CVLT - Earnings call transcript Q2 2020

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Commvault Second Quarter Fiscal Year 2020 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speakers today, Michael Melnyk, Director of Investor Relations. Thank you. sir. ahead, go Please

Michael Melnyk

thanks our in earnings fiscal And call results. for to discuss second for morning. today dialing our Good quarter XXXX

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

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

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

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

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

non-GAAP non-GAAP This GAAP is following available call, be the on webcast measures and between The of call. website. for available being conference reconciliation today's results. our will we replay financial On our archive on and An webcast. will be website is can found refer call recorded conference to this the

acquisition Xst. Hedvig closed on reminder, October a our As

second results do not our Hedvig. quarter result discussed morning include As a this

Commvault; on and Carolan, Brian President Financial With Q&A. of are of the Officer commentary and Brian Sanjay remarks Executive Officer share and open before me Mirchandani, for Chief call opening Sanjay call the will each and Chief Commvault.

Sanjay. With that, to over turn Sanjay? it I'll

Sanjay Mirchandani

morning. Thank today. And us Good for Michael. thanks joining you,

you execution press we both reflects the outlook good expectations This start of revenue release As we our the positive from results our priorities performance headway saw at established above morning, operating well delivered on the we this innovation are and and as year. for simplification, making as margins. fiscal the

Commvault do achievable progress to focused making call and meeting last on measurable of acquisition our earnings brand actions them. major since remained The our but are We Conference month. at new partners a hosting and first we Go real, customers, thought re-launching our with leaders X,XXX have include SaaS this we and setting early nearly work Metallic, Hedvig. goals and Key introduction offering,

more provide highlight few will results contexts first priorities on underway. our in Brian and work our want to minutes. a positive I But financial

one one. them discuss Let's by

business. we First, we are how do simplifying

core simplify improve the structure profitability not contribute our and initiative. operational only During growth to our in us to continue and enable redesign The processes. we odd to reinvest quarter, resulting driving reexamine, efficiencies but

linearity and drive the processes better tools to and predictability sales align streamline continue also and than pipeline. We implement, to our in

well. being and extended as partners our customers are Enhancements to

to greater Commvault do we to noted are about before. feedback as business changes efforts our a and enhancements from making our with our advantage enthusiasm. empower on ecosystem The We levels simplify help new program. has transparency who long to excited said, achieve build than time to these profitability it plan positive by Commvault. this TIM more to of these been The more beneficial the business easier AG, partner Bijan partner and of will Taleghani are We and simplicity them faster resellers for

once as year, we've Forrester consecutive been and backup We Quadrant we for leader in most Commvault resiliencies most customers. on the in Xth for two solutions innovative for developing Commvault a innovator proud the to was validated Gartner's This Magic of are influential in and was cited makers Wave got for our for Next, recovery. the the XXth leader data were analyst has decision recent IT named of solutions when again innovation. always and recognition we received. as an

our our and we artificial industry new innovating our and and capabilities expect into numerous leading applications. XX continuously release We've intelligence and are products machine capabilities to Commvault public every We portfolio roughly learning updates and extended across built complete days. providers also cloud

are result, a which we strong customer ratings rates. high our reflected satisfaction and renewal have As lower in base customer

it simpler and for buy as which and of particularly partner model focused Vincent it customers make is sensitive and easy giving for Activate Not data will we Solutions the also President product requirements. buy but and use load compliance the customer governance noted, customers We've and made we provide a needed excited analyze Commvault to and recently our ready data. only pricing a are technology featuring our to Arrosoft We are launched with intuitive, analytics to work the easier easier about us Chang, insight on partners use. to and for sell. Activate new licensing rich more reimagine to

into innovation our new turning market are opportunities. we Importantly,

recently include For new Commvault's solution. flexibility, sets makes our data on SaaS example, technology. unrivaled proven startup enterprise protection to protection Metallic, data grade software to been for simplicity. standard have Metallic portfolio scalability and expanded internal we've Both service

it the available factor, United States Guggenheimer, service. of partners in Metallic are Corporate are data on the easy Now excited truly is launching and of in said, Steve cloud, customers Vice any through a applications customers cloud. an initial can leverage today about set offering. in the our who their migrating as technology as appliance or of form to mutual many the President Microsoft premise, our

additional providing for One protection is interesting use for user Office Microsoft really Metallic within individual of the information is XXX. cases

closed roadmap and there. in go-to-market our we CEO, put on to October of veteran And includes Lakshman stop acquisition organization. innovation our Hedvig Hedvig leaders We and Xst. to Commvault lead a and major strategies. also first Avinash This and drive sales Hedvig Hedvig's global Wigglesworth place Co-Founder David industry bench class world didn't We've

We double-digits. Metallic gives opportunity for entry Commvault. for TAM represent growth storage compelling growing believe a the Hedvig Hedvig and approximate the defined us billion $X.X and solidly market in software

and market. data and to rate. is In the addition, addressable Together, Metallic grow combo its market has by cloud we execution, replication strength, these projected potential. growth billion on that at meaningfully market enable to combined This within a XX%. opens TAM our an protection well believe full new opportunity with approximate almost $X.X data service enhanced When offerings expand us customer our base public established broader high-single-digit focus

to regions they are efforts showing during improve go-to-market. signs execution, quarter. particularly how deals are Finally, in in paying-off the evidenced of all figure These seven I'll share landed three by working having

completely Commvault's up a working clients. segment. We've to segmentation this strategy installed opportunities I'd expand Anthony VP, lead we've initial and Fortune among focus success. Structurally, new and our to clarity. leaders to asked be XXX to drive key He'll new go-to-market enterprise based land Faustini build added key global

business of David industry We America Vice to as was enterprise have and veteran of new and to our DELL we filling hired XX EMC's We customers. believe and increase by and wallet impact. than Boyle, of David instrumental progress measures with expected existing We're field XXX immediate capture sales. better these more positions. capacity all meaningful year in building enable a open also making will us share President customers addressing

to partner a ecosystem continues Supporting be priority. our

and positive with indicators in-line are program Our initial expectations.

Specifically, our pipeline partner healthy are year-on-year. and deals driven sequentially is and our up

strategic from strong including delighted two Mercer in NetApp, channels this leaders serve of partners alliances, Head Rowe, seeing are advisor. go-to-market And as HPE. To class to join chose Edison our like further our the new October, Wipro will who and and and we momentum Peres, program, largest enhance Commvault we're Global world a

the an are in perspective, blocks we to committed believe place and From extremely remained partner ecosystem. growing we execution our building

enable from manage is to one This On-prem, means data today protect, any cloud, Commvault customers the application next. machines, customers technology virtual data and use anywhere. become as the to containers, ready. ahead, Looking helping to on our move they in dedicated we our and in control,

DevOps While to complexity especially tremendous generations automation This hard manage, of and creating customers fragmentation. data multi is and create infrastructures, data. also advantages. multiple They their cloud, cloud stop potential with native offer competitive never and applications, that applications

and drive predictable and our to needs a storage critical create are bringing business be shareholders, we the data together customers. help is management pursuing and executing our the and for IT our rapidly meet professionals Hedvig, this growth. value ready, to drive data Taking spot. responsible value, with acquisition of To strategies To relentlessly we're must step it sweet further

leaders; closed products. a major but executed financial focus launch improved This it on priorities. to and our precision. We lift, new we results; It quarter, continue added delivered with new acquisition was heavy was we a

are I the road taking the I'm results ahead. the deliver on confident in in and actions the And better believe track future. right even to we're we

me more let that, to Brian. over turn to With details. Brian give financial it you

Brian Carolan

year-over-year, everyone. morning, of of of in sequentially. XXXX. financial I'll the some growth cover Total second now X% good fiscal million, and for decline Sanjay, $XXX.X and quarter X% the quarter the Thanks, highlights revenue second was

moderate revenue sequentially. expected and As constant FX our quarter. increased prior with headwind year-over-year On and the X% in was a total currently consistent guidance, basis, second a X%

constant and currency an of increase was software basis, and X% $XX.X increased revenue year-over-year, products Software a of X% X% X% and products and declined On sequentially. million, grew revenue sequentially. year-over-year, represented

by of the from $XXX,XXX revenue up which Our constant growth year-over-year. from year-over-year. software products APAC XX% on respectively sequentially. revenue been growth EMEA flat quarter. deals down performed sequentially XX% well growing increased a represented X% year-over-year increased XX% but XX% deals Revenue sequentially and driven the Americas, and these large X% Revenue X% we transactions software with and defined sequentially was as enterprise double-digits and primarily XX% for with basis. EMEA over currency would APAC have grew largest region, deals. and year-over-year

during deal XX% quarter, Our $XXX,XXX the sequentially. average and enterprise was XX% approximately up size year-over-year

in a exchange quarter. during tempered Total by rates. had was As seven was Sanjay moment the slight decline. million, year-over-year ago, approximately mentioned in services revenue a Growth each region figure foreign changes deals we $XX

of services. subscription a customers year-over-year professional moving decline and Some in our to models

in margins third-party cost included products our Hyperscale X% software down million the Gross decline Software to Appliances approximately of royalties for The revenue. is $XXX year-over-year. were our points cost to and of and approximately expenses XXX related Total XX.X%, Hyperscale the of related were cost year-over-year. basis of hardware solutions a quarter, operating the

resources to strategy, overall our reallocating by investment continue expense go-to-market our optimize other growth in We and base initiatives. driving toward innovation

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

shifts continued models adapt see more our Now, and to that transition flexibility repeatable provide revenue. continuing to their to We business. subscription in I'll changes consumption touch our pricing models customers to to

have These repeatable or to start our track of annual progress highlighted revenue revenue. and metrics contract I are with metrics the repeatable We two investors two help subscription value revenue growth transition. and will revenue ACV.

revenue subscription, point As our maintenance XX% to are repeatable which These software of year. up QX revenue. year-over-year basis outperform consider a nature. fiscal streams prior repeatable were revenue continue X% represents We XXXX repeatable be approximately the approximately revenue in reminder, streams non and repeatable our XXX our improvement to from fiscal primary services. This a total

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

approximately up ACV XX% year-over-year of grown sequentially. As up $XXX XX% has million, to QX, and

more As and agreements renewals start FY'XX, ASC-XXX adoption to the our expect of a three and subscription In FY'XX, meaningful seeing first of average of subscription year which contract software that of focusing is we started services streams. on years. approximately a weighted we revenue our in sold we reminder, when the length impact was repeatable

I'll our sheet and gears shift now cash to balance flows.

approximately quarter XXth, cash of to end, Hedvig from June balance closed short-term million, XXXX. As balance $XXX XXth, transaction. we September our up investments our on and the Subsequent million was $XX

part our $XXX was approximately million acquisition, approximately cash of this of For cash half outside agreement, resides million of After which balance as over our the in $XXX purchase paid the terms just the transaction. we US.

our the remains $XXX quarter. repurchase Hedvig expires the anticipated March of on As we And costs, of in million we XXst, that the not timing the XXXX. to repurchase remain any during intend other restructuring did and in current Approximately stock transaction, authorization result program. opportunistic

the Days linearity compares Sales throughout was in XXXX. was to DSO XX favorably XX days or better of XXXX XX QX, days Outstanding days. a result quarter. in and The This QX, improvement

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

operations million which and QX, linearity flow be free as over our prior be capital improved we XX% results, less out cash in for year. by was most Free our the operating cash performance quarter. flow quarter, will the better strong in from The expenditures defined cash that up approximately flow during was $XX.X paid of approximately QX. impacted $XX Note the accrued by restructuring which costs million of driven will

outlook. discuss I'll financial Now our near-term

to Our simplified, 'XX innovate agenda. progress make QX our beginning and demonstrate results that in we're execute

believe work the we of company We recognize position for we encouraged by ahead With to said, that range. us be million growth. we revenue nominal are Services from revenue the have also sequentially, a modestly up software return products includes that QX current predictable more contribution $XX consensus current of with we our expectations. approximately our 'XX as for progress forecast but This that within and in line should expected is Hedvig. consensus

Keep outlook, cause such factors volatility in we timing as we in and deal QX are and of expectations, while rates our results. mind second our close confident the quarter-to-quarter exceed can about half size, that

growth call, As the we we 'XX we continued and expect that show our baseline last throughout quarter, fiscal noted on sequential marked a of year. to rest the QX believe

QX. EBIT expectations Now, margin I'll discuss our for

our Over cost as reallocated go-to-market next of quota the couple optimize quarters, sales course the efforts. hiring achieved some reps will of be of we carrying savings to the

investment. we annual customer our pressures, Go quarter forecasts event above the with a addition, additional was is earlier cost in be which current approximately margins significant XX.X%. this QX, and held Commvault Even consensus EBIT represented these In expect of to XX%

to Looking sequentially ahead, from we quarter QX EBIT expect levels. fourth increase margins

our briefly Lastly, let share you on update count. me

in Hedvig for a As approximately million as the consideration XX.X stock part average of QX, a we transaction, issued the weighted result shares of of expect diluted XXXX. the count share

it Now remarks. closing Sanjay back some to I'll over for turn Sanjay?

Sanjay Mirchandani

Thank you, Brian.

technology As Commvault loyal for great outstanding a people, the company, growth investments. I've since shared joining bones, sheet good that a base and allows has balance customer

team innovation. past our we internal go-to-market capabilities, Over enhanced strengthen few and our our on laser operations, the quarters, remained simplified focused

as our upstarts almost Go are we and the win to Additionally, is and we introduction getting in I'm it. word traditional our don't the in If the of technologies from my the competitors, where have confident XX%. portfolio Metallic for Hedvig of But of see The share success TAM and and taking well as of reputable portfolio customers are that industry. our acquisition only better. conferences our recent indication, we Commvault. have believe by business excited we take need take expanded our partners new

During is already evolution. into the is conference not Christophe has its phase ESG's changing. company of Bertrand, It next The actively changed. Commvault morphing

T we will simplified, and and just must continue agenda. a In closing, And and I'm return deliver its to opportunity our enable has Commvault our accomplished the innovate, shareholders. has growth. proud team on execute in about to quarters. on This capitalize optimistic high predictable responsible I'm couple of what of it,

of his continue to Before a I two Directors. to for to right my Bunte, when wrap Officer an will on down former the Al Board from serve our I to prepared our like immeasurable. role, decided up employees stayed the company. on take although joined has thank instrumental advisory and Chief the to I'd He and company were comments, Operating as our he is time step who moment contributions decades advisor His

you, of thank behalf on the entire Al. So team,

open we will Now questions. to the call

Operator

Instructions] [Operator

William question first comes Jason from with Blair. Or Ader

open. is Your line

JasonAder

I questions. had you. two Thank just

bit color but but talk, any and any definitely it be. be you the QX, made. quite specific with I anticipating the detail a in would sales to and just more at helpful. that on sales streamlining that's Maybe know little were bit marketing you've I First, where some going talked reallocation will a about you've changes we that it up on can on be line, Sanjay, very marketing. more it the below was looking about of understand

BrianCarolan

Yes, and then number to restructuring mean indicated QX towards our a Good over morning, you and our It's in fiscal we Sanjay. behind of and start additional that hand carrying I'll see can made sales in I'll here. Brian resources Jason. both I more bit towards earnings little recognize in We pivoting quota- call as we're last a we, that more front. capacity. adjustments we're

efforts see of direct resources to think I in enhanced as increase our we're making quota partner good quarter that this going and far you're thus carrying past support in network well of we've our quarter. some this an

Sanjay Mirchandani

resource from allocation the add things boards laser actively We've model That been leadership. some to is early that segmentation focused want. allows more where I'll be good Jason, our a that that, a about that thesis; Yes. the direction. results thing partner us and We we've focused, on only on feel the we've pretty to brought go-to-market landing on fact working that in and we realigned are strategy more

JasonAder

headcount the And Hedvig? excluding quarter-to-quarter what from is

Sanjay Mirchandani

didn't We specifically. comment that on

JasonAder

Okay.

of that or If has the Obviously to Brian, Has at where just you been anything better had a be your on over second comments any all Then methodology methodology. over would relative you in visibility did change guidance it and QX, couple that so? on question, quarters than then the last year changed? expected last have helpful. result

BrianCarolan

Yes.

the been ahead we've focused are about QX, fiscal time in more of I work take going bringing early in where good think this a to new I in repeatable seeing we've it's of We predictable leadership think on recently, expectations, say attracting and in it's and and little bit we've to year. growth. we're of consistent and on feel there's but about terms of some sequential We guidance new us resurgence for terms we would now They're to us progress what for talent of good the gain growth rest firmly some feel we. made it's got and more but with board. I good; visibility, it's

Sanjay Mirchandani

Yes.

Brian just Just to what I'm -- to going one supplement going thing to I'm said.

we're in we right it's business Those of growth. sure inside predictable got business. are also our on So then making expecting that sure things make are and about that types linearity focus and the quarter-on-quarter we've to linearity super sequential our of

Operator

from question Aaron comes next with Our Fargo. Wells Rakers

line Your is open.

AaronRakers

couple as Thanks. if questions, A Yes. well. can I

that it's well. trends it's as factor revenue relative where deferred know down basis or constant fiscal the and last about takes at year-over-year But to is look you we've on a X% currency I seen, a the year. As still we up exited give

I'm forward, curious quarters going some just of revenue So trends about of sequential see the growth as think as hopefully how company think revenue. in reacceleration the we about should next we you growth billings couple and deferred over

BrianCarolan

Yes, It's terms Aaron. here. to so morning, Good quarter. especially this seasonality deferred of that Brian is there some in number revenues

of resurgence that a line. contribute see growth renewals QX that to in general in to and heavier often fiscal just tend to will our then tied sequential our expect We to that support be our fiscal QX, in

AaronRakers

some about guidance we that think then opportunity in to annualized subscription. on look about as just your terms forward. give not manifesting ability see to of you contributions you albeit about all base? some understand you up into seeing to contract love about about throughout XXXX? that the comment. the thinking see talk Brian, what Can should I you as talk in sell in model comment renewal pretty customer been terms fiscal what value, have you know we going you've also, also up Okay itself And kind of opportunities I to to that How and going as talked of also, be for when do an of you're you XXXX good far fiscal then you've sell said at your the

Sanjay Mirchandani

sort Aaron, get I'll it's to to of part then Sanjay. over of go handed the first the first. I'll question Brian.

with launched set a Hedvig, a of make every ago We've portfolio. forget with Commvault they're and at weeks other XX-day all got for not a We've just we at sizes. really doing reimagine sort couple doing between excited the and Metallic, Commvault customer, the fact a This We've about of great capabilities the Activate drops all of are up that level, that this capabilities products XX that high So we're our of essentially customers hyperscale got days of technology. Complete, to great Go. now. our that

spectrum great and but use you a of data So of to all not got of call in able analyze we the protected customers ready different that just now or manage help in allow look be actually capabilities if that us go and do them we've that, for at entire back data data to ways. what set the

up we So when the sort back sell we to that's what we other And Brian I'll hand to capability. it say piece. of have alluding to address

BrianCarolan

creates going talking create well. for about the sell this some going but be to to So, that we're time that we it new see some really think of the Aaron, as any of our recently the to And in it's expect going we're first going meaningful days, well we've magnitude we that so we've renewals opportunity some some acquired. we as FY'XX It's we as with kind excited year obviously and sold as quite FY'XX. time an original been it's be be because opportunity what we're that enter that to early it's for cross-sell, first dealing in the to technologies up subscription that contracts meaningful, of

Sanjay Mirchandani

of into more software-defined capabilities go-to-market in Hedvig, the taking that of have a we storage Hedvig, that of you are we selling to case inside And organization, portfolio set give market. case In capabilities some specialized-- color. just dedicated the of to set the

nicely go-to-market So and we thought our through pretty this well overlays segmentation. with

Operator

Jefferies. question next Brent comes with from Our Fill

open. is line Your

JosephGallo

Joe the environment quarter. results. EMEA like update demand I to This see you then in just the up to that start in work on And Any Congrats the result some noted I numbers. had It the guys strong. for show last Brent. was Good on guys. general. the there believe there? looks weakness hard on region is Hey, in macro

BrianCarolan

shown some actually signs the macro No, we especially pleased could very in statements some there. wide, But softening. we overall surround have environment UK are performance just the had the EMEA of Yes. cautionary with

on mentioned were really year-over-year including think I pleased of geographic our and seven-figure there. in sequential call each EMEA growth that deals a with I one the there regions we're and

JosephGallo

great guess, you busy products have Enterprise and guys guys Awesome, viewed hear. very follow-up been I And there biggest quarters adding to customer We've you've organically is solution. Go? then as Sanjay, complete Is inorganically. way guess a ready been left? the most anything or you're three What's what's I just always you another now. asked the missing there request coming out of

Sanjay Mirchandani

the Instead customers no to away of that management of data as that I data to the products, different of DevOps giving going believe they might to our we're than customers to instead multi-cloud, to resonating the is said look move we together bit is I away to with problems And hard but cloud you going our whole that have native engagement giving problems really has that data tackle management that a us that anything things working going done. do say that allow with and are one deep yesterday. is be that to automation applications, lot storage will bringing truly are and sharing that surely

They've the thought is about building. technology Hedvig that. good traction acquisition amazing. And very are feel well incredible through they from what We was got the

very feel about we together. So good coming the

our I ahead see else's. that way no will one bring like And is So will think we're to time everyone these think you of I together else. pieces look portfolio portfolio in our

Operator

from Eric Our Martinuzzi with next Street. question Lake comes

Your open. line is

EricMartinuzzi

gross us outlook assume Yes. quarter. Question EBITDA or an gave margin I for QX. EBIT know EBITDA you gave outlook, on for not

versus the where margins were gross that one curious here XX% [eighty posted QX, just in you we QX think QX. I eight] in do go in the

BrianCarolan

Brian sales best Eric. in our Yes, ever It's Actually actually quarter saw we hyperscale. question. for terms good here. Hi, QX appliance of in the

So of on actually And XXX with want that then gross the from out pleased back We of year. question and fiscal we that little probably I pressure point the put one obviously heads going QX and to remainder levels. QX into make continue about sequentially a were then the a we for to other fiscal headcount. margin, probably so expect flatten Jason's are would bit to down

EricMartinuzzi

Okay could of really you're and as sales with you that then APAC, Americas, a in -- right doing kind because you've in --what of the spot been the Americas as obviously, what's EMEA that you. in that's stumbling the Americas? contrast Could strength outside are for the seen much having obviously the you software sore and there success we're

Sanjay Mirchandani

And Americas where need The a that open headcount quarter. building back. our in I wouldn't QX use the I'd a closed that Americas. lot been the we we're And that wouldn't last mean in in you I had rebuild working say rebuilding we're been on capacity. is the terminology well. this we've through single good our in us we the more give largest that I could data but quarter in very say Americas. QX --I up we've US aligning transparent partner deal points fact We is program exact the of a the business matter America. appliance we're for sequentially and over of

hyperscale only is the in well. launched just Metallic US. technology the We So working

work back in US away and We're come down never hired conjunction building capably, the in So this we've US do with very in David that. global and we're just Boyle to got from segment. I've with doubling focus the progress. we to on Anthony what Faustini shied

EricMartinuzzi

top is longer in I nominal? internal In then is characterized the it line? Hedvig as when an there contribution ringing Hedvig you other no Is And far start QX, for for know as nominal. timeline when Okay. in us words Hedvig's as the register

BrianCarolan

would year contribution Brian was there We not won't that for it's here. be FY'XX. up saying but Yes. coming envision Hedvig that the probably into Eric, majority We're this XXXX. from

Sanjay Mirchandani

portfolio strategic reason the the just to not Hedvig isn't our on want be an that it folks was to into to went I future, there. into say remind And as impact around impact we acquisition that to has financial going

strategic, we because We for impact on technical on longer- the for I but has the just-- this term pipeline for half, into this of went deals portfolio. second the IP have some that the

EricMiller

get I feel had I enterprise to I larger that get when. from conversations excited the they're for your just of trying what at was a some accounts with just about it. Go in then definitely

Sanjay Mirchandani

Yes.

EricMiller

appreciate Certainly the strategic impact.

Operator

Our James next with question comes from Jaffray. Piper Fish

is line open. Your

JamesFish

seeing Hey, guys It vendors quarter. the the like in you're primary concern on months. curious but moving a you as specifically the just fit on sort have double-click views question. the good on are it about thinking guess had secondary kind The just you're six enterprises macro-environment downtick with sounds guys. storage large enterprise given over the Congrats And forward? what forward quarter environment? what this all outcome spending how it a I seeing there? quarter that Maybe of of your last moving relates to really large is prior

Sanjay Mirchandani

you if in some today we a are customers feel our scalar. And this you a customer hyper more investing simplicity getting This solution of our That's that's to great do continuing traction if question. is and over position we we've the it's the business now. look key, time, than with With is at an where at, is look we area Hedvig, been felt grow. able for good way. our we are what's in storage and And secondary is to causing, bring that composite what for

that together in which the containerized of environments thought world. or the bring of build, generation the defined into lay believe virtual we lines cloud that truly storage coming blow will over It's applications any the to did machines that and bring place. -- software through VMware storage off sort environments of obviously next We want multi traditionally that ubiquity kind the secondary they primary and is, between do

to to build it that cloud about be That's applications ability and the the mindset we've the got ubiquity able platform anywhere. on really and it's move around a any So here.

JamesFish

Brian, you, term? then your like to And you look quarter it. your Got Any or longer under quarters few maybe belt business now this what think under now for what update could belt. as

BrianCarolan

Yes.

I So, tell forward. our making and comment increase by potential, adding go-to-market and capacity encourages expansion we're to remainder not going overall will specifics. just increase encouraged longer- year. the we TAM acquisition and of adjustments the launch us for on with we James, you we're That as sales as any move of the especially with Hedvig really we're Metallic, growth of the But the term that that the

Operator

Thank you.

Dan Bergstrom Our comes from Markets. RBC next with Capital question

line is Your open.

DanBergstrom

protection around any Yes. Thanks that a have opportunity additional Office is XXX. with new customer partner Did Around essentially you? my you for there? and previous the the feedback Metallic sales early Or motion product partner then is early taking that -- And question. for fit that a upgrades? around o-XXX

Sanjay Mirchandani

Sanjay. is this Dan,

take X,XXX files, it of service. those have XXX for we with are, -- we of capabilities, capability XXX Commvault product, while. things and going Office SaaS a absolutely absolutely need So just that that support endpoint to We size the but some today a not our has a VMs Office studies us get a in XXX customers have told employees our has workflows told and us data predefined to complete

our obviously So enterprise the we demanded a of that but was had for the customers very in for piece capability while. XXX that house sort we technology into a product, Office built

that there missed? another your was question sorry, part So of I

DanBergstrom

early Any product? the on feedback

Sanjay Mirchandani

Yes.

activities the technology So that launched two sub to it, is it lots website we've want to and delivered only since seem and of got I like and we weeks ago. on trials reinforce lots through partners. this lots and of Partners lots

our and to very programs. commitment feedback far The our the positive. community so is As partner

Operator

you. Thank

Our with Kurtz KeyBanc. next question Alex comes from

open. is line Your

AlexKurtz

Thanks mention couple top-line you the here. what did sort taking for adoption subscription the of for Brian, questions impact in was quarter? to the a Yes.

BrianCarolan

the Alex, didn't of moderate year. we a range as think figure And agreements. past headwind year for that's off of terms we probably we over renew We as Again, the kind it the moving through specifically, go but quickly been low-X in some call we've us transition. start as to looking fiscal again, turning of start a our tailwind next into headwinds early to when forward those we're in

AlexKurtz

take are to productivity say this at the Because based year? hiring going So the guess, it And for would linearity of Okay. I lot on is a America of you to long your in your to to it's get kind up months means of impacting least just you North second them crew fiscal And of how that and next year? of will the that, six assumptions take ramp timing what what productivity? think next sort productivity to really half? just reps the that of running

BrianCarolan

Yes.

looking two, get enterprise about you're when of an three, productive. for think quarters it I to four fully does the profile sales take, rep,

next a terms will the the hiring beginning So by the seen activity, impact of lot be of in far. of encouraged Then in year. we're fiscal think seen I what so we've

there's active This an quarter, pipeline.

Boyle attracting Riccardo haven't Commvault Faustini Blasio, encouraged I Di and we those that have the leadership are place seen Anthony we so to new before. by think we're David in

So encouraged. we're more

Sanjay Mirchandani

up as fill think we've And and once we working we've this good the attention fast to as We're lot place. a open I them. a opened on just -- have. in got we're can as we positions We hard

if faster. you good Now have all in I to free help we guys really call, send it to feel get We We us. the can them the can reps, know guys. do sales you while take

End Q&A of

Operator

today's Thank currently no showing at Ladies you Thank you. this questions and And further all. this conference time. concludes I'm gentlemen, participating. for

now You may disconnect.

Michael Melnyk	Director of Investor Relations
Sanjay Mirchandani	CEO and President
Brian Carolan	CFO
Jason Ader	William Blair
Aaron Rakers	Wells Fargo
Joseph Gallo	Jefferies LLC
James Fish	Piper Jaffray
Dan Bergstrom	RBC Capital Markets
Alex Kurtz	KeyBanc Capital Markets

Commvault Systems (CVLT) 29 Oct 192020 Q2 Earnings call transcript