Commvault: Fiscal 2Q16 Financial Results

Commvault Systems, Inc. announced its financial results for the second quarter ended September 30, 2015.

“I’m pleased to report that in the fiscal second quarter we executed well relative to expectations, delivering sequential growth in revenue and non-GAAP EBIT,” said Robert Hammer, chairman, president and CEO. “Solid execution across the business, combined with careful management of expenses, enabled us to achieve better than expected non-GAAP earnings per share. Strong efforts by our field organizations and positive reactions to our transformational initiatives contributed to substantial growth in sales pipeline inflow. We believe that this momentum combined with our Commvault Next program have helped strengthen our competitive position, increased our available market, and made it easier for partners to sell and for customers to buy Commvault solutions. While we still have a lot of work to do to achieve our long term goals, we have increased confidence in our ability to achieve our financial objectives for the second half of fiscal 2016. In addition, we have remained opportunistic, repurchasing $34.6 million of our common stock since our last earnings call.”

Hammer added: “Our momentum is further supported by the successful launch of our next generation solutions portfolio, which fundamentally redefines the data protection, archive and cloud data markets. For customers, the new Commvault Data Platform makes it possible to better manage the challenges of disruption, whether they are seeking to move data to the cloud, manage data in the cloud, provide secure access to data, consume new technology to replace legacy systems, move from closed proprietary systems to open, and/or assure a sound, holistic data management strategy to gain more value and business insight in the midst of unprecedented market change and consolidation.“

“We also take note that Joe Eazor, CEO of EarthLink Holdings, has joined the Commvault board of directors,” said Hammer. “Joe is a technology and software industry veteran with substantial strategic planning, sales and operations experience at some of the most innovative tech companies in the world. We welcome his fresh perspective that we believe will contribute to Commvault’s performance and stockholder returns.”

Total revenues for the second quarter of fiscal 2016 were $140.7 million, up 1% sequentially, down 7% compared to the second quarter of the prior fiscal year, and down 1% on a year-over-year constant currency basis.

Software revenue was $57.6 million, an increase of 2% sequentially, a decrease of 17% year-over-year, and down 12% on a year-over-year constant currency basis. Services revenue in the second quarter of fiscal 2016 was $83.2 million, an increase of 2% year-over-year and 1% sequentially. On a constant currency basis, services revenue in the second quarter of fiscal 2016 increased 8% year-over-year.

On a GAAP basis, loss from operations (EBIT) was $4.6 million for the second quarter compared to a loss of $6.3 million in the prior quarter.  Non-GAAP income from operations (EBIT) increased to $10.9 million, or 17%, in the second quarter of fiscal 2016 compared to $9.3 million in the first quarter of fiscal 2016.

For the second quarter of fiscal 2016, Commvault reported a net loss of $9.2 million. Non-GAAP net income for the quarter was $6.8 million, or $0.15 per diluted share, versus $0.12 in the first quarter of fiscal 2016.

Since Commvault’s first fiscal quarter earnings conference call on July 28, 2015, Commvault has repurchased $34.6 million of common stock (965,000 shares) under its share repurchase program. On October 22, 2015, the board of directors extended the expiration date of the share repurchase program to March 31, 2017 and authorized an increase to the existing share repurchase program so that $150.0 million is now available.

Operating cash flow totaled $9.6 million for the second quarter of fiscal 2016. Total cash and short-term investments were $400.0 million as of September 30, 2015 compared to $387.6 million as of March 31, 2015.  During the quarter there were no borrowings against the revolving credit facility.

Recent Business Highlights:
On October 20, 2015, Commvault announced the next generation of its solutions portfolio, delivering a spectrum of innovation designed to help customers address the increasing challenges of managing data and information in highly disrupted, fast-paced global business environments. This included more than 100 specific innovations, and unveiled a new business model highlighting the opportunities for Commvault, its partners, third-party software developers, and customers to innovate on the Commvault Data Platform.  

In a series of relates announcements aligned
to the next generation software release, Commvault also announced:
A series of emerging customer needs facing CIOs and technology and business leaders as they face the challenges of rapidly changing technology, tightening resource requirements, and ever-expanding volumes of data. Through these insights, it outlined the Principals of Modern Data Management that should be the minimum requirements found in a modern, holistic data management solution.
 
New innovations in the Commvault Data Platform to extend and hardware array and snapshot management capabilities to three leading partners: Hitachi Data Systems, Pure Storage, and Nutanix.

On October 16, 2015, Commvault announced that PFD Food Services, the largest privately-owned food distributor in Australia, is using Commvault to ensure the protection and high availability of its strategic data assets in its journey to the cloud.

On October 13, 2015, Commvault announced with Greenply Industries Limited, the completion of a major modernization data centre infrastructure by implementing SAP HANA, Cisco UCS C240 servers and Commvault’s data protection and information management solution.

On October 6, 2015, the company has added new support for Amazon Simple Storage Service Standard-Infrequent Access (Amazon S3 Standard-IA). Commvault Software’s native support for Amazon S3 Standard-IA provides customers with access to a high-performing and durable cloud storage option for their less frequently accessed data.