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Commvault: Fiscal 1Q18 Financial Results

Revenue flat sequentially and no more profitable but software revenue up 18% over prior year

(in $ million) 1Q17 1Q18 Growth
Revenue
151.8 166.0 9%
Net income (loss) (2.6) (0.3)  

Commvault Systems, Inc. announced its financial results for the first quarter ended June 30, 2017.
 
N. Robert Hammer, chairman, president and CEO stated: “We began fiscal year 2018 with a solid first quarter, highlighted by 18% year-over-year software revenue growth. All of our global sales regions contributed to our year-over-year software revenue growth which was driven by a significant increase in the dollar amount of enterprise revenue transactions and strong initial results from our new committed subscription based pricing model. We continue to see improved business momentum as a result of our industry leading technology and services that provides customers the ability to move and manage applications and data in the cloud, as well as to easily migrate applications and data to more modern on-premise infrastructures. We have made very good progress across all aspects of the company and we continue to build the foundation for sustained solid revenue and earnings growth.”

Total revenues for the first quarter of fiscal 2018 were $166.0 million, an increase of 9% year-over-year, and flat sequentially. On a constant currency basis, total revenue increased 11% year-over-year. Software revenue was $74.8 million, an increase of 18% year-over-year, and down 4% sequentially.  On a year-over-year constant currency basis software revenue increased 19%. Services revenue in the quarter was $91.2 million, an increase of 3% on both a year-over-year and sequential basis.

On a GAAP basis, loss from operations (EBIT) was $4.4 million for the first quarter compared to a loss of $3.2 million in the prior year. Non-GAAP EBIT increased 11% to $15.9 million in the quarter compared to $14.3 million in the prior year.

For the first quarter of fiscal 2018, the company reported a GAAP net loss of $0.3 million, or $0.01 per diluted share.  Non-GAAP net income for the quarter increased to $10.1 million, or $0.21 per diluted share, from $9.0 million, or $0.20 per diluted share, in the first quarter of fiscal 2017.

Operating cash flow totaled $19.9 million for the first quarter of fiscal 2018 compared to $24.0 million in the prior year quarter. In the first quarter of fiscal 2018 te firm made a $3.0 million prepayment for software royalties related to solutions for hyperconverged environments and scale-out appliances. 

Total cash and short-term investments were $481.0 million as of June 30, 2017 compared to $450.2 million as of March 31, 2017. 

As of July 25, 2017, there is $125.0 million available under the share repurchase program that currently expires on March 31, 2018. There have been no borrowings against the line of credit during fiscal 2018.

Recent Business Highlights:
• On June 1, 2017, announced that Capt. “Sully” Sullenberger and explorer Robert Swan OBE (Officer of the British Empire) will headline the keynote agenda at its second annual customer conference, Commvault GO 2017, to be held November 6-8, 2017 in Washington D.C. At the event, both of them will speak about their personal experiences accomplishing remarkable things, how data played a key role, and will provide attendees with insight on how they can leverage their own data to unlock new opportunities and strive for competitive advantages.
• On May 24, 2017, called on organizations to urgently prepare for the arrival of EU GDPR compliance regulations, or risk being among the first to be penalized when the regulations take effect. Corporate complacency is one of the biggest barriers to GDPR compliance with many organizations yet to implement either suitable processes or technology. With instances of intrusions such as ransomware and leakware on the rise, failure to implement a secure data management platform can result in organizations facing damaging financial penalties.
• On May 16, 2017, launched its new VM Backup and Recovery trial software for customers and partners with significant enhancements on user experience, DR and cloud on-ramp. VM Backup and Recovery software enables customers to build, protect and optimize VMs throughout their lifecycle and migrate data and VMs to the public cloud of their choice, including AWS, Microsoft Azure and VMware.

Comments

On the positive side:

  • sales up 11% Y/Y, $166 million being an historical record for the company not including $179 million for the last three month period
  • revenue increasing from 7% to 13% Y/Y each quarter since more than one year
  • software quarterly revenue up 18% over prior year

On the negative side:

  • sales down 4% sequentially
  • software revenue down 4% Q/Q
  • Loss of $0.3 million compared to $3.3 million net income the former quarter

 

 

 

 

 

 

 

 

Fiscal period Revenue Y/Y growth Net income (loss)
1Q15 152.6 14% 12.7
2Q15 151.1 7% 6.5
3Q15 153.0 -0% 3.1
4Q15 150.7 -4% 3.4
FY15 607.5 4% 25.7
1Q16 139.1 -9% (1.3)
2Q16 140.7 -7% (9.2)
3Q16 155.7 2% 4.9
4Q16 159.6 6% 5.8
FY16 595.1 -2% 0.1
1Q17 152.4 10% (2.0)
2Q17 159.3 13% (0.6)
3Q17 165.8 7% (0.0)
4Q17 172.9 8% 3.2
FY17 650.5 9% 0.5
1Q18 166.0 9% (0.3)

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