Commvault Systems Inc Earnings Summary
Commvault Systems Inc has revealed impressive financial results for the fiscal second quarter ending September 30, 2025. The company surpassed its annualized recurring revenue (ARR) target of $1 billion, achieving this milestone two quarters earlier than projected. This achievement highlights Commvault's solid performance and successful growth strategy, driven by its robust ARR and agile cloud-based solutions.
In this report, we will delve into the detailed earnings, explore specific revenue segments, discuss key developments, and provide insights into the company's stock forecast.
Commvault Systems Inc Results
| Financial Metric | Q2 Fiscal 2026 | Year-over-Year Change |
|---|---|---|
| Total Revenue | $276 million | 18% |
| GAAP Net Income | $15 million | - |
| Earnings Per Share (EPS) | $0.33 | - |
| Operating Margin | 4.5% | - |
| Non-GAAP EBIT | $51 million | - |
| Non-GAAP Operating Margin | 18.6% | - |
Commvault recorded total revenues of $276 million, representing an 18% year-over-year increase. The company's operating efficiency is demonstrated by a GAAP net income of $15 million and an EPS of $0.33. With a non-GAAP EBIT of $51 million, Commvault's operating margin stands at a robust 18.6%.
Revenue Breakdown
| Segment | Revenue | Year-over-Year Growth |
|---|---|---|
| Subscription Revenue | $173 million | 29% |
| SaaS Revenue | $80 million | 61% |
| Term-based License Revenue | $93 million | 10% |
Segment Performance Analysis
Commvault's subscription revenue reached $173 million for the quarter, marking a substantial 29% year-over-year growth. Notably, within the subscription revenue, the company's SaaS revenue surged by an impressive 61% to $80 million. This growth underscores Commvault's successful transition to a subscription-based model and its leadership in delivering SaaS solutions. Term-based license revenue also increased by 10%, highlighting steady demand despite the shift to subscription models.
Key Developments
Noteworthy developments in the quarter include the completion of the acquisition of Satori Cyber Ltd., a strategic move to enhance Commvault's cyber-resiliency platform. This acquisition significantly bolsters the company's capabilities in AI-driven risk management and data protection across hybrid and multi-cloud environments.
Additionally, Commvault launched several innovative products, such as Clumio for Apache Iceberg on AWS, HyperScale Edge for remote locations, and HyperScale Flex for high-performance workloads. These launches broaden the company's product portfolio, providing customers with resilient data protection solutions crafted for diverse needs.
A significant strategic partnership with BeyondTrust was also announced. This integration between Commvault Cloud and BeyondTrust's Password Safe aims to mitigate credential risk and enhance data recovery efficiency, further strengthening Commvault's security offerings.
Comments from Company Officers
Sanjay Mirchandani, President and CEO of Commvault, commented, "Commvault delivered a strong quarter fueled by solid ARR and SaaS growth that accelerated a key milestone for the company – achieving $1 billion in total ARR – two quarters earlier than projected." Mirchandani emphasized the strategic importance of Commvault's cloud-first, AI-enabled cyber resilience platform in supporting enterprises' growing reliance on data resilience.
Dividends and Share Repurchases
During the fiscal second quarter, Commvault repurchased approximately 737,000 shares of common stock for $131 million, reflecting the company's commitment to return value to shareholders and enhance shareholder equity.
The company also completed a $900 million convertible debt offering with a 0% coupon, strategically designed to mitigate potential dilution from convertible notes through capped calls.
Commvault Systems Inc Stock Forecast
Based on Commvault's strong financial performance, strategic acquisitions, and product innovations, we anticipate continued growth in stock value. The company's robust ARR and solid subscription revenue provide a strong foundation for future revenue streams.
Given current macroeconomic conditions and Commvault's current market standing, the stock is projected to reach a high of $3 within the next 12 months. The base case scenario suggests a stock price stabilization around $2.70 to $2.80, while a more conservative scenario might see the stock trading between $2.50 and $2.60. These projections consider the ongoing strength in Commvault's core business, strategic growth initiatives, and current market capitalization of approximately $5.2 billion.
In conclusion, Commvault Systems Inc has demonstrated exceptional performance in its fiscal second quarter, propelled by strategic investments, innovative product offerings, and a significant milestone in ARR growth. With a strong financial backbone and strategic initiatives, Commvault is well-positioned for continued success and favorable stock performance in the upcoming quarters.
