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    Commvault Announces Fiscal 2025 Fourth Quarter Financial Results

    4/29/25 7:45:00 AM ET
    $CVLT
    Computer Software: Prepackaged Software
    Technology
    Get the next $CVLT alert in real time by email

    TINTON FALLS, N.J., April 29, 2025 /PRNewswire/ -- Commvault (NASDAQ:CVLT) today announced its financial results for the fourth quarter and fiscal year ended March 31, 2025. 

    Commvault is a leading provider of cyber resilience and data protection solutions for hybrid cloud organizations. (PRNewsfoto/Commvault)

    "It was a record-breaking year at Commvault," said Sanjay Mirchandani, President and CEO. "Commvault surpassed all key metrics, ended the year with over 12,000 subscription customers, and is firmly positioned as a growth company with subscription revenue up 45% in Q4. We continue to deliver cloud-first innovations that solve a hard problem for customers – strengthening their cyber resilience."

    Notes are contained at the end of this Press Release.

    Fiscal 2025 Fourth Quarter Highlights -

    • Total revenues were $275 million, up 23% year over year
    • Subscription revenue was $173 million, up 45% year over year
    • Income from operations (EBIT) was $27 million, an operating margin of 9.7%
    • Non-GAAP EBIT1 was $59 million, an operating margin of 21.5%
    • Operating cash flow was $77 million, with free cash flow1 of $76 million
    • Fourth quarter share repurchases were $30 million, or approximately 182,000 shares of common stock

    Fiscal 2025 Full Year Highlights -

    • Total revenues were $996 million, up 19% year over year
    • Total annualized recurring revenue (ARR)2 grew to $930 million, up 21% year over year
    • Subscription revenue was $590 million, up 37% year over year
    • Subscription ARR2 grew to $780 million, up 31% year over year and represents 84% of Total ARR2
    • Income from operations (EBIT) was $74 million, an operating margin of 7.4%
    • Non-GAAP EBIT1 was $210 million, an operating margin of 21.1%
    • Full year operating cash flow was $207 million, with full year free cash flow1 of $204 million
    • Full year share repurchases were $165 million, or approximately 1,215,000 shares of common stock
    • On April 17, 2025, our Board of Directors increased our share repurchase program to $250 million

    Financial Outlook for First Quarter and Full Year Fiscal 20263 -

    We are providing the following guidance for the first quarter of fiscal year 2026, based on current macroeconomic conditions:

    • Total revenues are expected to be between $266 million and $270 million
    • Subscription revenue is expected to be between $166 million and $170 million
    • Non-GAAP gross margin is expected to be between 81% and 82%
    • Non-GAAP operating margin1 is expected to be approximately 21%

    We are providing the following guidance for the full fiscal year 2026, based on current macroeconomic conditions:

    • Total revenues are expected to be between $1,130 million and $1,140 million
    • Total ARR2 is expected to grow between 16% and 17% year over year
    • Subscription revenue is expected to be between $727 million and $732 million
    • Subscription ARR2 is expected to grow between 22% and 23% year over year
    • Non-GAAP gross margin is expected to be between 81% and 82%
    • Non-GAAP operating margin1 is expected to be approximately 21%
    • Free cash flow1 is expected to be between $210 million and $215 million

    The above statements are based on current targets using exchange rates as of March 31, 2025. 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 29, 2025 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 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)



    Q4'24



    Q1'25



    Q2'25



    Q3'25



    Q4'25

    Revenue Summary:



















    Subscription

    $        119,873



    $        124,080



    $        134,038



    $        158,321



    $        173,228

    Perpetual license

    15,196



    13,736



    10,522



    16,423



    14,962

    Customer support

    77,025



    76,288



    77,688



    77,078



    76,509

    Other services

    11,198



    10,568



    11,030



    10,808



    10,340

    Total revenues

    $        223,292



    $        224,672



    $        233,278



    $        262,630



    $        275,039





    Q4'24



    Q1'25



    Q2'25



    Q3'25



    Q4'25

    Y/Y Growth:



















    Subscription

    27 %



    28 %



    37 %



    39 %



    45 %

    Perpetual license

    (13) %



    4 %



    (27) %



    10 %



    (2) %

    Customer support

    — %



    (1) %



    1 %



    — %



    (1) %

    Other services

    (20) %



    (2) %



    (7) %



    (1) %



    (8) %

    Total revenues

    10 %



    13 %



    16 %



    21 %



    23 %

     



    FY'24



    Y/Y Growth



    FY'25



    Y/Y Growth

    Revenue Summary:















    Subscription

    $              429,167



    23 %



    $              589,667



    37 %

    Perpetual license

    57,613



    (23) %



    55,643



    (3) %

    Customer support

    307,771



    (2) %



    307,563



    — %

    Other services

    44,696



    (6) %



    42,746



    (4) %

    Total revenues

    $              839,247



    7 %



    $              995,619



    19 %

    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

    Q4'24 Revenue as Reported (GAAP)

    $       119,873



    $         15,196



    $         77,025



    $         11,198



    $       223,292

    Q4'25 Revenue as Reported (GAAP)

    $       173,228



    $         14,962



    $         76,509



    $         10,340



    $       275,039

    % Change Y/Y (GAAP)

    45 %



    (2) %



    (1) %



    (8) %



    23 %

    Constant Currency Impact

    $           1,900



    $               242



    $           1,111



    $              (65)



    $           3,188

    % Change Y/Y Constant Currency

    46 %



    — %



    1 %



    (8) %



    25 %





    Subscription



    Perpetual

    license



    Customer

    support



    Other

    services



    Total

    FY'24 Revenue as Reported (GAAP)

    $       429,167



    $         57,613



    $       307,771



    $         44,696



    $       839,247

    FY'25 Revenue as Reported (GAAP)

    $       589,667



    $         55,643



    $       307,563



    $         42,746



    $       995,619

    % Change Y/Y (GAAP)

    37 %



    (3) %



    — %



    (4) %



    19 %

    Constant Currency Impact

    $           2,624



    $               283



    $           1,266



    $              (18)



    $           4,155

    % Change Y/Y Constant Currency

    38 %



    (3) %



    — %



    (4) %



    19 %

    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.



    Q4'24



    Q1'25



    Q2'25



    Q3'25



    Q4'25



    Revenue

    Y/Y

    Growth



    Revenue

    Y/Y

    Growth



    Revenue

    Y/Y

    Growth



    Revenue

    Y/Y

    Growth



    Revenue

    Y/Y

    Growth

    Americas

    $  131,069

    7 %



    $  138,725

    14 %



    $  144,408

    20 %



    $  155,435

    24 %



    $  169,384

    29 %

    International

    92,223

    14 %



    85,947

    13 %



    88,870

    10 %



    107,195

    17 %



    105,655

    15 %

    Total revenues

    $  223,292

    10 %



    $  224,672

    13 %



    $  233,278

    16 %



    $  262,630

    21 %



    $  275,039

    23 %

     



    FY'24



    FY'25



    Revenue

    Y/Y Growth



    Revenue

    Y/Y Growth

    Americas

    $             498,545

    6 %



    $             607,952

    22 %

    International

    340,702

    8 %



    387,667

    14 %

    Total revenues

    $             839,247

    7 %



    $             995,619

    19 %

    Total ARR, Subscription ARR and SaaS ARR2

    ($ in thousands)



    Q4'24



    Q1'25



    Q2'25



    Q3'25



    Q4'25

    Total ARR2

    $           769,946



    $           802,709



    $           853,265



    $           889,628



    $           930,051

    Subscription ARR2

    $           596,667



    $           635,910



    $           687,050



    $           734,212



    $           780,098

    SaaS ARR2

    $           167,509



    $           187,908



    $           214,832



    $           258,957



    $           281,045

    For the three months ended March 31, 2025 -

    Income from Operations (EBIT)

    • Income from operations (EBIT) was $27 million, an operating margin of 9.7%
    • Non-GAAP EBIT1 was $59 million, an operating margin of 21.5%

    GAAP and Non-GAAP Net Income1

    • GAAP net income was $31 million, or $0.69 per diluted share
    • Non-GAAP net income1 was $46 million, or $1.03 per diluted share

    Cash Summary and Share Repurchases

    • Cash flow from operations was $77 million in the fourth quarter
    • During the fourth quarter, Commvault repurchased $30 million, or approximately 182,000 shares, of common stock at an average share price of approximately $163.73 per share

    For the year ended March 31, 2025 -

    Income from Operations (EBIT)

    • Income from operations (EBIT) was $74 million, an operating margin of 7.4%
    • Non-GAAP EBIT1 was $210 million, an operating margin of 21.1%

    GAAP and Non-GAAP Net Income1

    • GAAP net income was $76 million, or $1.68 per diluted share
    • Non-GAAP net income1 was $165 million, or $3.65 per diluted share

    Cash Summary and Share Repurchases

    • Cash flow from operations was $207 million in the full fiscal year
    • As of March 31, 2025, ending cash and cash equivalents were approximately $302 million
    • During the full fiscal year, Commvault repurchased $165 million, or approximately 1,215,000 shares, of common stock at an average share price of approximately $135.77 per share

    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,



    2025



    2024



    2025



    2024

    Revenues:















    Subscription

    $ 173,228



    $ 119,873



    $    589,667



    $    429,167

    Perpetual license

    14,962



    15,196



    55,643



    57,613

    Customer support

    76,509



    77,025



    307,563



    307,771

    Other services

    10,340



    11,198



    42,746



    44,696

    Total revenues

    275,039



    223,292



    995,619



    839,247

    Cost of revenues:















    Subscription

    25,801



    15,486



    88,899



    58,406

    Perpetual license

    312



    316



    1,500



    2,168

    Customer support

    13,746



    15,806



    57,680



    60,752

    Other services

    7,907



    7,538



    30,956



    30,284

    Total cost of revenues

    47,766



    39,146



    179,035



    151,610

    Gross margin

    227,273



    184,146



    816,584



    687,637

    Operating expenses:















    Sales and marketing

    120,152



    94,458



    434,117



    354,994

    Research and development

    39,333



    35,244



    146,286



    132,328

    General and administrative

    38,274



    29,938



    138,375



    113,997

    Restructuring

    812



    4,548



    10,026



    4,548

    Change in contingent consideration

    (426)



    —



    2,060



    —

    Depreciation and amortization

    2,401



    1,768



    9,072



    6,415

    Impairment charges

    —



    —



    2,910



    —

    Total operating expenses

    200,546



    165,956



    742,846



    612,282

    Income from operations

    26,727



    18,190



    73,738



    75,355

    Interest income

    1,556



    1,893



    6,654



    5,423

    Interest expense

    (103)



    (104)



    (416)



    (415)

    Other income, net

    453



    3,076



    1,077



    3,250

    Income before income taxes

    28,633



    23,055



    81,053



    83,613

    Income tax expense (benefit)

    (2,360)



    (103,065)



    4,947



    (85,293)

    Net income

    $   30,993



    $ 126,120



    $      76,106



    $    168,906

    Net income per common share:















    Basic

    $       0.70



    $       2.89



    $           1.74



    $           3.85

    Diluted

    $       0.69



    $       2.81



    $           1.68



    $           3.75

    Weighted average common shares outstanding:















    Basic

    44,066



    43,672



    43,850



    43,885

    Diluted

    45,158



    44,917



    45,187



    45,100

     

    Table II

    Commvault Systems, Inc.



    Condensed Consolidated Balance Sheets

    (In thousands)

    (Unaudited)







    March 31,



    March 31,





    2025



    2024

    ASSETS

    Current assets:









    Cash and cash equivalents



    $            302,103



    $            312,754

    Trade accounts receivable, net



    251,995



    222,683

    Assets held for sale



    34,770



    38,680

    Other current assets



    46,189



    21,009

    Total current assets



    635,057



    595,126











    Deferred tax assets, net



    133,378



    111,181

    Property and equipment, net



    8,294



    7,961

    Operating lease assets



    10,124



    10,545

    Deferred commissions cost



    79,309



    62,837

    Intangible assets, net



    20,737



    1,042

    Goodwill



    185,255



    127,780

    Other assets



    46,112



    27,441

    Total assets



    $        1,118,266



    $            943,913











    LIABILITIES AND STOCKHOLDERS' EQUITY

    Current liabilities:









    Accounts payable



    $                    373



    $                    299

    Accrued liabilities



    147,133



    117,244

    Current portion of operating lease liabilities



    4,614



    4,935

    Deferred revenue



    402,930



    362,450

    Total current liabilities



    555,050



    484,928











    Deferred revenue, less current portion



    223,282



    168,472

    Deferred tax liabilities



    1,384



    1,717

    Long-term operating lease liabilities



    6,338



    7,155

    Other liabilities



    7,090



    3,556











    Total stockholders' equity



    325,122



    278,085

    Total liabilities and stockholders' equity



    $        1,118,266



    $            943,913

     

    Table III

    Commvault Systems, Inc.



    Consolidated Statements of Cash Flows

    (In thousands)

    (Unaudited)





    Three Months Ended

    March 31,



    Year Ended

    March 31,



    2025



    2024



    2025



    2024

    Cash flows from operating activities















    Net income

    $    30,993



    126,120



    $    76,106



    $ 168,906

    Adjustments to reconcile net income to net cash provided by

    operating activities:















    Depreciation and amortization

    2,429



    1,796



    9,187



    6,530

    Noncash stock-based compensation

    28,992



    22,610



    113,262



    94,551

    Noncash change in fair value of equity securities

    (396)



    191



    (364)



    17

    Noncash change in fair value of contingent consideration

    (426)



    —



    2,060



    —

    Noncash impairment charges

    —



    —



    2,910



    —

    Noncash operating lease expense

    2,082



    2,439



    6,408



    6,685

    Deferred income taxes

    (17,194)



    (109,598)



    (23,474)



    (109,598)

    Amortization of deferred commissions cost

    9,658



    6,987



    33,414



    26,531

    Changes in operating assets and liabilities:















    Trade accounts receivable, net

    3,425



    (1,049)



    (62,012)



    (21,725)

    Operating lease liabilities

    (1,963)



    (2,308)



    (7,136)



    (6,135)

    Other current assets and Other assets

    (9,051)



    (1,634)



    (8,615)



    336

    Deferred commissions cost

    (20,316)



    (9,411)



    (49,848)



    (29,952)

    Accounts payable

    292



    87



    (948)



    195

    Accrued liabilities

    15,140



    16,146



    25,235



    16,998

    Deferred revenue

    29,749



    27,951



    87,659



    50,394

    Other liabilities

    3,541



    (342)



    3,538



    65

    Net cash provided by operating activities

    76,955



    79,985



    207,382



    203,798

    Cash flows from investing activities















    Purchase of property and equipment

    (783)



    (859)



    (3,756)



    (4,086)

    Purchase of equity securities

    (545)



    (373)



    (1,333)



    (1,435)

    Business combination, net of cash acquired

    598



    —



    (65,311)



    —

    Net cash used in investing activities

    (730)



    (1,232)



    (70,400)



    (5,521)

    Cash flows from financing activities















    Repurchase of common stock

    (29,821)



    (50,366)



    (165,015)



    (184,021)

    Proceeds from stock-based compensation plans

    6,437



    5,687



    17,537



    13,440

    Payment on contingent liability

    (340)



    —



    (340)



    —

    Net cash used in financing activities

    (23,724)



    (44,679)



    (147,818)



    (170,581)

    Effects of exchange rate — changes in cash

    6,027



    (5,630)



    185



    (2,720)

    Net increase (decrease) in cash and cash equivalents

    58,528



    28,444



    (10,651)



    24,976

    Cash and cash equivalents at beginning of period

    243,575



    284,310



    312,754



    287,778

    Cash and cash equivalents at end of period

    $ 302,103



    $ 312,754



    $ 302,103



    $ 312,754

















    Supplemental disclosures of noncash activities















    Issuance of common stock for business combination

    $            —



    $            —



    $      4,900



    $            —

    Operating lease liabilities arising from obtaining right-of-use assets

    $       1,109



    $           35



    $      5,796



    $      5,528

     

    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,



    2025



    2024



    2025



    2024

    Non-GAAP financial measures and reconciliation:















    GAAP income from operations

    $   26,727



    $   18,190



    $   73,738



    $   75,355

    Noncash stock-based compensation4

    28,840



    21,093



    108,615



    93,034

    FICA and payroll tax expense related to stock-based compensation5

    1,767



    1,073



    5,459



    3,285

    Restructuring6

    812



    4,548



    10,026



    4,548

    Amortization of intangible assets7

    1,176



    312



    3,705



    1,250

    Litigation settlement8

    —



    —



    675



    —

    Business combination costs9

    201



    —



    2,541



    —

    Noncash impairment charges10

    —



    —



    2,910



    —

    Change in contingent consideration11

    (426)



    —



    2,060



    —

    Non-GAAP income from operations

    $   59,097



    $   45,216



    $ 209,729



    $ 177,472

















    GAAP net income

    $   30,993



    $ 126,120



    $   76,106



    $ 168,906

    Noncash stock-based compensation4

    28,840



    21,093



    108,615



    93,034

    FICA and payroll tax expense related to stock-based compensation5

    1,767



    1,073



    5,459



    3,285

    Restructuring6

    812



    4,548



    10,026



    4,548

    Amortization of intangible assets7

    1,176



    312



    3,705



    1,250

    Litigation settlement8

    —



    —



    675



    —

    Business combination costs9

    201



    —



    2,541



    —

    Noncash impairment charges10

    —



    —



    2,910



    —

    Change in contingent consideration11

    (426)



    —



    2,060



    —

    Gain on escrow payment12

    —



    (1,670)



    —



    (1,670)

    Non-GAAP provision for income taxes adjustment13

    (17,000)



    (116,136)



    (47,143)



    (134,989)

    Non-GAAP net income

    $   46,363



    $   35,340



    $ 164,954



    $ 134,364

















    GAAP diluted earnings per share

    $       0.69



    $       2.81



    $       1.68



    $       3.75

    Noncash stock-based compensation4

    0.64



    0.47



    2.40



    2.06

    FICA and payroll tax expense related to stock-based compensation5

    0.04



    0.02



    0.12



    0.07

    Restructuring6

    0.02



    0.10



    0.22



    0.10

    Amortization of intangible assets7

    0.03



    0.01



    0.08



    0.03

    Litigation settlement8

    —



    —



    0.01



    —

    Business combination costs9

    —



    —



    0.06



    —

    Noncash impairment charges10

    —



    —



    0.06



    —

    Change in contingent consideration11

    (0.01)



    —



    0.05



    —

    Gain on escrow payment12

    —



    (0.04)



    —



    (0.04)

    Non-GAAP provision for income taxes adjustment13

    (0.38)



    (2.58)



    (1.03)



    (2.99)

    Non-GAAP diluted earnings per share

    $       1.03



    $       0.79



    $       3.65



    $       2.98

    GAAP diluted weighted average shares outstanding

    45,158



    44,917



    45,187



    45,100





    Three Months Ended

    March 31,



    Year Ended

    March 31,



    2025



    2024



    2025



    2024

    Non-GAAP free cash flow reconciliation:















    GAAP cash provided by operating activities

    $   76,955



    $   79,985



    $ 207,382



    $ 203,798

    Purchase of property and equipment

    (783)



    (859)



    (3,756)



    (4,086)

    Non-GAAP free cash flow

    $   76,172



    $   79,126



    $ 203,626



    $ 199,712

    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 gross margin, non-GAAP net income, non-GAAP diluted earnings per share, non-GAAP free cash flow, annualized recurring revenue (ARR), subscription ARR and SaaS 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. 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. 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, litigation settlement, business combination costs, noncash impairment charges, changes in the estimated fair value of contingent consideration, and a gain related to a non-refundable escrow payment associated with assets held for sale 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,



    2025



    2024



    2025



    2024

    Cost of revenues

    $                 1,324



    $                 1,608



    $               5,744



    $               6,832

    Sales and marketing

    12,599



    6,796



    47,627



    36,630

    Research and development

    6,225



    5,402



    24,028



    21,585

    General and administrative

    8,692



    7,287



    31,216



    27,987

    Stock-based compensation expense

    $               28,840



    $               21,093



    $           108,615



    $             93,034

    The table above excludes stock-based compensation expense related to the Company's restructuring activities described below in Note 6.

    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 gross margin.  Commvault defines this non-GAAP financial measure as GAAP gross margin adjusted to exclude cost of revenues related to noncash stock-based compensation.

    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 24%. Beginning in fiscal 2025, Commvault lowered 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.

    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 license contracts, 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 license contracts, 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. During the first quarter of fiscal 2025, we entered into a settlement agreement resulting in a payment of approximately $1.5 million which resolved certain legal matters. Approximately $0.7 million was recorded in general and administrative expenses for the year ended March 31, 2025, and the remaining $0.8 million was incurred in a prior period that is not presented in the consolidated statements of operations.



    9. During fiscal 2025, Commvault incurred costs related to the acquisitions of Appranix, Inc. and Clumio, Inc., including legal, accounting and advisory services. Management believes, when used as a supplement to GAAP results, that the exclusion of these costs will help investors and financial analysts understand Commvault's operating results and underlying operational trends as compared to other periods.



    10. Represents noncash impairment charges of assets held for sale.



    11. Represents the change in the estimated fair value of the contingent consideration arrangement related to the acquisition of Appranix, Inc.



    12. Represents a non-refundable escrow payment received related to assets held for sale.



    13. The provision for income taxes is adjusted to reflect Commvault's estimated non-GAAP effective tax rate of 24% for fiscal 2025, and 27% for fiscal 2024. Beginning in fiscal 2025, Commvault lowered 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.

     

    Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/commvault-announces-fiscal-2025-fourth-quarter-financial-results-302440249.html

    SOURCE COMMVAULT

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