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01/11 04:06
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
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.
Net New ARR $47 million net new ARR added, a record in constant currency.
Subscription ARR Rose 30% to $894 million, driven by strong demand for subscription services.
Total Revenue Grew 18% to $276 million, reflecting strong performance across offerings.
Total ARR Grew 22% to $1.04 billion, achieving $1 billion milestone two quarters earlier than expected.
SaaS ARR Grew 56% to $336 million, surpassing the $330 million target two quarters early.
SaaS Customers Increased nearly 9,000, representing a 40% year-over-year growth.
Net Dollar Retention Remained healthy at 125%, supported by successful up-sell and cross-sell initiatives.
Gross Margins 80.5%, reflecting the acceleration in SaaS mix and shift in software duration.
Operating Expenses $170 million, consistent with prior quarter and fiscal year, supporting growth trajectory.
Non-GAAP EBIT $51 million, resulting in a margin of 18.6%, influenced by SaaS bookings and integration costs.
Free Cash Flow Grew 37% year-over-year to $74 million, driven by strong deferred revenue and cash collections.
Commvault Cloud Cyber Resilience platform: Strong demand from hybrid cloud customers, addressing new attack vectors and AI-driven threats. Identity and data security offerings grew double digits sequentially, representing nearly 40% of net new ARR.
Active Directory and Entra ID: Fastest-growing SaaS offering, used for identity protection services. A large bank in Asia Pacific used it to recover identity operations after a cyberattack.
Clumio portfolio: Introduced new recovery capabilities for AWS, including DynamoDB and Apache Iceberg. Added new customers, including 3 Fortune 1000 and 2 Fortune 500 companies.
Satori Cyber acquisition: Provides monitoring and protection for large language models and structured data. Integrated into Commvault Cloud platform.
Cloud adoption: Commvault moved and protects approximately 8 exabytes of customer data into the cloud, with a 40% CAGR over the past 5 years. SaaS customers grew nearly 9,000, a 40% increase year-over-year.
New customer acquisitions: Added 3 Fortune 1000 and 2 Fortune 500 customers to the Clumio platform. BBVA chose Commvault to reduce cloud-native complexity and protect AWS data.
ARR growth: Achieved $1 billion in total ARR, 2 quarters earlier than expected. SaaS ARR grew 56% to $330 million.
Revenue growth: Total revenue grew 18% to $276 million. Subscription revenue increased 29%, including 61% growth from SaaS platform.
Profitability: Q2 free cash flow grew 37% year-over-year to $74 million. Gross margins were 80.5%.
Partnership with BeyondTrust: Integrated identity security capabilities with Commvault Cloud platform to enhance recovery and reduce unauthorized access.
Focus on AI resilience: Acquired Satori Cyber to address resilience requirements in the age of AI. Provides automated discovery, classification, and access management for structured data.
Cybersecurity Threats: New attack vectors are constantly emerging, and with AI, data is more distributed, introducing more threat vectors for organizations to manage. This increases the need for robust detection, protection, and recovery solutions.
Regulatory Compliance: Organizations face challenges in meeting complex regulatory requirements, such as DORA compliance, which can impact operations and require advanced solutions.
Cloud Transition Complexity: Customers are choosing shorter contract durations to maintain flexibility between software and SaaS as they evaluate their transition to the cloud, which could impact deal sizes and revenue predictability.
Economic Uncertainty: The shift in term duration and customer caution in committing to long-term contracts may reflect broader economic uncertainties, potentially affecting revenue stability.
Integration Costs: The integration of acquisitions like Satori Cyber adds costs and operational complexity, which could impact profitability in the short term.
Competitive Pressures: The company operates in a highly competitive market, requiring continuous innovation and investment to maintain its leadership position.
Key Business Drivers: Commvault anticipates continued growth driven by three factors: strong demand for the Commvault Cloud Cyber Resilience platform, the ongoing shift to the cloud, and reliance on the company's innovation engine to meet evolving customer needs.
Cloud Data Growth: The company expects rapid growth in cloud-borne and cloud-bound data, fueled by the proliferation of AI. Commvault projects continued acceleration in moving and protecting customer data in the cloud, with a focus on its Clumio portfolio for AWS.
SaaS ARR Growth: Commvault achieved $336 million in SaaS ARR, exceeding its $330 million target two quarters early. The company expects SaaS ARR to continue growing, supported by strong adoption and new customer acquisitions.
Subscription ARR and Revenue: Subscription ARR is projected to grow by 24%-25% year-over-year in fiscal 2026. Subscription revenue is expected to reach $753-$757 million, representing 28% growth at the midpoint.
Total Revenue: Total revenue for fiscal 2026 is expected to be in the range of $1.161 billion to $1.165 billion, reflecting a 17% increase at the midpoint.
Gross Margins: Gross margins for fiscal 2026 are projected to be between 80.5% and 81.5%, reflecting the growth of the SaaS platform.
Non-GAAP EBIT Margins: Non-GAAP EBIT margins are expected to be approximately 18.5%-19.5%, reflecting ongoing investments in growth initiatives.
Free Cash Flow: Free cash flow guidance for fiscal 2026 has been raised to $225-$230 million, benefiting from recent federal tax law changes.
Innovation and AI Integration: Commvault plans to integrate its recent acquisition, Satori Cyber, into its platform to address resilience requirements in the age of AI. The company will introduce new innovations at its upcoming customer event.
Repurchase of $131 million of stock: During the quarter, the company repurchased $131 million of stock, of which $118 million was executed in conjunction with a convertible senior notes offering.
Convertible Senior Notes Offering: The company closed a private offering of $900 million of convertible senior notes with a 0% coupon rate. This capital raise was aimed at optimizing the balance sheet and providing additional flexibility for capital allocation decisions.
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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