CVLT - Earnings call 3 2024 | Commvault Systems, Inc.

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Operator

Hello, and welcome to the Commvault Q3 Fiscal Year 2024 Earnings Conference Call. [Operator Instructions] I will now turn the conference over to Mike Melnyk, Head of Investor Relations. Please go ahead.

Michael Melnyk

Good morning, and welcome to our earnings conference call. I'm Michael Melnyk, Head of Investor Relations, and I'm joined by Sanjay Mirchandani, Commvault's CEO; and Gary Merrill, Commvault's CFO.An earnings presentation with key financial and operating metrics is posted on the Investor Relations website for reference. call and forward-looking prospects. today's future about on plans expectations, made will statements include Commvault, Statements All risks, uncertainties forward-looking and such statements assumptions. are subject to release cause periodic from the to Commvault's of SEC materially the refer the different uncertainties language those actual discussion today's Please forward-looking that results and could be cautionary for a in most company's statements. filed reports earnings recent risks with the the contemplated in and to any obligation to Commvault does statements. these not assume update

results presented found GAAP again on financial website. basis. Commvault's reconciliation between and us. non-GAAP you call, non-GAAP A measures this During are for joining Thank on a the be can our

over Now, it to I'll for Sanjay? his turn opening remarks. Sanjay

Sanjay Mirchandani

report Good you expectations, today. Thank exceeded quarter. joining this across you, including double-digit thank and year-over-year exceptional an morning, metrics, most our Mike. own QX By our important growth was KPIs. results pleased for to our us I am

set Cloud, year-over-year driven increased grew world actors we which products market-leading to than $X especially more data under over with Total to threat perimeter These XX% cyber-attacks use the security repurchase XX% while the are year-over-year in sophistication over total as to represents companies cyber-attacks.For million revenue a intensity million. a points when future now, XX% We our suffice. and platform It's more for results $XXX just now is grew in subscription increasingly their demand financial total increase basis hence resiliency. the include a would now to ever, $XXX than introducing primary results.Some alone to was This XXX revolutionary of cyber cyber to our by and margins $XXX Subscription half of million, underlying are Gone by XX% growth how time operating stage of highlights also in. Commvault years total by ARR year-over-year of with keep revenue, innovation ARR we've ARR, the of the approach of for compliant reinforce in and XX% Commvault's that billion. to revenue. metric the services XX% increased expanded year-over-year resilient days measure a two X.XX matter year-over-year ARR.SaaS get different shares. grapple secure, bad how require and discussed we volume, will continuing radically to until

efficiencies leading those platform, to partners the Palo with others. Alto share AI heavy integrating data our November, Sentinel fastest, our So, by well protection just of rather platform, at hyperscalers, and security, Databricks, fueled in massive to emphasis Microsoft lowest today. scale.The this data platform recovery companies the worlds. together support we than our solution we of resilience. With pleased of like will cost at are about. combined the to provides workloads operational In prevention, between all we need deliver intelligence reliable organizations Networks, This cybersecurity natural any resilience. I'm AI more our intelligence transition Cloud and No industry the predictive analysts restored recovery and rapidly, Commvault and platform and XX-year from anywhere Commvault a history. other like than make any introduced With and all space be customers, platform, Avaya, been as and true other major and and recovery, threat workloads. center SaaS most giving Cloud Industry-leading CIOs to anywhere, with offers vendor best in do and brings total as market customers have pivot looking and recovery. important among automated data data Darktrace, in cyber data T-cells This choices AI. the has reading reliably of longer powered can putting ownership.We capabilities, from most our Metallic at scale

analyst-on Enterprise assurance Because found satisfied to are regulated we team I the customer "We are gives Cloud of one flexibility instance, Strategy a assure leadership that For auditors. Group, that was told us Commvault our protected that and only the and highly our industry. Cloud, can customer solution very we we set critical Commvault all customer to to the announcement sleep competitive challenges. innovations platform cyber-resilience". company Commvault's Vice the Goodwin that introduce par in Research realigns better President, Phil products we in be at a now".IDC said, And "this meet and on continue stalled major preferences

the are incident exists clean readiness. our planning closing For room offering, with between and recovery response that example, gap we

cyber and gas to incumbent vendor. their also help This and XXX on-demand ransomware Our perspective resilience of and Fortune This that customer this represent posture. capital eliminate new helps active QX, its with its new allows airgap move thoroughly well our us us that immutable security is company customer take cost ownership innovation. to examples their total XXX forefront anomaly vendors and of recovery Subscription protection, provides protecting test over state couple added half of at with ransomware to their modernize unified It from cleanroom fiscal posture, bringing our from A Commvault recovery detection share and total lower environment total to a we for detected them kind safe the and keep another them of onto business.In to the platform. And land patchwork X,XXX. a innovation It expand groundbreaking sets and capabilities cost-effectively an of turned almost that new base. cyber to of us equipment enable better in recover. subscription improved QX, apart workloads plans. the competition them our now also large improve customers agency customers resilience we customers,

and development, from in product cybersecurity strategy a a ship security council opportunities. council Resilience and government trends cloud threats, Cyber thought couldn't about partnering excited which served who 'XX. two results. turn discuss management advise our is closing year cyber, that, Melissa we leader two our Gary We momentum would of by comprised But Gary? over The in visionaries also and as cyber months Hathaway, organizations. It year established more presidential security top will from administrations. on away and chaired to be With digital and approach I'll it fiscal our fiscal risk to I

Gary Merrill

Thanks, year-over-year Sanjay, and our strong Starting of I million, QX. to pleased Total QX top $XXX line. revenue was am report expectations. significantly revenue good morning, earnings increase outpaced everyone. in XX% and an outperformance with and the

impact operating the XXXX of licenses ARR, operating to quarter, million, a to 'XX support accelerating a support revenue.Our Overall, support and from Year-to-date, flat which XX% approximately XX% year-over-year as presented perpetual from as execution with our ended SaaS the strong $XX delivered trend the represents our gross current to renewal we licenses driven year-over-year of X,XXX increased are year-over-year, continued City. in growth with term our marketing and total sequentially, revenue, gross margins includes double-digit existing of support and we higher expansion points $XXX representing perpetual large conversions and ARR deal both SaaS growth margins. customers. close XXX licenses. just of includes customer million fiscal was continues spend as perpetual with by fiscal was revenue Our million, fiscal revenue support to total our million, X% year-over-year revenue reflective percentage majority to rates X% XX% retention subscription XX%, ARR. arrangements to York license in reported down annualized expenses revenue Fiscal customer contribution reflecting software software net $XXX basis SaaS I'll acquisitions year-over-year contracts and total million, our when strong healthy largest the year term the sales balance software revenue up in revenue reflect year approximately normalizing solid software our manage headwinds was year-over-year. licenses business of increased results.We year an revenue the XX% fewer software Within basis. improvement highlighted revenue to and of $XXX the revenue subscription limited from global SHIFT to term benefit XX% volume. price year. to sequentially against average subscription, our for QX growth grew discuss was year.QX customer our million. This in in SaaS throughout believe XX which million, increase term-based objective improved consistent with Subscription on XX% NRR, term resulted coming these results verticals and continued QX fiscal revenue fiscal go-to-market relative quarter SaaS of planned fiscal At and year-over-year, customer our in QX up license customer an and growth the in year-over-year. contracts, $XXX and sequentially was both this run the the we ARR QX dollar includes by support points quarter total This XX% event rate, as related software leverage by over XX.X% QX strength exit or 'XX term for perpetual and and licenses to during $XXX,XXX, expenses were expenses selling to we of Fiscal deals expect term-based basis XX% representing term-based profitability. to software year year-over-year, current the sold new X% deal perpetual support of continued of was customer execution software investments $XXX our QX rate, expenses in and both and geographies. increases was including 'XX. New underlying At XXX%.Now, perpetual next a arrangements. licenses driven fiscal of become a year.Moving revenue headcount trajectory, $XX and in generally from of employees, up that to compares from is are

to in points flow United million with XX.X%.Moving customer balance and EBIT current margins was million We and teams increased $XX in and $XXX ended Our year-over-year metrics. which the headcount sales $XX journey increased the teams, support Non-GAAP accelerating some customer velocity additional million motion. year-over-year sheet renewal EBIT related our basis XX% to key to QX of and quarter cash, cash success inside non-GAAP includes for XXX debt sales to States. no and balance the

flow.Now, free we QX grew first $XX flow, revenue cash flow of biggest generated cash of or of of and X the of million increase SaaS Our free fiscal software The the an $XXX our free deferred quarters million. cash year-over-year strength year-on-year. XX% Through the flow cash contracts. XX% payment to million, drivers year, outlook would we full In resulting our year-to-date repurchase under stock include fiscal I'll of and in fiscal representing our QX, renewals million totaling discuss upfront subscription XXX% year QX the on of $XX typically free $XXX program, repurchases multiyear repurchased 'XX. year-to-date for

exchange following the metrics current based foreign of guidance currency rates. are All on

subscription which relative subscription revenue reflects million. licenses to For customer to our million term-based year-over-year fiscal the we renewal momentum but software This pool to portion QX. XX% represents of includes QX expect both and be the QX, midpoint. a smaller $XXX at and $XXX in expansion growth in new QX revenue, SaaS outlook continued This business, fiscal

As range EBIT to a scaling focus discrete of base our million objectives. in changes, our year of continue XX% in the range subscription go-to-market range of our to foundational our levels, to reflected amplifying revenue result, and $XXX are on the revenue the motion million. QX total expect capitalize fiscal to opportunities, QX on XX%.We At execute to investing growing margin consolidated to expect in to $XXX our renewal some These XX% secure gross we growth to margins XXXX include investments and these land-and-expand we XX% margins be our guidance. which be

an share the for total revenue on million diluted shares.Now, fiscal which includes, 'XX, year. and full expectations for is give want updated to once again, year raising approximately QX projected ARR fiscal Our XX.X full total I our outlook count the

continued includes which SaaS a these the to similar of expect the prior revenue ARR reflects a the growing over XXX-basis we prior subscription basis now and exceed midpoint total of increase prior million licenses $X to at in $XXX at levels, to We subscription million, increase to We point is year. guidance.From expect momentum XXXX reflecting million revenue total of revenues growth now year-over-year, year-over-year range business be XX% our our for the At a over $XXX our which guidance. our reflects XX% compared fiscal our subscription term-based expect point year-over-year guidance. the and increase XX% increase full a revenue midpoint, XX% over XXX in will revenue and ARR, year perspective,

$XXX an total We compared expect to the million midpoint revenue in our million, to at of guidance. $XXX the be increase prior $XX reflecting million range to

software improved the usually EBIT fiscal full Our of 'XX combined fiscal ongoing margin, reflects trends seasonally second of flow outlook that we 'XX revenue the offerings.Moving the half to with subscription year SaaS total momentum stronger cash year year, outlook. and the in experience our fiscal

of non-GAAP margin points to continue to EBIT margins basis expansion to We XXX expect XX% gross year-over-year. of XX and XX%

We are expected cash also million. flow maintaining free year our of full $XXX

quarter. of share current of As had we are annual XX% repurchasing flows. remaining to existing million we practice our we free during December expect on the ahead momentum Year-to-date, repurchase the cash with of share and target, this at existing well continue to repurchase $XXX XX, continue of our and intend least authorization, pacing our we

take all open on line Relations for deck website.Operator, you to Investor section our For details on of trends metrics, our our review now can key the questions. investor and please time of contained the

Operator

[Operator comes Aaron the Instructions] line Your of of first Wells Rakers from question Fargo.

Aaron Rakers

business Congrats with as appreciate thinking ease not look to into the But return How we that obviously layer curious the start seeing March quarter? think how I start you're into fiscal growth subscription that just momentum quarter. you're growth we the the well. the we think particular, looking fiscal to you of first guess support as the I SaaS and to guidance in XXXX. next do I going about customer give And do out on and question, year? I'll rate good guys the maybe about I'm guess into about to seasonality? decline and in And that; as

Gary Merrill

from March at the of QX off start Hey you, the things. Aaron, perspective. hear good I'll of and morning, current couple start different Maybe piece it's a to Gary. with Nice quarter I'll it,

the finished, one buying of really to is are the quarter changing full for at numbers. what year-over-year mentioned continued in seeing best had. our was the together, looking specifically revenue more QX not fiscal and And And is see at significant the to ever we've and that about revenue, we're that guidance that generating just starting QX to so SaaS that expand quarter really XX% in what our growth tailwind QX. best, see quarter if solved QX, subscription the as opportunity in a the a midpoint. us year our back renewal And relative expecting just is the Also you motion. by we'll momentum some people about So we us quarter slightly gave measures. It's now be is we're and confidence predictability less provides we're lane own to we're our of Fiscal to raise and cyber that both Those during smaller P&L. way a trends the QX

QX also had we've as history. that's fiscal guidance our our into the in had ever renewable So reflected largest

some also to good for you relative to and that customer is partner there help to ecosystem year. what's us happening you and be into foundation now helping, with really digits. in going revenue we the year-over-year is support are set mentioned, see execution next what acceleration really continued down So our starting those is the revenue the the single What's along low declines our trends, total as and think in mitigated

I call. that conversions reflective that's fewer mentioned of of Some on last

of see support. the continue headwinds then we fewer We conversions eliminate in to that some see

we'll fiscal also will which momentum of some see. some that provide headwinds mitigated would So into going those get of next continued year,

Aaron Rakers

that. Yes. Gary, I appreciate

Do fiscal that kind year? can ask look on customer maybe support you as just the to next revenue we me of succinctly. think into growth double and turn Let click more

Gary Merrill

say, would flat would look Aaron, would year, I in is what is at say slightly basis, I expect would next year on point. as this the fiscal to No, down full I I I expect a what

the licenses think slightly that majority fiscal will back term which full I into will year term the like that the of means probably basis end on take become from customer a support digits but down. think by and year, will our next support, single piece next of that be year, I us the of low half maintenance component the

Aaron Rakers

quick helpful. And then the Yes, that's final question.

what have a side, with? the from like term the you're you can macro might seeing sounds deals term about term the large you're improved; length perspective, eased. On of engaged just It the talk deals have

So updated any just any compression lengths seeing, kind or kind of thoughts what on of you're term term dynamics?

Gary Merrill

absolutely. Yes,

I'd quarter, stabilization Last say, our saw, first So in to what is see stabilization. the we quarter we length. continue now term

This quarter, quarter we saw of another stabilization.

On for our execution, products still years, there. stabilization, term good demand also X more but demonstrated little side, is also is SaaS is about subscription but by which the predictability rounding resilient a to giving that average our in also

also with Those are some ecosystem, support modern some right? also and or like keeping this piece larger projects that other the how partner others transformational align we The new critical whether provide with for there deals that's and term foundational and they hyperscalers it healthy. bigger parking be to the is tied ecosystem, of

Sanjay Mirchandani

Aaron, I'll And point. it's Sanjay. hey add one just more

As start to and both their move in and to the hybrid cloud cloud hybrid and our same platform the pivoting centric. allows workloads, have data technology do and really the customers support and that workloads mitigation moving model them

That's seeing as well. well. that we're helping as So

Operator

comes from Howard next Ma with Securities. the question Your of line Guggenheim

Howard Ma

but environment and I of like the results. dissect to to separate versus and security Great, what a might thoughts Sanjay. may it the the internal go-to-market the improving. and be to be stack might rank your the force be? looks thanks would versus question, understand new initiatives between internal it and have budgets, you increasing I were hard infrastructure guess, execution, and execution Sanjay, spending internal your external, tailwinds for in I'm curious from product consolidating if external, or outperformance the if own be impressive It quarter, first that were you general secular I

Sanjay Mirchandani

in XX% XX% own base our Well, internally. our working. installed more moving transformation, And new I because Howard, I as would Gary business format on and touched well format that a it's quarter probably is customers into really subscription-oriented this our past, would actually as this, of the say for a ratable say customers

tailwind is Our subscription renewal kicking in.

our aligning that the actually all to that. campaigns, generation cyber. for ago X execution front campaigns, stuff in around you'd the this and our a years demand last marketing internally, headwind testimony the talked really things is was tailwind that was to us quarter force, becoming nice about opportunity a X, our So our avail of us sales We've expect

attention. So the that's And we're well Commvault Cloud beginning feeding recovery AI kicking in on and point, as nicely some demand the third new Metallic really shoots platform, at seeing green of that get we're is the on like customers' by into customers technologies this platform, resilience. the platform cyber to are actual the clean

So alongside solving what perfect we're to of math, what a hard it's what and and do for we're good of is I'd able but are not problem the Cyber XX% a really for combination that we're fact threats certainly real we're doing customers. is say meaningful. seeing execution them

Howard Ma

that's recent logos, as us net thanks? of modules well can numbers security to good have adoption these security give by Sanjay. bundles, follow-up a initial some color, with thank these launch existing the customers as and Commvault Cloud Okay, Gary, Gary. cross-selling you you and I in quantifying around that traction new really for new

Gary Merrill

Morning Yes. Howard.

couple of a So things.

just platform, on gen. new As So ago, hit where the a just demand focused market we're of our to Cloud, months related is Commvault couple announcements now you know, okay? our

early QX our see is benefits and well. the this reflected going that's it's creating, do also we're is some So of outlook, us okay? in starting None amazing in the that reflected to What our see for as in results to our that we're to in will pipeline give expansion started opportunity an QX. funnel we of for that

installed through close gen for And through we're in that had, and seeing executing results what customers finally a that easy the QX opportunity and the We have our building that that software So accelerated quarter-on-quarter. all ability rates said, to for to the our the platform go we've that we pipeline cyber-resilience buying facilitates demand was model announced. year now our that about cross-sell today, makes next our foundational offering against way is between SaaS strong and base. as the from fiscal Sanjay process we expansion have

Sanjay Mirchandani

of customer terms it Sanjay we're at shift impact, been dollar but quite key. we and it's And see make from having about platform. of Howard, bring think completeness just right, point of really the resilience here, honestly in the more proof deep recovery early have very Yes fact what we really anecdotal quantify is take security journey has core the ability really We've the X still deep to our call dives protection builds. pipeline sure conversations conversations, of to the to and view. and concepts November an ever had about you of been that cyber the number we and teams as how are seen The than able we've what they positive the that we're because we I'll on unprecedented. launched since CISOs light with to on give then I

Operator

line Sandler. Your of the question comes next James Fish with from Piper

James Fish

Hey, quarter. guys. Great

resiliency Officer, or the can what's buying example, this be you Security parse of the cyber final use know exposure of building asked really are are that look last point to the Chief off than what as in out, cases traditional is the budgets for we've and it how around rather really backup Information customers that kind a room, to in hard Just pitch? into often strength, but cyber guys cybersecurity I Q recovery, at percentage

Sanjay Mirchandani

without before nothing then We're continue up Hey seeing June, a conversations. cyber We've innovations, the and of pointless, in that the series security previous information lot was protection our time. wasn't security to long for and Last a data follow we first And I of that in James, in its there. got product followed a security. Even this way, store we question. by sort Sanjay. November, there now. the security our was touched announced of on resilience, we that up in just analyst's

into So, officially protection cyber end-to-end data come are with we you together. and time, I've And have I our give our we've overall security data protection capabilities.Let for data and extended said a emerging, resilience an me they've example. built this security platform, long think which

breach recovering or So, you threat recovering if and a from back. an attack can't or bring a you're you're data data, blindly just

to okay, that make threat-scanning since data have that have or been up vulnerability in you the You sure you're new backed that any added for may environment.

So, threat scanning, which was a typical security with shift left capabilities. recovery capability is completely integrated

So, been that's what we've doing.

And so, talk it's this mean, protection, segregate of And security us customers versus to may is very this the talk cyber. but fact the about protect protection, and want we've say, hey, sort against it's while. for that yes, threat really light resilient. doing they and of this say, is the data it hard with to is a been I that to we

So, it's one all one capability. platform

James Fish

are go-to-market looking Sanjay. the you guys that. mentioned, you on then, sense, invest appreciate to Gary, I had side. And Makes

in details you there? objectives? many looking can sales team kind you quarter on should more like a to in to field, upcoming guys mainly looking add we hit elaborate Just more heads the to this little the it How those inside for Is at be bit or order going of on be that?

Gary Merrill

a little I Yes, like prepared Jim. investment. my remarks, to in Thanks, Yes. talk about of some

to Sanjay always profitable talked have So, I think about, and and it's growth. foundational I what responsible about

to our foundation. And together level the is accelerate We're of makers with sure next we us the that front about as decision the to be targeting around the okay. making amazing resources sure investments that importantly, starting have that's cyber demand related seeing the our world make okay. buyers some partner right really that I around more accelerating are in these But opportunity of growth generate the able make to that require can is growth. campaign resilience. we're of And into resilience, investments cyber And some it make right decisions to year, that give to drive most to the and cyber does resilience SaaS we this look alignment, we continue the to sure What model. to help that's into capitalize ecosystem, of continue especially all, that us. hopefully on out require some in that come investment, it's of in So opportunity the

Number large cyber see did quarter, capitalize if on the at And really I to So, pieces is some we key HyperScaler's. products. lot are a on. we're three with marketplace that to with ecosystem, our one want the route, and there's great We also through of this is ever building acceleration integrated this. GSI third of MSP starting amount look It's out focused largest our to We're SaaS-focused that HyperScaler's. the partner especially momentum. align these transformational projects tightly revenue with

the key us you to growth, So, are focused on. of areas if try to capitalize important we're on the to think some they about the areas are that

Operator

DA from comes the question line Kessinger Davidson. Rudy next Your of with

Rudy Kessinger

the also, look from what SaaS looks Could Or you this coming it numbers just cross-sell you ARR when impressive. new mostly I'll a SaaS, Metallic any growth SaaS growth? of versus sustained true just a percent SaaS really about bit do net add here. quarter there ARR XX% ARR what quarter-over-quarter, just quarter in On reaccelerated The conversions is yet? at in organic growth is some new great new you my customers? is still last that And growth. ARR to like good have quarter, congrats talk really at

Gary Merrill

quarter at we from an no from related And to last One this was ARR, high of is basis. $XXX to that things quarter look ARR at volume. the look hitting we how key SaaS we the sequentially had million the sequential growth

introducing ARR, SaaS meaning as the the land-and-expand additional than you more of the call the sequential offerings, get still two with our is, delivery in similar cross-sell next increase to relatively as that majority to So, it workloads. combination business up shows for a but in We're resilience highest the things, and upsell, the cross-sell we're functionality.Now, still One start of in And we it's acceleration as-a-service the opportunity in the model. we're are primary I'll highlighted. from see numerical, to seeing had workloads seeing the of be setting which new starting just less we cyber we're same commence, year. new the ourselves workloads of fiscal that

to been So, next NRR key driver up-sell. the the for look that. XXX% year the has we fiscal But on

The is and cycle renewal strong piece really driving maturing other to key renewal. though growth the

very of have a renewal mature doing maturing as and now well. a we're So, good fully cycle job

momentum. pieces helped those driving So, that

Sanjay Mirchandani

customers our question, quarter. SaaS we are workloads with our our quite the cloud. as the the which I know something as growing new cross-sell platform land, in hyper customers hundreds is appreciate software but on acquisition as with and to of our testament part SaaS single strategy And to you the is didn't also a directly -- of ask because customer momentum working is move actually every

they start have may a to move one with then center. in quickly workload way a products in different So, you that you center-based the back want into because up and data data workload

the So, not that offers, and both that's a a platform And start only then the go software also journey for cross-sell cross-selling us. in enables do but ways. on-premise so And we having they for the within can between differentiator hybrid key we with and or singular anywhere cloud capabilities either SaaS. look SaaS at have, customers,

Gary Merrill

one finish canalizing from So last Rudy, seeing our your what in Metallic question converting all is growth. installed There's to we're true over wanted is of not that's piece base. that, I on

That's not. part all current is business. new question or of the not the business. what's and This that we're about net asked play specifically, driving You

Rudy Kessinger

look in this at not quick helpful guiding that record you're last just we Should on expect ARR in very I QX. I Metallic how color. QX come from SaaS to net out know given ARR. your I QX. play should new was a quarter again But all new in last net That's new ARR SaaS. to months year? December? see to step-up just for net one your good mentioned Again, Great. you specifically one SaaS back year versus the expect the seasonality, ARR March guess the SaaS If into we quarter,

Gary Merrill

year. expect like year would you saw seasonality the from this QX for think something QX is I to last fair we fiscal for

million XX-or-so roughly saw growth. we sequential think I

think keep sometimes it's think more, that momentum would our slightly is or I objective be to going. that what

and strong the pipeline a to we're have improve going close seeing well. continue rates our as into We quarter,

about going fiscal where for to optimistic the we're land we're year. So,

Sanjay Mirchandani

calling not but trending it we're We're in.

Operator

Martinuzzi question of next line Lake the with from Street. Your Eric comes

Eric Martinuzzi

the a was XX% that Americas verticals kind broad-based noticed across for Or of region, pickup nice Was verticals? particular I you? year-on-year. up on any stood out Yes. that there

Gary Merrill

a From that as XX% quarter. subscription strong by a our driven really Our Americas business revenue year-over-year, well. up had total perspective, really was Americas

strong the up some XX% the well traction And larger as deals. larger on land Just revenue the of kind on is we're what seeing was larger deals. as deals total Americas really The subscription in year-over-year. expand of renewals

over we're of deals software deals almost up big XX% we term kind Our what $XXX,XXX, those say year-over-year.

that So tied a customers are we we cyber difficult vertical talked resilience it's message sure Last and lot the helping all that. our Not problems. making to about driving solve those quarter, specific.

deals. renewal This and to stream quarter, broad-based the vertical against larger across it was stream executing more the tied the

Eric Martinuzzi

buyback going this of a or past but the when view you going given greater us least that XX, about for consistent then at the that current program, Is And XX% the offset relatively FY you the for are of free forward years revisit been than plan? couple flow. to here cash you annual you've know intent I the haven't

Gary Merrill

Yes.

our trend. XX% will modeling strategy our key hold. So of part a now buybacks free our is are of at a and our cash of We guidance flow current good right guidance stated responsible that to publicly continue growth believe least

months, through free ability of we continue and as to our of market, because X a shareholder flow north the have we're that. that in kind drive cash well XXX% and of also the can company to you of we're value. see value the opportunistic As We're we tell, ahead

Operator

line of Your comes the question next Ader Blair. Jason from with William

Jason Ader

I without 'XX Do more guidance right think it you whether we wanted could think, on reiterating higher be just FY pinning to revenue are the growth higher now, Analyst sure, that, think sense you outlook. revenue to Day. to do could than wanted growth X% X% think down the about you've in of about, I CAGR that. you from about 'XX? I you've XXXX be ask as I'm know maybe get talked and XXXX, not updated just but specifically, the then a what, 'XX, growth you

Gary Merrill

a I'll couple get Hey Jason, Good of morning. claims. Gary. it's these

an revenue for ARR we're from perspective. an first, growth of what So us output is seeing ultimately

and there, start me strong let really seeing we're growth. So

really that our at all growth is quarter If seeing we're our you XX% look of across this ARR of strong, and corporate businesses.

Our QX line, end that X% this guidance up roughly in we'll implies fiscal growth. on revenue year top the that

'XX forward. that next our in results, we give be yet, most amazing growth work more will we'll on next FY is Obviously, key. higher for opportunity we as 'XX guidance to have start our an to than given That's market. 'XX. the have we clarity year we We call, as expectation clearly quarter, little And FY full FY a the move importantly not see towards opportunity but 'XX FY accelerate

And be the our year year So that quarter the momentum line. we on higher as just we on market, see growth build clearly, opportunity the next the continue is in to we where expectation can had. this will from our top than

Jason Ader

include and the so and but Can guess, XXX%, you're And one renewal your then that contracts, sources coming of be was SaaS, assume today? how in call I quarter you of in would committed don't you would much actually those know Gary? to the how given then the two support renewal going let's renewals, there. combined, get just in given kind a you're always us and terms for let's things sense get is revenue let's assume get the revenue a quarter those I from quarter of effectively, one day -- much you another give of going just actually a it, to in bag of which,

Gary Merrill

the say contractual on or pieces, in See of Jason, look Though couple with we quarter. one you revenue the as quantify key we day so piece. other predictable. and support, that's SaaS can by our is very take get divide our customer right? roughly to four you That's almost SaaS And the piece ARR and don't the bag have that I'll of QX disclose guaranteed specifically. at ARR a we

look those our [indiscernible] we a see then goes just support, starting just at when how the strong leverage and The to So point you SaaS business. and drive we two quarter. over renewal piece pieces, it. that have the It's customer you incremental very

predictable I quarter think as each we these foundational I'll some relative predictability where more what is pieces that's each a increasing close than kind sequentially quarter the on and on basis, more of and goes. of previous that with becomes focus is

Jason Ader

today, are just but Of to much versus I new renewals ask your $XXX,XXX-plus going or to basically try. actual in Let how you're this slightly different if it, I'm don't a answer me know going deals business business? upsell way.

Gary Merrill

are Those contributions. they're specifics. very specifics, both healthy healthy not Yes. get into to contributions. We going those get but We're can't into

Jason Ader

a obviously lot it than ago? a quarters it's And couple of was today higher

Gary Merrill

right. that's Yes,

Operator

question Markets. Blakey comes KeyBanc of from next Tom Your the Capital with line

Thomas Blakey

Great execution here results. and Congratulations. solid

want there Jason on the maybe potential piggyback Just on to opportunity. renewal

that was the You passed were opportunity pretty clear XQ Fiscal just about we a very saying for company. large

the I have think as XX Will solid Gary think Maybe, you XX. be of Fiscal lower. be the the it XQ literally but the grasp us, the I that a said renewal would Fiscal renewal in bigger will one on. same that just opportunity in like largest Fiscal Jason, or seems opportunity asked

Gary Merrill

a Fiscal lower. XX. it's fiscally jump give fiscal and little all let out will Got foundational be QX tied the FY that largest periods help maybe it. me to and and in we've QX it's right I'll and you candor to over will deals modestly because pieces just Gary Hey our Tom, done

So significantly, not lower. but

a larger renewal signality of I by So would into populate larger is but year, rental than will always year-over-year. This same On year the than the that year, second next right? sequential basis, as saw this year, I expect the that to population be not an the any this the trend, next stronger overall amount we year look had year. that half continue. of means fiscal half that And first the

be will Next extent. lesser much a but larger, to

Thomas Blakey

recovery Much of less Fiscal of 'XX, context terms resilience of agree to you terms there. the opportunities from up attacking set with of regard incentives Fiscal the data than of years the security but have internally you of that 'XX. Fiscal higher us that capacity CISO Maybe opportunity couple the here. That's have maybe and Talk 'XX have last you like with about expanding data the to cyber we in climb in to Commvault and a in helpful. to to you suite the kind convergence here

Gary Merrill

part was what Sorry, last your of question? the

Thomas Blakey

to you of to what kind out So of build approach the suite terms discussions? need in or addition CISO have capacity to in kind continued do incentives be of

Gary Merrill

our who and obviously, plans, cyber needed is around really comp focus investment new as we've on that really that. and our the just force announced at our field. cyber ecosystem more we're but enable Board, and of fine-tune thought the enablement Hathway to enabling the security around around Resilience specialists capabilities within continue now, we a some kind security.So We've what's the and an also them our field right but Melissa it important put sales there Incentives, also we which alongside customer the conversations on security journey. is that our understand ongoing amping the really was capabilities, practitioners. also getting resilience, cyber that We've got CTOs headed put really, in Cyber adviser absolute we've board We've and by not brought how into much of our cost we of as and effort luminaries some recently well to unprecedented time an product, to call presidential security within administrations inside that's field seasoned really leadership put in security, and

to customers we integrate resilience integrated call something partners be continue shifted So is to going work And the lot me side, into part In of and which yes, a do we've with left. and identifying defend, platform, connections other defendant there's ecosystem and of subtlety, an a and we -- we've -- perimeter security also actually forget. for sites the we We've on. technology because it's but the that the we to as gone I'd words, make increase it's it our and continue identify piece, and have of important integrate wrong making to manage is defend safer. recovery it which the the the sides we together, working our makes and and what do use that sure the customer costs the both perimeter

And a try We as been test. announced we've to with that it the for lots so simple do. as this And bring lots and lot November, in quite We to long a of do. long, simple, work time. at. litmus at in been a we there's backup we've of all hire. but security Everybody Lots thing

Thomas Blakey

your firms lines The that envision with be initial along follow-up conversations there at would regarding the those and continued who is see an -- consolidating share security more would this of and this a a is Do budgets kind to who on you -- for last TCO like those preamble, vendors expansion? is this or ever just more the had is expanding -- more. decade been probably are wallet vendors? just Or this or a of have Commvault your taking

Sanjay Mirchandani

the I pieces that solution fact think, a coming like traditionally together our view, have two platform. that point been are the I from Tom, think of separate

protection hard solve And we've a infrastructure they're I And together complex Just of piece say piece, so data -- we customers a of team we quite with -- security IT has customers as seen organization, just not the the this working is it at the be table see together. well munch to security. our think the the together sort problem. to as in issue to rightfully many budget they data

It efficiencies internal does think sort have you you're I customer. inside So because it not of customers we're make approach taking. we're -- don't friction for actually the a seeing easier with

Thomas Blakey

four very impressive, that's gross there. And quick have Gary. sorry just one helpful. margin was one, Yes, the to Okay. questions But guidance

talk regard the you with moving helpful scaling pieces cloud and maybe would thank That Just be and here. specifically metallic there, guys. the about to

Gary Merrill

wrap sure. you. can with question that for Yes, And with up I

chunk gross margins. a acceleration important, term and see One there's a stability software, and they're when subscription of in gross is, subscription you from is getting two that pieces. drive margin in So high perspective, the gross very margin our

starting see our goal getting growth, We're The land SaaS going expand range XX%-plus of So when that we're clearly well margins, we're and working gross into margin objective to on A momentum. and margin. of good to ago, gross in and time our XXs, very getting piece our okay? we to though, get is getting on stability the key towards margin renewal improvements that. good gross towards And gross leverage that of in see we're gross the right year leverage that were over XX% getting on driving now plus. margin on now to we the you're our way

Thomas Blakey

Thanks quarter. Okay. guys. Great

Gary Merrill

Thank you.

Operator

apologies. My

Your Wells next Fargo. Aaron of question comes the Rakers of line from

Aaron Rakers

customers going the this any momentum leverage scrubbed Thanks, an of architecturally, going attributes guys. succinctly with starting data through that to around you or like perspective that as that quick engagements could sentiment enterprises say of change as Obviously, curious, lot Are more business kind follow-up. cycle and to the a kind your center business. I'll Thanks driving for we actually the their about of how you around resilience AI they're overall think here. think of investment from AI and cybersecurity for the forward? just be is and the and data see about brief I'm what's AI. of evolving

Gary Merrill

the mean a fact. can't conversation up. coming have AI you is short the That's answer without just I

do on what customers head Now little is we've got make AI. can because done we've Aaron, lives your is, a for question done of their we've look its we a what at what bit. turn that And I'll better --

Now type we've technology mostly had AI machine in our type for years, scenarios. learning but and many automation in

that, falls truly of risk and large the with so but work degrees and of is today.The just into is AI, newer watching the first our Now scale assessment. with operational threat and resilience, delivering enables ability One volumes to just product second giving really not in that's generation deep the technology, the them value, and data automation, primary buckets. AI management is okay? three operational foray really of that delivering with AI And really value

do the really number the restored, written side cyber and the risks, data a helping resilient. that's the of who and fashion, with threats So customers get really of or can the volume do job real anomaly been to AI wonderful

great been of that the payload. traction, entry recovery. I The lot think with of between is is who's just a getting product. a time predictive data of and recovering the because very of and immense sophistication complexity into built absolutely span the which solid I clean the customer value we've the one has is for So complex backups reached breaches think And that

And AI a across to so, applying of really we're AI correct point using end that's to and the get customers truly matters. recovery and then At starting help the what scenario resilient really help recovery. customers cleanroom be a day,

AI it's we've technology, And the three buckets but under three it, and arbiter big enough are of in over first are simplifying applied our -- so, these the these the continuing. which I'm

robust map. I And written everything We very talked about a have exists. road

on AI our day, very at we no now.And lot we end to we're mission-critical a it customers. it's -- because there's very around for have a washing of take the So there's which conservative right the be working with going approach that data this

Operator

question-and-answer will call closing the the for over remarks. Melnyk concludes This Mike turn to I session.

Michael Melnyk

everyone, Thanks, for this morning. joining

Relations reminder, to has a very much. reach to presentation the As quarter website free any Feel Investor summarizing me KPIs. a out Thanks our key during the with questions.

Sanjay Mirchandani

you. Thank

Operator

This concludes today's joining. for you conference We thank call.

now You may your disconnect lines.

Commvault Systems (CVLT) 30 Jan 242024 Q3 Earnings call transcript