CommVault: Fiscal 3Q13 Financial Results

(in US$ million)	3Q12	3Q13	9 mo. 12	9 mo. 13
Revenues	103.6	128.1	292.6	357.6
*Growth*		24%		*22%*
Net income (loss)	7.2	12.2	22.1	36.2

CommVault Systems, Inc. announced its financial results for the third quarter ended December 31, 2012.

N. Robert Hammer, CommVault’s chairman, president and CEO stated: "We achieved excellent third quarter financial performance which was highlighted by record results in quarterly revenues of $128.1 million, non-GAAP operating income of $29.8 million and non-GAAP EPS of $0.39. Our year-over-year software revenue growth of 28% was driven by an all-time high volume of enterprise deals (transactions greater than $100,000) and outstanding execution from all of our major geographic operations. During the third quarter, we continued to make significant investments to position the company for long term growth while still delivering record non-GAAP operating profits. We are in an excellent position to continue to accelerate our pace of innovation in our addressable markets to provide unique value to our customers, while continuing to deliver above market financial results on a consistent basis."

Total revenues for the third quarter of fiscal 2013 were $128.1 million, an increase of 24% over the third quarter of fiscal 2012 and an increase of 8% over the prior quarter.

Software revenue in the third quarter of fiscal 2013 was $65.9 million, an increase of 28% year-over-year and an increase of 11% sequentially. Services revenue in the third quarter of fiscal 2013 was $62.2 million, an increase of 19% year-over-year and 6% sequentially.

Income from operations (EBIT) was $20.2 million for the third quarter, a 64% increase from $12.3 million in the same period of the prior year. On a sequential basis, income from operations (EBIT) decreased 10% in the third quarter of fiscal 2013. Non-GAAP income from operations (EBIT) increased 52% to $29.8 million in the third quarter of fiscal 2013 compared to $19.6 million in the third quarter of the prior year. On a sequential basis, Non-GAAP income from operations (EBIT) increased 3% in the third quarter of fiscal 2013.

For the third quarter of fiscal 2013, CommVault reported net income of $12.2 million, an increase of $5.0 million compared to the same period of the prior year. Non-GAAP net income for the quarter increased 50% to $19.0 million, or $0.39 per diluted share, from $12.7 million, or $0.27 per diluted share, in the same period of the prior year.

Operating cash flow totaled $27.5 million for the third quarter of fiscal 2013 compared to $27.7 million in the third quarter of fiscal 2012. Total cash and short-term investments were $397.2 million as of December 31, 2012 compared to $300.2 million as of March 31, 2012. There were no share repurchases during the third quarter of fiscal 2013, which still leaves $102.8 million remaining in the existing repurchase plan available through March 31, 2014.

Recent Business Highlights:

On January 16, 2013, announced that its Simpana 9 data and information management software has received the Certificate of Networthiness (CoN) from the U.S. Army Network Enterprise Technology Command.
On November 15, 2012, announced its Simpana 9 software will ship with the Dell PowerVault DL2300 appliance to deliver integrated, scalable and simplified data protection to safeguard information for medium-to-large, distributed organizations.
On October 29, 2012, introduced Simpana IntelliSnap Recovery Manager, a standalone software product for automating snapshot management and application-aware recovery across multiple storage arrays and physical or virtual servers.

Comments

Abstracts of the earnings call transcript:

Bob Hammer, chairman, president and CEO:
"For FY14 we believe we will be able to achieve solid double-digit revenue.
"We are planning to formally launch Simpana 10 on February 25, 2013 and will begin shipping this quarter.
"Simpana 10 is not just another innovative CommVault release, it is an industry changing breakthrough product that includes innovations that will impact the way data is stored, managed, accessed, the way operations are managed and the unique way of business insight can be extracted from data."

Brian Carolan, CFO:
"Our higher software revenue was derived from the record number of enterprise deals, which we define as deals over $100,000 in software revenue in a given quarter. "Enterprise deals were 58% of license revenue in the quarter, representing year-over-year growth of 59% and 17% sequentially. The number of enterprise deals grew by 64% year-over-year and 10% sequentially.
"Our average enterprise deal size was approximately $260,000 during the current quarter, compared to $247,000 in the prior quarter.
"Software revenues derived from our indirect distribution channels increased 26% over the prior year period and represented 86% of software revenue. Our direct revenue grew 40% year-over-year and represented the balance of software revenue.
"For the quarter, total revenue through Arrow comprised approximately 28% of total revenue, growing 27% year-over-year and 3% sequentially.
"Sales through our Dell relationships accounted for approximately 19% of total revenues for the quarter. Total quarterly Dell revenues grew 2% year-over-year and declined 4% sequentially.
"We added approximately 485 new customers in the quarter, our historical customer count now totals approximately 17,700 customers. Approximately two-thirds of our quarterly software revenue comes from our existing install base which combined with our capacity based licensing model provides a very strong engine for future growth.
" (...) we expect to introduce our next software release, Simpana 10 in fiscal Q4.
" (...) we closed on the purchase of a 55 acre parcel of land located about 5 miles from our current headquarters. We are in the process of completing the design of the new campus headquarters which will be completed in phases. We’d expect to complete phase I of the project in about 2 years. Our early estimate of the cost of the phase I build out including the land purchase, building and campus infrastructure is approximately $125 million to $135 million."