CVLT - Earnings call transcript Q1 2025

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Operator

Thank you for standing by. My name is Kath, and I will be your conference operator today. At this time, I would like to welcome everyone to the Commvault Q1 Fiscal Year 2025 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Mike Melnyk, Head of Investor Relations. Please go ahead.

Michael Melnyk

to conference welcome and morning, our call. earnings Good

actual All to that include to statements of could we and statements reports begin, Commvault and the on risks, with obligation you language the like I'd prospects. plans Please expectations, will these company's Before discussion uncertainties recent cause a statements. that uncertainties periodic in made and filed update to are to refer different the most does remind today's materially and in Commvault's today's Commvault's future for forward-looking release assumptions. risks contemplated such statements about any to be from subject results the SEC forward-looking these not cautionary those assume statements. call earnings forward-looking

on joining Commvault's basis. to it now measures Sanjay? can over call, financial non-GAAP his opening between non-GAAP website. Thank presented our us. Sanjay our for on remarks. CEO, are results you and a the this again And be GAAP Mirchandani, reconciliation for A turn During I'll found

Sanjay Mirchandani

morning, this to Total joining across QX our USD quarter QX hitting million. KPIs did an outstanding to great increased revenue this our and today's while start flow million. SaaS XX% profitably million. USD initiatives We XXX XX% million, all cash thank XXX accelerated record for to Good was we and and rose in margins. ARR Subscription momentum to fiscal to primary USD ARR XXX call. USD year. you jumped XXX XX% free investing XX% quarter. Total and saw ARR growth

error, which cyber help customers or the global part critical QX, a with to whether the had a a seen, the a our results turn as becoming stage paramount, challenges set more human massive integral through patch. security conversation. to before, these CIOs that's accelerate conversations in need record we've contributed to continues resilience. for Our outage of Commvault continued platform cyber-attack, as our for growth We natural more and navigate ever fiscal an and from three recovering companies readiness disaster, us rapidly recently industry-leading and momentum than We're year. The from recovery. CISOs In resilience risk, is we areas, for our faulty

one. each discuss Let's

our First, ThreatWise According Cyber year-over-year. we threat occurring their help Readiness reduce a security detection. organizations alone. doubled our breach XX% risk. of reduce with sales recent have providing by businesses of in offering Resilience year risk advanced to like In ThreatWise the material Commvault XX% Capabilities over past report, experienced QX,

a it AI while enhances organizations. bigger cyber Additionally, also can for resilience, create attack surface

Our cyber AI-enabled is address threat customers their Active resilience. to helping Insights analysis real-time conduct technology

copy provide are said, ago, includes of Second, addition of our with to Air businesses in X,XXX gap actors includes immutable data. week to Gap That ready managing for air bad ready. your customers we type over day offering. which be saw being shows outage We a risk, need an that to that research in. every having to of get Protect their That global the going our

plans. ready cyber how be comes that could they testing when down that know businesses do to We how done. regularly recovery So happens? It that's revolutionize

at offering test plans good affordably demand. easily, else recovery and in this. Our Cleanroom scale cyber across advance businesses Recovery enables their times, frequently in Nobody workloads to does on

organizations Resilience Trailblazing the Cyber transportation a are at And market, Cyber advantage of technology our to winner the is While taking this global conference, have Commvault Cleanroom health in already Magazine. new and by invested Defense for pharmaceutical, was offering care RSA and named it.

capability The or this Appranix of is groundbreaking have not that Third, much days and Cloud about reduce in the we applications the enhance to this as the to We'll anymore. months, has Commvault taken at within hours. or when offering platform. to their acquired businesses quarter to months our cloud breached, rebuild need time and technology recover coming start customers allowing Traditionally, this their weeks more data fast. integrate say

ability quickly is their enabling their to and customers recover Our their resilience. reduce readiness critical risk, to enhance help

help turn However, proud of journeys. approximately accelerate their customers enabled also we I'm to securely in minimizing X customers us them hybrid modernization to data to enabling efficiently of the we the the today, ownership. as tenfold public cloud past it move total exabytes increase X this And have cloud. cost That's over while do while nearly a to years. of do that

and cloud a example, recently estate significant real For data on reducing operational lender, complexity gaining efficiencies. we Lendlease, its while the global helped footprint to migrate center

data they cost lower achieved As Cloud. Commvault a a management total XX% for result, using of ownership

Group, ENOC and stop them network. now while Cloud a cloud proven their and Commvault operational infrastructure there. being cost-to-system business recovery in It XX% reduce expenses. And takes an XX% XX% its to to harnessed doesn't time continuity global its on-premise a leading trusted, restore overhead improved drive less Additionally, data achieving operating and partner modernize a across reduction to enhance energy efficiencies, provider,

During leadership for to the the contractors. this, company we achieve and Commvault can now unclassified government we securely extended information quarter, environments for government our agencies resiliency only government top high Among computing FedRAMP organizations. cyber competitors, are in Cloud cloud our handle also With controlled, for authorization.

for the U.S. Cloud AWS government. on Commvault the federal Additionally, is now Marketplace

us new teams partner this suited change, with next lead that Commvault. With its ideally successful Gary our continued few strengthen instrumental she closely teams. he join A for this we tenure evolution. on in charge Throughout we're to drive sales CFO Finally, announce CFO, has become growth partner Officer, we ago, our his In will leading our first our Jen Merrill Commvault company's bench weeks close at believe to IPO. and Toast, the at DiRico of was as as Jen and excited XX. decade will our worked announced Chief and during to wave Commercial and the to sales role, where the a to is August globally. executive quarter, we that Gary spent

leadership operational officially our joins experience quarters who the this including will team, a at discuss expansion, company's Jen's lead significant USD a will As family to as that, of to Chief Accounting in Danielle to and the financial Danielle? X weeks. on our Danielle the will straight of believe and call here success to I Today, earnings over as results. We discussion worked Officer, tends its well. contributed enable senior she calls Commvault us billion. extensive Gary company turn matter. With XX to accelerate after she our will Abrahamsen, growing with the I've a personal growth couple earnings for lead now Jen over to ARR member Toast discussion

Unknown Executive

Sanjay, everyone. Thank good morning, and you,

key we full the of I'll third QX 'XX. year, growth, a double-digit to start fiscal had across mentioned, providing delivering Sanjay record momentum revenue before As results our our our for all outlook year our total fiscal accelerating recap the and QX guidance consecutive metrics. with increased quarter

on all otherwise As are a basis rates a year-over-year noted. growth reminder, unless

QX, software now XX% XX% Subscription XX% from of For growth in by revenue continued and growth a the revenue, exceeds to growth well contributions of licenses, double-digit increase increased driven subscription portfolio total ahead fueled accelerated fiscal total our million, rate. revenue. which growth in USD term SaaS XXX by revenue market was

had includes transactions of deals. From expand reflected growth we quarter XX% product a in [ larger over verticals USD are revenue saw compared of was licenses XXX,XXX approaching XX run and geographies. reached term-based are fitness. and to and between revenue related perspective, perpetual QX of USD license customer resilience as regions inflection as the revenue where X% in for Once strong derived support to our land as Americas software ] and we our XX% accelerated by software market In international of Commvault sales. QX cyber each was both USD steady rate sold impressive from crossed and the customer in QX of down we point and healthy license a prior over double-digit limited renewals close software the year. the total term Cloud sequentially we another as term were We volume million we key perpetual revenue revenue, and customer growth. term XX% perspective, started licenses Our pleased arrangements platform again, support total we and increased a monetize support revenue balance an support perpetual revenue achieving state perpetual a software million, from with XX is year-over-year. both resonating believe have software geographic our QX, offerings. From which also growth

just From QX quarter. SaaS grew XX% includes over compared ARR and retention ago. net from to of in ARR. in total Directory XX% of to customers, cloud was and quarter We Subscription USD which [ our Cleanroom. new SaaS saw USD represents a install be our customers of our our growth XX% a the growth we upsell X,XXX strong by as discuss dollar total perspective, of XXX XXX jumped ARR accelerated to quarter the over I'll XXX%, total XX% growth XXX ago. SaaS workloads driver base. Existing million of with Active year-over-year ended Now added workloads ] XXX from and ARR year QX This the of ARR, contracts, benefited USD or approximately SaaS expansion a million XX% term-based with representing to continues including and both and hybrid million. during ARR contributing SaaS XX% activities. XX% subscription XX% being newer such cross-sell of ARR. the SaaS year ARR, growth, subscription customer customer total now ARR licenses accelerated primary

Fiscal bonuses benefiting million, to live our employees, resource growth discuss the EBIT of million I'll expenses SaaS our XX%, and gross costs QX through strategic onboarding were flat and XXX to roughly at higher revenue. We philosophy. over including continued Now term software from and the acquisition. Non-GAAP on RSA a non-GAAP QX employees XX.X%, expenses investments Appranix approximately responsible and increased ended improvement the XX% QX was margin demonstrating licenses. with XX conference, associated commissions appearance with the X% USD quarter was an and gross sales margins brought margin and for event commitment in-person USD in X,XXX growth a Fiscal year-over-year, kick-off sequentially, including operating the EBIT record increase profitability.

some key metrics, and debt flow USD we in XXX cash. balance no million quarter sheet cash the to and Moving ended with

subscription repurchase year-over-year of payment which of cash XXX We includes XX% million, cash now grew USD software USD deferred authorization. share XX business, on we QX, free the have typically in and upfront SaaS XXX% revenue In representing existing strength multiyear our on continued stock, to free QX XX remaining USD of growth repurchased our flow Our flow. contracts. million reflecting million

Now fiscal and our for our outlook discuss I'll year fiscal guidance 'XX. improved for QX

midpoint. the which million to be This both XXX SaaS term-based and we XX% includes expect year-over-year growth XXX For fiscal at the million. subscription USD licenses USD QX, revenue, of portion software to represents

As expect XX% gross we be a USD the in USD a growth these million range the to levels, of revenue XXX million margin to to be X% total to QX with At result, of we revenues XX%. at XXX consolidated midpoint. expect

We non-GAAP in margin expect QX be XX% the range to of EBIT XX%. to

Our approximately projected diluted XX million QX fiscal for shares. count is share

morning's full raised release, in now press expect year we 'XX. year of As this year-over-year. saw total have We growth for fiscal outlook ARR you 'XX the our XX% fiscal

of growing of and to at be in SaaS. to We expect be million, million, fiscal year-over-year. From approximately a revenue X.X% increase the revenue We now USD expect total range in both and licenses the subscription XXX XXX expect in of from subscription the contribution strong range USD range accelerate growth XXX term million the revenue with now year-over-year ARR million 'XX full at of year to USD the perspective, increase we to midpoint. XX% XXX an software to USD XX% to XX% midpoint,

'XX of business. in SaaS inclusive updated expect EBIT flow fiscal accelerating to full contribution to the margin, the and outlook, range XX.X% continue margins of to our Moving be we of year to cash gross XX.X%, our

at free cash investments also to of existing flow perspective, of cash be momentum. From margins annual expect continue least in non-GAAP the million. continue a continue inclusive to cash USD And XX% continue practice of we XXX free EBIT flow XX% certain repurchasing to free XX%, expect flow. range to our We focused revenue year our of least we of full expect lastly, to at with to our

our our aligns more As the tax from non-GAAP next We 'XX, a XX% rate with over few reminder, rate we down to that XX% lowered for fiscal believe tax rate effective closely a expectations years. XX%. year

current contribution of billion our fiscal XXX of momentum accelerating year initial can cyber representing 'XX of the ranging to our subscription our including USD year million. ARR tailwinds our we in updated execution SaaS XX% deliver 'XX, start an fiscal ARR and ARR on outlook, USD to field, the USD from Given confident fiscal momentum aspirations 'XX that total remain million total X ARR, we market with XXX

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

Operator

you. Thank

from We Wells will question question-and-answer [Operator comes the of Fargo. the begin with now line Your first Aaron session. Rakers Instructions]

Aaron Rakers

ago? the early, hearing Commvault's I engagements from resonating, of but resiliency Congrats macro cyber of have customers you're pipeline solid results environment, it that the activity just for a Yes. been [ that, Obviously, but like current discussion start what and tied -- since to outage Maybe here the on then deal quarter. following of I'd interested be your so asking the CrowdStrike flow strategy week by downage. the kind in be ] know kind maybe the Sanjay, what or curious customer in I'll

Sanjay Mirchandani

good customers with macroeconomic what for we're of quarters. hard in but we're situation because was particular. line as It's is a resilience been solving we're our general, we're it in a from problem drawing straight previous seeing fundamentally, the kind resilience cyber quarter a And is --

around our conversation we the would a cyber. We're around Air cloud trusted was line a this need it? not the off-site CIOs secure outside copy. It's be in sort of that it had looks happened, been a we And fix to out this went pipeline which of much So is with malicious of the us of been thing, Gap environment with up do making and do the a Had from an a what a Protect, you CrowdStrike do need what to around at resilience secure to having and figure incident like, conversation categorically had really environment recover situation, direct have situation. customers and It wrong. just a what repeatedly conversations scrambling that, bringing time resilience. capabilities, trying resilience was resonating lot to malicious you so our same still Our good. And what brought cyber be looks wasn't resilient to what as we'd floor would to to the CISOs difference.

Aaron Rakers

quick as follow-up. And then a just

you in a from mentioned perspective you you're grow kind mentioned You cross-sell there dollar net the business of XXX% is added rapidly? quantification what I'm that and that could upsell, retention give to any or good Metallic, with of number as us terms curious opportunity opportunities. continues seeing commentary cross-sell

Sanjay Mirchandani

me fill little workloads Danielle Let you color, give we're you. of for our substantially. workloads, bit growing new a What is then and will in some hybrid quite our numbers seeing

applications off Directory of type about a Protect, which to secure in Gap seen Directory secured growing customers year-on-year, handsomely. for ThreatWise, talked us workloads okay? we're X,XXX that storage the Air is Gap and outside got our and get mission-critical, we've workloads, deception up Active we So doubling Air And start. seeing capability cloud. We've container over Protect, the well our using threat because substantial, great bodes cloud-based our shows Office backed XXX Kubernetes cloud-native being Active That

seeing that door, let of of So than X/X our Danielle a color tend we're to of more one there's product some have if good -- want... there's So there, you more customers the okay? I'll traction. out add lot

Unknown Executive

software their when navigate customers to platform our platform, unified our Commvault offerings. to easily objective create SaaS allowed and between our So, one Cloud that really we was launched their

closer X/X about, a expand We opportunity And in to That so that -- seen it a cross-sell is of coming of particular, in a And opportunities, call it out about us sold on number our traction that what natural today. X/X ago. is did really allowed year from the revenue. we've navigation. that, monetize our to

that his So customers really way seeing are about spoke the the that remarks. buying, way changing, we Sanjay are in opening

Operator

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

Howard Ma

X to underpenetrated want investments and government I And for are may Pacific in ask you Asia the those be region. that about vertical the areas Commvault.

CTO, on in mentioned community. recently Carahsoft, at as authorization, region. the U.S. your FedRAMP And Asia Commvault targeting also recently you achieved that you a with security remarks, you So partnership High field in prepared focused then Cloud hired just in Pac, expanded intelligence your

So to those how And bear we fruit is, my them should expect question impactful year? are investments? to you this

Sanjay Mirchandani

that a High around of long are rarefied very FedRAMP of our the governments area world of government, space we're federal the journey getting a competitors certification. went focus. we through certified. on definite come in with that So our technology We of And certification level don't even have. Most the close

obtain that our by announced. marketplaces easier government making far being marketplace, on and technology to like access just marketplace AWS we're the we addition, federal In

deep, federal Access, for, a specialized CTO investing from it. And resources with looking have point observed our agencies we're we compliance and deep, safety field that are in in community we're governments view deeply there. point are take deep, our some of also and of So, you've around issues, level as to issues can that capabilities cyber government field from of getting rooted a world. the security standards and view

mostly So thinking for bit of of So side, on the kind product go-to-market it's that's active how it. on area okay? about us, a an investment little now side, we're the

If the sure On enabling you APAC, look et -- growth we close there. so cetera, that go-to-market also we're the are making in side with. modest and some doing that's we're channels, Carahsoft,

Southeast and has Australia, Asia Asia is a go as to But continuing there. We're historically area. that New up, coming lot Zealand, Pacific our we're it ANZ for focus a That's been been deeper. Mainland opportunity and bit of in there's focus Singapore, Our and just investing little the China.

and it's -- 'XX part of year our plan, it's fiscal of part ]. we've everything So part shared as of -- but it's [ again,

Howard Ma

makes strength I back try term out license, the and well. subscription is it wonder, trying renewal up? year? the are for And as has Danielle also, least subscription the gross SaaS this that that to at the you rate, that and has it. been ticking more X-year question And new into benefiting to your I me way we want renewals was And to in specifically from ask figure you

Unknown Executive

deals. very I items want QX, that remarks, in on So a this our XX% software saw And my term I and renewal, right? by our a prepared volume. much our software we first large SaaS. When on opportunities over of growth from land actually on this and expand our that's in quarter, deals contribution all we mentioned think the say, subscription driven particular, thing saw the about $XXX,XXX I I to balanced line, our right, rate was think actually our So

mentioned you rate. our GRR So

our seeing are We GRR strengthen. rate

So we really want really but fact contribution line. the in I came of are subscription seeing highlight good quarter signs, balanced the from to success that pieces of all those that the the

Operator

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

James Fish

Actually wanting quarter to went another unnoticed. good last where and a guys announcement back you Dell to kind little bit go actually of quarter had that fairly

has relationship update of any gate how ability that Just kind hit from milestones out to gone the on and here? of the

Sanjay Mirchandani

and partnering customer installed said as we Dell a compete us. -- the with the said decide, right So installed we is want we till after it this it base on to the time both we're installed was of Veritas a for when it long-term base, was decides last their they go to us going -- data domain base. This around until we initiative announced quarter,

bit that a time, of of the be I never it's So XX, installed want to expect of it. a up help And do them exactly that's base in is turn and take us way come the moving want want. situations move. [indiscernible] us proof picking working. XX-day is ramp and want to a We're how big to little and concept, we'd hit. that to will expected This We're throes where it's in us a in, in customers

the yet, share So down we down road. nothing road, more more the will but data

James Fish

better on for thanks understanding as on years. sequential But were the ] subscription, accelerating. jumping than down deals here more ago, it closer fiscal about and X sequentially and Metallic we on all signed Danielle, why X-year was think when if the for X of getting back so, term drop this at But deals guide, is And the call being [ color us. we actually to with and closer duration spend kind QX the look years durations

So, side is this something there just guys the macro little on? you a is that being prudently are cautious bit Or more on conservative?

Unknown Executive

that I seeing So go into I lot the momentum of QX. see -- say we're right, that right? in of QX, the really, you we is renewals, into lot we're going of actually I guidance a couple conservative. And we and pool slightly we're subscription we're So renewal raised there's that a what line, wouldn't momentum SaaS it factoring that prudently line back mean into being going a our obviously, SaaS that. But a recognized into right? right? pieces at So have the SaaS that smaller mentioned, into which slightly in in subscription -- capitalization goes is [indiscernible]. the And of

of instead don't in really we benefit seeing but growth So see time. that can the And I over in rate the we're our the following SaaS see in that ARR. quarter, think you

Operator

with D.A. [Operator next comes Rudy line question the Instructions] Kessinger Your of Davidson. from

Rudy Kessinger

These impressive. in especially new sounds know maybe very, strengthening quarter of I -- on saying ARR to the like want the very look kind two based. it narrow was net broad issues. you're I figures

that. products? in on of seeing that, can how there your starting the you you're cyber that you contribute on ASP you're deals color cyber in type some that uplift I did resilience just just Could any heard I expand the believe materially of Firstly, share And to is resilience, say include monetize you quarter?

Unknown Executive

rest traction want actually, for about from a seeing guidance and it talk And we had quarter, and start material talk the broader raise in in talk of the I'll Maybe the quarter, to you of recovery do confidence this what then cyber about saw the contribution Sanjay, that through? Sanjay we're our resiliency autonomous right? quarter that and I'll part market, hand bundle. us to offerings our the cyber gave year. is we to our recovery to this the over particular, what So

Sanjay Mirchandani

Yes.

cyber with think it overall isn't SKU, that integrated. services that resilience, an So our Cloud it's delivers about Commvault really, platform are the to way one

customer SKU its cloud of getting for delivered we like what using are software, words, that in So okay? So integrated play. Protect capabilities avail a our And SaaS-based that seeing we're let's say, uplift or our is Cyber it's ThreatWise, our the Gap can services through other Resilient Air through an the And seen we're which marked the in looking resilience solution. the and customers the platform uplift contribution. that that since released and in integrate entirety is even actually some in QX we've autonomous at a services, the cyber pipeline on SKUs, to level these

So it. the think way it's that's -- to about

Rudy Kessinger

Okay. asked Got sounds [indiscernible] [indiscernible] Dell it. but And -- I know about it like you on sound and James just it,

Sanjay Mirchandani

progress. in work It's

We are building it. we're competitors, we it's relationship we're are and excited so also a about collaborators, that out,

work I on. the is is think [indiscernible] and the teams are working potential going The massive,

Rudy Kessinger

The of has displacement pace been the obviously, between Or any over I increase couple quarters? is the legacy couple to of displacements in just of kind others, and have broader guess, last it going you pace be state? seen steady of of Dell a question, legacy the

Sanjay Mirchandani

say, there now a we No, some audit no, the legacy we have. teams companies incomplete. or we capabilities to committees, is it's best leadership it's marked resilient? Whether protect ourselves? of to best by technology by inside ransomware resilience, the Do is the have boards, And are and stuff by focus

of pipeline refresh And the big so part there is of a -- installed is some our base. of a

Operator

That session. back Melnyk over concludes the to conference now for I turn remarks. Q&A our will closing Mike

Michael Melnyk

today. us joining for everyone for Thanks

presentation we Relations reminder, Investor website. the a have a on As

look Thanks to to to any much. some seeing will If we out very you forward me, you questions, and free have upcoming reach conferences. feel at

Operator

Thank gentlemen, and today's all Ladies you concludes for that joining. call.

You may disconnect. now

Commvault Systems (CVLT) 30 Jul 242025 Q1 Earnings call transcript