Subscription growth boosts Commvault’s fourth-quarter revenue by 10% – Business
Commvault Systems Inc. today reported that it generated $223.3 million in revenue during its fiscal fourth quarter ended March 31, 10% more than the same time a year earlier.
The company’s stock closed up 3% on the expectation-topping results.
Commvault attributed the sales jump entirely to growing demand for its subscription-based products. The company provides a collection of data protection applications that it bundled into a single platform, the Commvault Cloud, last year. Commvault reported today that subscription revenue rose 27% year-over-year in the fourth quarter, to $119.9 million.
The company generates the rest of its revenue from perpetual software licenses and services such as customer support. Commvault’s perpetual license business shrunk from $17.56 million a year ago to $15.19 million, a 13% decline. Revenue from customer support contracts remained flat at $77.02 million, while other services accounted for $11.19 million in sales.
Commvault Cloud, the centerpiece of the company’s subscription revenue growth push, debuted in November. It enables organizations to back up data in cloud environments, on-premises infrastructure and software-as-a-service applications such as Salesforce. There are also features for quickly restoring standby data copies if the original records become unavailable.
Alongside its core backup and recovery features, Commvault Cloud includes a number of more advanced tools. A built-in chatbot called Arlie helps administrators more quickly find data about their companies’ backup environments. It can also perform more complex tasks, such as checking that a backup copy of a file doesn’t contain malware before restoring it.
Commvault detailed today that its subscription-based data protection offerings are used by about 9,300 organizations. That’s up from 7,400 a year ago and 6,700 at the end of 2022. Customers are using Commvault’s software to protect over 4.5 exabytes of cloud data.
The company’s subscription revenue segment includes not only its SaaS products but also other offerings such as maintenance contracts. The SaaS portfolio grew much faster than the segment as a whole in the first quarter, boosting annual recurring revenue by 65% year-over-year to $168 million.
Commvault says the product portfolio’s net dollar retention rate is 123%. That’s a metric used to track whether customers increase their spending over time. A net dollar retention rate above 100% indicates a spending increase.
“Our Commvault Cloud platform is resonating with customers, who entrust us with their data and resilience in this era of unrelenting cyber threats,” said Chief Executive Sanjay Mirchandani (pictured).
The growth in its SaaS business helped Commvault top the Zacks revenue estimate by nearly 5%. The company’s adjusted net income of $35.3 million also surpassed expectations: the sum translates to adjusted earnings of $0.79 per share, six cents more than analysts had anticipated.
For the current quarter, Commvault is forecasting $213 million to $216 million in revenue with an 18% to 19% adjusted operating margin. The company estimates that it will end fiscal 2025 with total sales of between $904 million and $914 million, up from $839.2 million this year.