Commvault: Fiscal 1Q19 Financial Results

Commvault Systems, Inc. announced its financial results for the first quarter ended June 30, 2018.

N. Robert Hammer, chairman, president and CEO, stated: “Our first quarter highlights included total revenues of $176.2 million, which is an increase of 6% year-over-year, a 44% increase in year-over-year non-GAAP operating income, non-GAAP EPS of $0.36, 10% annual deferred revenue growth, and 24% year-over-year growth in operating cash flow.  We continue to make excellent progress with our subscription-based pricing models, which increased 44% over the prior year.  Our improved earnings were driven by cost efficiencies implemented as part of our Commvault Advance initiatives which include simplification of our business processes with an emphasis on products and packaging, pricing, go to market messaging, partnerships and alliances, and organizational changes within sales and distribution. We believe these strategic transformation initiatives will position us for long-term, sustainable growth, while improving operating performance in the near term.”

Total revenues for the first quarter of fiscal 2019 were $176.2 million, an increase of 6% year-over-year, and a decrease of 5% sequentially. Software and products revenue was $75.1 million, flat year-over-year, and down 10% sequentially. Services revenue in the quarter was $101.1 million, an increase of 11% year-over-year and flat sequentially.

On a GAAP basis, loss from operations (EBIT) was $6.8 million for the first quarter compared to a loss of $4.4 million in the prior year. Non-GAAP EBIT was $22.8 million in the quarter compared to $15.9 million in the prior year, an increase of 44%.

For the first quarter of fiscal 2019, Commvault reported a GAAP net loss of $8.6 million, or a $0.19 loss per diluted share. The first quarter GAAP results in fiscal 2019 included $11.4 million of expenses related to restructuring and a non-routine shareholder matter. These expenses have been excluded from our non-GAAP results and are further discussed in Table IV. Non-GAAP net income for the quarter was $17.3 million, or $0.36 per diluted share.

Operating cash flow totaled $24.8 million for the first quarter of fiscal 2019 compared to $19.9 million in the prior year quarter. Total cash and short-term investments were $461.7 million as of June 30, 2018 compared to $462.4 million as of March 31, 2018.

During the first quarter of fiscal 2019, Commvault repurchased approximately 366,000 shares of its common stock totaling $25.0 million.

Recent Business Highlights:
• On July 17, 2018, announced new, simplified product, pricing, and packaging that makes it easier than ever before to buy, implement and sell Commvault solutions. With these changes, the company converged data management solutions redefining how progressive enterprises of all sizes protect, manage and use their data – now even more simple, scalable, and complete. In addition, it also announced that it expanded its dedication to partners. Through significant commitments to personnel, programs and resources, all of which put partners firmly at the center of go-to-market strategy, it creates a foundation for the success of Commvault and its worldwide partner network.
• On July 2, 2018, announced Two Degrees Mobile Limited (2degrees), New Zealand’s newest full-service telecommunications provider, extended its engagement with the vendor to include the deployment of Commvault HyperScale Software to support the modernization of its data protection and management infrastructure.
• On June 27, 2018, announced a new technology partnership with Lucidworks, in AI-powered search and discovery. Through this agreement, the two companies will begin working together to bring new innovations in AI to the evolving data backup and protection market.
• On June 26, 2018, announced a new partnership with IBM, in which IBM Business Resiliency Services will be able to provide a managed service based on company’s portfolio of data management and protection software, including the Commvault Data Platform. 
• On June 6, 2018, Commvault and Alibaba Cloud, the cloud computing arm of Alibaba Group, jointly announced a partnership to leverage each other’s technology and market advantages to deliver scalable hybrid cloud data management solutions to help customers and partners across the globe accelerate digital transformations.
• On May 23, 2018, announced continued business expansion by its ecosystem of channel partners worldwide as a result of the implementation of the Commvault Data Platform as the foundation of wider GDPR solutions.
• On May 22, 2018, announced expansion of its portfolio with further integrations into Microsoft Office 365 to improve data protection, migration, security, eDiscovery and compliance for its customers. Enterprise IT organizations can now extend their Commvault investments to protect their Office 365 assets.