CVLT - Earnings call transcript Q1 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, ladies and gentlemen, and welcome to the Commvault Q1 Fiscal Year 2020 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded.

I would now like to introduce your host for today's conference, Mr. Jay Whalen, Chief Accounting Officer. Sir, you may begin.

Jay Whalen

morning. Good in fiscal dialing call. quarter for today for first our earnings Thanks me Sanjay Brian Officer; Officer. are the Carolan, President Financial With call Executive Mirchandani, on and Chief Chief and

beliefs, statements Safe to question-and-answer future the plans, at performance. projections are statements, the the call everyone provisions like expectations including intentions our All including to statements the session I'd Securities of include future begin, this call, the we that relate Before current regarding of and the are Private pursuant may the made our to Act end statements XXXX Harbor during in financial remind that forward-looking of the expectations. Reform based or Litigation and on regarding

risks inherent such and conditions. software general results factors, difficulties the competitive in products and and uncertainties and Actual materially and number differ may sale delays as economic manufacturing, due development, marketing to services, of related of a

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

also has press to available release over The earlier Relations our also website. furnished issued the and press been was on it earnings SEC services X-K is Our as Wire the release filing. an Investor today

webcast. IV the being conference archive available website. non-GAAP of website and webcast on be on posted results. financial provide press for our found the release conference today's the An is recorded This GAAP on between On and following be will this call, replay available is call. reconciliation non-GAAP we measures will and call accompanying could Table our The

Sanjay. turn call over now the to will I

Sanjay Mirchandani

earnings quarter fiscal you joining thank Good morning, call. for our first and

In spent product CEO time and President, we we I as have customers, years my partners, and what first value teams colleagues, believe I drive customer of And lot have come. our to to to need a our six innovation and months for with continue

not excuses to results. our we our QX believe we’re we're to-date said, future pleased going and making progress talk than Rather That our about is bright. with why

and we As hear foundation do on last steps the our have have call are right the lay decisive to you we that this stressed we actions, and work to on call, taken believe we making growth. for will

initiatives. people strategy He the Di and Riccardo and execute. the our industry having In foundation Blasio to Commvault strong is order, an identified very we right build the with The right, go-to-market strong starts including extensive Revenue quick impact. our and his new condition non-voted He brings right Chief reputation to knowledge on channel reinvigorate to making field already the execution for Officer. of the

the launch Hamilton’s is Sandra critical to innovative Rob team new quarter. I’ll to progression Commvault next tell in driving model. is evolving product is an customer our business She more test our minutes. Kaloustian, engagement company. in on our focused as a a Customer veteran our incubation few Success you new expertise

expertise robust innovation newly this. really already of our management our brings about We advance Ranga and to hired deep the Rajagopalan, needed VP excited Products are experience domain roadmap. And product

expedite built would execution. is growth. I more share our strategy It around on innovation last our During call, to three and priorities simplification, faster details the I said

these. a few with progress each take of minutes our to Let's discuss

partner Sales our operational by our and class about all portal Gary team operation’s Merrill, is forecasting and employee analytical Simplification efficiency. world enablement processes, experience. and tools is improving focused internal our capabilities. Led on

engagement model success, believe is with a customer what building Commvault. are Combined on class we Sandy focus world we Hamilton's for

Simplifying to-date. solutions we of progress and We how increase customer full and are of will the our business the us with with priority. This second innovation do potential unlock partners relationships. our to customers our us driving pleased to our value enable the extremely brings

is our and managing are Our we our year. our petabytes that trusted to by This real. said the and cases to Last use multi-cloud said workload we the past doubled in more customers now is Simply than in encouraged customers seeing. and than with customers petabytes XXX cloud XXX is has are grown has mission-critical in Commvault. we are for the quarter, more technology

for three from of strategy. determine way like a companies call view from-to I the always this to to is technology journey. That CIO, customers partner their speak what Commvault a they I and to our help existing is IP to matter most, new something, best reasons, point This to to need need a one customer's from strategies the them When be to trusted this on something go differentiator to rely on key technology.

for exciting applications, our Number native just Ransomware also e-discovery are to to the reason. new which two, cloud to way our a support us and comply and brings with in third customer leveraging like technicians us regulatory partners requirements

and they skills pivot As infrastructure also modernize must applications, accordingly. companies' and their workforce

efficiently software so and various task Commvault more productive. manage, that be more complex companies' employees helps can

deliver more AWS to rely multi-cloud our Azure, a services new delivered is hired seamless offerings customers' strategies, experiences. strategic, is a Microsoft and As cloud cloud way. cloud protected the compliment recently as platform to and Amazon pursue service that application in application platform Google cloud data modern become across ensure to We of enhancement the to native cloud

a how and this by multi-cloud in software and we're scalability announce provides the are available with make by feedback in We we HyperScale encouraged pay to in a hybrid year-over-year, customers QX as And mid-August as their SaaS growth and will well appliance on-prem, the they new to manage finally, flexibility launch new U.S. customer offering initial during that environments. excited that the

offer capabilities for experience and streamline and is with and best of known a a confident decades going team such user operational to the in and practices focused on way above In testing use. experience, early in up this Simplifying to fast Commvault use. delivered to is deliver a simple Built it No and of minutes. our crucial. advancing our innovation that provisioned or offers live will that is impress offer in SaaS capabilities vendor drive is literally space time easy so is set other our efficiency the of by in-house are this and start market I’m to as backing our market.

flawlessly are and Additionally partnerships. execute. of on to about our success in hinges going execution we talk geographies terms Today ability

QX. we few Our what a goal is to let provide in worked Brian get into more you with overview But be seeing everything by we me in geography. do, a we’re brief will in moments. predictable specifics

In volume robust strong and the North are large we sizes and encouraging. America, the have the is pipeline a in increasing deals of Deal economy is pipeline.

However, challenges deal we’ve had in closure.

working this, actively Given people. focused are increasing carrying we’ve Riccardo place quickly and quarter acted to right with Americas leaders our quietly team, sales put he’s the closely in this. on

deal an We related. is Europe, large area we largest cross-border improvement. for which slowing, our macro believe second is saw market

which We are larger and steady cycles. six also more opportunities seeing a closing stream are large seven with complex of figure

by adjusting and are encouraged We the prospects. accordingly

excited about we the We are also had. opportunity

significant show trends Australia, our geography. India this very We growth are in largest believe opportunities to are there strong impressive continues in and growth. We seeing market

more about let’s Now talk partners.

continue strides make our great We to with ecosystem. partner

partner us by survey regarded store by a technology partner a the that of fact, This year for very Commvault recognizing HPE community. confirmed highly solutions. worldwide our further is In is reinforce partner as recent

and by partner data well launched just history. received of technology our Additionally, choice. predictability a the of and This we transparent significantly backup ago been incentives. probability Commvault’s leading two partners in makes rewarding year enablement is now tools, program most a are Combined and financially partners, simplified weeks simplest, towards program this their full for increase Commvault with who

we our execution, optimizing enhancing our program, expect our will in of by customers and the today customer choice both and the closing, In Commvault partners and dramatically our future. for continually be vendor experience, improving

have We and decisive progress our has taken efficiency. made operational to significant action

is our ability QX predictable return with are improved been we execute not while to have committed we and and growth. innovation Again, been Our richer. roadmap ever about optimistic pleased to our results, our

let me over to quarter it turn Brian? Now, the Brian review first to results.

Brian Carolan

Sanjay good everyone. morning, Thanks and

fiscal for quarter a quarter first year-over-year. some cover I of the in will X% revenues financial $XXX.X of decrease representing now highlights million, XXXX.Total were the first

and revenue which million, down $XX.X was products a was on year-over-year XX% constant and down XX% Software basis. currency

the Our the for primary performance year-over-year in reason decline. Americas the was

We to this macro a pointed headwind as also European the environment quarter.

partner While advantage our first program. we improvements are new the quarter, strategies, decline disappointed in we with see year-over-year the our new including go-to-market to expect from

the value XX% we enterprise products approximately for revenue Revenue quarter. XX% that year. prior defined was software deal see on size We innovation of the underscores software enterprise Revenues our invest of the that transactions our $XXX,XXX growth these $XXX,XXX, the was continuing customers which year-over-year, to and during from deals enterprise from quarter, up XX% focused over in however is as represented believe over enterprise so it in the average size innovation contracts the down Commvault’s of market. deals support and in these to why our segment in growth we're the

for million, a was QX of revenue decrease services Total approximately X% $XX.X year-over-year.

was customers moving exchange the maintenance While changes year-over-year of decline in we rates as tempered recent revenues. our strong continue as services by software revenue to in models have by renewal foreign growth to and rates, some well subscription

also quarter, first We down quarter X,XXX were expenses year-over-year. for which operating is year-over-year. Total with the down approximately X% million the employees, approximately $XXX approximately ended X%

Operating the XX.X resulting the million.Net of based quarter, average a shares. $XX.X margins for X.X% in count per million of operating or weighted approximately approximately share, or quarter EBIT $XX.X was share income diluted were $X.XX for income million on

to now to more models pricing Let We changes adapt repeatable on to models to continuing consumption transition me flexibility our see in provide touch shift revenue. their continued that our subscription to and business. customers

track For we've that and subscription our been two metrics investors help revenue the progress revenue growth the highlighting transition. quarters past of few

revenue Value repeatable Annual start Contract are known and metrics revenue. two with will These ACV.I repeatable as otherwise

services. primary a streams are maintenance our As subscription repeatable revenue software and reminder,

nature. We approximately revenue in of will fiscal be consider XXXX to repeatable our XX% QX

outperform and our revenue X% non-repeatable were down revenue year-over-year. These continue streams to

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

ACV ago. up XX%from $XXX year As a of QX, grown has to million,

renewals a services impact the sold approximately agreements streams. average is years. contract the revenue length of in started focusing to a subscription reminder and expect we seeing more start we we meaningful repeatable on FY of FY our subscription XXXX weighted software three As XXXX,while In

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

at of short-term As prior XXXX.Our XX, days XX balance June down million, the balance quarter. DSO in versus investments cash from XX, our days March was $XXX XX X% our and was approximately

X% required standard. has $XXX period. over the calculation the was revenue been of deferred part the DSO as record revenue of basis million, our reminder, revenue to of a revenue customers. approximately an As which our currency new is is deferred constant includes revenue invoiced to year was receivables a prior services that unbilled all up increase On were Deferred X%,nearly

Free period. approximately which we less quarter, as flow cash $XX prior up flow the XX% year from was cash over the million for expenditures defined capital operations

we million on quarter the repurchased at current approximately common average Approximately in $XX remains an the that $XX expires per XXXX. million During repurchase approximately of cost our March of XX, $XXX stock share. authorization program

will to share repurchases. opportunistic We with continue be our

our of Let me is and driving operations, our We do believe innovation. potential. plan financial implementing business indicative our We're recent excellence longer-term actively our of now Commvault's outlook. financial discuss executional performance near-term simplifying not

may sales of n financial the Americas they addition, steps resources like In quarter carrying are in time result the improved some taking adding performance. take we before

result, measured QX. with revenue to being our we outlook. flat We will software up slightly expect currently continue be QX from a As to

that services revenue be flat. expect will also We

will likely lumpy, a remain rates near-term. As the in deal reminder, particularly large closure

worth part indirect over refreshed advantage more is we As and expect a of It our believe quarter. noting headwind sequential improve we run program, in to predictable time. rate be FX the second also market that our to should partner provide routes revenue

for costs. EBIT Let me discuss taken now reduce significant our expectations to last the have QX.Over margin steps year we

operational improvement, simplify business improve to of execution. and will areas We operations continue our identify

to EBIT outlook However, software, expect our measured to we flat sequentially. due be on would

opportunity this growth. for as future reset We're baseline to the using a QX

saw the in persist we Some headwinds of in the current quarter. QX

sequential However, expect and marked fiscal for have demonstrate we second the positive half in of year we throughout results the and our our growth show believe We're the that confident for trough year. the to predictable we we future financial shareholders. to intend

with Melnyk, Management all Before of over to of of our integral have our XX engage regarding us Sanjay, press our may experience, us financial Michael comes be you Mike Investor years with stakeholders. team, helping I back things over of to part turn and seen Director our new will release services an Relations. key

to turn back Sanjay? I'll Sanjay. things over

Sanjay Mirchandani

Thanks Brian.

to strategy. right Although made the our we changes to have work do, we've

modern industry and the predictable team partner product customers with rich pipeline growth. get is to towards to us infrastructure come. why products partners in our back that Our and have environment. create This move our The for ripe for ecosystem, they and we're value multipart opportunity. to is shareholders strong confident we And our as our to leadership years and customers, need ability

and our for we questions. can open prepared remarks, This up concludes now

Operator

Instructions] comes question Aaron with Our from first Rakers Fargo. Wells [Operator

is line Your now open.

Aaron Rakers

of of First potential We've curious, Any three Commvault, quarters, as topline growth know around seen that But bit can your gotten growth? of I perspective of at just appreciate now kind growth? topline story, the areas of little as kind far all, and we around arms I a should the had a from addressable so long-term think the you Company. you've of of about how tough kind how two I'm commentary Sanjay, really focus. as thinking the the just this market you're expectations the of about time

follow-up also of kind organization, think then long-term of I terms margin EBIT about cetera? in profitability, you sales in have well. operating what the and a market just of et the make I'm curious you And And go-to as model investments as

Sanjay Mirchandani

about been been good almost six have QX And good. transitioned. the some have business, running it's the that in in It's the It's the first newer spent new We I've my markets. technologies a talk today. roadmaps. full to Yes, time details I quarter after because to field. I months the be innovation been good I of bringing got amount of program, partner the with we're into

almost they're years. I to around So I going a do think something. our wish It's believe almost world you five about company transitioning. for question; again, of something it's been me. to a the - and on all the stronger. days a good longer-term journey, large how that customers XX are potential? I from feel your see But, results the this if were I

as the And an that they to can truly they company next come point to through the solutions, a help global count on integrated a need a try them fact is customers big result, kind They they after what to back road map. solve they for. basis need problem

every We every that doing or or with our day. it's that's do Well, We're day multi-cloud that virtual it's customers. containers.

richer. been never has roadmap Our

want to that's trends also We to attach us big because ourselves customers where be.

work we're we're AWS, making big with So additions care next need ahead technology on whether actual customers our solve to we of The our the it be public for. the all problem the to Microsoft doing where to providers. - they're or of this keeps trying

a our on spending time simplification. lot of We're

So innovation is it. of piece one

as would that second as very it tech wasn't roadmap rich I company, innovation different a a bullish The having about, we I is, so piece feel be believe as my conversation.

about not it's anymore. So the innovation

asking about. but some pages your question, to Being second you’re to allows that. Simplification efficiency only cetera, that the are very strongly not also allows of us to et us We drive the in really investing square. feel operationally is of I something excellent part

focused its of squarely how view needless the that making on - a progress we're will these if to I there. good we're you we is bit making we're details, mention that. you would so tell making And results, but And little

Rob focused management. talents what our company think SaaS with comes on. to and with Sandy, execution, of Riccardo, product to That's what flawless. down be truly it get the the focused execution the that truly focused our on. with some on. to innovation this to need they're product, that's we product I And that Ranga So flywheel new - We're execution bringing I'm

up need focused We've be would, having just we has of and where to to a running. getting days we're of XX you little now just need if time, we done. identified bit So that and field helped for get a me, it

is here goal predictable return fast the we know, growth you as can. just So, to to as

Aaron Rakers

bit sales understand how of much place just think Particularly then in need do kind how that force; a around attrition region? about of And next on in of a you Americas the the of much couple capacity little over sales as help maybe to us you we Can seen you follow-up and have put discussion. that what's the quarters? how going to

Sanjay Mirchandani

economy Europe us We're looks the and six in it is for strong, - the Americas seven Americas the funnel good. seeing seeing funnel. come - demand the and is we're figure deals So the both is in in up

So I pipeline the feel much U.S. better and about the things across

accolades What it's is And partner place getting the we good community. from we've partner program into seen, new. put our that brand

hugely attrition, way feel do I that being super attrition quarter-and-quarter. stage. in company some we're about on the just need selective So We're to we're attrition the It's it our On to good happens start us talent any that just and at concerned will right. into that this giving trying bring about traction. not our

supportive that we that the is folks of on. right focused is the to the Riccardo build So sales caliber cost sales very fact bring of, trying what the that organization need we're I'm into in to and

Operator

question next with And comes from Ader Blair. Jason our William

now Your line open. is

Jason Ader

you Sanjay, a basically competing that wouldn't solution service? can that as as some expand this all new up And SaaS are selling of backup just on and offering. back with recovery your the so, Is partners a that's be a at if service? sold

Sanjay Mirchandani

be am product without about little you launching. that telling much too [indiscernible] So going just I the to we're

start I'm an team So it's really I'm is because is up built sense the The give inside incredible to we've about going that product a a at working that excited you a company. that this pace. something like

experience. customer with things user them. where very head, ours of a point on we're the really it about, about things all all to expanding the the making like experience It's user a the point technology a do we the turned how principles and about it's They at when design

work things over and super what and taken learning we've best made many years so that's and decades part machine do. have them that of We've wished a the customer the practices and easy and anticipates of product the last learned really to

Without pre-empting because of the into matter weeks. set XXX% - sold without a is partners. partner This friendly, private going and it's in into getting feature through data we're product XXX%

see And what and the with collaborating actually see so doing. in we partners is all sales completely focus competing, ourselves partners like we we're our that our ourselves don't

Jason Ader

mentioned, out the of those are speaking can specifics exciting? historically talk then about what partner that different it's that any you've there on you specifics program what And than that folks had accolades Some getting partner partners, from, is some with you of new programs? you're your

Sanjay Mirchandani

XXXX, So time needed with we of July making thought we do about to about first and easy it's in launched sure making obviously business the and lot with all we a to all focus. partners we understood where it's spent it's sure that sure easy It's us. making thing - we

in So registration engagement the completely the process model for stream the portal, step enablement, anything there. the out the just we I of that guide think it's taken overall of reinvented completely us a and deal ahead

late actually we've as a So we the but that. of game, little result may stepped been for have a ahead

structure we sort portal want that. development analyze given funds, of we've feedback we've plans them, - to is we've of the that up more which The on some got that they the business they feedback, the wanted adjusted, structure retail that

know, SE's Because know. that's it's the running, up more as account the running, it makes And that getting difficult enabled it for not partners. to easy you up then and whole and up get and all if running; the cost, just that's [indiscernible] managers cost hidden we partners of happens, But them.

sales of play, stuff So deal leadership engagement built content registration, an portal, around top all in. the sales the effort the the videos, model, the that is kit, the incredible

excited we’re it. So really about

we program [indiscernible]. - got the this worldwide great. think and is all and the is in feedback I early

Jason Ader

in, of window Sanjay And of he couple give some time, bit only lot into conversations a one can diagnosis. a now I there the some mean on okay. of at months with you different is from us last let’s two he say essentially spent Riccardo companies. his worked what a of he's only been He your me. came months a with

today you then to can he So go the in is share on telling that us and the problems you organization that with sales organization? market exist what

Sanjay Mirchandani

met expertise We’ve keeping and so you Riccardo talking he been quick. in all had has in landscape long just the ramp even time. the if space bit new in simple. I the way know So about up ways a guy things - you he kind knows is his been a the well. so he industry little He In has the came and is which been domain of many before pretty energy same approach he a it all he

a program in, that, investing are really model, strong partner sure are the Having that we deeper the segmentation your sure going to ecosystem at that compensation way right just having looking making are that tweaks making use needed spreading and to focused in cases be are the customers to so, matter place. that for that Then we not focused need them the we after most on. ourselves market are going on we

these already things because So started the are details. need out the on they more in street that big the stuff U.S. in the there in rolling We demand a all are is capacity, we

of are matters as all geographical on, expanding it focused we mentioned where things I So example. APAC these

with on the there work So those doing of work of there. inside trying our a are We’ve pieces and again together we customer bring we’ll all there. to do things success the marketing digital also and lots is of so and be lot

Brian Carolan

Riccardo making calling Brian and he comes it And to in I forecast already here bring going diligence think When when that forecasting, to Jason we’re it’s take table impact sure wealth to having experience a part that. it’s your that of just we’re something just also area. is pipeline,

Sanjay Mirchandani

on forecast course. he As we speak is

Operator

from John question And with our DiFucci Jefferies. next comes

Your line now is open.

John DiFucci

it of most comes are place I I all large at declined doesn't hear a it the So in I the in software really sequentially. about quarter-to-quarter, down numbers. think it long-term hit And seems actually here. last seem know in can't to it’s two revenue for to but like Sanjay really point years with you pieces but questions the opportunity team like And to just row management some you, new the this guidance place it’s flat trying well the do presume, you great something the gave

stock I frankly, stuff look we got it. mean I reach revenue, and to at look cover times look at four cheapest you stock the your you way the is when So the at stock like we I just just that think recurring And and here. why numbers talking stuff you really that you you the short-term long-term buying Commvault came about When that's and some right hit product we having came now needs known I started is product execution. to. mean some it as good the

And first you ones tired? one fiscal don't I know questions know that this can the the but hit just in How back with guiding. but one goes even those you I if guess - along happened. it’s the investors it be years two that’s it's these row it got it’s revenue at disappointing really place, get numbers value after you I going the team I of are while a wondering last confident a a just loss quarter, least because in software when quarter your quarter I'm next declined, flat to

Sanjay Mirchandani

opposite John could we’re to on. then there I hear we have in is are the are innovation much will our problem. piece innovation quickly great it or an from say have execution what that are space you. on keep focused And I have we to numbers technology. The say hitting so focused said are differently - as – we on you as moving wouldn’t we

to to customers saying really continuing of flow have have we a we evolve it. listening saying and good and I’m not that’s our So technology what

And doing no it. right about good is we technology. on good right is that with. singular is excuse around every growth our that don't take completely it right is feel have have that a the I back internally it to I to strategy focused day. as lightly agree I the you said this we I piece everything trying pretty about we so rest I With the feel It’s everything are now single pretty good driven team the a have growth. there and bit, pretty miss So that feel just get

Brian Carolan

John And at that can QX. years think of to I look couple just the add, our you last in fiscal

what As this we’re going a good for QX. do to measure

to that's play. confidence. - understand gain I the have do back growth the here, baseline need the of predictable to we right back motions to We reset We kind think the to we do. believe importance we and in understand trying investor get we’re that. want We of

got program. We’ll We affect agreement partner that got team. to the leadership advantage of the the the start hopefully I - renewal the right We seeing new a subscription alluded on call.

got in lot favor and hitting we of here. we importance And of So understand a again it and growing our number here. things reset the we from of baseline the kind to the try

John DiFucci

what release that basis hitting it’s thing year-over-year is a the press Okay, think and on said number you that it I constant you said But that think currency growth to on in I do great. have repeatable the do - revenue and do the there? first you you got point, decline X% Brian. Is

Brian Carolan

is Maybe favorable slightly more not…

John DiFucci

there thing risk point which had you're you of the last the around And XXXX couple and not me said It years. the opportunity then implies over to renewals coming sort up seems to also but but a they be a huge that renew. excitement performance last now big to that you question, cross-sell, just the renewal fiscal upsell that some and just given don't

Brian Carolan

I going with look for FY say and renewals as proxy subscription we’re that that I we’ll do different is to think if can we is pretty closer we get would maintenance a can our look at look couple good on a at renewals it color you But more how you XXXX. support you give at it, ways to strong.

and with success the of And get a the instituting things a function handle world-class these so customer really we’re that and both looking it's closely making win-win Sandy Hamilton for and customer kind that cycle. Commvault sure as we have making we in sure renewal good with to care

John DiFucci

declined X%? revenue repeatable the but Okay

Brian Carolan

software of kind that it this longer-term is Understood, you a just window XX-day results of some within driven I think goes near-term if but at hand-in-hand, window. not it's by but look -

Operator

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

open. now is line Your

Andrew Nowinski

to relates your follow-up I to as profitability. just like long-term a to question it prior

for I laid least team up think marketing and like spending on out near-term. in plan more percentage you revenue, at management a the the but spending sales a had it as ramping for sounds prior of reducing plan

what understand cutting track? on trying trying views did to I'm transition guess that slow that and are also given back get subscriptions I and So subscription that balance initiatives while managing how might growth your through cost growth then long-term on to model to significantly you second

Brian Carolan

margin I We of over time. require growth recalibration will understand understand to that be predictable get wouldn't more a little terms balanced is quarter and say that to to in need this a carrying approach. resources adding and anything We probably responsible improvement than topline that else. both of and going more to the means

into to near-term and focused point. we right We're that have on we're resources we place investments the execute drive to longer-term plans this And the in confident implement growth. need putting just our at right that and

Andrew Nowinski

think that can that And you guess that that noted or you wasn't then Europe macro pressure in and certain related. certain of are your an was was putting be how ask business I to need improvement area you a [indiscernible] just I on want I region?

Sanjay Mirchandani

customer’s bit. which would don’t seeing we’re space or slow, business. think and - think macro Europe - European across little actually enterprise the is being the that a and We is seen that much fundamentally or that the we played slowdown larger played We’ve slowdown in I been a the transaction have deals

multiple there’s that it’s -- longer serious so but which technology pan-European. Some a look customers that what a transaction little think in layers means way, of we that takes a sort of looking the are that of in multi-cloud in at and of thing combination that are sort very

Operator

next KeyBanc Capital Markets. Kurtz our comes And Alex from question with

Your open. line now is

Alex Kurtz

a this execution been is in pipeline the your now [indiscernible] these deal so big right how challenge you years forecast been something because guys of impact big your HyperScale you are I but you're question. big competing, you in the doing deals, the a means that Commvault, way, recurring on what Brian, back how deals for then has as big quarter Commvault, as technology your Just go have deals you’re quick matters over that far for differently

Brian Carolan

here. Brian Its out. that take to Just

a is that to the in being improve result our what’s our execution, not yes, So lumpiness need to forecasting so mean, the understand methodology. referred I predictable we

think hygiene predictable, feel and going with Our to become of the that. we’re Riccardo, direction do more overall I

one. step that’s So

from Secondly customer we start going more incentives predictable put we we’re both also stream in come to this with our customers. partner the revenue and rolled that be program off seeing existing to for that and new that’s going as place, acquisition

I then going that’s kind the seeing, to start towards come an to will to but impact. more the effect and that have going business we’re of subscription add And baseline should more to third, FY that taking going start that predictability believe XXXX again, revenue out that’s

Alex Kurtz

and more so then to can on much some HyperScale, effectively midmarket metrics how of against guys some is compete it you product some And kind about the allowing into go last and XX just that excitement you guys kind is a of this when days? this the product contacts give product you startups, over us about that there or of performing the announced

Brian Carolan

the of technology HyperScale I yes, mean, the last The is days, future. XX

to on I think respect comments. a offerings think -- basis one one year-over-year that seeing is with again growth that I and we’re this of HyperScale we're

Sanjay Mirchandani

HyperScale, is the on appliance want play of we -- it’s the it Alex, about way one an part soft our may both is our me, they let line think HyperScale approach with to overall the big customers this the me, take. Let and

works together. technology Our

an They have overtime cases in our all the higher a and talk footprint, public So if and software on-prem footprint. other. they want appliance pattern to capability or range an certain but same am It’s I SaaS a they to footprint in a - a it, converged want each other like. to the customer has they has oversimplifying cuts cloud

talking conjunction So have result, that product HyperScale complete hold of about to a got an than us overtime and a with sort more enabled start in with out capability. we’ve as customers or it cloud

So customer solution -- it have the overall any way an any is us of for important in they is can like. part of - that sort

is very It very friendly, is to channel easy it up. set

minutes XX off of setting I a It’s As from scratch. found personally it maybe software. is - you know, it have piece good in this

Our the partners reference like architecture.

exceeding technology. So our ends expectations of beating it's you know, - sort as

lot end moving of doing the part well. and have is customers. It of very a We it’s about year

Operator

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

now line is Your open.

Eric Martinuzzi

to declined -- recognition subscription that going the was it a software. based on revenue there? question the my line grow in in are subscription contract I QX.Could regarding recognition memory I which revenue as that between utility is we QX on you impression that the have sequentially and the more refresh added

Brian Carolan

here. its Brian Eric,

really it So depends drive on that revenue. our needs service that providers based of our component of utility

into enter arrangement committed do with we Sometimes them. a multi-year

years makes time. point recognized at they’ll then gets economic basically a as to utility. it is sense a commit subscription if So do what and in one arrangement That couple opposed us they’ll them to actually committed for

Eric Martinuzzi

Okay.

that… is then assumption the So

Brian Carolan

yes, Its nature. becomes does subscription the that but gets revenue periods the recognized in and amount and gets it called become our in part repeatable out gets overall of recognized committed utility it

Eric Martinuzzi

here just for bit trying did And see little we get then a question normalized to a of I second am and feel the CapEx.

CapEx you abnormally to XXX,XXX kind quarter, we related in for I new guys a still a but year had XXXX? the low, that anticipate that think should was ago the is normalized things fiscal facility of what

Brian Carolan

million more on the think appropriate. plus $X.X or that minus probably will I number plus to

Operator

Thank you. does Q&A conference. conclude conclude for it in does today's you session call. And for Thank and today our your participation today’s that

have disconnect. You all may Everyone great. a

Commvault Systems (CVLT) 30 Jul 192020 Q1 Earnings call transcript