accounts and other reserves	493		801
Other	115		—
Less: valuation allowance	(90,242)		(78,339)
Total deferred tax assets	11,837		10,030
Deferred tax liabilities:
Depreciation and amortization	(3,945)		(4,553)
Deferred commissions and other	(8,700)		(6,238)
Total deferred tax liabilities	$	(12,645)	$	(10,791)
Net deferred tax liability	$	(808)	$	(761)

Commvault Systems, Inc.

Notes to Consolidated Financial Statements — (Continued)

(In thousands, except per share data)

Year Ended March 31,
2016 2015 2014
Statutory federal income tax expense rate 35.0 % 35.0 % 35.0 %
State and local income tax expense, net of federal income tax effect 11.2 % 3.0 % 2.5 %
Impact of limit on executive compensation — % 3.2 % 1.5 %
Foreign earnings taxed at different rates 67.9 % 1.0 % 0.7 %
Domestic permanent differences 116.8 % 4.1 % 0.3 %
Foreign tax credits (54.1 )% (2.8 )% (1.3 )%
Research credits (141.2 )% (4.9 )% (1.9 )%
Tax reserves 8.7 % (5.3 )% (0.8 )%
Valuation allowance 50.1 % — % — %
Statutory tax rate changes (20.1 )% — % — %
Other differences, net 18.3 % 0.7 % 0.8 %
Effective income tax expense 92.6 % 34.0 % 36.8 %

Net deferred tax assets arise due to the recognition of income and expense items for tax purposes, which differ from those used for financial statement purposes. ~~The~~ASC 740, Income Taxes, provides for the recognition of deferred tax assets if realization of such assets is more likely than not. In assessing the need for a valuation allowance, we considered all available objective and verifiable evidence both positive and negative, including historical levels of pre-tax income (loss) both on a consolidated basis and tax reporting entity basis, legislative developments, expectations and risks associated with estimates of future pre-tax income, and prudent and feasible tax planning strategies. As a result of this analysis, we determined that it is more likely than not that we will not realize the benefits of our gross deferred tax assets and therefore have recorded a valuation allowance to reduce the carrying value of these gross deferred tax assets, net of the impact of the reversal of taxable temporary differences. At March 31, 2022 and 2021, we recorded valuation allowances of $90,242 and $78,339, respectively, representing an increase in the valuation allowance of $11,903 in 2022, due to the uncertainty regarding the realization of such deferred tax assets. Included in the March 31, 2022 valuation allowance of $90,242 was $3,894 related to purchase accounting.

During fiscal 2019, the Company ~~assesses~~could no longer assert that it had the ~~likelihood that~~intent to indefinitely reinvest the earnings and profits of the foreign subsidiaries, with the exception of India. Accordingly, the Company was required to adjust its deferred tax ~~assets will be recovered from future taxable income, and to~~liability for the ~~extent that the Company believes recovery is~~effects of this change in assertion. This effect was not ~~likely, the Company establishes a valuation allowance. The significant components of the Company’s deferred tax assets are as follows:~~

March 31,
2016 2015
Deferred tax assets:
Stock-based compensation $ 40,033
$ 30,561
Deferred revenue 12,496
10,542
Tax credits 6,970
6,229
Accrued expenses 1,155
1,570
Allowance for doubtful accounts and other reserves 753
697
Net operating losses —
26
Less: valuation allowance (2,772 ) (1,343 )
Total deferred tax assets 58,635
48,282
Deferred tax liabilities:
Depreciation and amortization (8,659 ) (7,237 )
Net deferred tax asset $ 49,976
$ 41,045
significant. Our position during fiscal 2022 remains unchanged.

At March 31, ~~2016 the Company maintained valuation allowances totaling $2,772 against New Jersey state research~~2022, we had federal NOL carry forwards of $33,978. There are $8,062 NOLs that will expire by 2036 and $25,915 NOLs that will not expire. As of March 31, 2022, we had deferred tax ~~credits due to uncertainties~~assets related to state NOL carry forwards of $1,793 which expire over various years beginning in 2031 depending on the ~~ability to utilize such state research tax credits before they expire. The Company increased the valuation allowance $1,429 in fiscal 2016 due to lower estimates~~jurisdiction. As of forecasted New Jersey taxable income in the periods prior to the expiration of the research tax credits. The Company based its valuation allowance on its estimates of taxable income and the period over which its state research tax credits will be recoverable.

~~Commvault Systems, Inc.~~

~~Notes to Consolidated Financial Statements — (Continued)~~

~~(In thousands, except per share data)~~

It is the Company’s intention to reinvest undistributed earnings of its foreign subsidiaries and thereby infinitely postpone their remittance. As a result, deferred U.S. income taxes have not been provided on undistributed earnings of foreign subsidiaries of the Company. In the event we needed to repatriate funds from outside of the United States, such repatriation would likely be subject to restrictions by local laws and/or tax consequences including foreign withholding taxes or U.S. income taxes. It is not currently practical to estimate the legal restrictions or tax liability that would arise from such repatriations. The cumulative amount of unremitted earnings from the foreign subsidiaries that is expected to be permanently reinvested was approximately $22,565 on March 31, ~~2016.~~2022, we had foreign NOL carry forwards of $38,391 that will not expire.

Excess tax benefits related to share-based payments are credited to equity. When determining this excess tax benefit, the Company elected to follow the tax law approach. As a result, the Company’s excess tax benefit which was recorded to equity was approximately $3,265 and $2,141 for the years ended March 31, 2016 and 2015, respectively.

~~At March 31, 2016, the Company has~~We also had federal and state research tax ~~credit (R~~credits ("R&D ~~credits)~~credit") carryforwards of approximately ~~$3,350~~$35,140 and ~~$3,868,~~$18,873, respectively. The federal ~~research tax~~R&D credit carryforwards expire from ~~2025~~2033 through ~~2036,~~2042, and the state ~~research tax~~R&D credit carryforwards expire from ~~2016~~2023 through ~~2023. At March 31, 2016, the Company has federal Alternative Minimum Tax credit carryforwards of $1,149.~~2037.

~~The Company conducts~~

We conduct business globally and as a result, ~~files~~file income tax returns in the United States and in various state and foreign jurisdictions. In the normal course of business, ~~the Company is~~we are subject to examination by taxing authorities throughout the ~~world, including such major jurisdictions as the United States, Australia, Canada, Germany, Netherlands and United Kingdom.~~world. The following table summarizes the tax years ~~in the Company’s major tax jurisdictions that remain~~ subject to income tax examinations by tax authorities as of March 31, ~~2016.~~2022. The years subject to income tax examination in ~~the Company’s~~our foreign jurisdictions cover the maximum time period with respect to these jurisdictions. Due to ~~NOL carryforwards,~~NOLs, in some cases the tax years continue to remain subject to examination with respect to such NOLs.



Tax Jurisdiction		Years Subject to Income Tax Examination
U.S. Federal		~~2013~~ 2018 - Present
~~New Jersey~~Foreign jurisdictions		2012 - Present
~~Foreign jurisdictions~~	~~2011 - Present~~

Commvault Systems, Inc.

Notes to Consolidated Financial Statements — (Continued)

(In thousands, except per share data)

The calculation of ~~the Company’s~~our tax liabilities involves dealing with uncertainties in the application of complex tax regulations in each of ~~its~~our tax jurisdictions. The number of years with open tax audits varies depending on the tax jurisdiction. A number of years may lapse before a particular matter is audited and finally resolved. A reconciliation of the amounts of unrecognized tax benefits is as follows:


Balance at March 31, 2019	$	1,592
Additions for tax positions related to fiscal 2020	170
Additions for tax positions related to prior years	—
Settlements and effective settlements with tax authorities and remeasurements	—
Reductions related to the expiration of statutes of limitations	(100)
Foreign currency translation adjustment	—
Balance at March 31, 2020	1,662
Additions for tax positions related to fiscal 2021	614
Additions for tax positions related to prior years	—
Settlements and effective settlements with tax authorities and remeasurements	—
Reductions related to the expiration of statutes of limitations	(65)
Foreign currency translation adjustment	—
Balance at March 31, 2021	2,211
Additions for tax positions related to fiscal 2022	2,808
Additions for tax positions related to prior years	90
Settlements and effective settlements with tax authorities and remeasurements	—
Reductions related to the expiration of statutes of limitations	(117)
Additions for tax positions related to purchase accounting	4,232
Foreign currency translation adjustment	—
Balance at March 31, 2022	$	9,224

Balance at March 31, 2013 $ 4,570
Additions for tax positions related to fiscal 2014 316
Additions for tax positions related to prior years 433
Settlements and effective settlements with tax authorities and remeasurements (1,283 )
Reductions related to the expiration of statutes of limitations —
Foreign currency translation adjustment 77
Balance at March 31, 2014 4,113
Additions for tax positions related to fiscal 2015 490
Additions for tax positions related to prior years 252
Settlements and effective settlements with tax authorities and remeasurements (2,838 )
Reductions related to the expiration of statutes of limitations —
Foreign currency translation adjustment (12 )
Balance at March 31, 2015 2,005
Additions for tax positions related to fiscal 2016

Additions for tax positions related to prior years 170
Settlements and effective settlements with tax authorities and remeasurements (171 )
Reductions related to the expiration of statutes of limitations (64 )
Foreign currency translation adjustment 12
Balance at March 31, 2016 $ 1,952

All of the Company’s unrecognized tax benefits at March 31, 2016 of $1,952, if recognized, would favorably affect the effective tax rate. Components of the reserve are classified as either current or long-term in the Consolidated Balance Sheet based on when the Company expects each of the items to be settled.Unrecognized tax benefits and the related accrued interest and penalties totaling $1,346 are recorded as Other Liabilities on the Consolidated Balance Sheet, of which $207 represents interest and penalties. The Company also has unrecognized tax benefits and related accrued interest and penalties totaling $901 as a reduction of Deferred Tax Assets on the Consolidated Balance Sheet, of which $88 represents interest and penalties.

~~The Company estimates~~We estimate that no significant remaining unrecognized tax benefits will be realized during the fiscal year ending March 31, ~~2017.~~2023. Interest income, expense and penalties related to unrecognized tax benefits are recorded in Income tax expense in the Consolidated Statements of Operations. In the year ended March 31, 2022, we recognized interest income ~~tax expense.~~of $8 related to the release of reserves. In the years ended March 31, ~~2016, 2015~~2021 and ~~2014, the Company~~2020, we recognized ~~$52, $224~~expense of $9 and ~~$89,~~$6, respectively, ofrelated to interest and ~~penalties in the Consolidated Statement of Income.~~penalties.

~~10.~~12. Employee Benefit Plan

~~The Company has~~We have a defined contribution plan, as allowed under Section 401(k) of the Internal Revenue Code, covering substantially all employees. Effective January 1, 2012, ~~the Company makes~~we make contributions equal to a discretionary percentage of the employee’s contributions determined by ~~the Company.~~us. During the years ended March 31, ~~2016, 2015~~2022, 2021 and ~~2014, the Company~~2020, we made contributions of ~~$2,047, $1,955,~~$2,923, $2,445, and ~~$1,451,~~$2,487, respectively.

~~11.~~13. Segment Information

~~The Company operates~~We operate in ~~one~~1 segment. ~~The Company’s~~Our products and services are sold throughout the world, through direct and indirect sales channels. ~~The Company’s~~Our chief operating decision maker (the “CODM”) is the ~~chief executive officer.~~Chief Executive Officer. The CODM makes operating performance assessment and resource allocation decisions on a global basis. The CODM does not receive discrete financial information about asset allocation, expense allocation or profitability by product or geography.

Commvault Systems, Inc.

Notes to Consolidated Financial Statements — (Continued)

(In thousands, except per share data)

Revenues by geography are based upon the billing address of the customer. All transfers between geographic regions have been eliminated from consolidated revenues. The following table sets forth revenue and long-lived assets by geographic area:


	Year Ended March 31,							Year Ended March 31,
	2016		2015		2014			2022		2021		2020
Revenue:							Revenue:
United States	$	343,015	$	344,931	$	333,700	United States	$	398,632	$	379,106	$	342,660
Other	252,111		262,612		252,640		Other	370,959		344,366		328,225
	$	595,126	$	607,543	$	586,340		$	769,591	$	723,472	$	670,885

No individual country other than the United States accounts for 10% or more of revenues in the years ended March 31, ~~2016, 2015~~2022, 2021 and ~~2014.~~2020. Revenue included in the “Other” caption above primarily relates to ~~the Company’s~~our operations in Europe, Australia, Canada and Asia.


	March 31,
	2022		2021
Long-lived assets:
United States	$	275,546	$	248,386
Other	56,453		48,187
	$	331,999	$	296,573

March 31,
2016 2015
Long-lived assets:
United States $ 135,562
$ 143,975
Other 7,079
3,037
$ 142,641
$ 147,012

At March 31, ~~2016~~2022 and ~~2015~~2021 no ~~other~~ individual country, other than the United States, accounts for 10% or more of long-lived assets.

~~12. Selected Quarterly~~14. Restructuring

Our restructuring plans are aimed to increase efficiency in our sales, marketing and distribution functions as well as reduce costs across all functional areas. In the fourth quarter of fiscal 2022, we initiated a restructuring plan to combine the management of our EMEA and APJ field organizations. Restructuring charges relate primarily to severance and related costs associated with headcount reductions, stock-based compensation related to modifications of existing unvested awards granted to certain employees impacted by the restructuring plan and lease abandonment charges.

For the years ended March 31, 2022, 2021 and 2020, restructuring charges were comprised of the following:


	Year Ended March 31,
	2022		2021		2020
Employee severance and related costs	$	4,483	$	19,040	$	16,834
Lease impairments related costs (1)	—		1,684		2,761
Stock-based compensation	1,709		2,747		1,753
Total restructuring charges	$	6,192	$	23,471	$	21,348

(1) There were no lease impairment charges for the year ended March 31, 2022. Lease impairment charges relate to 7 and 6 offices for the years ended March 31, 2021 and 2020, respectively.

Commvault Systems, Inc.

Notes to Consolidated Financial ~~Data (unaudited)~~Statements — (Continued)

(In thousands, except per share data)

Quarter Ended
June 30 September 30 December 31 March 31
Fiscal 2016
Total revenue $ 139,123
$ 140,742
$ 155,696
$ 159,565
Gross margin 118,576
119,803
135,267
138,768
Net income (loss) (1,300 ) (9,236 ) 4,878
5,794
Net income (loss) per common share:
Basic (1) $ (0.03 ) $ (0.20 ) $ 0.11
$ 0.13
Diluted (1) $ (0.03 ) $ (0.20 ) $ 0.10
$ 0.13
Quarter Ended
June 30 September 30 December 31 March 31
Fiscal 2015
Total revenue $ 152,643
$ 151,144
$ 153,021
$ 150,735
Gross margin 131,716
130,858
133,080
129,821
Net income 12,729
6,496
3,073
3,352
Net income per common share:
Basic (1) $ 0.28
$ 0.14
$ 0.07
$ 0.07
Diluted (1) $ 0.27
$ 0.14
$ 0.07
$ 0.07
Restructuring accrual

The activity in our restructuring accrual for the years ended March 31, 2022 and 2021 is as follows:


~~(1)~~	Per common share amounts for the quarters and full year have been calculated separately. Accordingly, quarterly amounts do not add to the annual amount because of differences in the weighted average common shares outstanding during each period used in the basic and diluted calculations.


	Year Ended March 31,
	2022		2021
Beginning balance	$	3,095	$	2,531
Employee severance and related costs	4,483		19,040
Payments	(5,317)		(18,476)
Ending balance	$	2,261	$	3,095

15. Leases

We determine if an arrangement contains a lease at inception. We generally lease our facilities under operating leases. Operating lease right-of-use ("ROU") assets are included in Operating lease assets on our Consolidated Balance Sheets. Current portion of operating lease liabilities and Long-term operating lease liabilities are included on our Consolidated Balance Sheets.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at the commencement date.

We recognize operating lease costs over the estimated term of the lease, which includes options to extend lease terms that are reasonably certain of being exercised, starting when possession of the property is taken from the landlord. When a lease contains a predetermined fixed escalation of the minimum rent, we recognize the related operating lease cost on a straight-line basis over the lease term. In addition, certain of our lease agreements include variable lease payments, such as estimated tax and maintenance charges. These variable lease payments are excluded from minimum lease payments and are included in the determination of lease cost when it is probable that the expense has been incurred and the amount can be reasonably estimated.

Our lease liabilities relate primarily to operating leases for our global office infrastructure. These operating leases expire at various dates through fiscal 2031. We did not have any material finance leases for either the years ended March 31, 2022 or 2021.

Commvault Systems, Inc.

Notes to Consolidated Financial Statements — (Continued)

(In thousands, except per share data)

Net lease cost recognized in our Consolidated Statements of Operations is summarized as follows:


	Year Ended March 31,
	2022		2021		2020
Operating lease cost	$	7,129	$	9,048	$	8,795
Short-term lease cost	123		232		410
Variable lease cost	1,608		1,938		2,088
Net lease cost	$	8,860	$	11,218	$	11,293

Cash flow information


	Year Ended March 31,
	2022		2021		2020
Cash paid for operating lease liabilities	$	8,277	$	10,370	$	9,476
Additions of operating lease assets (non-cash)	$	1,827	$	17,603	$	8,448

As of March 31, 2022, the minimum lease commitment amount for operating leases signed but not yet commenced was immaterial.

As of March 31, 2022, the maturities of lease liabilities based on the total minimum lease commitment amount including options to extend lease terms that are reasonably certain of being exercised are as follows:


2023	$	4,745
2024	4,226
2025	3,904
2026	2,080
2027	568
Thereafter	1,846
Total minimum lease payments	$	17,369
Less: Imputed interest	1,321
Present value of operating lease liabilities	$	16,048
Less: Current portion of operating lease liabilities	4,778
Long-term operating lease liabilities	$	11,270

Lease term and Discount rate


	Year Ended March 31,
	2022		2021
Weighted-average remaining term (in years)	4.18		4.43
Weighted-average discount rate	4	%	4	%

Commvault Systems, Inc.

Notes to Consolidated Financial Statements — (Continued)

(In thousands, except per share data)

16. Revolving Credit Facility

On December 13, 2021, we entered into a five-year $100,000 senior secured revolving credit facility (the “Credit Facility”) with J.P. Morgan. The Credit Facility is available for share repurchases, general corporate purposes, and letters of credit. The Credit Facility contains financial maintenance covenants including a leverage ratio and interest coverage ratio. The Credit Facility also contains certain customary events of default which would permit the lender to, among other things, declare all loans then outstanding to be immediately due and payable if such default is not cured within applicable grace periods. The Credit Facility also limits our ability to incur certain additional indebtedness, create or permit liens on assets, make acquisitions, make investments, loans or advances, sell or transfer assets, pay dividends or distributions, and engage in certain transactions with foreign affiliates. Outstanding borrowings under the Credit Facility accrue interest at an annual rate equal to Secured Overnight Financing Rate plus 1.25% subject to increases based on our actual leverage. The unused balance on the Credit Facility is also subject to a 0.25% annual interest charge subject to increases based on our actual leverage. As of March 31, 2022, there were 0 borrowings under the Credit Facility and we were in compliance with all covenants.

We have deferred the expense related to debt issuance costs, which are classified as Other assets, and will amortize the costs into interest expense over the term of the Credit Facility. Unamortized amounts at March 31, 2022 were $543. The amortization of debt issuance costs and interest expense incurred for the year ended March 31, 2022 was $109. There was 0 amortization or expense incurred for the year ended March 31, 2021.



Item 9.			Changes Inin and Disagreements ~~with~~With Accountants on Accounting and Financial Disclosure

~~Not applicable~~None.



Item 9A.			Controls and Procedures


~~(a)~~	~~Evaluation of Disclosure Controls and Procedures~~

(a)Evaluation of Disclosure Controls and Procedures

Our management, with the participation of the Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as of March 31, ~~2016.~~2022. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of March 31, ~~2016.~~2022.


~~(b)~~	~~Management’s Report on Internal Control over Financial Reporting~~

(b)Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over our financial reporting as defined in Rules 13a-15(f) of the Exchange Act. There are inherent limitations in the effectiveness of any internal control, including the possibility of human error and the circumvention or overriding of controls. Accordingly, even an effective internal control can provide only reasonable assurance with respect to financial statement preparation. Further, because of changes in conditions, the effectiveness of any internal control may vary over time.

Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our internal control over financial reporting as of March 31, ~~2016.~~2022. In making this assessment, management used the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission ~~(“COSO”~~("COSO") in the 2013 Internal Control—Integrated Framework.

Based on our assessment, using those criteria, our management concluded that, as of March 31, ~~2016~~,2022, our internal control over financial reporting was effective. The effectiveness of our internal control over financial reporting as of March 31, ~~2016~~2022 has been audited by Ernst & Young LLP, our independent registered public accounting firm, as stated in their report, which is included below in this Annual Report on Form 10-K.


~~(c)~~	~~Changes in Internal Control over Financial Reporting~~

(c)Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the fourth quarter of fiscal ~~2016~~2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Commvault Systems, Inc.

Opinion on Internal Control over Financial Reporting

~~The Board of Directors and Stockholders of~~

~~Commvault Systems, Inc.~~

We have audited Commvault ~~System,~~Systems, Inc.’s internal control over financial reporting as of March 31, ~~2016~~2022, based on criteria established in Internal ~~Control-Integrated~~Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Commvault Systems, Inc.’s (the Company) maintained, in all material respects, effective internal control over financial reporting as of March 31, 2022, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of March 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income (loss), stockholders' equity and cash flows for each of the three years in the period ended March 31, 2022, and the related notes and our report dated May 6, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the ~~company’s~~Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the ~~Public Company Accounting Oversight Board (United States).~~PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect ~~and correct~~ misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Commvault Systems, Inc. maintained, in all material respects, effective internal control over financial reporting as of March 31, 2016, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Commvault Systems, Inc. as of March 31, 2016 and 2015, and the related consolidated statements of income, comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended March 31, 2016 of Commvault Systems, Inc. and our report dated May 6, 2016 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

~~MetroPark,~~Iselin, New Jersey

May 6, ~~2016~~2022



Item 9B.			Other Information

None.


Item 9C.			Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not ~~applicable~~applicable.

PART III



Item 10.			Directors, Executive Officers and Corporate Governance

We will furnish to the SEC a definitive Proxy Statement not later than 120 days after the close of the fiscal year ended March 31, ~~2016.~~2022. Information with respect to this Item is incorporated herein by reference from the sections of our ~~2016~~2022 Proxy Statement ~~including in the sections~~ captioned, “Our Board of Directors” and “Corporate Governance”.

Our Board of Directors has adopted a code of business ethics and conduct, which applies to all of our employees. The code of business ethics and conduct is in addition to our code of ethics for senior financial officers. The full texts of our code of business ethics and conduct and our code of ethics for senior financial officers can be found on our website, www.commvault.com.



Item 11.			Executive Compensation

Information with respect to this Item is incorporated herein by reference from the sections of our ~~2016~~2022 Proxy Statement ~~including in the section~~ captioned ~~“Compensation Discussion~~“Executive Compensation” and ~~Analysis”~~"Compensation Committee Report".



Item 12.			Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Information with respect to this Item is incorporated herein by reference from the section of our ~~2016~~2022 Proxy Statement ~~including in the section~~ captioned “Security Ownership of Certain Beneficial Ownership and Management”.

Securities Authorized for Issuance under Equity Compensation Plans

The following table provides information as of March 31, ~~2016~~2022 with respect to the shares of our common stock that may be issuable upon the exercise of options, warrants and rights under or existing equity compensation plans. The following information is as of March 31, ~~2016:~~2022:


						Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a)	Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (b)		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c)
	Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a)	Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (b)		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c)(2)
Equity compensation plans approved by security holders(1)	8,150,000	$	43.90	1,629,000
Equity compensation plans approved by security holders (1)					Equity compensation plans approved by security holders (1)	4,227,157	$	60.30	2,089,949
Equity compensation plans not approved by security holder	—	—		—	Equity compensation plans not approved by security holder	—	—		—
Totals	8,150,000	$	43.90	1,629,000	Totals	4,227,157	$	60.30	2,089,949

~~(1)~~

Consists of shares of common stock to be issued upon exercise of outstanding options and vesting of restricted stock awards under our 1996 Stock Option Plan and 2006 Long-Term Stock Incentive Plan. These amounts do not include potentially issuable shares under the Employee Stock Purchase Plan. The company has reserved 2,642,832 shares for the future issuance of shares under the Employee Stock Purchase Plan.

(1)Consists of shares of common stock to be issued upon exercise of outstanding options and vesting of restricted stock awards under our Omnibus Incentive Plan. These amounts do not include potentially issuable shares under the Employee Stock Purchase Plan. We have reserved 3,264 thousand shares for the future issuance of shares under the Employee Stock Purchase Plan.


~~(2)~~	On each April 1, the number of shares available for issuance under the 2006 Long-Term Stock Incentive Plan is increased, if applicable, such that the total number of shares available for awards under the 2006 Long-Term Stock Incentive Plan as of any April 1 is equal to 5% of the number of outstanding shares of our common stock on that April 1.



Item 13.			Certain Relationships and Related Transactions, and Director Independence

Information with respect to this Item is incorporated herein by reference from the sections of our ~~2016~~2022 Proxy Statement ~~including in the section~~ captioned “Transactions with Related Persons”, "Corporate Governance - Independence and Composition of our Board of Directors" and "Corporate Governance - The Board of Directors and Its Committees-General".



Item 14.			Principal Accountant Fees and Services

Information with respect to this Item is incorporated herein by reference from the section of our ~~2016~~2022 Proxy Statement ~~including in~~captioned “Ratification of the ~~sections captioned “Audit,~~Appointment of Independent Auditors - Audit, Audit-related, Tax and All Other Fees”.

PART IV



Item 15.			Exhibits and Financial Statement Schedules

Financial Statements

See “Index to Consolidated Financial Statements” set forth in Item 8 for a list of financial statements filed as part of this report.

Financial Statement Schedules

~~The following financial statement schedule should be read in conjunction with the Consolidated Financial Statements set forth in Item 8 and appears below:~~

~~Schedule II — Valuation and Qualifying Accounts for the years ended March 31, 2014, 2015 and 2016.~~

All ~~other~~ schedules are omitted because they are not required or because the required information is ~~shown~~included in the ~~financial statements~~Consolidated Financial Statements or notes thereto.

~~Schedule II — Valuation and Qualifying Accounts~~



Delaware		22-3447504
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
~~1 Commvault Way~~ ~~Tinton Falls, New Jersey~~	~~07724~~
~~(Address of principal executive offices)~~	~~(Zip Code)~~


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	CVLT	The Nasdaq Stock Market



~~Title of each class~~		~~Name of each exchange on which registered~~
~~Common Stock, $0.01 par value~~	~~The NASDAQ Stock Market~~



~~Name~~	~~Age~~	~~Position~~
~~N. Robert Hammer~~	74	~~Chairman, President and Chief Executive Officer~~
~~Alan G. Bunte~~	62	~~Executive Vice President, Chief Operating Officer~~
~~Brian Carolan~~	45	~~Vice President, Chief Financial Officer~~
~~Ron Miiller~~	49	~~Senior Vice President of Worldwide Sales~~



		Page
	PART I
Item 1.	Business	4
Item 1A.	Risk Factors	1411
Item 1B.	Unresolved Staff Comments	2821
Item 2.	Properties	2821
Item 3.	Legal Proceedings	2821
Item 4.	Mine Safety Disclosures	2821
	PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	2922
Item 6.	~~Selected Financial Data~~[Reserved]	3124
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3324
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	4836
Item 8.	Financial Statements and Supplementary Data	4937
Item 9.	Changes In i n and Disagreements ~~with~~W ith Accountants on Accounting and Financial Disclosure	7567
Item 9A.	Controls and Procedures	7567
Item 9B.	Other Information	7770
Item 9C.	~~PART III~~ Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	70
	PART III
Item 10.	Directors, Executive Officers and Corporate Governance	7770
Item 11.	Executive Compensation	7770
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	7770
Item 13.	Certain Relationships and Related Transactions, and Director Independence	7871
Item 14.	Principal Accountant Fees and Services	7871
	PART IV
Item 15.	Exhibits and Financial Statement Schedules	7871
Item 16.	Form 10-K Summary	73
SIGNATURES		8174



	3/31/2011	3/30/2012	3/28/2013	3/31/2014	3/31/2015	3/31/2016
Commvault	100.0	124.5	205.6	162.9	109.6	108.2
NASDAQ Composite Index	100.0	111.2	117.5	151.0	176.2	175.1
NASDAQ Computer Index	100.0	119.3	111.0	145.5	174.0	184.1



	As of March 31,
	2016		2015		2014		2013		2012
	(In thousands)
Balance Sheet Data:
Cash and cash equivalents	$	288,107	$	337,673	$	457,733	$	433,964	$	297,088
Short-term investments	99,072		49,936		24,976		1,948		3,146
Working capital	252,413		267,480		387,004		343,094		222,301
Total assets	714,573		713,466		755,384		604,854		432,688
Deferred revenue	244,866		229,735		209,575		184,270		147,373
Total stockholders’ equity	396,268		407,010		462,578		354,017		229,984



	Payments Due by Period
	Total		Less Than 1 Year		2-3 Years		4-5 Years		More Than 5 Years
Operating lease obligations	$	33,902	$	8,540	$	12,886	$	8,848	$	3,628
Purchase obligations	13,708		11,591		2,075		42		—
Total	$	47,610	$	20,131	$	14,961	$	8,890	$	3,628



	March 31, 2015
	As Reported		As Adjusted
Current assets:
Deferred tax assets, net	$	16,142	$	—
Total Current Assets	$	541,551	$	525,409

Deferred tax assets, net	$	24,903	$	41,045



March 31, 2016	Level 1		Level 2		Level 3	Total
Cash equivalents	$	95,735	—		—	$	95,735
Short-term investments	—		$	99,215	—	$	99,215



March 31, 2015	Level 1		Level 2		Level 3	Total
Cash equivalents	$	204,939	—		—	$	204,939
Short-term investments	—		$	49,955	—	$	49,955



Year Ending March 31,
2017	$	8,540
2018	6,815
2019	6,071
2020	4,973
2021 and thereafter	7,503
	$	33,902



Range of Exercise Prices	Options Outstanding at March 31, 2016	Weighted-Average			Options Exercisable at March 31, 2016	Weighted- Average Exercise Price
Range of Exercise Prices	Options Outstanding at March 31, 2016	Remaining Contractual Life	Exercise Price		Options Exercisable at March 31, 2016	Weighted- Average Exercise Price
$11.12 - 13.81	918	2.31	$	12.38	918	$	12.38
15.88 - 26.83	1,122	3.52	23.17		1,122	23.17
27.02 - 41.31	192	6.99	36.29		107	34.34
41.55	723	5.51	41.55		723	41.55
43.30 - 45.39	90	8.94	44.39		5	44.31
45.44	794	8.45	45.44		254	45.44
45.84 - 55.58	292	7.78	49.76		173	50.50
56.57	692	6.28	56.57		564	56.57
58.25 - 86.64	351	7.02	76.75		308	77.43
87.20	765	7.34	87.20		439	87.20
$11.12 - 87.20	5,939	5.63	$	44.07	4,613	$	40.25



Non-Vested Restricted Stock Units	Number of Awards		Weighted Average Grant Date Fair Value
Non-vested as of March 31, 2013	1,198		$	46.45
Granted	562		84.66
Vested	(473	)	42.11
Forfeited	(85	)	53.57
Non-vested as of March 31, 2014	1,202		65.63
Granted	815		46.62
Vested	(491	)	59.22
Forfeited	(114	)	63.70
Non-vested as of March 31, 2015	1,412		56.82
Granted	1,543		37.27
Vested	(547	)	38.38
Forfeited	(196	)	49.24
Non-vested as of March 31, 2016	2,212		$	43.43



Balance at March 31, 2013	$	4,570
Additions for tax positions related to fiscal 2014	316
Additions for tax positions related to prior years	433
Settlements and effective settlements with tax authorities and remeasurements	(1,283		)
Reductions related to the expiration of statutes of limitations	—
Foreign currency translation adjustment	77
Balance at March 31, 2014	4,113
Additions for tax positions related to fiscal 2015	490
Additions for tax positions related to prior years	252
Settlements and effective settlements with tax authorities and remeasurements	(2,838		)
Reductions related to the expiration of statutes of limitations	—
Foreign currency translation adjustment	(12		)
Balance at March 31, 2015	2,005
Additions for tax positions related to fiscal 2016
Additions for tax positions related to prior years	170
Settlements and effective settlements with tax authorities and remeasurements	(171		)
Reductions related to the expiration of statutes of limitations	(64		)
Foreign currency translation adjustment	12
Balance at March 31, 2016	$	1,952



	Quarter Ended
	June 30			September 30			December 31		March 31
Fiscal 2016
Total revenue	$	139,123		$	140,742		$	155,696	$	159,565
Gross margin	118,576			119,803			135,267		138,768
Net income (loss)	(1,300		)	(9,236		)	4,878		5,794
Net income (loss) per common share:
Basic (1)	$	(0.03	)	$	(0.20	)	$	0.11	$	0.13
Diluted (1)	$	(0.03	)	$	(0.20	)	$	0.10	$	0.13
	Quarter Ended
	June 30			September 30			December 31		March 31
Fiscal 2015
Total revenue	$	152,643		$	151,144		$	153,021	$	150,735
Gross margin	131,716			130,858			133,080		129,821
Net income	12,729			6,496			3,073		3,352
Net income per common share:
Basic (1)	$	0.28		$	0.14		$	0.07	$	0.07
Diluted (1)	$	0.27		$	0.14		$	0.07	$	0.07



	Balance at Beginning of Year		Charged (Credited) to Costs and Expenses			Deductions		Balance at End of Year
	(In thousands)
Year Ended March 31, 2014
Allowance for doubtful accounts	$	103	$	8		$	—	$	111
Valuation allowance for deferred taxes	$	1,395	$	—		$	13	$	1,382
Year Ended March 31, 2015
Allowance for doubtful accounts	$	111	$	1		$	8	$	104
Valuation allowance for deferred taxes	$	1,382	$	(39	)	$	—	$	1,343
Year Ended March 31, 2016
Allowance for doubtful accounts	$	104	$	247		$	36	$	315
Valuation allowance for deferred taxes	$	1,343	$	1,429		$	—	$	2,772



Exhibit No.		Description
3.1		Amended and Restated Certificate of Incorporation of Commvault Systems, Inc., as amended (Incorporated by reference to Exhibit 3.1 to the Registrant’s Form 10-Q for the quarter ended September 30, 2019).
3.2		Certificate of Amendment of Amended and Restated Certificate of Incorporation of Commvault Systems, Inc. (Incorporated by reference to Exhibit 3.1 to ~~Registrant’s Registration Statement on~~the Registrant's Form ~~S-1, Commission File No. 333-132550)~~8-K dated August 28, 2020).
~~3.2~~ 3.3		Amended and Restated Bylaws of Commvault Systems, Inc. ~~(Incorporated by reference to Exhibit 3.1 to the Registrant’s Form 8-K dated April 25, 2014).~~
~~3.3~~ 3.4		Certification of Designation of Series A Junior Participating Preferred Stock of Commvault Systems, Inc. (Incorporated by reference to Exhibit 3.1 to the Registrant’s Form 8-K dated November 14, 2008).
4.1		Form of Common Stock Certificate (Incorporated by reference to Exhibit 4.1 to the Registrant’s Registration Statement on Form S-1, Commission File No. 333-132550).
4.2		~~Rights Agreement between Commvault Systems, Inc. and Registrar and Transfer Company (Incorporated by reference to Exhibit 4.1 to Registrant’s Form 8-K dated November 14, 2008).~~Description of Securities.
9.1		Form of Voting Trust Agreement (Incorporated by reference to Exhibit 9.1 to the Registrant’s Registration Statement on Form S-1, Commission File No. 333-132550).
10.1*		~~Commvault Systems, Inc. 1996 Stock Option Plan, as amended (Incorporated by reference to Exhibit 10.2 to the Registrant’s Registration Statement on Form S-1, Commission File No. 333-132550).~~
10.2*	Form of Commvault Systems, Inc. 2006 Long-Term Stock Incentive Plan (Incorporated by reference to Exhibit 10.3 to the Registrant’s Registration Statement on Form S-1, Commission File No. 333-132550).
10.3*	Form of Non-Qualified Stock Option Agreement (Incorporated by reference to Exhibit 10.4 to the Registrant’s Registration Statement on Form S-1, Commission File No. 333-132550).
10.4* 10.2*		Form of Restricted Stock Unit Agreement (Incorporated by reference to Exhibit 10.5 to the Registrant’s Annual Report on Form 10-K for the year ended March 31, 2007).
10.5* 10.3 *		Employment Agreement, dated as of February 1, 2004, between Commvault Systems, Inc. and N. Robert Hammer (Incorporated by reference to Exhibit 10.5 to the Registrant’s Registration Statement on Form S-1, Commission File No. 333-132550).
10.6*	Form of Employment Agreement between Commvault Systems, Inc. and Alan G. Bunte and Louis F. Miceli (Incorporated by reference to Exhibit 10.6 to the Registrant’s Registration Statement on Form S-1, Commission File No. 333-132550).
10.7*	Form of Corporate Change of Control Agreement between Commvault Systems, Inc. and Alan G. Bunte and Louis F. Miceli (Incorporated by reference to Exhibit 10.7 to the Registrant’s Registration Statement on Form S-1, Commission File No. 333-132550).
10.8*	Form of Corporate Change of Control Agreement between Commvault Systems, Inc. and Brian Carolan, and Ron Miiller (Incorporated by reference to Exhibit 10.8 to the Registrant’s Registration Statement on Form S-1, Commission File No. 333-132550).
10.9*	Form of Indemnity Agreement between Commvault Systems, Inc. and each of its current officers and ~~directors (Incorporated by reference to Exhibit 10.9 to the Registrant’s Registration Statement on Form S-1, Commission File No. 333-132550).~~directors.
10.10* 10.4 *		Commvault Systems, Inc. Employee Stock Purchase Plan dated December 9, 2013 (Incorporated by reference to Exhibit 10.10 to the Registrant’s Annual Report on Form 10-K for the year ended March 31, 2014).
~~10.11~~ 10.5 *		~~Revolving Credit~~Employment Agreement, dated ~~June 30, 2014 among Commvault Systems, Inc. as~~January 8, 2019, between the ~~Borrower, certain subsidiaries of the Borrower Party hereto, as the Guarantors, Bank of America, N.A., as Administrative Agent, Swingline Lender~~Company and ~~L/C Issuer, and the Lenders Party hereto~~Sanjay Mirchandani. (Incorporated by reference to Exhibit ~~10.10~~10.1 to the Registrant’s ~~Annual Report on~~Form 8-K dated February 5, 2019).
10.6 *		Executive Retention and Severance Agreement, dated April 1, 2019, between Commvault Systems, Inc. and Jay Whalen (Incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K dated March 31, 2019).
10.7 *		Commvault Systems, Inc. Omnibus Incentive Plan (as amended by the Fifth Amendment thereof) (Incorporated by reference to Exhibit 10.1 to the Registrant's Form 10-Q for the quarter ended ~~June~~September 30, ~~2014)~~2021).


10.8			Credit Agreement, dated December 13, 2021, by and among Commvault Systems, Inc., the Lenders from time to time party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent (Incorporated by reference to Exhibit 10.1 to the Registrant's Form 10-Q for the quarter ended December 31, 2021).
* 10.9*			~~Management contract or compensatory plan or arrangement.~~

Offer Letter, dated April 28, 2022, between the Company and Gary Merrill. (Incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K dated May 3, 2022).
21.1
~~Exhibit No.~~	~~Description~~
~~21.1~~	List of Subsidiaries of Commvault Systems, Inc.
23.1		Consent of Ernst & Young LLP
31.1		Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
~~32.1~~ 32.1**		Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
~~32.2~~ 32.2**		Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)


*			Management contract or compensatory plan or arrangement.
**			Furnished herewith.


COMMVAULT SYSTEMS, INC.

~~COMMVAULT SYSTEMS, INC.~~By:		/s/ SANJAY MIRCHANDANI
		Sanjay Mirchandani
~~By:~~		~~/s/ N. ROBERT HAMMER~~
	~~N. Robert Hammer~~
	~~Chairman,~~Director, President and Chief Executive Officer



Signature		Title

/s/ ~~N. ROBERT HAMMER~~SANJAY MIRCHANDANI		~~Chairman,~~Director, President and Chief Executive Officer (Principal Executive Officer)
~~N. Robert Hammer~~Sanjay Mirchandani
/s/ BRIAN CAROLAN		~~Vice President,~~ Chief Financial Officer (Principal Financial Officer)
Brian Carolan
/s/ ~~GARY MERRILL~~JAMES WHALEN		~~Vice President,~~ Chief Accounting Officer (Principal Accounting Officer)
~~Gary Merrill~~James Whalen
/s/ ~~ALAN G. BUNTE~~NICHOLAS ADAMO		~~Director~~Chairman of the Board
~~Alan G. Bunte~~Nicholas Adamo
/s/ ~~JOSEPH F. EAZOR~~MARTHA H. BEJAR		Director
~~Joseph F. Eazor~~Martha H. Bejar
/s/ ~~FRANK J. FANZILLI, JR.~~R. TODD BRADLEY		Director
~~Frank J. Fanzilli, Jr.~~R. Todd Bradley
~~/s/ ARMANDO GEDAY~~	~~Director~~
~~Armando Geday~~
/s/ KEITH GEESLIN	Director
Keith Geeslin
/s/ ~~F. ROBERT KURIMSKY~~VIVIE LEE		Director
~~F. Robert Kurimsky~~Vivie Lee
/s/ ~~DANIEL PULVER~~CHARLES E. MORAN		Director
~~Daniel Pulver~~Charles E. Moran
/s/ ~~GARY SMITH~~ALLISON PICKENS		Director
~~Gary Smith~~Allison Pickens
/s/ ARLEN SHENKMAN		Director
Arlen Shenkman
/s/ DAVID F. WALKER		Director
David F. Walker