Commvault: Fiscal 3Q16 Financial Results

Commvault Systems, Inc. announced its financial results for the third quarter ended December 31, 2015.

“We achieved excellent third quarter financial performance which was highlighted by quarterly revenues of $155.7 million, non-GAAP operating income of $21.0 million and non-GAAP diluted EPS of $0.28,” said N. Robert Hammer, chairman, president and CEO. “Our sequential software revenue growth of 24% was the result of outstanding execution in the Americas and EMEA driven by strong enterprise transaction close rates. Our quarterly financial results validate the continued successful implementation of our transformation initiatives; our industry leading technology and services, particularly those that enable customers to manage the transition to the cloud; and our ability to take advantage of increased uncertainties in the competitive landscape. We believe we are in an excellent position to capitalize on the unique opportunities in front of us, including increasing our market share in our core data protection and management business, expanding our cloud-based offerings, and accelerating our move into certain vertical markets.”

Hammer added: “Our next generation Commvault Data Platform launched during the quarter aligns very well with the structural changes in the market, is receiving positive response from customers and partners, and will serve as one of the key foundations for growth in fiscal 2017.”
 
Total revenues for the third quarter of fiscal 2016 were $155.7 million, an increase of 11% sequentially, 2% year-over-year, and 6% on a year-over-year constant currency basis. Software revenue was$71.4 million, an increase of 24% sequentially, flat year-over-year, and up 4% on a year-over-year constant currency basis. Services revenue in the quarter was $84.3 million, an increase of 1% sequentially, 4% year-over-year, and 9% on a year-over-year constant currency basis.

On a GAAP basis, income from operations (EBIT) was $3.5 million for the third quarter compared to a loss of $4.6 million in the prior quarter. Non-GAAP EBIT increased to $21.0 million, or 93%, in the quarter compared to $10.9 million in the second quarter of fiscal 2016.

For the third quarter of fiscal 2016, Commvault reported GAAP net income of $4.9 million. Non-GAAP net income for the quarter was $13.2 million, or $0.28 per diluted share, versus $0.15 per diluted share in the second quarter of fiscal 2016.

During the quarter, Commvault made an equity investment in Laitek, Inc., a pioneer in rapid data migration and storage services for healthcare picture archiving and communication system (PACS) replacements. By combining Laitek’s data migration expertise with Commvault’s healthcare data protection and information management capabilities, hospitals will be able to take back control of their clinical data, managing and protecting it for the long term. The investment will be accounted for using the equity method.

Operating cash flow totaled $15.8 million for the third quarter of fiscal 2016. Total cash and short-term investments were $401.1 million as of December 31, 2015 compared to $387.6 million as of March 31, 2015. During the quarter, there were no borrowings against the revolving credit facility. Since December 31, 2015, Commvault has repurchased approximately $14.8 million of common stock (476,967 shares) under its share repurchase program. As of January 27, 2016, there is $135.2 million available under the share repurchase program that currently expires on March 31, 2017.

Recent Business Highlights:

• On December 7, 2015, Commvault announced IntelliSnap for NetApp, a new array-based snapshot management solution that accelerates and simplifies data protection and recovery for NetApp customers. It replaces NetApp SnapProtect, enables customers to expand to the full range of Commvault’s data protection solutions and shifts support responsibility for the deployed solution to Commvault’s customer support organization.
• On November 12, 2015, Commvault announced a 98% customer satisfaction rate in the company’s fifth annual Support and Services Survey – re-affirming its excellence and commitment to helping customers maximize the return on their Commvault software investment and turn data from a complex management burden to a powerful strategic asset.
• On October 20, 2015, Commvault announced its next generation integrated solutions portfolio, including software, services and the Commvault Data Platform. The eleventh version of the company’s solutions delivered innovation that provides customers with market-leading support as they transition to the cloud, navigate new technology infrastructures, and find new value as they activate their data.