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01/11 04:05
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Commvault's strong financial performance, with a 23% revenue increase and 45% subscription revenue growth, coupled with a robust SaaS ARR growth of 68%, indicates positive momentum. The share repurchase program and high gross margins further boost sentiment. Despite competitive pressures and macroeconomic concerns, the company's strategic positioning in cyber resilience and strong guidance suggest a positive outlook. The Q&A session revealed management's confidence in their growth strategy and resilience, although some concerns about clarity on Clumio's contribution and growth versus margin trade-offs were noted. Overall, the positive financial metrics outweigh the uncertainties.
Total Revenue $275 million, increased 23% year-over-year, driven by a robust 45% increase in subscription revenue.
Subscription Revenue $173 million, grew 45% year-over-year, driven by momentum across the SaaS platform and expansion with existing customers.
Total ARR $930 million, improved 21% year-over-year, reflecting strong performance across geographic regions and increased contributions from new offerings.
SaaS ARR $281 million, jumped 68% year-over-year, indicating strong growth in the SaaS segment.
Subscription ARR $780 million, grew 31% year-over-year, now constituting 84% of total ARR compared to 77% one year ago.
Revenue from term software transactions over $100,000 Increased by 38%, benefiting from improved volume and average transaction size.
Q4 Free Cash Flow $76 million, driven by deferred revenue from SaaS contracts and strength in the term software business.
Full Year Free Cash Flow $204 million, representing 81% of free cash flow returned to shareholders through stock repurchases.
Gross Margins 83.1%, reflecting a strong mix of term software sales and optimization in SaaS margins.
Non-GAAP EBIT $59 million, grew 31% year-over-year, with margins up 130 basis points to 21.5%.
Operating Expenses $168 million, representing 61% of total revenue, down from 62% in the prior year.
New Products: Commvault introduced Active Directory forest-level recovery, automating rapid recovery of users, groups, and permissions, significantly reducing recovery time. Commvault Cloud Rewind enables rapid rebuilding of cloud-native applications post-cyber attack, allowing customers to recover quickly. Commvault Clumio offerings like Backtrack help customers recover massive AI data repositories on Amazon S3 quickly and efficiently.
Market Expansion: Commvault added nearly 3,000 subscription customers in Q4, reaching over 12,000 worldwide. Commvault's total addressable market is now estimated at approximately $24 billion, reflecting growth in data security and cloud security. Commvault partnered with Accenture Italia to support a leading Italian banking group with DORA compliance, enhancing its cyber resilience.
Operational Efficiencies: Commvault achieved a 21% increase in total ARR, reaching $930 million, with a 68% increase in SaaS ARR to $281 million. Gross margins for Q4 were 83.1%, reflecting a strong mix of term software sales and SaaS optimization. Q4 free cash flow was $76 million, with a full year total of $204 million, representing 81% of free cash flow returned through stock repurchases.
Strategic Shifts: Commvault is focusing on cyber resilience as a top strategic priority, responding to increasing ransomware and cyber attacks. Commvault plans to drive increased multi-product adoption of its SaaS offerings, targeting a higher percentage of customers using multiple products.
Cyber Resilience Risks: Increasing frequency of ransomware and sophisticated cyber attacks, leading to heightened demand for Commvault's solutions.
Regulatory Compliance Risks: Need to support compliance with regulations such as GDPR, DORA, SOCI, and APRA, which may pose challenges in meeting evolving standards.
Competitive Pressures: Intense competition in the data protection and recovery market, necessitating continuous innovation and differentiation.
Supply Chain Challenges: Potential disruptions in supply chains that could impact the delivery of services and products.
Economic Factors: Monitoring the macro environment for potential changes in demand trends that could affect business performance.
Total Revenue Growth: Total revenue increased 23% to $275 million.
Subscription Revenue Growth: Subscription revenue grew 45% to $173 million.
Total ARR: Total ARR improved 21% to $930 million.
SaaS ARR Growth: SaaS ARR jumped 68% to $281 million.
Customer Acquisition: Added nearly 3,000 subscription customers.
Market Opportunity: Total addressable market estimated to be approximately $24 billion.
Cyber Resilience Focus: Cyber resilience remains a top strategic priority for organizations.
Product Adoption: Approximately 30% of SaaS customers utilize multiple offerings.
Q1 2026 Subscription Revenue Guidance: Expected to be in the range of $166 million to $170 million, representing 35% year-over-year growth at the midpoint.
Q1 2026 Total Revenue Guidance: Expected to be in the range of $266 million to $270 million, with growth of 19% at the midpoint.
FY 2026 Total ARR Growth Guidance: Expected growth of 16% to 17% year-over-year.
FY 2026 Subscription Revenue Guidance: Expected to be in the range of $727 million to $732 million, growing 24% at the midpoint.
FY 2026 Total Revenue Guidance: Expected total revenue of $1.13 billion to $1.14 billion, an increase of 14% at the midpoint.
FY 2026 Free Cash Flow Guidance: Projected free cash flow of $210 million to $215 million.
Share Repurchase Program: Commvault repurchased $165 million of stock in fiscal year 2025, representing 81% of free cash flow, exceeding their guidance to return at least 75%.
The earnings call reflects strong financial performance, with significant growth in subscription revenue and ARR. Despite some concerns about competition and contract duration shifts, the company's strategic investments in SaaS and market share gains are promising. The Q&A indicates confidence in growth and resilience strategies, with positive insights on TAM growth and competitive positioning. Overall, the sentiment is positive, with potential for stock price increase driven by strong financials and optimistic guidance.
The earnings call summary reflects strong financial performance, with a 46% increase in revenue and consistent gross margins. While operating expenses are high, the increase in non-GAAP EBIT and free cash flow is encouraging. The Q&A section highlights successful cross-sell and upsell strategies, and the raised revenue guidance indicates confidence in future performance. Despite some unclear responses from management, the overall sentiment is positive, driven by robust growth metrics and strategic focus on cyber resilience.
The earnings call reflects strong financial performance, with a 23% revenue increase and robust subscription growth. Positive guidance and strategic expansion in SaaS and cyber resilience markets support the outlook. Share repurchases exceeding guidance enhance shareholder value. Despite competitive pressures and macroeconomic concerns, management's focus on resilience and innovation is promising. Q&A insights show confidence in market positioning, though some responses lacked specificity. Overall, the positive financial metrics, optimistic guidance, and strategic positioning suggest a positive stock price movement, likely in the 2% to 8% range.
Commvault's strong financial performance, with a 23% revenue increase and 45% subscription revenue growth, coupled with a robust SaaS ARR growth of 68%, indicates positive momentum. The share repurchase program and high gross margins further boost sentiment. Despite competitive pressures and macroeconomic concerns, the company's strategic positioning in cyber resilience and strong guidance suggest a positive outlook. The Q&A session revealed management's confidence in their growth strategy and resilience, although some concerns about clarity on Clumio's contribution and growth versus margin trade-offs were noted. Overall, the positive financial metrics outweigh the uncertainties.
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