CommVault: Fiscal 3FQ15 Financial Results

 CommVault Systems, Inc. announced its financial results for the third quarter ended December 31, 2014.

Bob Hammer, chairman, president and CEO, stated: “We executed well relative to expectations going into the quarter and in the face of significant foreign exchange headwinds. We delivered $153.0 million in total revenue, which represents sequential quarterly growth. Our key standalone virtualization and cloud operations solutions sets that were priced and packaged for the mid-market segments received strong early market traction. We continue to remain steadfast to our objective of returning to strong revenue and earnings growth in the second half of next fiscal year. Tied to that objective, we made significant progress during the quarter on key initiatives including alignment of worldwide sales resources to our new standalone products’ go to market efforts; adding resources and focus to key channel partner relationships to increase penetration in both the SMB and enterprise segments; and, enhancing our Americas sales territory structure to drive higher productivity.”

Hammer added: “We also made very good progress on our next series of standalone products which are planned to launch in March as well as the development of our next generation data and information platform which will go into beta in the near future.“

Total revenues for the third quarter of fiscal 2015 were $153.0 million, which is flat compared to the third quarter of the prior fiscal year. Software revenue in the third quarter of fiscal 2015 was $71.7 million, a decrease of 9% year-over-year and an increase of 3% sequentially. Services revenue in the third quarter of fiscal 2015 was $81.3 million, an increase of 10% Y/Y and a decline of 1% sequentially.

On a GAAP basis, income from operations (EBIT) was $4.9 million for the third quarter compared to $27.7 million in the same period of the prior year. Non-GAAP income from operations (EBIT) decreased 40% to $25.3 million in the third quarter of fiscal 2015 compared to $42.5 million in the third quarter of the prior year. On a sequential basis, non-GAAP income from operations (EBIT) decreased 3% in the third quarter of fiscal 2015.

For the third quarter of fiscal 2015, CommVault reported net income of $3.1 million compared to $17.6 million in the same period of the prior year. Non-GAAP net income for the quarter decreased 41% to $15.9 million, or $0.34 per diluted share, from $26.9 million, or $0.54 per diluted share, in the same period of the prior year.

Operating cash flow totaled $20.2 million for the third quarter of fiscal 2015 which was a decrease of $9.9 million, or 33%, compared to the third quarter of fiscal 2014. Total cash and short-term investments were $364.9 million as of December 31, 2014 compared to $482.7 million as of March 31, 2014. During the third quarter there were no borrowings against the revolving credit facility.

In the third quarter of fiscal 2015, CommVault repurchased $50.0 million of common stock (1.03 million shares) under its share repurchase program. For the fiscal year to date, the company has repurchased $155.1 million of common stock. As of January 28, 2015, there is $100.0 million remaining in the share repurchase program which expires on March 31, 2016.

In December 2014, the company completed its planned move to a new corporate HQs facility located in Tinton Falls, NJ, which is owned outright. The fiscal 2015 third quarter GAAP results include $4.1 million of non-routine expenses related to this move consisting of a $3.1 million lease termination charge associated with the previous leased HQs location, $0.6 million of accelerated depreciation on assets associated with the previous HQs and $0.5 million of moving and related costs. These expenses have been excluded from the company’s non-GAAP results.