CommVault: Fiscal 4Q08 Financial Results

(in US$ millions)	4Q07	4Q08	FY07	FY08
Revenues	42.6	56.6	151.1	198.3
*Growth*		33%		*31%*
Net income (loss)	51.8	6.2	64.3	20.8

CommVault Systems, Inc. announced its financial results for the fourth quarter and fiscal year ended March 31, 2008.

N. Robert Hammer, CommVault’s chairman, president and CEO stated, “We again achieved another record quarter as we continue to execute on our business plans and strategies. Our 33% growth in total revenues in the fourth quarter compared to the prior year was driven by increased market penetration and acceptance of our Simpana Software Suite. The demand for our Simpana Software Suite was very strong and helped drive the accelerated growth of our emerging products. Our international investments continue to have high returns as we had another excellent quarter from our international operations. All of the key elements of our business are in place for us to execute and achieve our fiscal 2009 objectives.”

Total revenues in the fourth quarter of fiscal 2008 were a record $56.6 million, an increase of 33% over the fourth quarter of fiscal 2007 and 13% over the prior quarter. Software revenue in the fourth quarter of fiscal 2008 was $31.3 million, up 32% year-over-year and 16% sequentially. Services revenue in the fourth quarter of fiscal 2008 was $25.3 million, up 34% year-over-year and 8% sequentially.

For the full fiscal year, total revenues were $198.3 million, an increase of 31% over fiscal 2007, and software revenue was $109.0 million, up 30% from the prior year. Services revenue for the full fiscal year was $89.3 million, an increase of 33% over fiscal 2007.

Income from operations (EBIT) was $8.6 million for the fourth quarter, a 52% increase from $5.6 million in the same period of the prior year. Non-GAAP income from operations (EBIT) increased 47% to $10.9 million in the fourth quarter of fiscal 2008 compared to $7.5 million in the fourth quarter of the prior year. Income from operations for the full fiscal year was $23.7 million, an increase of 43% over fiscal 2007. Non-GAAP income from operations (EBIT) for the full fiscal year was $32.8 million, an increase of 44% over fiscal 2007.

For the fourth quarter of fiscal 2008, CommVault reported net income of $6.2 million, a decrease of $45.7 million compared to the same period of the prior year. Net income for the same period of the prior year includes a tax benefit of $45.6 million primarily due to the reversal of substantially all of the Company’s deferred tax valuation allowances. Non-GAAP net income for the quarter increased 41% to $8.5 million, or $0.19 per diluted share, from $6.0 million or $0.14 per diluted share in the same period of the prior year.

Net income for the full fiscal year was $20.8 million, a decrease of $43.5 million compared to fiscal 2007. Net income for fiscal 2007 includes a tax benefit of $45.4 million. Non-GAAP net income for the full fiscal year increased 31% to $26.1 million, or $0.57 per diluted share, compared with $19.9 million or $0.47 per diluted share in the prior year.

In the fourth quarter of fiscal 2008, CommVault repurchased 1,028,476 shares of common stock totaling $15.0 million under its previously announced share repurchase program. CommVault is authorized to repurchase an additional $25.0 million under its existing share repurchase program.

Operating cash flow totaled $11.0 million for the fourth quarter of fiscal 2008 and $34.4 million for the full fiscal year. Total cash and cash equivalents as of March 31, 2008 were $91.7 million.

Fiscal 2009 Guidance
For the fiscal year ending March 31, 2009, CommVault’s initial guidance is:

Total revenues of approximately $245 million.
Non-GAAP gross margin of approximately 86.7%.
Non-GAAP income from operations (EBIT) margin to increase approximately 150 basis points over fiscal 2008 Non-GAAP income from operations (EBIT) margin.
Non-GAAP diluted EPS in the range of $0.70 per share to $0.72 per share using an effective tax rate of approximately 30% and a weighted average diluted share count of approximately 45.2 million to 46.2 million. The weighted average diluted share count does not take into consideration any share repurchases in fiscal 2009.
An actual cash tax rate in the high teens based on current assumptions.