CommVault: Fiscal 2Q11 Financial Results

CommVault Systems, Inc. announced its financial results for the second quarter ended September 30, 2010.
 
N. Robert Hammer, CommVault’s chairman, president and CEO stated: “We achieved a solid second quarter which was highlighted by record quarterly revenues and a 560 basis point sequential improvement in Non-GAAP operating margins. Our sequential total revenue growth of 13% and sequential software revenue growth of 26% was driven by significantly more enterprise deals and excellent results from our European operations. The outlook for our business continues to be strong and we are really excited about our recently announced introduction of Simpana 9. We believe that Simpana 9 will enable companies to deploy for the first time truly modern data management that bridges the physical storage world and the rapidly emerging virtual one. We are still confident that we have the opportunity to deliver double-digit revenue and earnings growth for fiscal 2011.”

Total revenues for the second quarter of fiscal 2011 were $75.2 million, an increase of 13% over the second quarter of fiscal 2010 and an increase of 13% over the prior quarter. Software revenue in the second quarter of fiscal 2011 was $35.8 million, increases of 7% year-over-year and 26% sequentially. Services revenue in the second quarter of fiscal 2011 was $39.5 million, increases of 19% year-over-year and 4% sequentially.

Income from operations (EBIT) was $9.2 million for the second quarter of fiscal 2011 compared to $6.5 million in the same period of the prior year. Non-GAAP income from operations (EBIT) increased 14% in the second quarter of fiscal 2011 to $12.9 million compared to $11.3 million in the second quarter of the prior year.

For the second quarter of fiscal 2011, CommVault reported net income of $5.4 million, an increase of $0.7 million compared to the same period of the prior year. Non-GAAP net income in the second quarter of fiscal 2011 was $8.6 million, or $0.19 per diluted share, compared to $7.8 million, or $0.17 per diluted share, in the same period of the prior year.

Operating cash flow totaled $7.5 million for the second quarter of fiscal 2011 compared to $10.6 million in the second quarter of fiscal 2010. Total cash and short-term investments were $178.8 million as of September 30, 2010 compared to $174.6 million as of March 31, 2010.

During the second quarter of fiscal 2011, CommVault repurchased $18.6 million of common stock (933,000 shares) under its share repurchase program. As of November 2, 2010, CommVault has repurchased in total $71.7 million of common stock (4.4 million shares) out of the $120.0 million in total that is authorized under its share repurchase program. As a result, CommVault may repurchase the remaining $48.3 million of its common stock under the repurchase program through March 31, 2012.

Certain executive officers, Directors and employees of CommVault currently hold approximately 268,000 in-the-money stock options that will expire in the next 12 months. CommVault expects that all of these stock options will be exercised prior to their expiration.

Recent Business Highlights:

• On October 6, 2010, CommVault finalized a master distribution agreement with Hitachi Computer Peripherals Co., Ltd. (HCP), a wholly owned subsidiary of Hitachi, Ltd. to market and sell CommVault Simpana software and support services to enterprise customers and resellers in Japan.
• On October 5, 2010, CommVault announced the debut of its next generation release of its CommVault Simpana software. CommVault believes that Simpana 9 breaks new ground by enabling companies to deploy for the first time truly modern data management that bridges the physical storage world and the rapidly emerging virtual one.
• On September 14, 2010, CommVault announced that it has partnered with Mezeo Software to provide enterprises and service providers with secure, reliable and cost-effective cloud-based data management solutions by seamlessly integrating CommVault’s cloud-optimized Simpana software with the Mezeo Cloud Storage Platform.
• On September 13, 2010, CommVault announced that it continues to reinforce its strong Dell OEM partnership with the introduction of the Dell PowerVault DL Backup to Disk Appliance, powered by CommVault with Simpana 8.