Commvault: Fiscal 2Q17 Financial Results

Commvault Systems, Inc. announced its financial results for the second quarter ended September 30, 2016.

N. Robert Hammer, chairman, president and CEO stated: “We achieved strong second quarter financial performance which was highlighted by 22% year-over-year software revenue growth driven by a significant increase in the number of enterprise revenue transactions across all of our geographic regions. In addition, focused efforts by our marketing and field organizations during the quarter contributed to continued growth of our sales funnels. We anticipate that our recent business momentum combined with innovations announced earlier this month at Commvault GO 2016, our inaugural global customer conference, should provide a stronger foundation for continued growth. These innovations include enhanced stand-alone solutions for DR, dev test, application management and software-defined data services for big data workloads and digital repository environments. We continue to believe we are in an excellent position to capitalize on the opportunities in front of us, including both increasing our market share in our core data management business as well as expanding our cloud-based offering footprint.“

Total revenues for the second quarter of fiscal 2017 were $159.3 million, an increase of 13% year-over-year, and 5% sequentially. Software revenue was $70.5 million, an increase of 22% year-over-year, and 10% sequentially. Services revenue in the quarter was $88.9 million, an increase of 7% year-over-year, and flat on a sequential basis.

On a GAAP basis, loss from operations (EBIT) was $0.8 million for the second quarter compared to a loss of $4.6 million in the prior year. Non-GAAP EBIT increased 68% to $18.2 million in the quarter compared to $10.9 million in the prior year.

For the second quarter of fiscal 2017, Commvault reported a GAAP net loss of $0.6 million, or a $0.01 loss per diluted share. Non-GAAP net income for the quarter was $11.5 million, or $0.25 per diluted share, versus $0.15 per diluted share in the second quarter of fiscal 2016.

Operating cash flow totaled $20.2 million for the second quarter of fiscal 2017 compared to $9.6 million in the prior year quarter. Total cash and short-term investments were $439.6 million as of September 30, 2016 compared to $387.2 million as of March 31, 2016. During the quarter, there were no borrowings against the revolving credit facility or repurchases of Commvault’s shares. As of October 25, 2016, there is $93.1 million available under the share repurchase program that currently expires on March 31, 2017.

Recent Business Highlights:
    •    From October 3-6, 2016, the firm hosted its inaugural customer conference, Commvault GO.  With more than 1,200 attendees, the event was a sellout, and included both private and public sector customers and prospects, along with, partners, industry analysts and experts, with all topics dedicated to helping customers better protect and activate their data. Attendees were presented with learning sessions and hands-on labs to address best practices for modern data centers, the move to the cloud, backup, application recovery and more. Response to the event has been positive as Commvault looks to begin planning for next year.
    •    On October 4, 2016, the company introduced innovations in the Commvault Data Platform extending its leadership in the backup, recovery and archive space. Latest innovations build on its open API architecture to provide new levels of openness offering customers flexibility of choice in infrastructure, platform, compute and storage providers; extended automated platform orchestration for more efficient management of IT; and new user interfaces simplifying how business users leverage the platform. The vendor also announced new software-defined data services, designed to enable customers to leverage new solutions tailored to big data and digital workloads.
    •    On October 4, 2016, the firm also announced that customers running SAP HANA can gain greater business value from their data and improve IT efficiencies as the 11th version of the company’s solutions portfolio (v11) – Commvault Software and the Commvault Data Platform – had achieved SAP-certified integration with the SAP HANA platform on IBM Power Systems.
    •    On July 11, 2016, the company launched new Reference Architectures with alliance partner Cisco to give customers and partners an easy-to-buy, pre-optimized and validated solution for simplified data protection and recovery using Commvault’s software deployed on the Cisco UCS infrastructure. It announced support into Cisco’s HyperFlex hyperconvergence system to help organizations protect data workloads and applications across virtualized and cloud infrastructures.