Commvault: Fiscal 3Q21 Financial Results

(in $ million)	3Q20	3Q21	9 mo. 20	9 mo. 210
Revenue	176.4	188.0	506.1	532.1
*Growth*		7%		5%
Net income (loss)	(0.6)	1.7	(14.6)	(37.2)

Commvault Systems, Inc. announced its financial results for the third quarter ended December 31, 2020.

“The strategic moves we made over the past 2 years are delivering results,” said Sanjay Mirchandani, president and CEO, Commvault. “We have simplified how we do business, dramatically improved our execution, and are innovating faster than ever.“

Total revenues for 3FQ2121 were $188.0 million, an increase of 7% Y/Y.

Total recurring revenue was $140.0 million, an increase of 13% Y/Y.

Annualized recurring revenue (ARR), which is the annualized value of all active recurring revenue streams at the end of the reporting period, was $507.2 million as of December 31, 2020, up 11% from December 31, 2019.

Software and products revenue was $88.6 million, an increase of 16% Y/Y. The yearly increase of these revenue was driven by a 19% increase in revenue from larger deals (deals greater than $0.1 million in software and products revenue).

Larger deal revenue represented 68% of software and products revenue in 3FQ21. The number of larger deal revenue transactions increased 3% Y/Y to 187 deals for 3FQ21. The average dollar amount of larger deal revenue transactions was approximately $322,000, representing a 15% increase from 3FQ20.

Services revenue in the quarter was $99.4 million, flat Y/Y.

On a GAAP basis, income from operations (EBIT) was $2.7 million for 3FQ21 compared to a loss of $0.5 million in the prior year. Non-GAAP EBIT was $37.3 million in the quarter compared to $28.9 million in 3FQ20.

Operating cash flow totaled $17.0 million for 3FQ21 compared to $0.9 million in 3FQ20. Total cash and short-term investments were $388.4 million as of December 31, 2020 compared to $339.7 million as of March 31, 2020.

During 3FQ21, the company repurchased 700,694 shares of its common stock totaling $33.1 million at an average price of approximately $47.28 per share.

Comments

$188 million is the best quarter ever in revenue, up 7% Y/Y and 10% Q/Q, and more than expected at the end of the former quarter ($174 million to $176 million), and also back to profit.

Shares were up up 5% after these fiscal results beating top and bottom line estimates.

CEO Mirchandani said:" When I joined Commvault, we focused on 3 priorities: one, simplifying our business to make it easier for partners and customers to work with us; two, radically innovating to meet the market in massive transition; and three, executing by focusing on what matters to deliver results, which is why we've exceeded expectations in 5 of the last 6 quarters, with the only exception at the start of the pandemic."

Finally the company is back to better results with this new strategy.

Software and products revenue was $89 million, up 16% Y/Y, also a quarterly record. Large deal revenue greater than $100,000 of software grew 19% Y/Y, with the average deal size yearly up 15% to $322,000.

Subscription revenue increased over 50% Y/Y and represented 55% of software products revenue up from 41% a year ago.

Annual recurring revenue increased 11% Y/Y and is now over $500 million.

In 4FQ21, the company expects software and products revenue growth of 26% to be $84 million. Total revenue would be approximately $182 million, up 11% Y/Y and down 1% Q/Q.

For FY23, it believes software revenue CAGR to be in the range of 9% to 10%. Subscription revenue as a percentage of software and products revenue will approach 70% to 75%, up from approximately 55% in FY21. And it sees total annual revenue growth of approximately 6% to 7%.

Revenue and net income (loss) for Commvault in $million

Fiscal period

Revenue

Y/Y
growth

Net income
(loss)

FY15

607.5

25.7

FY16

595.1

-2%

0.1

FY17

650.5

0.5

1Q18

166.0

(0.3)

2Q18

168.1

(1.0)

3Q18

180.4

(59.0)

4Q18

184.9

11%

(1.7)

FY18

699.4

(61.9)

1Q19

176.2

(8.6)

2Q19

169.1

0.9

3Q19

184.3

13.4

4Q19

181.4

-2%

(2.2)

FY19

711.1

3.6

1Q20

162.2

-8%

(6.8)

2Q20

167.6

-1%

(7.1)

3Q20

176.4

-4%

(0.7)

4Q20

164.7

-9%

(5.6)

FY20

670.9

-6%

(5.6)

1Q21

173.0

2.3

2Q21

171.1

(41.2)

3FQ21

188.0

1.7