Commvault Systems (Nasdaq: CVLT) lifts Q1 subscription ARR to $1,054M
Rhea-AI Filing Summary
Commvault Systems reported fiscal first-quarter 2027 results for the period ended June 30, 2026. Total revenues were $314.1 million, up 11% year over year, driven by subscription revenue of $267.0 million, up 16%. SaaS revenue surpassed $100 million, rising 39%.
Subscription annualized recurring revenue reached $1,054 million, up 22%, and subscription net dollar retention was 114%, reflecting expansion within the existing subscription customer base as defined by the company. GAAP income from operations was $25.7 million (8.2% margin), while non-GAAP EBIT was $71.5 million (22.8% margin). GAAP diluted EPS was $0.50; non-GAAP diluted EPS was $1.42.
Operating cash flow was $51.7 million and non-GAAP free cash flow $51.1 million, up 71% year over year. Cash and cash equivalents totaled $929.8 million against $881.9 million of convertible notes. Revenue grew in both regions, with Americas up 9% and International up 15%. Management guided fiscal 2027 subscription revenue to $1,119–$1,129 million, subscription ARR to $1,200–$1,210 million, non-GAAP EBIT margin to about 21%, and free cash flow to $250–$260 million, and highlighted a multi-year strategic partnership with Microsoft Azure.
Positive
- Recurring revenue and ARR expanded, with subscription revenue $267M up 16%, SaaS revenue $100.6M up 39%, and subscription ARR $1,054M up 22% year over year.
- Profitability and cash generation improved on a non-GAAP basis, with non-GAAP EBIT $71M (22.8% margin), non-GAAP net income $59M, and free cash flow $51M up 71% year over year.
Negative
- GAAP bottom-line performance eased, as GAAP net income was $21.1M and diluted EPS $0.50, compared with $23.5M and $0.52 in the prior-year quarter.
Filing Explained
The filing adds a $10 million completed share repurchase, while future buybacks remain guidance and restructuring activities are not yet fully complete.
A Form 8-K reports specified material events, and this filing furnishes Commvault’s completed fiscal first-quarter results for the period ended
Commvault says it repurchased approximately 98,000 common shares during the quarter, using cash for that transaction; it also expects future share repurchases to equal approximately
The filing changes the presentation of recurring-revenue metrics: beginning in fiscal 2027, Subscription ARR includes enterprise support, while Total ARR is no longer disclosed. Subscription ARR is an annualized active-contract measure and is not a forecast of future revenue.
The restructuring plans are not fully complete: the company says most related costs had been incurred by
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Total revenues: $314,131 thousand
Subscription revenue: $267,027 thousand
SaaS revenue: $100,550 thousand
+5 more
8 metrics
Total revenues
$314,131 thousand
Total revenues for the three months ended June 30, 2026; 11% year-over-year growth
Subscription revenue
$267,027 thousand
Subscription revenues in Q1 fiscal 2027; up 16% year over year
SaaS revenue
$100,550 thousand
Software-as-a-service revenue in Q1 fiscal 2027; up 39% year over year
Subscription ARR
$1,054,311 thousand
Subscription annualized recurring revenue as of Q1 fiscal 2027; described as up 22% year over year
Non-GAAP income from operations
$71,473 thousand
Non-GAAP EBIT in Q1 fiscal 2027 with a 22.8% operating margin
GAAP net income
$21,139 thousand
GAAP net income for the three months ended June 30, 2026
Non-GAAP free cash flow
$51,101 thousand
Non-GAAP free cash flow for Q1 fiscal 2027; up 71% year over year
Cash and cash equivalents
$929,837 thousand
Cash and cash equivalents balance as of June 30, 2026
Key Terms
Subscription annualized recurring revenue, Subscription net dollar retention rate, non-GAAP free cash flow, constant currency basis, +1 more
5 terms
Subscription annualized recurring revenue financial
"Subscription annualized recurring revenue (ARR)1,2 reaches $1,054 million,"
Subscription net dollar retention rate financial
"Subscription net dollar retention rate5 was 114%,"
Percentage that shows how revenue from existing subscription customers changed over a set period after accounting for upgrades, downgrades, and cancellations. Think of it as measuring whether the same group of customers is paying more, the same, or less—like checking if a garden’s plants produced more fruit this year after pruning and new growth. It matters to investors because it reveals the health and growth potential of recurring revenue without counting new customers.
non-GAAP free cash flow financial
"Non-GAAP free cash flow. Commvault defines this non-GAAP financial measure as net cash"
Non-GAAP free cash flow is a company’s reported cash generated from operations after paying for routine investments in property and equipment, adjusted by management to exclude or include certain items that aren’t part of standard accounting rules. Investors watch it as a practical measure of the cash a business has available for dividends, stock buybacks, debt repayment or reinvestment — like a household’s usable savings after adjusting for one-time or unusual expenses — but calculations vary between firms, so comparisons require caution.
constant currency basis financial
"Commvault analyzes revenue growth on a constant currency basis in order"
A "constant currency basis" is a way companies compare financial results by removing the effects of changing exchange rates between different currencies. It helps show how the business is really performing, without the confusion caused by currency value swings, much like adjusting for inflation to see true growth.
contingent consideration financial
"Represents the change in the estimated fair value of the contingent consideration"
Contingent consideration is an additional payment agreed when one company buys another that will be paid later only if specific future targets are met, such as revenue, profit, or regulatory milestones. It matters to investors because it shifts risk between buyer and seller and affects the acquiring company's future cash flow and reported value — like promising a bonus after results are proven.
Earnings Snapshot
Total revenues: $314,131 thousand · Guidance included
Three months ended June 30, 2026
Total revenues
$314,131 thousand
up 11% year over year
Subscription revenue
$267,027 thousand
up 16% year over year
SaaS revenue
$100,550 thousand
up 39% year over year
Subscription ARR
$1,054,311 thousand
up 22% year over year
GAAP diluted EPS
$0.50
Non-GAAP diluted EPS
$1.42
Non-GAAP EBIT margin
22.8%
Non-GAAP free cash flow
$51,101 thousand
up 71% year over year
Guidance
For Q2 fiscal 2027, Commvault expects subscription revenue between $264 million and $268 million and a non-GAAP EBIT margin of approximately 20%. For full fiscal 2027, it guides to subscription revenue of $1,119–$1,129 million, subscription ARR of $1,200–$1,210 million, non-GAAP EBIT margin of approximately 21%, free cash flow of $250–$260 million, share repurchases of approximately 60% of free cash flow, and diluted shares outstanding of approximately 42 million.
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
What were Commvault (CVLT)’s total revenues and growth in Q1 fiscal 2027?
Commvault reported total revenues of $314.1 million for Q1 fiscal 2027, representing 11% year-over-year growth. Subscription revenues were the main driver, supported by ongoing adoption of term-based licenses, support, and SaaS offerings across Americas and International regions.
How fast are Commvault (CVLT)’s subscription and SaaS businesses growing?
In Q1 fiscal 2027, subscription revenue was $267 million, up 16% year over year. Within that, SaaS revenue reached $100.6 million, up 39% year over year. Subscription ARR grew to $1,054 million, an increase of 22% year over year.
What profitability did Commvault (CVLT) report on GAAP and non-GAAP bases?
Commvault generated GAAP income from operations of $25.7 million with an 8.2% margin and GAAP diluted EPS of $0.50. Non-GAAP EBIT was $71.5 million with a 22.8% margin, and non-GAAP diluted EPS was $1.42 for Q1 fiscal 2027.
What guidance did Commvault (CVLT) provide for fiscal 2027 subscription revenue and free cash flow?
For full fiscal 2027, Commvault expects subscription revenue between $1,119 million and $1,129 million and subscription ARR between $1,200 million and $1,210 million. It also projects free cash flow between $250 million and $260 million and a non-GAAP EBIT margin of about 21%.
What is Commvault (CVLT)’s cash position and leverage as of June 30, 2026?
As of June 30, 2026, Commvault held $929.8 million of cash and cash equivalents. On the liability side, it reported $881.9 million of convertible notes, net, along with total current and long-term deferred revenue of $764.9 million.
What key operating metrics did Commvault (CVLT) highlight for customer retention and growth?
Commvault reported a subscription net dollar retention rate of 114%, indicating net expansion within its existing subscription customer base. It also disclosed SaaS ARR of $424.3 million and overall subscription ARR of $1,054.3 million as of Q1 fiscal 2027.
What strategic developments did Commvault (CVLT) announce alongside Q1 fiscal 2027 results?
Commvault highlighted a multi-year strategic partnership with Microsoft to offer its AI and cyber resilience solutions as a native ISV service on Microsoft Azure. It was also named a Leader in the Gartner Magic Quadrant for Backup and Data Protection Platforms for the 15th consecutive year.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 28, 2026
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission file number) | (I.R.S. Employer Identification No.) | ||||||||||||
(Address of principal executive offices, including zip code)
(732 ) 870-4000
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition
On July 28, 2026, Commvault issued a press release announcing its results for its first fiscal quarter ended June 30, 2026. A copy of the press release is attached hereto as Exhibit 99.1.
This information is being furnished pursuant to Item 2.02 and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities under that section and shall not be deemed to be incorporated by reference into filings under the Securities Act of 1933.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits:
| Exhibit No. | Description | ||||
99.1 | Press Release dated July 28, 2026 | ||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in the Inline XBRL document) | ||||
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
COMMVAULT SYSTEMS, INC.
| Date: | July 28, 2026 | /s/ Gary Merrill | ||||||
| Gary Merrill Chief Financial Officer (Principal Financial Officer) | ||||||||
3
Commvault Announces First Quarter Fiscal 2027 Financial Results
Subscription revenue1 climbs +16% year over year to a record $267 million
Subscription annualized recurring revenue (ARR)1,2 reaches $1,054 million, up +22% year over year
Free cash flow3 increased +71% year over year to $51 million
Tinton Falls, N.J. – July 28, 2026 – Commvault (Nasdaq: CVLT) today announced its financial results for the fiscal first quarter ended June 30, 2026.
"Our results reflect what we’re hearing from customers every day – they are embracing our AI-enabled platform to protect data, govern access, and make clean, trusted recoveries," said Sanjay Mirchandani, President and CEO, Commvault. "With strong growth and record profitability, Commvault is well positioned to continue taking share in an AI-first world."
Notes are contained at the end of this press release
First Quarter Fiscal 2027 Highlights -
•Subscription revenue1 was $267 million, up 16% year over year, inclusive of:
◦SaaS revenue crossed $100 million, up 39% year over year
•Subscription ARR1,2 grew to $1,054 million, up 22% year over year
•Income from operations (EBIT) was $26 million, an operating margin of 8.2%
•Non-GAAP EBIT3 was $71 million, an operating margin of 22.8%
•Operating cash flow was $52 million, with free cash flow3 of $51 million, up 71% year over year
Recent Business Highlights -
•Commvault and Microsoft announced a multi-year strategic partnership to offer Commvault's AI and cyber resilience solutions as a native ISV service on Microsoft Azure, underscoring the importance of AI and resilience for enterprises.
•Commvault was named a Leader in the Gartner® Magic Quadrant™ for Backup and Data Protection Platforms for the 15th consecutive year.
Financial Outlook for Second Quarter and Full Year Fiscal 20274 -
We are providing the following guidance for the second quarter of fiscal year 2027:
•Subscription revenue1 is expected to be between $264 million and $268 million
•Non-GAAP EBIT margin3 is expected to be approximately 20%
We are providing the following updated guidance for the full fiscal year 2027:
•Subscription revenue1 is expected to be between $1,119 million and $1,129 million
•Subscription ARR1,2 is expected to be between $1,200 million and $1,210 million
•Non-GAAP EBIT margin3 is expected to be approximately 21%
•Free cash flow3 is expected to be between $250 million and $260 million
•Share repurchases are expected to be approximately 60% of free cash flow3
•Diluted shares outstanding are expected to be approximately 42 million
1
The above guidance metrics contemplate current macroeconomic conditions. These statements are forward-looking and made pursuant to the safe harbor provisions discussed in detail below. We do not undertake any obligation to update these forward-looking statements. Actual results may differ materially from anticipated results.
Conference Call Information
Commvault will host a conference call today, July 28, 2026 at 8:30 a.m. Eastern Time (5:30 a.m. Pacific Time) to discuss quarterly results. The live webcast and call dial-in numbers can be accessed by registering under the "News & Events" section of Commvault's website at ir.commvault.com under the "Investor Events" heading. An archived webcast of this conference call will also be available following the call.
About Commvault
Commvault (Nasdaq: CVLT) is a leader in unified resilience at enterprise scale. In a constantly evolving threat landscape, Commvault keeps customers ready by unifying data security, identity resilience, and cyber recovery, on one cloud-native, AI-enabled platform. Customers trust Commvault to conduct the fastest, most complete recoveries – not just their data, but their entire business. Purpose-built for the agentic enterprise, Commvault also enables organizations to safely embrace AI while protecting against AI-driven threats.
Safe Harbor Statement
This press release may contain forward-looking statements, including statements regarding financial projections, which are subject to risks and uncertainties, such as those related to our restructuring plans, competitive factors, difficulties and delays inherent in the development, manufacturing, marketing and sale of software products and related services, general economic conditions, outcome of litigation and others. For a discussion of these and other risks and uncertainties affecting Commvault's business, see "Item 1A. Risk Factors" in our annual report on Form 10-K and "Item 1A. Risk Factors" in our most recent quarterly report on Form 10-Q. Statements regarding Commvault’s beliefs, plans, expectations or intentions regarding the future are forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from anticipated results. Commvault does not undertake to update its forward-looking statements.
Investor Relations Contact
Michael J. Melnyk, CFA
646-522-6160
mmelnyk@commvault.com
Media Contact
Andrea Duffy
646-295-5241
andreaduffy@commvault.com
2
Overview
($ in thousands)
| Q1'26 | Q2'26 | Q3'26 | Q4'26 | Q1'27 | ||||||||||||||||||||||||||||||||||||||||
| Revenue | Y/Y Growth | Revenue | Y/Y Growth | Revenue | Y/Y Growth | Revenue | Y/Y Growth | Revenue | Y/Y Growth | |||||||||||||||||||||||||||||||||||
| Subscription: | ||||||||||||||||||||||||||||||||||||||||||||
| Term-based license | $ | 109,282 | 36 | % | $ | 92,647 | 10 | % | $ | 118,950 | 22 | % | $ | 114,445 | 6 | % | $ | 110,420 | 1 | % | ||||||||||||||||||||||||
| Term-based support | 47,582 | 20 | % | 49,686 | 19 | % | 50,962 | 18 | % | 53,933 | 21 | % | 56,057 | 18 | % | |||||||||||||||||||||||||||||
| SaaS | 72,445 | 66 | % | 80,018 | 61 | % | 87,379 | 44 | % | 93,139 | 43 | % | 100,550 | 39 | % | |||||||||||||||||||||||||||||
| Total subscription | 229,309 | 40 | % | 222,351 | 26 | % | 257,291 | 28 | % | 261,517 | 20 | % | 267,027 | 16 | % | |||||||||||||||||||||||||||||
| Perpetual license | 7,335 | (47) | % | 12,073 | 15 | % | 13,675 | (17) | % | 10,129 | (32) | % | 8,695 | 19 | % | |||||||||||||||||||||||||||||
| Perpetual support | 31,439 | (14) | % | 30,543 | (15) | % | 29,309 | (14) | % | 26,972 | (15) | % | 25,475 | (19) | % | |||||||||||||||||||||||||||||
| Other services | 13,895 | 31 | % | 11,221 | 2 | % | 13,557 | 25 | % | 13,074 | 26 | % | 12,934 | (7) | % | |||||||||||||||||||||||||||||
| Total revenues | $ | 281,978 | 26 | % | $ | 276,188 | 18 | % | $ | 313,832 | 19 | % | $ | 311,692 | 13 | % | $ | 314,131 | 11 | % | ||||||||||||||||||||||||
Constant Currency - Revenue
($ in thousands)
The constant currency impact is calculated using the average foreign exchange rates from the prior year period and applying these rates to foreign-denominated revenues in the current corresponding period. Commvault analyzes revenue growth on a constant currency basis in order to provide a comparable framework for assessing how the business performed excluding the effect of foreign currency fluctuations. The non-GAAP financial measures presented in this press release should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP.
Q1'26 Revenue as Reported (GAAP) | Q1'27 Revenue as Reported (GAAP) | Constant Currency Impact | % Change Y/Y (GAAP) | % Change Y/Y Constant Currency | |||||||||||||||||||||||||
| Subscription: | |||||||||||||||||||||||||||||
| Term-based license | $ | 109,282 | $ | 110,420 | $ | (659) | 1% | —% | |||||||||||||||||||||
| Term-based support | 47,582 | 56,057 | (603) | 18% | 17% | ||||||||||||||||||||||||
| SaaS | 72,445 | 100,550 | (1,166) | 39% | 37% | ||||||||||||||||||||||||
| Total subscription | 229,309 | 267,027 | (2,428) | 16% | 15% | ||||||||||||||||||||||||
| Perpetual license | 7,335 | 8,695 | 150 | 19% | 21% | ||||||||||||||||||||||||
| Perpetual support | 31,439 | 25,475 | (243) | (19)% | (20)% | ||||||||||||||||||||||||
| Other services | 13,895 | 12,934 | 114 | (7)% | (6)% | ||||||||||||||||||||||||
| Total | $ | 281,978 | $ | 314,131 | $ | (2,407) | 11% | 11% | |||||||||||||||||||||
3
Disaggregation of Revenues
($ in thousands)
Our Americas region includes the United States, Canada, and Latin America. Our International region primarily includes Europe, the Middle East, Africa, Australia, India and Southeast Asia.
| Q1'26 | Q2'26 | Q3'26 | Q4'26 | Q1'27 | ||||||||||||||||||||||||||||||||||||||||
| Revenue | Y/Y Growth | Revenue | Y/Y Growth | Revenue | Y/Y Growth | Revenue | Y/Y Growth | Revenue | Y/Y Growth | |||||||||||||||||||||||||||||||||||
| Americas | $ | 170,928 | 23 | % | $ | 168,125 | 16 | % | $ | 178,852 | 15 | % | $ | 184,977 | 9 | % | $ | 186,779 | 9 | % | ||||||||||||||||||||||||
| International | 111,050 | 29 | % | 108,063 | 22 | % | 134,980 | 26 | % | 126,715 | 20 | % | 127,352 | 15 | % | |||||||||||||||||||||||||||||
| Total revenues | $ | 281,978 | 26 | % | $ | 276,188 | 18 | % | $ | 313,832 | 19 | % | $ | 311,692 | 13 | % | $ | 314,131 | 11 | % | ||||||||||||||||||||||||
Subscription ARR and SaaS ARR1,2
($ in thousands)
| Q1'26 | Q2'26 | Q3'26 | Q4'26 | Q1'27 | |||||||||||||||||||||||||
| Subscription ARR | 867,306 | 918,130 | 966,260 | 1,014,729 | 1,054,311 | ||||||||||||||||||||||||
| SaaS ARR | 306,874 | 335,669 | 363,732 | 400,157 | 424,337 | ||||||||||||||||||||||||
Additional Financial Information
•We repurchased approximately 98,000 shares of common stock for $10 million during the three months ended June 30, 2026
•Weighted average diluted shares outstanding were approximately 42 million for the period ended June 30, 2026
•Cash and cash equivalents totaled $930 million as of June 30, 2026
•Subscription net dollar retention rate5 was 114%
4
Commvault Systems, Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
| Three Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Revenues: | |||||||||||
| Subscription: | |||||||||||
| Term-based license | $ | 110,420 | $ | 109,282 | |||||||
| Term-based support | 56,057 | 47,582 | |||||||||
| Software-as-a-service | 100,550 | 72,445 | |||||||||
| Total subscription | 267,027 | 229,309 | |||||||||
| Perpetual license | 8,695 | 7,335 | |||||||||
| Perpetual support | 25,475 | 31,439 | |||||||||
| Other services | 12,934 | 13,895 | |||||||||
| Total revenues | 314,131 | 281,978 | |||||||||
| Cost of revenues: | |||||||||||
| Term-based license | 4,243 | 2,242 | |||||||||
| Software-as-a-service | 29,652 | 25,972 | |||||||||
| Perpetual license | 171 | 245 | |||||||||
| Customer support | 14,699 | 14,207 | |||||||||
| Other services | 8,844 | 8,111 | |||||||||
| Total cost of revenues | 57,609 | 50,777 | |||||||||
| Gross margin | 256,522 | 231,201 | |||||||||
| Operating expenses: | |||||||||||
| Sales and marketing | 139,795 | 122,479 | |||||||||
| Research and development | 39,542 | 40,062 | |||||||||
| General and administrative | 46,751 | 41,270 | |||||||||
| Depreciation and amortization | 2,319 | 2,607 | |||||||||
| Restructuring | 2,396 | 237 | |||||||||
| Change in contingent consideration | — | (545) | |||||||||
| Total operating expenses | 230,803 | 206,110 | |||||||||
| Income from operations | 25,719 | 25,091 | |||||||||
| Interest income | 7,687 | 2,009 | |||||||||
| Interest expense | (1,473) | (278) | |||||||||
| Other income, net | 269 | 61 | |||||||||
| Income before income taxes | 32,202 | 26,883 | |||||||||
| Income tax expense | 11,063 | 3,387 | |||||||||
| Net income | $ | 21,139 | $ | 23,496 | |||||||
| Net income per common share: | |||||||||||
| Basic | $ | 0.51 | $ | 0.53 | |||||||
| Diluted | $ | 0.50 | $ | 0.52 | |||||||
| Weighted average common shares outstanding: | |||||||||||
| Basic | 41,345 | 44,326 | |||||||||
| Diluted | 41,869 | 45,283 | |||||||||
5
Commvault Systems, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
| June 30, | March 31, | |||||||||||||
| 2026 | 2026 | |||||||||||||
| ASSETS | ||||||||||||||
| Current assets: | ||||||||||||||
| Cash and cash equivalents | $ | 929,837 | $ | 899,987 | ||||||||||
| Trade accounts receivable, net | 271,568 | 330,483 | ||||||||||||
| Other current assets | 65,520 | 56,040 | ||||||||||||
| Total current assets | 1,266,925 | 1,286,510 | ||||||||||||
| Deferred tax assets, net | 150,360 | 153,766 | ||||||||||||
| Property and equipment, net | 9,677 | 9,750 | ||||||||||||
| Operating lease assets | 33,985 | 34,920 | ||||||||||||
| Deferred commissions cost | 110,465 | 103,892 | ||||||||||||
| Intangible assets, net | 18,459 | 19,715 | ||||||||||||
| Goodwill | 209,132 | 209,322 | ||||||||||||
| Other assets | 91,418 | 68,430 | ||||||||||||
| Total assets | $ | 1,890,421 | $ | 1,886,305 | ||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||
| Current liabilities: | ||||||||||||||
| Accounts payable | $ | 156 | $ | 651 | ||||||||||
| Accrued liabilities | 138,979 | 165,583 | ||||||||||||
| Current portion of operating lease liabilities | 7,148 | 6,963 | ||||||||||||
| Deferred revenue | 473,744 | 484,973 | ||||||||||||
| Total current liabilities | 620,027 | 658,170 | ||||||||||||
| Convertible notes, net | 881,926 | 880,863 | ||||||||||||
| Deferred revenue, less current portion | 291,151 | 293,725 | ||||||||||||
| Deferred tax liabilities | 1,306 | 1,565 | ||||||||||||
| Long-term operating lease liabilities | 28,581 | 29,675 | ||||||||||||
| Other liabilities | 15,379 | 14,813 | ||||||||||||
| Total stockholders’ equity | 52,051 | 7,494 | ||||||||||||
| Total liabilities and stockholders’ equity | $ | 1,890,421 | $ | 1,886,305 | ||||||||||
6
Commvault Systems, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
| Three Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash flows from operating activities | |||||||||||
| Net income | $ | 21,139 | $ | 23,496 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | 2,319 | 2,607 | |||||||||
| Amortization of debt issuance costs | 1,164 | 85 | |||||||||
| Amortization of deferred commissions costs | 14,582 | 10,989 | |||||||||
| Noncash stock-based compensation | 35,290 | 30,180 | |||||||||
| Noncash operating lease expense | 1,916 | 1,636 | |||||||||
| Noncash change in fair value of contingent consideration | — | (545) | |||||||||
| Noncash adjustment on headquarters sale leaseback | — | 495 | |||||||||
| Deferred income taxes | 2,962 | 3,908 | |||||||||
| Other | (182) | (61) | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Trade accounts receivable, net | 58,714 | 3,748 | |||||||||
| Other current assets and Other assets | (23,190) | 2,378 | |||||||||
| Deferred commissions cost | (21,299) | (15,072) | |||||||||
| Accounts payable | (506) | (320) | |||||||||
| Accrued liabilities | (26,281) | (47,260) | |||||||||
| Operating lease liabilities | (1,889) | (1,908) | |||||||||
| Deferred revenue | (12,308) | 17,440 | |||||||||
| Other liabilities | (761) | (115) | |||||||||
| Net cash provided by operating activities | 51,670 | 31,681 | |||||||||
| Cash flows from investing activities | |||||||||||
| Purchase of property and equipment | (569) | (1,879) | |||||||||
| Purchase of investments | (7,895) | (6,144) | |||||||||
| Proceeds from sale of headquarters, net | — | 34,849 | |||||||||
| Net cash provided by (used in) investing activities | (8,464) | 26,826 | |||||||||
| Cash flows from financing activities | |||||||||||
| Repurchase of common stock | (10,131) | (15,050) | |||||||||
| Payment of debt issuance costs | — | (1,846) | |||||||||
| Other | (75) | (12) | |||||||||
| Net cash used in financing activities | (10,206) | (16,908) | |||||||||
| Effects of exchange rate — changes in cash | (3,150) | 19,532 | |||||||||
| Net increase in cash and cash equivalents | 29,850 | 61,131 | |||||||||
| Cash and cash equivalents at beginning of period | 899,987 | 302,103 | |||||||||
| Cash and cash equivalents at end of period | $ | 929,837 | $ | 363,234 | |||||||
| Supplemental disclosures of noncash activities | |||||||||||
| Operating lease liabilities arising from obtaining right-of-use assets | $ | 932 | $ | 20,252 | |||||||
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Commvault Systems, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)
(Unaudited)
| Three Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Non-GAAP financial measures and reconciliation: | |||||||||||
| GAAP income from operations | $ | 25,719 | $ | 25,091 | |||||||
Noncash stock-based compensation6 | 34,725 | 30,105 | |||||||||
FICA and payroll tax expense related to stock-based compensation7 | 877 | 1,799 | |||||||||
Restructuring8 | 2,396 | 237 | |||||||||
Amortization of intangible assets9 | 1,256 | 1,071 | |||||||||
Change in contingent consideration10 | — | (545) | |||||||||
Adjustment on headquarters sale leaseback11 | — | 495 | |||||||||
Non-recurring strategic pricing initiative costs12 | 6,500 | — | |||||||||
| Non-GAAP income from operations | $ | 71,473 | $ | 58,253 | |||||||
| GAAP net income | $ | 21,139 | $ | 23,496 | |||||||
Noncash stock-based compensation6 | 34,725 | 30,105 | |||||||||
FICA and payroll tax expense related to stock-based compensation7 | 877 | 1,799 | |||||||||
Restructuring8 | 2,396 | 237 | |||||||||
Amortization of intangible assets9 | 1,256 | 1,071 | |||||||||
Change in contingent consideration10 | — | (545) | |||||||||
Adjustment on headquarters sale leaseback11 | — | 495 | |||||||||
Non-recurring strategic pricing initiative costs12 | 6,500 | — | |||||||||
Non-GAAP provision for income taxes adjustment13 | (7,646) | (11,024) | |||||||||
| Non-GAAP net income | $ | 59,247 | $ | 45,634 | |||||||
| GAAP diluted earnings per share | $ | 0.50 | $ | 0.52 | |||||||
Noncash stock-based compensation6 | 0.83 | 0.66 | |||||||||
FICA and payroll tax expense related to stock-based compensation7 | 0.02 | 0.04 | |||||||||
Restructuring8 | 0.06 | 0.01 | |||||||||
Amortization of intangible assets9 | 0.03 | 0.02 | |||||||||
Change in contingent consideration10 | — | (0.01) | |||||||||
Adjustment on headquarters sale leaseback11 | — | 0.01 | |||||||||
Non-recurring strategic pricing initiative costs12 | 0.16 | — | |||||||||
Non-GAAP provision for income taxes adjustment13 | (0.18) | (0.24) | |||||||||
| Non-GAAP diluted earnings per share | $ | 1.42 | $ | 1.01 | |||||||
| GAAP diluted weighted average shares outstanding | 41,869 | 45,283 | |||||||||
| Three Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Non-GAAP free cash flow reconciliation: | |||||||||||
| GAAP cash provided by operating activities | $ | 51,670 | $ | 31,681 | |||||||
| Purchase of property and equipment | (569) | (1,879) | |||||||||
| Non-GAAP free cash flow | $ | 51,101 | $ | 29,802 | |||||||
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Key Performance Indicators
We monitor subscription annualized recurring revenue ("Subscription ARR"), SaaS ARR and subscription net dollar retention rate ("Subscription NRR") to help evaluate the state of our business. We believe these metrics are material to investors to understand the growth and performance of our business, as they help normalize certain variable factors and provide a consistent view of our recurring revenue profile. Subscription ARR and SaaS ARR exclude non-recurring elements and reflect the annualized value of active contracts, while subscription NRR measures net expansion within our existing subscription customer base. Together, we believe these metrics offer meaningful insight into the health and trajectory of our recurring revenue streams. Total ARR, which also included the annualized maintenance contract on perpetual licenses, is no longer disclosed.
Use of Non-GAAP Financial Measures
We have provided in this press release the following non-GAAP financial measures: non-GAAP income from operations (EBIT), non-GAAP EBIT margin, non-GAAP net income, non-GAAP diluted earnings per share, and non-GAAP free cash flow. This financial information has not been prepared in accordance with GAAP. Commvault uses these non-GAAP financial measures internally to understand, manage and evaluate its business and make operating decisions. Commvault believes that the use of these non-GAAP financial measures, when used as a supplement to GAAP financial measures, provides an additional tool for investors to use in evaluating ongoing operating results and trends, and in comparing its financial results with other companies in Commvault’s industry, many of which present similar non-GAAP financial measures to the investment community. Commvault has also provided its revenues on a constant currency basis. We analyze revenue growth on a constant currency basis in order to provide a comparable framework for assessing how the business performed excluding the effect of foreign currency fluctuations.
All of these non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures, which are included in this press release.
Non-GAAP EBIT and non-GAAP EBIT margin. These non-GAAP financial measures exclude noncash stock-based compensation charges and additional Federal Insurance Contribution Act (FICA) and related payroll tax expense incurred by Commvault when employees vest in restricted stock awards. Commvault has also excluded restructuring costs, noncash amortization of intangible assets, the change in the estimated fair value of contingent consideration, adjustments from the sale and leaseback of headquarters, and non-recurring strategic pricing initiative costs from its non-GAAP results. These adjustments are further discussed in the reconciliation of GAAP to non-GAAP financial measures. Commvault believes that these non-GAAP financial measures are useful metrics for management and investors because they compare Commvault’s core operating results over multiple periods. When evaluating the performance of Commvault’s operating results and developing short- and long-term plans, Commvault does not consider such expenses.
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Although noncash stock-based compensation and the additional FICA and related payroll tax expenses are necessary to attract and retain employees, Commvault places its primary emphasis on stockholder dilution as compared to the accounting charges related to such equity compensation plans. Commvault believes that providing non-GAAP financial measures that exclude noncash stock-based compensation expense and the additional FICA and related payroll tax expenses incurred on vesting of restricted stock awards allow investors to make meaningful comparisons between Commvault’s operating results and those of other companies.
There are a number of limitations related to the use of non-GAAP EBIT and non-GAAP EBIT margin. The most significant limitation is that these non-GAAP financial measures exclude certain operating costs, primarily related to noncash stock-based compensation, which is of a recurring nature. Noncash stock-based compensation has been, and will continue to be for the foreseeable future, a significant recurring expense in Commvault’s operating results. In addition, noncash stock-based compensation is an important part of Commvault’s employees’ compensation and can have a significant impact on their performance. The following table presents the stock-based compensation expense included in cost of revenues, sales and marketing, research and development and general and administrative ($ in thousands):
| Three Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cost of revenues | $ | 1,403 | $ | 1,249 | |||||||
| Sales and marketing | 14,168 | 12,586 | |||||||||
| Research and development | 8,284 | 7,070 | |||||||||
| General and administrative | 10,870 | 9,200 | |||||||||
Stock-based compensation expense | $ | 34,725 | $ | 30,105 | |||||||
The table above excludes stock-based compensation expense related to the Company's restructuring activities described below in Note 8.
The components that Commvault excludes in its non-GAAP financial measures may differ from the components that its peer companies exclude when they report their non-GAAP financial measures. Due to the limitations related to the use of non-GAAP measures, Commvault’s management assists investors by providing a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure. Commvault's management uses non-GAAP financial measures only in addition to, and in conjunction with, results presented in accordance with GAAP.
Non-GAAP net income and non-GAAP diluted earnings per share (EPS). In addition to the adjustments discussed in non-GAAP EBIT, non-GAAP net income and non-GAAP diluted EPS incorporates a non-GAAP effective tax rate of 24%.
Commvault anticipates that in any given period its non-GAAP tax rate may be either higher or lower than the GAAP tax rate as evidenced by historical fluctuations. The GAAP tax rates in recent fiscal years were not meaningful percentages due to the dollar amount of GAAP pre-tax income. For the same reason as the GAAP tax rates, the estimated cash tax rates in recent fiscal years are not meaningful percentages. Commvault defines its cash tax
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rate as the total amount of cash income taxes payable for the fiscal year divided by consolidated GAAP pre-tax income. Over time, Commvault believes its GAAP and cash tax rates will align.
Commvault considers non-GAAP net income and non-GAAP diluted EPS useful metrics for Commvault management and its investors for the same basic reasons that Commvault uses non-GAAP EBIT and non-GAAP EBIT margin. In addition, the same limitations as well as management actions to compensate for such limitations described above also apply to Commvault’s use of non-GAAP net income and non-GAAP diluted EPS.
Non-GAAP free cash flow. Commvault defines this non-GAAP financial measure as net cash provided by operating activities less purchases of property and equipment. Commvault considers non-GAAP free cash flow a useful metric for Commvault management and its investors in evaluating Commvault's ability to generate cash from its business operations. In addition, the same limitations as well as management actions to compensate for such limitations described above also apply to Commvault’s use of non-GAAP free cash flow.
Forward-looking non-GAAP measures. In this press release, Commvault presents non-GAAP EBIT margin and free cash flow on a forward-looking basis. The most directly comparable GAAP measures are not accessible on a forward-looking basis without unreasonable efforts, because certain items that impact these GAAP measures, cannot be reasonably predicted or quantified. The probable significance of these items may be material, and as a result, the corresponding GAAP measures and a quantitative reconciliation to those GAAP measures are not available on a forward-looking basis.
11
Notes
1.Beginning in fiscal 2027, Customer support revenue has been further disaggregated between support associated with term-based software license arrangements ("Term-based support") and support associated with perpetual software license arrangements ("Perpetual support"). Subscription revenue has also been reclassified to include Term-based support revenue, in addition to Term-based license and SaaS revenues. Prior period amounts have been reclassified to conform to the current period presentation. These reclassifications have no impact on total revenues, net income, or the underlying revenue recognition for these arrangements.
In addition, Subscription ARR2 has been reclassified to include enterprise support, further aligning Subscription ARR with Subscription revenue. Prior to fiscal 2027, enterprise support was included only in Total ARR. Prior period amounts have been reclassified to conform to the current period presentation. Total ARR, which also included the annualized maintenance contract on perpetual licenses, is no longer disclosed.
2.Subscription ARR represents the annualized value of all active contracts as of the end of a reporting period attributable to term‑based licenses, maintenance and support services associated with term license arrangements, SaaS subscriptions, and consumption‑based arrangements, calculated by dividing the total active contract value by the number of days in the contract term and multiplying the result by 365. For consumption-based arrangements on a pay as you go model without a fixed commitment, the applicable ARR is calculated by annualizing the revenue contractually expected to be received in a given month based on actual monthly usage from a prior month. SaaS ARR includes only the cloud‑hosted portion of subscription ARR and is calculated using the same methodology.
These metrics should be viewed independently of GAAP revenue, deferred revenue and unbilled revenue and are not intended to be combined with or to replace those items. These metrics are not a forecast of future revenues. Management believes that reviewing these metrics, in addition to GAAP results, helps investors and financial analysts understand the value of Commvault's recurring revenue streams presented on an annualized basis. There is no direct GAAP comparative to ARR.
3.A reconciliation of GAAP to non-GAAP results has been provided in the reconciliation of GAAP to non-GAAP financial measures included in this press release. An explanation of these measures is also included under the heading "Use of Non-GAAP Financial Measures."
4.Commvault does not provide forward-looking guidance on a GAAP basis as certain financial information, the probable significance of which cannot be determined, is not available and cannot be reasonably estimated. See "Forward-looking non-GAAP measures" for additional explanation.
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5.Subscription net dollar retention rate (Subscription NRR) includes all contracts attributable to term‑based licenses, maintenance and support services associated with term license arrangements, SaaS subscriptions, and consumption‑based arrangements. Subscription NRR is calculated as the percentage of subscription ARR retained from existing customers at the start of an annual period after accounting for expansion revenue, churn, and downgrades, measured on an annualized basis using the trailing four quarter average. Acquired subscription ARR is excluded until the acquisition is fully integrated, which we generally expect to occur twelve months from the close date. We believe our subscription NRR offers valuable insight into the year-over-year expansion of our existing customer base, reflecting both increased utilization of current products and services as well as the adoption of additional offerings. There is no direct GAAP comparative to NRR.
6.Represents noncash stock-based compensation charges associated with restricted stock units granted and our Employee Stock Purchase Plan, exclusive of stock-based compensation expense related to Commvault's restructuring activities described below in Note 8.
7.Represents additional FICA and related payroll tax expenses incurred by Commvault when employees vest in restricted stock awards.
8.Restructuring charges relate to two plans designed to optimize our cost structure, enhance organizational agility, align resources with strategic priorities, and reorganize our business technology function. These initiatives include workforce reductions, technology transitions, office lease closures, and the exit of operations in certain jurisdictions. The related charges primarily consist of severance and associated employee termination costs, stock‑based compensation expense resulting from modification events, and office closure and exit charges. As of June 30, 2026, the majority of these costs have been incurred and the remaining activities are anticipated to be completed in fiscal 2027.
9.Represents noncash amortization of intangible assets.
10.Represents the change in the estimated fair value of the contingent consideration arrangement related to the acquisition of Appranix, Inc.
11.During the first quarter of fiscal 2026, we finalized the sale of our corporate headquarters and entered into a lease for a portion of the premises. These noncash charges represent accounting adjustments for a $1.3 million loss associated with the related lease terms and an $0.8 million adjustment to reflect the final sale price of the assets resulting in a net charge of $0.5 million recorded in general and administrative expense on the consolidated statements of operations.
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12.These charges relate to a non-routine business expense incurred during the period associated with contingent performance-based fees tied to strategic pricing and packaging initiatives. The arrangement also includes provisions for potential additional contingent fees of up to $3.0 million. As of June 30, 2026, no amounts have been recognized with respect to the potential additional contingent fees, which remain subject to future contractual conditions and performance outcomes. Given the non-recurring nature of the matter, these costs have been excluded from operating results as they are episodic in nature, directly tied to a discrete strategic initiative, and not reflective of ongoing operating performance.
13.The provision for income taxes is adjusted to reflect Commvault’s estimated non-GAAP effective tax rate of 24%.
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