CommVault: Fiscal 2Q09 Financial Results

(in US$ millions)	2Q08	2Q09	6 mo. 08	6 mo. 09
Revenues	47.4	63.3	91.4	118.3
*Growth*		+34%		*+29%*
Net income (loss)	3.4	4.7	6.4	8.2

CommVault announced its financial results for the second quarter ended September 30, 2008.

N. Robert Hammer, CommVault’s chairman, president and CEO, stated: "We delivered an excellent second quarter which was highlighted by record revenues and increased earnings. Our 32% growth in software revenue was driven by our ability to close a record number of enterprise deals during the quarter, strong demand for our non-backup products and another exceptional quarter from our international operations. Our performance in a challenging economic environment demonstrates the quality and value that our Simpana software suite provides to our customers worldwide."

Total revenues in the second quarter of fiscal 2009 were $63.3 million, an increase of 34% over the second quarter of fiscal 2008 and an increase of 15% over the prior quarter. Software revenue in the second quarter of fiscal 2009 was $35.2 million, up 32% year-over-year and up 27% sequentially. Services revenue in the second quarter of fiscal 2009 was $28.2 million, up 35% year-over-year and 3% sequentially.

Income from operations (EBIT) was $7.7 million for the second quarter, a 66% increase from $4.7 million in the same period of the prior year. Non-GAAP income from operations (EBIT) increased 49% to $10.4 million in the second quarter of fiscal 2009 compared to $7.0 million in the second quarter of the prior year.

For the second quarter of fiscal 2009, CommVault reported net income of $4.7 million, an increase of $1.3 million compared to the same period of the prior year. Non-GAAP net income for the quarter increased 35% to $7.7 million, or $0.17 per diluted share, from $5.7 million, or $0.12 per diluted share, in the same period of the prior year.

Due to the uncertainties in the equity markets, the foreign exchange markets and the macro economic environment, CommVault is providing both quarterly and annual guidance.
For the quarter ending December 31, 2008, CommVault currently expects:

Total revenues in the range of $63 million to $65 million.
Non-GAAP gross margin of approximately 87.0%.
Non-GAAP income from operations (EBIT) margin of 16.0% to 17.0%.
Non-GAAP diluted EPS in the range of $0.17 per share to $0.19 per share using an effective tax rate of approximately 30% and a weighted average diluted share count of approximately 43.5 million. The weighted average diluted share count does not take into consideration any additional share repurchases.

The non-GAAP gross margin percentages above exclude approximately $0.1 million related to noncash stock-based compensation charges. The non-GAAP diluted EPS guidance excludes approximately $0.04 per share of noncash stock-based compensation charges, net of non-GAAP income tax benefits of approximately $0.02 per share, and any additional FICA expense that will be incurred by CommVault when employees exercise in the money stock options or vest in restricted stock awards.

For the fiscal year ending March 31, 2009, CommVault currently expects:

Total revenues in the range of $247 million to $250 million.
Non-GAAP gross margin of approximately 87.0%.
Non-GAAP income from operations (EBIT) margin of 15.5% to 16.5%.
Non-GAAP diluted EPS in the range of $0.66 per share to $0.68 per share using an effective tax rate of approximately 30% and a weighted average diluted share count of approximately 44.0 million to 44.6 million. The weighted average diluted share count does not take into consideration any additional share repurchases during the remainder of fiscal 2009.
An actual cash tax rate in the range of 10% to 15%.

The non-GAAP gross margin percentages above exclude approximately $0.3 million related to noncash stock-based compensation charges. The non-GAAP diluted EPS guidance excludes approximately $0.16 per share to $0.18 per share of noncash stock-based compensation charges, net of non-GAAP income tax benefits of approximately $0.07 per share, and any additional FICA expense that will be incurred by CommVault when employees exercise in the money stock options or vest in restricted stock awards.

Operating cash flow totaled $14.2 million for the second quarter of fiscal 2009 compared to $4.5 million in the second quarter of fiscal 2008. Total cash and cash equivalents as of September 30, 2008 were $101.3 million.

During the second quarter of fiscal 2009, CommVault repurchased 651,221 shares of common stock under its share repurchase plan with a total cost of approximately $8.9 million, of which $6.0 million was paid as of September 30, 2008. As of October 29, 2008, CommVault has repurchased $40.2 million of common stock (2,853,105 shares) out of the $80.0 million in total that is authorized under its stock repurchase program. As a result, CommVault may repurchase an additional $39.8 million of its common stock through July 31, 2009.

Recent Business Highlights:

On October 21, 2008, CommVault announced a strategic partnership with McAfee to deliver an integrated data and security management solution built on the two companies’ respective data management, backup and security expertise.
On October 8, 2008, CommVault announced that it is teaming with Dell to offer a new integrated backup-to-disk solution that will give small- and medium-sized (SMB) companies better assurance that mission-critical data is protected, available and accessible.
On September 15, 2008, CommVault announced that it won the Diogenes Labs – Storage magazine Quality Award in the enterprise-class backup and recovery software category.
On September 8, 2008, CommVault announced that its Simpana software suite was certified for Microsoft’s most advanced Windows Server operating system, Windows Server 2008.