Commvault: Fiscal 4Q16 Financial Results

Highlights

• Ends fiscal year strong, overachieves on both fourth quarter revenue and earnings expectations
• Record total quarterly revenue of $159.6 million; third straight quarter of sequential growth
• The move to the cloud acts as a major catalyst for growth

Commvault Systems, Inc. announced its financial results for the fourth quarter and fiscal year ended March 31, 2016.

N. Robert Hammer, chairman, president and CEO, stated: “We delivered record quarterly revenue of $159.6 million, representing constant currency growth of 8% over the prior year quarter and 3% sequentially. Operating performance for the fourth quarter was highlighted by non-GAAP operating profit of $26.2 million, representing increases of 29% year-over-year and 25% sequentially. Our customers continue to embrace our market-leading integrated solutions, particularly those that enable customers to manage the transition to the cloud. Our industry leading technology coupled with solid sales execution continue to give us increased confidence in our future. In addition, our latest software release has been very well received by the market, in particular for our platform and expanded cloud functionality, and is expected to drive momentum into fiscal 2017. We remained opportunistic during the fourth fiscal quarter, repurchasing a total of $56.9 million of our common stock.”

Total revenues for the fourth quarter of fiscal 2016 were $159.6 million, an increase of 6% year-over-year, an increase of 2% sequentially and an increase of 8% on a year-over-year constant currency basis. Software revenue in the fourth quarter of fiscal 2016 was $73.3 million, an increase of 5% year-over-year, an increase of 3% sequentially and an increase of 6% on a year-over-year constant currency basis. Services revenue in the fourth quarter of fiscal 2016 was $86.2 million, an increase of 7% year-over-year, an increase of 2% sequentially and an increase of 9% on a year-over-year constant currency basis.

For the full fiscal year, total revenues were $595.1 million, a decrease of 2% from fiscal 2015. On a constant currency basis, total revenues for the full fiscal year increased 3% over fiscal 2015. Software revenue for the full fiscal year was $258.8 million, a decrease of 9% from fiscal 2015. On a constant currency basis, software revenue for the full fiscal year decreased 4%. Services revenue for the full fiscal year was $336.3 million, an increase of 4% from fiscal 2015. On a constant currency basis, services revenue for the full fiscal year increased 9%.

On a GAAP basis, income from operations (EBIT) increased 95% to $9.3 million for the fourth quarter compared to $4.8 million in the same period of the prior year. Non-GAAP income from operations (EBIT) increased to $26.2 million in the fourth quarter of fiscal 2016 compared to $20.3 million in the fourth quarter of the prior year.

On a GAAP basis, income from operations (EBIT) for the full fiscal year was $2.0 million. Non-GAAP income from operations (EBIT) decreased to $67.3 million in fiscal 2016 compared to $104.7 million in fiscal 2015.

For the fourth quarter of fiscal 2016, Commvault reported net income of $5.8 million. Non-GAAP net income for the quarter increased to $16.6 million, or $0.36 per diluted share, from $12.8 million, or $0.27 per diluted share, in the same period of the prior year.

For the full fiscal year, Commvault reported a net income of $0.1 million. Non-GAAP net income for the full fiscal year decreased to $42.4 million, or $ 0.91 per diluted share, from $66.0 million, or $1.40 per diluted share, in fiscal 2015.

Operating cash flow totaled $37.2 million for the fourth quarter of fiscal 2016 which was an increase of $1.2 million, or 3%, compared to the fourth quarter of fiscal 2015. For the full fiscal year, operating cash flow was $84.4 million, compared to $123.8 million for fiscal 2015. Total cash and short-term investments were $387.2 million as of March 31, 2016 compared to $387.6 million as of March 31, 2015. During the fiscal fourth quarter, Commvault repurchased $56.9 million of our common stock (1.60 million shares) bringing our fiscal 2016 total repurchases to $91.5 million (2.56 million shares). As of May 3, 2016, there is $93.1 million available under the share repurchase program that currently expires on March 31, 2017. We made no borrowings against our line of credit during fiscal 2016.

Recent news:

• On March 15, 2016, announced that it teamed up with Forsythe Hosting Solutions and Hitachi Data Systems to provide a new, enterprise, hybrid cloud-capable backup and recovery as a service (BaaS) solution for enterprises looking to offload day-to-day backup and recovery responsibilities from in-house staff. The solution combines Commvault’s next-generation software and data platform, Hitachi Data Systems’ software-defined infrastructure solutions, and Forsythe’s hosting and managed services.
• On March 9, 2016, announced that it launched Commvault Remote Managed Services to give customers the option of supporting and managing Commvault software environments through Commvault’s dedicated Remote Managed Services team. This offering is also available through Commvault partners.
• On March 9, 2016, also announced new innovations to the Commvault Data Platform to further provide customers with a holistic, highly-scalable, and cost-efficient means of storing, accessing and recovering business-critical data on-premise and in the cloud. The new innovations include extended hypervisor support, a scale-out storage option on commodity hardware, newly available of APIs that extend open access to the Commvault Data Platform, and expanded coverage and support for the Commvault IntelliSnap ecosystem. Commvault also announced technology enhancements to its market-leading Commvault integrated solutions portfolio designed to help enterprises better support and manage ‘big data’ initiatives leveraging big data environments such as Hadoop, Greenplum and GPFS.
• On March 1, 2016, at the largest healthcare industry trade show – HIMMS, launched Commvault Clinical Archive to modernize the way healthcare organizations manage, migrate and share clinical data; the first solution that can address data management in both the clinical and business sides of healthcare on a single platform. Following Commvault’s strategic investment in Laitek, a pioneer in rapid data migration and storage services for PACS replacements, Commvault developed a solution built on the Commvault Data Platform and Laitek’s Semperdata platform. With the announcement of Commvault Clinical Archive, Commvault delivered on its commitment to launch industry-specific offerings, with healthcare as a first area of focus.