CVLT - Earnings call transcript Q4 2019

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Operator

Good day, ladies and gentlemen, and welcome to the Fourth Quarter and Fiscal Year-End 2019 Commvault Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time.

As a reminder, this conference call is being recorded. I would now like to introduce your host for today’s conference, Jay Whalen, Chief Accounting Officer. begin. may you Jay,

Jay Whalen

Carolan, for earnings today the call. President the Officer; Sanjay Thanks Bunte, and fourth Advisor Executive call our quarter Mirchandani, to Brian Executive Chief XXXX With and Financial dialing morning. Officer; for Al in CEO. fiscal are Chief Good me on

financial expectations. the remind a competitive factors, including the and Before products in the at session Act regarding the the and to related Securities the Safe and as pursuant XXXX call Reform conditions. include made number uncertainties made provisions statements, and marketing differ everyone such economic delays and projections of forward-looking software may begin, Litigation to regarding All future Private development, the of beliefs, sale we that like materially due during performance. results statements manufacturing, statements question-and-answer of to the that are Actual relate and may general intentions our I’d plans, risks to and these in inherent the including future Harbor current end difficulties of call, or are services, expectations on of statements our

of business, in Factors these filings, the our any other risks in For cautionary a in information the report Form in quarterly SEC the under conference in in XX-K and company responsibility the call The circumstance. website. and affecting contains our our XX-Q, other undertakes discussion to press in and and uncertainties release statement contained no our update please in and Form our and Report Risk see Annual most recently

product features of at functionality addition, our sole the or any release, well as as development its In timing and remain discretion. of

as and Investor adopted can conference the measures available X-K April and was Wire our on accompanying the revenue an Table reconciliation on X, also to release XXX be it filing. Relations results. and SEC new IV the between financial issued today Commvault this call, website. press GAAP earnings non-GAAP has the the we press The The is provide been ASC Our press website. release found furnished standard will posted non-GAAP also release earlier services on XXXX. over On our on

done statements on and been comply all with adjusted Our so new prior adoption periods retrospective our a basis, have was the rules. financial to

comparable As disclosed both growth software for This our of a is are P&L. will result, be dollar for the references over we of today basis. revenue today’s the the archive products Sanjay? available call Sanjay. to being a will on in call. discuss and are inclusive now All or percentages will conference as being amounts our revenue and percentages call is turn webcast. replay to webcast An on recorded website following software I

Sanjay Mirchandani

many use in customers, pleased my engaging you partners our to and company on has conversations, Good forward getting in speaking confidence on heard talking best that significant to you our company. conference I an support opportunities. and to I’m reinforced our consistently and have general employees is Based us the overwhelming morning, CommVault and hear to ago, with to us data. their Jay. conversations call and Since on CommVault my influencers. there market today. with amount first with you. technology People joining views Thanks, spent a months CommVault and I’ve roughly as look These want to for industry particular. joining our the three know President of manage, win. on protect, for wanted time I in and and thank be the my CEO,

differentiate customer of core of to will the our the CommVault a It and our rich for been future. reasons the and innovation people success heritage of focus. One is company continue rooting in has are

spend years I products the come. drive I time team, value market more innovation that With make the for drive can with and the believe customer continue to in want fact, more the points. key to that we CommVault In I two to said,

am which the enterprise today, larger results not in reported challenges. a large with lumpiness pleased I reflect execution we business First, and

Second, believe an ahead is that opportunity indication for of I the strongly performance CommVault. our recent not

will there in revenue direction Brian As discuss we’re share. earnings value, are significant solid the repeatable that indicators in including and increases contract per shortly, right moving annual

rapid continuing to are CommVault potential. also be focused that we fiscal shows growth of and have through employees for my XXXX, predictable excellence; areas that clear In we company. our to now three these They reaches our business aligned work the operations; on key and performance full months, do with are more they direction recognize to driving we one, two, where also However, it the In responsible innovate couple is execution simplifying this and priorities ensure will pace. with conversations heading. its a areas: over energized as at past by the three,

As met first part listening my customer’s more firsthand my and we problems today future. heart an passionate days. experienced our have in in loyal incredibly team of solving about of the smart employees and I than is that with XX% I tour, XX that

employee XX% In fact, an feedback survey. the employees in unprecedented our share annual of recent

Brian let priority discuss opportunity over in me Brian? of detail, but will are the results. it review areas year QX and each So first, they engaged our three ahead. and XXXX to fiscal to turn our excited I about greater

Brian Carolan

of morning, a full sequentially highlights good and and for were cover million, fourth Total now X% the and the I’ll Sanjay, revenues some quarter everyone. both quarter year financial XXXX. in fourth year-over-year. fiscal representing you, decrease Thank $XXX.X

X% total fiscal of $XXX fiscal million, increase approximately revenues the year, XXXX. were over an representing For full

their primary enterprise our execution to due and associated factors differential be in longer compared to complexity. in particularly take As expected from two poor lower channel, we market. Sanjay reflects expectations revenues enterprise the with mentioned, can the contracts and believe Large to large mid than revenues can revenue lumpy transactions close

look was income models. by per are weighted diluted more basis, counts a quarter successful increase a repeatable $X.XX closer at sequentially shift Revenue constant QX can software Taking revenue, basis. On results year-over-year. or EPS over based also deals number software for continued represented and structure. these XX.X a and on of by down as quarter. million of X% to was software full $XX.X approximately the a year-over-year results Our tempered efforts share are year-over-year based revenue and XX% for share QX X% our define transactions a X% cost the revenue from and was XX% subscription we and software year-over-year on average $X.XX, of which Net products was and rightsizing enterprise up revenue growth revenue Revenue pricing the our million year products million, enterprise currency was $XXX,XXX transactions from XX% deals, shares. driven increased which year-over-year. were flat $XX.X

in over that Our up We it million, contracts of these growth year-over-year services innovation. to X% in continuing support average And was enterprise sequentially. prior believe the during is deal see that $XXX.X XX% revenue the in volume size our of and size growth. year. on decrease value was so why focused approximately X% enterprise an of quarter, Total QX we’re a approximately enterprise increase CommVault’s invest for to our and customers the $XXX,XXX of the underscores innovation

fiscal Total our down X% down in to of While basis, drive fiscal were margins the up X,XXX basis subscription year-over-year, of XX% which margins QX by by improving for Operating renewal reflecting rates revenue resulting XX.X% approximately products some cost the foreign a to operating quarter, Gross across to $XX.X cost expenses year, cost of or moving revenue. fiscal in included approximately The and XX% our of Software for with strong the million. year-over-year. X% approximately the full have were the the models. EBIT and approximately million to points customers maintenance we related year. and year-over-year. the related year-over-year our XX.X% rates business. HyperScale efficiencies operating and were efforts Operating service XX% exchange year-over-year approximately HyperScale software royalties was We down since employees, in quarter. Solutions of $XXX EBIT growth continue XXX sequentially. to for were operating year is quarter, ended changes our hardware were margins income On year our third-party of Appliances full beginning the XX.X% for the is was tempered expenses continued

early initiatives to reduction some cost take begin we As of our hold. saw

tax a lowered align rates. to reminder, XX% cash FYXXXX, XX% our long-term rate As we during pro income from that forma XX%. and to GAAP our believe tax will We

of to pricing their me make continuing customers see transition more provide now business. realize subscription drive more lifetime for continued value to the these we prospects models relationships our that to from it CommVault increase changes repeatable arrangements customers revenue. touch models our adapt customers to easier consumption a these and shift become power on the will models stream. and solutions. new our Let also should as We expect to that in revenue Growth repeatable Subscription flexibility and of our customer predictable the

revenue few or progress revenue our help investors two For the contract will repeatable with highlighting growth ACV. annual we and start metrics metrics These I of have transition. the revenue. to been revenue value and past track quarters, subscription two repeatable are

in are software repeatable. QX basis, would As of We a nature. total by products subscription year revenues These revenue were and fiscal approximately repeatable revenue our XX% was reminder, was full subscription a our year-over-year XXXX XX% streams XX% software driven repeatable of and be revenue primary revenue. services. and total consider maintenance On up to

pricing metric new growth annual of drive our opportunities. based utility metric expect upsell is models Our acquisition, subscription land growth the and that we and This second expand will demonstrates and customer contract value.

more QX, it $XX year million ago. what a ACV grown has of Xx to As was than

focused significantly, our years. expect these As to subscription the selling is ACV and go-to-market over we Advance on model Commvault of our grow highly part primarily subscription next licenses initiatives, several

QX, a million grown double of almost it what has ago. $XXX year to As ACV was

sheet now me cash flows. to and balance our gears shift Let

was define As cash approximately as cash and our cash XX, of $XXX Free short-term balance we flow XXXX. XX, which balance unchanged as investments from our from up December flow million operations of full the less up year-over-year. fiscal year prior flow XX% XXXX for capital cash for period. the expenditures, $XXX year million was million, approximately quarter, was over $XX Free approximately XX% March

As XX, XX was of DSO March days. our

the to of required our as were the receivables reminder, As DSO calculation includes unbilled standard. record a new revenue part

to shift to just continued mentioned. was more factors increase DSO repeatable contributing the of the I One that revenue in the

of was over of nearly XX, is that of As to currency constant the On deferred our has an is XXXX was revenue year. services deferred approximately a March revenue basis, customers. prior revenue balance which $XXX X%, invoiced revenue million, up been deferred increase X% our all

stock share. quarter, per approximately of $XX repurchased During $XX million at the our we an common approximately cost of average

per $XX years, program fiscal have approximately two increased our expires common stock now share. Directors an nearly April million or repurchase XXXX. our March up repurchased last XX, of On of share cost either extended the $XXX it average on our million XX, authorization until Over we the Board back $XXX to at is of

will with We to continue be our repurchases. opportunistic share

now longer-term potential. do CommVault’s We fiscal me not performance is financial XXXX QX financial discuss of Let and our believe indicative outlook. our

are Sanjay rapid operations, pace. our to still do and As we terms everything execution innovate across do outlined, there work driving simplifying a in continuing business to excellence of left at

confident developed input customers the weeks that still reflect employees and these Plans company underway as revenues, from received the ACV being are in of are since XX areas, and We in joining growth just Sanjay the to and ago. the demonstrated partners, in actions earnings. subscription has finalized by that each are

for don’t our actively comment until simply our are outlook further on in in are and we as of intend work. that us button. reset Revenue by It’s on tenure. have us Accordingly, and longer a targets to of the commentary longer for We end this hitting have Please term Sanjay’s fiscal along recruiting to filled Chief to providing quarter. take defer we this term lack a this analysis early we new role Officer also decided premature

on optimistic Importantly, potential are Commvault’s on our call. and we’re earnings our strategy outlook planning sharing about next and general

changes fundamental which our note execution. that to major QX, disruption was the and relates it carried to Advance restructuring a important effort. and We it transformation to Commvault to make business, tied risks, is As

QX perspective. challenging most is addition, the In historically fiscal quarter our for seasonality

software it quarter. and fact, in not in decline for revenue us fiscal is unusual to the first a In have products double-digit sequential

million software expect As million. be a revenue We are outlook. being result, our with $XX to QX of range the QX we currently $XX in to measured

indicate would that approximately We flat revenue also expect total which slightly $XXX be to will to services million. sequentially, $XXX of revenues down million

have improving in and a long-term. so large revenue more on closure our will As predictable likely in over deal remain lumpy, market to We focused reminder, rates indirect run remain routes the the area, particularly we this on near-term. rate

EBIT Let me now discuss QX. for our expectations margin

improvements annualized course the achieved significant year. reductions more XXXX. both to reduce have and enabled QX our the meaningful This million us of operating We costs. over cost has than in $XX earnings and fiscal to to steps We taken of deliver margins

as as hand While continue remarks to related on QX, expect be we decline leverage things to well our year-over-year our QX expect my we’re operating as Global Sanjay. initiatives, making range the also event. and well investments revenues, in of expenses operating we Ready, operating concludes Field from XX%. Enablement decline in XX% to now to a estimated I’ll margins reduced lower as basis reflects to over back Sanjay? That Commvault the simplification prepared to This our

Sanjay Mirchandani

protect, customers multi-cloud to up sized structure while by and right progress while data Throughout you, on manage both operationally hard as buybacks. revenue, taken repeatable the more and early fiscal drive cost our a year-over-year, organizationally. in significant company of This progress, making seeing work million worked continue share $XX use we’re has and hybrid cost enabled We’ve and is signs of and remains. over our our annualized help Brian. return with journey foundational as also shareholders steps year us which XXXX, evidenced to environments, Thank reductions their XX% team our important a cash to to

we we I three strategy I to focused our improvements better. our discussion in simplifying and bar the areas: at year a earnings this am as and key rapid significant indicated, look know is set, Brian As making excellence; through operations, earlier, on pivotal; more That driving two, execution three, a I call. continuing responsible predictable in forward to can fiscal business one, innovate growth next pace. XXXX, on as referenced in-depth do raising I sharing are

simplifying with our start me operations. Let business

Officer and role to simplify a internally, embraced do our us. efficiency and operational true Ultimately, last and recalibrating XXXX. analytics, there priority OKR empowering to I to fiscal the Commvault April, operational mentioned, few while can approach our organization by further have we’re Vice our team Gary deliver organization. place to veteran, drive for Chief to driving Gary as To eliminating our of to Brian business our enhancing in operations improve team productivity. is the to right as actively improvements ensure easier our and made partner and employees year weeks, Operations, year’s by Chief lead and strategy. We new leadership executive partner to teams technologies evolve Operating we’ve new we’ve position remove helped, changes our and realigning processes, stronger excellence, Officer. work the align we and processes several operational it our operational While Business tools are the globally, his improve and more and complexity make we need with recruiting our and simplification Also, Revenue we field In people initiatives global a on work much to I Merrill, President asked to our ensure to Accordingly excellence. from customers the in flattening performance closer last

We’re already making in these progress areas.

we For so hit and them the of quarters, running. structure in early territories the example, the finalized and hands commission our can field, and April, simplified ground got our they plan into

selling now can focus on our initiatives a customers teams result like field our of subscriptions. changes, strategic landing new As and our

This demand through aggressive strengthening also the our while large generation enablement funnel to includes We’re grow deal and capabilities more channel to designed the making predictability to resources run by business, closer my digital our better marketing. our and putting increasing improving incremental improvements better engagement, rates field.

simplifying. is area first The

in and prioritizing a this, This us critical excellence we’re enablement The responsible execution adjusting the pricing, areas been These is evolve to growth. improvement we to of have predictable organization. address area and drive readiness. motions for as second overall past. our our continue we’re is to partner-centric To during and ongoing go-to-market

year a it taking we’re fiscal However, further XXXX. in step

end to to ensuring Here’s with drive Strategy have He a will be do processes, the our improve and that’d Broderick, Readiness. responsible throughout effectively end products make bring in our to This market our and go-to-market and experience. efficiently of improve how. business CommVault to our satisfaction I Tom brought easier dramatically our ecosystem. To Business is and for clear path and drive VP strategy us

our messaging, customers product road also the We’re Ready, need tools events our with with conversations they teams enhancing enablement efforts the our starting and CommVault partners. maps in our event our Field mid-May. field and Enablement This Global consistent arm with to and global have productive campaigns, will

shift is has Additionally, reliable versus This we’ve and a a been fundamental part significant strategy. run of predictable, our on business. a rate our partner-led made yet progress not company

continue We relationships, expand to and our strengthen to improvements make experience. ecosystem our numerous and

buying and higher with with with ago, we’ve progress to By support has as in as key partner been not the are and alliances, to Council, the a an disruption impact. critical. teams time, detail partners. reflected, but leadership, and preferences drive services aligned feedback and field ways our our This are rapid an These we everything our our applications couple are Customer having regions. They’re leveraging opportunities discussed technology rapidly data The these year data product fiscal us. shifting company, organization building which lockstep available cost Data of built. are the security same become so and we XX has is technology amount America’s and sales center, of customers of in a their businesses of recovery just finally, managed underscores and and we enabler way cloud And Specifically, investing At strategic compressing. example, technology changing and and More on more, all the elevated closely in foundation SaaS. changes they’re more in CEOs approximately approach took and new making weeks comprises the and XXXX. Partner are leads are needs the never continue the for we’re industry. landscape Their Innovation growth. early our in evolving. innovation. must revenue Advisory which multi-cloud in actions cycles a as field to

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Let minutes me five of why this. so What reasons as bullish to take explain see see a I’m I to as the why future. couple about our I top

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Our investments skills our technologies making preserve customer’s transferable. by

to reduced just have individual Commvault, a eliminate organizations value for customers, reported into within platform. lost easier the to can dramatically cloud one that so unlocking to via down hours manage files time variety mortgage, lock-in, IT solutions or with few Commvault of do and American making initiatives data, eight from data it advancing Another as their because enabling our and portability to minutes. recovery for great environments. up and grow example, of staff, budget they a limited been To helping wide the Pacific They’ve summarize,

Our extensive more gives our and multi-cloud towards as patent decades to architecture advantage portfolio scale meaningful of deployments. problems customers have multiuse they solve and move experience, the us today,

and what competitors customer need most company Our cannot is we have their do have do scale to they base our company. depth not journeys. rich – out experience do did simply grow In and cloud become on it’s said it every been software lack conclusion, and of the level and architectures innovative customers not being forced to

like to protect However, a further enthusiastic manage, company employees, company, it’s say data. I’d so to be that take helping without a are and every is data. must and and customers a purpose use but the who because opportunity us, awaits data that step our ready it software seize passionate Commvault the little extremely

forward reach clearly We customers’ of our And partners broaden of will I’m our new these I months. the more technology questions. and item coming sharing finalize land before have customers, and that our the meet future I believe in last evolving finalizing to look take deliver needs. One unrivaled to we elements strategy initiatives new value.

after ensure that and graciously the transitioning to went stay know, in roles you the Bob As well. arrived, Hammer Bunte Al company at transition agreed and both

two down Bob and impression decades, current decided in that, complete. you. Bob is in member role Board, leaves advisory luck of Board While step lines now wish legacy endeavors. We to transition of all lasting that Al success best remains up for his the culture. proud a more the the him than and the has a its on questions. Having With company and his our Commvault led open our let’s Thank your a from for and future

Operator

Thank Instructions] Thank you. [Operator you.

Joel Fishbein Our question BTIG. comes from first with

now is open. line Your

Joel Fishbein

I some in? Good that the environment over competitive to were morning. what Sanjay, themes with ask just Thank Commvault of takeaways the customers past or the with weeks, relative conversations – came the wanted you key key when out you’re of wanted to your and several just that the were you. road I on customers

Sanjay Mirchandani

across spent maps the innovation. our ton saying around having and time was and in our Sure. I’ll Joel, absolutely appreciation was – thing every a start of road the the field ubiquitous conversation that first by

Our applications this today. And into we journey and can to you got that in technology just – and question was, be truly multi-cloud – and native Please using your they into ready the customer really going every us. works so keep we’re SaaS as our on for were stuff customers. be applications, about the cloud on innovating for

ubiquitous. your So where through really there’s models, around, my came you do business – that comments your you engagement easier a with? earlier, your bit or feedback, to were easier that was or business licensing we The us can areas packaging to just hope do make got for it little in make which do there much so would It’s I can it with.

meet the needs of that ecosystem was wide So to Those the that’s our needs loud And reflected in sure making customers’ customers things two and our that the things I’m focused on. – clear. globally. enough through between are that our also and came partner

Joel Fishbein

you. Thank

Sanjay Mirchandani

Thanks, Joel.

Operator

Wells Rakers Thank from comes with you. question And Fargo. Aaron next our

Your line is now open.

Aaron Rakers

Maybe packaging the and kind implementing layer question. and simplification seen we’re kind the building a of several the we’ve first of on on of comment, mentioned this follow-up of different Commvault last elements now transitional kind portfolio call, kind in side. And Yes. go-to-market. go-to-market Thanks changes. for another do product yet taking as question on on And well, of that but execute I of you have again

at terms call metrics So it the fiscal be the as fiscal rather looking the that either it a year? solidify that to changes of should Sanjay, in we of really is changes will thoughts I’d how implementing? next side you’re your through to about story, the into themselves that the hear year? think of those in things And execution the this start you’re course you investors now success love on think to maybe when Or

Sanjay Mirchandani

Yes.

– mean, So I been company, We’ve that significant what know out making management it’s transition this layers across I’d changes top between is year done it a the across we’re you’ve the where to to there. management And last been been – the – steps self-imposed. needs to we’ve you like We move truly to be. say of and has one of made the some proactive company business.

of I you, to some my In some signs you’ve success, of I through time. are few will early a is having in not addition, give these so science, been say to a and it There career, perfect this continued got work XX% with like do. – year-on-year, revenue million repeatable there of other are annualized where buybacks. other have some cost rightsizing areas savings, and up success: our $XX pieces we structure The over said, to

progress Board, actions certain pivoting our packaging – products, coming that sure in make licensing is and between really our the model our pressing our a Bob, for that role frankly, need talked company make the clear the I it with was was through. on and truly was some area Al not easy and when way models, long which need We’re things to engagement our being for of that this Areas channel – to customers, commit we’re the doing is world-class, go-to-market a good about where – that’s been a model a time.

this All it is heavy and of these – these lifting are – takes time.

more on place to to and on more just hoping on sort about In we Commvault stepping next the those a it. you simplification, been saying innovation. we the the and of I’m put what’s I’m of comes on call, that obviously feedback. I’m thinking took it last when building That’s As that. into Advance. execution share building Brian get strategy focusing initiatives year shared, on how excellence I’m put earlier absolutely with them I’m I’m under lot and and gas

Aaron Rakers

then And real a follow-up quickly good. Very question. on

you’d margin HyperScale. royalty a things the line the the a down ramp quite see bit that of the of product the gross come in function One of payments is the that’s has and and obviously that kind results on reported of

So terms can product about how you you should Thank in characterize against seen importantly gross talk same competitive of context, how market? ramp Rubrik the we can and about that you. think HyperScale kind that’s in of that we’ve of what the margin that really given – Cohesity and in

Brian Carolan

will the part of morning, I Good It’s take Brian Aaron. that. first here.

best impact. part of ever quarter the Appliances solutions. did and It the margin So for pleased form the we were Yes, the those quarter. really it of gross in up performance with show was HyperScale this

I as consistent run sold think XX over But quarter. our into normalizing will appliance more FYXXXX start different we this that we on countries get a rate. into past

line in solution product taking market. resonating So hold the and with that that we’re energized and is

Sanjay Mirchandani

that Yes, our it, than – have competitors I only in I lock-in. It’s absolutely. our choice at we have do think give not looked to The can we it when you give without – architecture I believe customers is differently we a have about to and can We came pure appliance. way give of you HyperScale you what as a the to you – and can is but a I give it mix you with choice partners. way as any customer The that as a in reference Or world-class We environment. your you and appliance. as deliver fits it to it we match you software.

work have in So a like out. done – way about use, product easier great line. to ton I mechanism. product, of really it one great making a delivery that’s it’s And It’s simplifying product to a it the the is think scaling Appliance we it.

Aaron Rakers

thank Perfect, you.

Operator

question from our you. Kurtz Alex comes next with And Thank KeyBanc.

Your now line open. is

Steve Enders

how you’re on of kind Enders being those with quarter. Hi, last on cloud wondering was of and Steve that you been the This there petabytes just kind in Alex. you’re just thanks. mentioned what seeing guys over public seeing about initiatives there’s and I that managed rates of cloud wonder have talking a I that retention in seeing and what you is you’re the changes. what it, hybrid customers XXX on kind for

Sanjay Mirchandani

to but a existing a new absolute There our cloud doubled have applications building space. native – and just applications are – last taking, then where over more an exabyte reinforces almost so porting and of have are direction actively the In technology And conservatively we it at yes, opinion my we’ve the multi-cloud, high the today environments, today just our across for customers we’re share not workloads or in the managing – this Steve, we’ll multi-cloud the or more cloud, it’s brand year. Conservatively that true hybrid and is move which customers in course doubled have over in seen growing. X.X level, about. we cloud,

know are they technology between direction platform other transfer our the between this the have as solutions direction. customers we is towards native one workloads, environments we definitely So skills just I this abstract – and portability, to for the new best and think I cloud our – scale

Steve Enders

there is And thanks. the they from retention subscription how rate Okay, of any approach a from basis change in customers there terms there? of those this and

Brian Carolan

terms model overall and longer term repeatable of us. going growth into revenue. as see can translate of results, predictable our Steve, in Well, we repeatable revenue kind in from That’s repeatable you nature the ACV and love for and our to subscription the

move So to as see the solution type a we cloud the for us. stickier being

resonating across a on-prem environments, and It’s both to able well. multitude span We’re really of off-prem.

talking moving I our that is and is forward. something everyone mean, around to conversations of it’s for cloud, going XX%-plus us mean, be I that’s So, meaningful

Steve Enders

great. Okay, Thank you.

Operator

with next our Piper from And Andrew you. Thank comes Nowinski question Jaffray.

is now open. line Your

Andrew Nowinski

Great. Thank for the question. taking you

and to deals lost You you talked understand QX trying large or the I’m QX space. in some whether about of the lumpiness slipped enterprise in in means large enterprise just whether those into that deals

Brian Carolan

it’s Hi, saw you I the Brian Yes, Andy, mean, Yes. numbers. here.

happy that. the We those doesn’t don’t always that, rate to blame not we more reliant on a close of you’re transitional that to deals. with Coming slippage. said move subscription predictable to outlook. and yet have were going the the the don’t major focused, still said call. channel deals But we off We the that upon the to as becoming business on we’re was run We large mean year, just don’t large deal We’re rates last enterprise blame basis like have like call, deals lost. QX

to it. we’ve senior on sight focused of and near-term sales the and have highly Sanjay direct the team some tactical I made We’re leaders, adjustments. line

importance predictable a run understand getting more have of We a We to plan. the rate.

However, mean, I there were cash revenue, just free that our pivoting pleased growth, the our bright off with repeatable earnings some we’re spots, flow. of a just for second.

bright of some are QX. out there spots So coming

Sanjay Mirchandani

move that a enterprise have around great news that mid-market a have we great we Brian’s – out on deals to that would is, on business. – what build based we good Brian The large to enterprise said. and based add needs. just a I focused point, customer we that to building is, and rate space. The a comes run news have And �� sometimes business need bad

us. So those for are areas focus

Andrew Nowinski

this then the large to the changes Commvault enterprise going some going problem, I you’re last ongoing been will the they’re simplification understand visibility, I’m and Okay, how subscription more to thanks. lumpiness are but give of issue. could And address and an talk changes you for business this help for I wondering, making about has Because decade. if you the think

it’s hard a I hard it’s fix. so – And know problem to

Sanjay Mirchandani

the of field, in on. side areas were touch two as Business the Appointing intelligence Those I’ll gives enterprise our capability the pipeline, Operations around centralized we funnel. And really the that managing us analytics. VP of that least doing Gary the also at rolling the have rapidly but off rigor a

around all doing kinds technology intelligence. We’re other the of and the capabilities

do that. we So a surrounding better job

The our capabilities grow. smoothness, with just time run our Both channel sure piece a and machinery, that rate that to on help more I territories working will Broderick predictions. go-to-market if and Support our move of know. make mid-market the and I and I Business commission far work, enterprise all give as play getting together see as get us plans don’t Strategy – quotas, our well better really go-to-market with VP you other that of our we set Tom is predictable are in predictable. our which as the our as a these will having would, early up channel come you over think, world-class Readiness,

Andrew Nowinski

right, All thank you.

Operator

comes with Jefferies. you. Thank from our John question DiFucci And next

open. Your line now is

Unidentified Analyst

and long-term the Hey, question. do can you changed revenue operating has fundamentally color Commvault anything announced but This John. on XX%-ish think with of the in back Events? market for you is appreciate giving to Or that get Thanks and understand guidance, margins Joe guys. you competitively. the kind all growth for XX% I you’re not that

Sanjay Mirchandani

bullish Joe, our I’m problems I’m ahead are of the multi-cloud. we extremely I solve again, to of bullish on on the place ahead customers say, just our technology. can’t customers, hard myself. extremely get for going our I’m with

business best and I as the a on the – focused approach simplification i.e., as think, how We’ve the it. none. to we’re is get technology in and our company, things, do got and company, the execution sharpen second our a we on squarely excellence pencil we to product have just

to you got just a back give the get me So to guys little with you to more call. time

Brian Carolan

to our just that, efficiencies. cost ability And Joe, we on demonstrated drive another point I think

growth. want to responsible Now predictable more focus and the we shift to

buy easier confident do position and a of that. strength We’re CommVault it to our We can customers on to need starting that we’re great with from focus technology. making the partners and for we

Unidentified Analyst

a Brian, quick then, And just Awesome. follow-up.

year I the revenue, results quarters ago. that think you had I to were think said for tempered you repeatable by but XX% the guided two

Or the quarter that just for company a was by… the slightly that results a comment. So were kind for was whole of trajectory tempered in as like

Brian Carolan

quarter mostly was It XX%. ended being that, in up say the repeatable would I number. it’s revenue of Yes,

related. subscription drove products of year and It in a for that the for being that. QX and in us meaningful terms Software therefore percentage the was revenue was watermark high

Unidentified Analyst

guys. Thanks Okay.

Operator

Eric question our with comes Martinuzzi Thank And Lake from next you. Street.

now open. Your line is

Eric Martinuzzi

Yes.

on to the focus wanted cost side. Just

look at out with Are that, we XXXX QX, be? near-term? to head X,XXX. or least count where Where to much As in fiscal we – the to optimizing XXXX are count head is pretty the you we we still finished needed

Brian Carolan

we undertook of take seriously that. we last it’s headcount overall Well, terms in just of it’s the series that of the mean we a I management something year, – actions. something and

think, most I is heavy us. that of lifting behind

line. just That’s top year. We’re thing the growth, focused focused at especially more efficiencies and on on most operational important this the

Eric Martinuzzi

much So in you count. change expect the wouldn’t head

Sanjay Mirchandani

an That’s not expectation.

Eric Martinuzzi

may up Chief your your – you’ve the follow-up, to to where new you Is Officer words, Okay. in his put set reps. needed sales and territories And and year correction. quotas just on new of entered what a management own sales here, come CRO her those have existing mid-year a chance addition territories a whoever and then other there of and in Revenue for related is. Obviously, quotas that or are, course to to stamp

Sanjay Mirchandani

is these leaders Gary their well things. and involved personally personally with Operations. well new way. make needless whoever understood, as that structured We’ve unit our been as on how our are VP hoping things comes we to been But I’m theater dimension, and do Merrill, an sure I’ve working of well a in has opinion

on we’re So well back not we way. anything our haven’t and held

I’m sure will that responsibly. the have but obviously person we’ll So new an opinion, do

Eric Martinuzzi

Thanks questions. for my taking

Operator

Erik our comes final Suppiger JMP. with from And question you. Thank

Your open. now line is

Erik Suppiger

Yes. Thanks the for question. taking

quarter? that seasonality, exit, you you on what kind was of were weakness would And see how demand what quarter? did seasonal exiting you did you the in March say Just linearity, by the the surprised the

Brian Carolan

not That’s as well. it the we’re I I on So, mean, call, happy. said said that Sanjay

We’re QX. are deals. there, loaded mean fairly fiscal that’s all us, do issues it those with rates. move Linearity, But did that large the number doesn’t of some fairly into come the typical typical itself. not backend year indication any was linearity underlying close was a not an quarter lost, but the quarter always yes, those quality DSO the It next into up for showed for in us. for They down happy it there’s

Erik Suppiger

you. thank good, Very

Operator

for today’s you. may have participating Thank great Ladies conference. you program does thank gentlemen, a in you and Everyone day. This today’s all disconnect. and conclude

Commvault Systems (CVLT) 30 Apr 192019 Q4 Earnings call transcript