Le Lézard
Classified in: Science and technology, Business
Subjects: ERN, ERP

Commvault Announces Fiscal 2024 Fourth Quarter Financial Results


TINTON FALLS, N.J., April 30, 2024 /PRNewswire/ -- Commvault [Nasdaq: CVLT] today announced its financial results for the fourth quarter and fiscal year ended March 31, 2024. 

"We had an outstanding quarter and a breakout year, highlighted by 10% total revenue growth and 15% total ARR growth in the fourth quarter," said Sanjay Mirchandani, President and CEO. "Our Commvault Cloud platform is resonating with customers, who entrust us with their data and resilience in this era of unrelenting cyber threats."

Notes are contained on the last page of this Press Release

Fiscal 2024 Fourth Quarter Highlights -

Fiscal 2024 Full Year Highlights -

Financial Outlook for First Quarter and Full Year Fiscal 20253-

We are providing the following guidance for the first quarter of fiscal year 2025:

We are providing the following guidance for the full fiscal year 2025:

The above statements are based on current targets using exchange rates as of April 29, 2024. 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, April 30, 2024 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 "Events" section of Commvault's website. An archived webcast of this conference call will also be available following the call.

About Commvault
Commvault (NASDAQ: CVLT) is the gold standard in cyber resilience, helping more than 100,000 organizations keep data safe and businesses resilient and moving forward. Today, Commvault offers the only cyber resilience platform that combines the best data security and rapid recovery at enterprise scale across any workload, anywhere?at the lowest TCO.

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 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.

Revenue Overview
($ in thousands)


Q4'23


Q1'24


Q2'24


Q3'24


Q4'24

Revenue Summary:










Subscription

$          94,537


$          97,290


$          97,757


$        114,247


$        119,873

Perpetual license

17,561


13,155


14,388


14,874


15,196

Customer support

77,335


76,915


77,019


76,812


77,025

Other services

14,045


10,790


11,833


10,875


11,198

Total revenues

$        203,478


$        198,150


$        200,997


$        216,808


$        223,292



Q4'23


Q1'24


Q2'24


Q3'24


Q4'24

Y/Y Growth:










Subscription

9 %


11 %


25 %


31 %


27 %

Perpetual license

(25) %


(26) %


(27) %


(25) %


(13) %

Customer support

(9) %


(5) %


(1) %


(1) %


? %

Other services

28 %


(4) %


(1) %


6 %


(20) %

Total revenues

(1) %


? %


7 %


11 %


10 %

 


FY'23


Y/Y Growth


FY'24


Y/Y Growth

Revenue Summary:








Subscription

$              347,784


30 %


$              429,167


23 %

Perpetual license

74,918


(33) %


57,613


(23) %

Customer support

314,313


(9) %


307,771


(2) %

Other services

47,575


13 %


44,696


(6) %

Total revenues

$              784,590


2 %


$              839,247


7 %

 

Constant Currency
($ 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.

 

 

 


Subscription


Perpetual license


Customer support


Other services


Total

Q4'23 Revenue as Reported (GAAP)

$         94,537


$         17,561


$         77,335


$         14,045


$       203,478

Q4'24 Revenue as Reported (GAAP)

$       119,873


$         15,196


$         77,025


$         11,198


$       223,292

% Change Y/Y (GAAP)

27 %


(13) %


? %


(20) %


10 %

Constant Currency Impact

$                 20


$              (99)


$           (140)


$              (59)


$           (278)

% Change Y/Y Constant Currency

27 %


(14) %


(1) %


(21) %


10 %



Subscription


Perpetual license


Customer support


Other services


Total

FY'23 Revenue as Reported (GAAP)

$       347,784


$         74,918


$       314,313


$         47,575


$       784,590

FY'24 Revenue as Reported (GAAP)

$       429,167


$         57,613


$       307,771


$         44,696


$       839,247

% Change Y/Y (GAAP)

23 %


(23) %


(2) %


(6) %


7 %

Constant Currency Impact

$        (1,456)


$           (480)


$        (1,973)


$           (195)


$        (4,104)

% Change Y/Y Constant Currency

23 %


(24) %


(3) %


(6) %


6 %

 

Revenues by Geography
($ in thousands)

Our Americas region includes the United States, Canada, and Latin America. Our International region primarily includes Europe, Middle East, Africa, Australia, India, Southeast Asia, and China.


Q4'23


Q1'24


Q2'24


Q3'24


Q4'24


Revenue

Y/Y
Growth


Revenue

Y/Y
Growth


Revenue

Y/Y
Growth


Revenue

Y/Y
Growth


Revenue

Y/Y
Growth

Americas

$  122,337

(1) %


$  122,124

? %


$  120,300

4 %


$  125,052

16 %


$  131,069

7 %

International

81,141

(1) %


76,026

1 %


80,697

12 %


91,756

6 %


92,223

14 %

Total revenues

$  203,478

(1) %


$  198,150

? %


$  200,997

7 %


$  216,808

11 %


$  223,292

10 %

 


FY'23


FY'24


Revenue

Y/Y Growth


Revenue

Y/Y Growth

Americas

$             469,244

2 %


$             498,545

6 %

International

315,346

1 %


340,702

8 %

Total revenues

$             784,590

2 %


$             839,247

7 %

 

Total ARR and Subscription ARR2
($ in thousands)


Q4'23


Q1'24


Q2'24


Q3'24


Q4'24

Total ARR2

$           668,411


$           686,028


$           711,462


$           752,480


$           769,946

Subscription ARR2

$           477,085


$           499,580


$           529,590


$           571,125


$           596,667

 

For the three months ended March 31, 2024 -

Income from Operations (EBIT)

GAAP and Non-GAAP Net Income1

Cash Summary and Share Repurchases

For the year ended March 31, 2024 -

Income from Operations (EBIT)

GAAP and Non-GAAP Net Income1

Cash Summary and Share Repurchases

Table I

Commvault Systems, Inc.


Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)



Three Months Ended
March 31,


Year Ended

March 31,


2024


2023


2024


2023

Revenues:








Subscription

$ 119,873


$   94,537


$    429,167


$    347,784

Perpetual license

15,196


17,561


57,613


74,918

Customer support

77,025


77,335


307,771


314,313

Other services

11,198


14,045


44,696


47,575

Total revenues

223,292


203,478


839,247


784,590

Cost of revenues:








Subscription

15,486


12,922


58,406


44,482

Perpetual license

316


519


2,168


2,439

Customer support

15,806


13,206


60,752


58,273

Other services

7,538


8,158


30,284


30,208

Total cost of revenues

39,146


34,805


151,610


135,402

Gross margin

184,146


168,673


687,637


649,188

Operating expenses:








Sales and marketing

94,458


87,222


354,994


340,783

Research and development

35,244


32,176


132,328


141,847

General and administrative

29,938


27,728


113,997


104,240

Restructuring

4,548


4,092


4,548


15,452

Depreciation and amortization

1,768


1,639


6,415


9,270

Headquarters impairment

?


53,481


?


53,481

Total operating expenses

165,956


206,338


612,282


665,073

Income (loss) from operations

18,190


(37,665)


75,355


(15,885)

Interest income

1,893


384


5,423


1,300

Interest expense

(104)


(157)


(415)


(472)

Other income (expense), net

3,076


(193)


3,250


(305)

Income (loss) before income taxes

23,055


(37,631)


83,613


(15,362)

Income tax expense (benefit)

(103,065)


5,862


(85,293)


20,412

Net income (loss)

$ 126,120


$ (43,493)


$    168,906


$     (35,774)

Net income (loss) per common share:








Basic

$       2.89


$      (0.98)


$           3.85


$         (0.80)

Diluted

$       2.81


$      (0.98)


$           3.75


$         (0.80)

Weighted average common shares outstanding:








Basic

43,672


44,437


43,885


44,664

Diluted

44,917


44,437


45,100


44,664

 

 

 

Table II

Commvault Systems, Inc.


Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)




March 31,


March 31,



2024


2023

ASSETS

Current assets:





Cash and cash equivalents


$            312,754


$            287,778

Trade accounts receivable, net


222,683


210,441

Assets held for sale


38,680


38,680

Other current assets


21,009


14,015

Total current assets


595,126


550,914






Deferred tax assets, net


111,181


?

Property and equipment, net


7,961


8,287

Operating lease assets


10,545


11,784

Deferred commissions cost


62,837


59,612

Intangible assets, net


1,042


2,292

Goodwill


127,780


127,780

Other assets


27,441


21,905

Total assets


$            943,913


$            782,574






LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:





Accounts payable


$                    299


$                    108

Accrued liabilities


117,244


97,888

Current portion of operating lease liabilities


4,935


4,518

Deferred revenue


362,450


307,562

Total current liabilities


484,928


410,076






Deferred revenue, less current portion


168,472


174,393

Deferred tax liabilities


1,717


134

Long-term operating lease liabilities


7,155


8,260

Other liabilities


3,556


3,613






Total stockholders' equity


278,085


186,098

Total liabilities and stockholders' equity


$            943,913


$            782,574

 

Table III

Commvault Systems, Inc.


Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)



Three Months Ended
March 31,


Year Ended

March 31,


2024


2023


2024


2023

Cash flows from operating activities








Net income (loss)

$ 126,120


(43,493)


$   168,906


$    (35,774)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:








Depreciation and amortization

1,796


1,667


6,530


10,323

Noncash stock-based compensation

22,610


24,679


94,551


105,746

Noncash change in fair value of equity securities

191


193


17


305

Noncash headquarters impairment

?


53,481


?


53,481

Deferred income taxes

(109,598)


(674)


(109,598)


(674)

Amortization of deferred commissions cost

6,987


6,093


26,531


22,626

Changes in operating assets and liabilities:








Trade accounts receivable, net

(1,049)


6,183


(21,725)


(11,596)

Operating lease assets and liabilities, net

131


5


550


(56)

Other current assets and Other assets

(1,634)


3,197


336


6,179

Deferred commissions cost

(9,411)


(7,866)


(29,952)


(30,529)

Accounts payable

87


(346)


195


(297)

Accrued liabilities

16,146


(7,110)


16,998


(24,213)

Deferred revenue

27,951


31,949


50,394


73,756

Other liabilities

(342)


(125)


65


1,011

Net cash provided by operating activities

79,985


67,833


203,798


170,288

Cash flows from investing activities








Purchase of property and equipment

(859)


(1,055)


(4,086)


(3,241)

Purchase of equity securities

(373)


(84)


(1,435)


(2,045)

Net cash used in investing activities

(1,232)


(1,139)


(5,521)


(5,286)

Cash flows from financing activities








Repurchase of common stock

(50,366)


(60,790)


(184,021)


(150,921)

Proceeds from stock-based compensation plans

5,687


6,113


13,440


15,405

Payment of debt issuance costs

?


?


?


(63)

Net cash used in financing activities

(44,679)


(54,677)


(170,581)


(135,579)

Effects of exchange rate ? changes in cash

(5,630)


2,292


(2,720)


(9,152)

Net increase in cash and cash equivalents

28,444


14,309


24,976


20,271

Cash and cash equivalents at beginning of period

284,310


273,469


287,778


267,507

Cash and cash equivalents at end of period

$ 312,754


$ 287,778


$   312,754


$   287,778

 

Table IV

Commvault Systems, Inc.


Reconciliation of GAAP to Non-GAAP Financial Measures

 (In thousands, except per share data)

(Unaudited)



Three Months Ended
March 31,


Year Ended

March 31,


2024


2023


2024


2023

Non-GAAP financial measures and reconciliation:








GAAP income (loss) from operations

$   18,190


$ (37,665)


$   75,355


$ (15,885)

Noncash stock-based compensation4

21,093


24,378


93,034


103,139

FICA and payroll tax expense related to stock-based compensation5

1,073


803


3,285


2,465

Restructuring6

4,548


4,092


4,548


15,452

Amortization of intangible assets7

312


312


1,250


1,250

Headquarters impairment8

?


53,481


?


53,481

Non-GAAP income from operations

$   45,216


$   45,401


$ 177,472


$ 159,902









GAAP net income (loss)

$ 126,120


$ (43,493)


$ 168,906


$ (35,774)

Noncash stock-based compensation4

21,093


24,378


93,034


103,139

FICA and payroll tax expense related to stock-based compensation5

1,073


803


3,285


2,465

Restructuring6

4,548


4,092


4,548


15,452

Amortization of intangible assets7

312


312


1,250


1,250

Headquarters impairment8

?


53,481


?


53,481

Gain on escrow payment9

(1,670)


?


(1,670)


?

Non-GAAP provision for income taxes adjustment10

(116,136)


(6,407)


(134,989)


(22,904)

Non-GAAP net income

$   35,340


$   33,166


$ 134,364


$ 117,109









Diluted weighted average shares outstanding

44,917


45,177


45,100


45,734

Non-GAAP diluted earnings per share

$       0.79


$       0.73


$       2.98


$       2.56



Three Months Ended
March 31,


Year Ended

March 31,


2024


2023


2024


2023

Non-GAAP free cash flow reconciliation:








GAAP cash provided by operating activities

$   79,985


$   67,833


$ 203,798


$ 170,288

Purchase of property and equipment

(859)


(1,055)


(4,086)


(3,241)

Non-GAAP free cash flow

$   79,126


$   66,778


$ 199,712


$ 167,047

.

Use of Non-GAAP Financial Measures

Commvault has provided in this press release the following non-GAAP financial measures: non-GAAP income from operations (EBIT), non-GAAP income from operations margin, non-GAAP net income, non-GAAP diluted earnings per share, non-GAAP free cash flow, annualized recurring revenue (ARR) and subscription ARR. 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. In addition, Commvault believes these non-GAAP operating measures are useful to investors, when used as a supplement to GAAP financial measures, in evaluating Commvault's ongoing operational performance. Commvault believes that the use of these non-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. 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.

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 income from operations and non-GAAP income from operations 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 exercise in the money stock options or vest in restricted stock awards. Commvault has also excluded restructuring costs, noncash amortization of intangible assets, noncash impairment charges, and a gain related to a non-refundable escrow payment associated with the pending sale of Commvault's headquarters from its non-GAAP results. These expenses are further discussed in Table IV. 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. 

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 stock option exercises and 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 income from operations and non-GAAP income from operations 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 March 31,


Year Ended March 31,


2024


2023


2024


2023

Cost of revenues

$                 1,608


$                     935


$               6,832


$               4,787

Sales and marketing

6,796


11,044


36,630


43,081

Research and development

5,402


5,518


21,585


28,540

General and administrative

7,287


6,881


27,987


26,731

Stock-based compensation expense

$               21,093


$               24,378


$             93,034


$           103,139

 

The table above excludes stock-based compensation expense related to the Company's restructuring activities described below in note six.

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 income from operations, non-GAAP net income and non-GAAP diluted EPS incorporates a non-GAAP effective tax rate of 27%. 

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 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 income from operations and non-GAAP income from operations 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 certain forward-looking non-GAAP metrics. Commvault cannot provide a reconciliation to the comparable GAAP metric without unreasonable efforts, as certain financial information, the probable significance of which may be material, is not available and cannot be reasonably estimated.

Notes

  1. A reconciliation of GAAP to non-GAAP results has been provided in Financial Statement Table IV included in this press release. An explanation of these measures is also included under the heading "Use of Non-GAAP Financial Measures."

  2. Annualized Recurring Revenue (ARR) is defined as the annualized recurring value of all active contracts at the end of a reporting period.  It includes the following contract types: subscription (including term licenses, SaaS and utility software), maintenance contracts related to perpetual licenses, other extended maintenance contracts (enterprise support), and managed services. It excludes any element of the arrangement that is not expected to recur, primarily perpetual licenses and most professional services. Subscription ARR includes only term licenses, SaaS and utility software arrangements. Contracts are annualized by dividing the total contract value by the number of days in the contract term, then multiplying by 365.

    ARR should be viewed independently of GAAP revenue, deferred revenue and unbilled revenue and is not intended to be combined with or to replace those items. ARR is not a forecast of future revenue. Management believes that reviewing this metric, in addition to GAAP results, helps investors and financial analysts understand the value of Commvault's recurring revenue streams presented on an annualized basis.

  3. 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 "Use of Non-GAAP Financial Measures" for additional explanation.

  4. 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 6.

  5. Represents additional FICA and related payroll tax expenses incurred by Commvault when employees exercise in-the-money stock options or vest in restricted stock awards.

  6. These restructuring charges relate primarily to severance and related costs associated with headcount reductions and stock-based compensation related to modifications of existing unvested awards granted to certain employees impacted by our restructuring plans.

  7. Represents noncash amortization of intangible assets.

  8. Represents noncash impairment charges related to the pending sale of Commvault's owned corporate headquarters.

  9. Represents a non-refundable escrow payment received related to the expiration of the exclusivity agreement for the pending sale of Commvault's owned corporate headquarters.

  10. The provision for income taxes is adjusted to reflect Commvault's estimated non-GAAP effective tax rate of 27% during fiscal 2024 and fiscal 2023. During the fourth quarter of fiscal 2024, the Company reversed its valuation allowance, resulting in a tax benefit of $85 million for the fiscal year ended March 31, 2024. Beginning in fiscal 2025, Commvault will lower its estimated non-GAAP effective tax rate from 27% to 24%. Commvault believes that a 24% rate more closely aligns with its effective tax rate expectations over the next few years.

 

SOURCE COMMVAULT


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