Commvault(CVLT) - 2026 Q1 - Quarterly Report

Part I – FINANCIAL INFORMATION Item 1. Financial Statements Commvault Systems, Inc. reported strong Q1 FY2026 financial performance, driven by subscription revenue growth, increased net income, and notable balance sheet and cash flow changes Unaudited Consolidated Balance Sheets Unaudited Consolidated Statements of Operations Unaudited Consolidated Statements of Comprehensive Income Unaudited Consolidated Statements of Stockholders' Equity Unaudited Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | March 31, 2025 | | :-------------------------- | :-------------- | :------------- | | Cash and cash equivalents | $363,234 | $302,103 | | Total current assets | $667,130 | $635,057 | | Total assets | $1,176,437 | $1,118,266 | | Total current liabilities | $535,983 | $555,050 | | Deferred revenue | $664,870 | $626,212 | | Total stockholders' equity | $364,739 | $325,122 | Consolidated Statements of Operations Highlights (Three Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :---------------------- | :---------- | :---------- | | Total revenues | $281,978 | $224,672 | | Total cost of revenues | $50,777 | $39,788 | | Gross margin | $231,201 | $184,884 | | Income from operations | $25,091 | $18,428 | | Net income | $23,496 | $18,527 | | Basic EPS | $0.53 | $0.42 | | Diluted EPS | $0.52 | $0.41 | Consolidated Statements of Cash Flows Highlights (Three Months Ended June 30, in thousands) | Activity | 2025 | 2024 | | :-------------------------------------- | :---------- | :---------- | | Net cash provided by operating activities | $31,681 | $44,692 | | Net cash provided by (used in) investing activities | $26,826 | $(22,336) | | Net cash used in financing activities | $(16,908) | $(46,052) | | Net increase (decrease) in cash and cash equivalents | $61,131 | $(24,883) | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section details Commvault's cyber resiliency focus, strong subscription revenue growth, key performance indicators, foreign currency impacts, operating expenses, and liquidity - Commvault aims to provide cyber resiliency by protecting and recovering data and cloud-native applications against increasing cyber threats, including ransomware, across on-premises, hybrid, and multi-cloud environments[90] - Subscription arrangements, including term-based licenses and SaaS, are the primary revenue drivers, with a focus on recurring revenue. Indirect distribution channels accounted for approximately 90% of total revenues[91][93] Key Performance Indicators (in millions) | Metric | June 30, 2025 | June 30, 2024 | % Growth | | :----------------- | :------------ | :------------ | :------- | | Total ARR | $996.2 | $802.7 | 24% | | Subscription ARR | $843.9 | $635.9 | 33% | | SaaS ARR | $306.9 | $187.9 | 63% | | SaaS NRR | 125% | 127% | -2% | - Total revenues increased by $57.3 million, or 26% year-over-year, primarily driven by a 36% increase in term-based license revenue and a 66% increase in SaaS revenue. Perpetual license revenue decreased by 47%[117][120] - Operating expenses increased across sales and marketing (28%), research and development (21%), and general and administrative (34%), primarily due to increased employee compensation, headcount, and marketing initiatives[125] - The company refinanced its revolving credit facility, increasing it to $300 million, and approved an increase in the share repurchase program to $250 million. Cash and cash equivalents stood at $363.2 million as of June 30, 2025[129][130] Overview Sources of Revenues Key Performance Indicators Foreign Currency Exchange Rates' Impact on Results of Operations Critical Accounting Policies Results of Operations Revenues Cost of Revenues and Gross Margin Operating Expenses Income Tax Expense Liquidity and Capital Resources Impact of Recently Issued Accounting Standards Item 3. Quantitative and Qualitative Disclosures about Market Risk Commvault faces foreign currency risk from international sales, incurring $1.2 million in transaction losses, while interest rate risk is insignificant - The company does not report significant interest rate risk[136] - Approximately 44% of sales were outside the United States for the three months ended June 30, 2025, exposing the company to foreign currency fluctuations, primarily against the Euro, Australian dollar, British pound sterling, Canadian dollar, Chinese yuan, Indian rupee, Korean won, and Singapore dollar[138] - Net foreign currency transaction losses of approximately $1.2 million were recognized for the three months ended June 30, 2025, compared to insignificant losses in the prior year[140] Interest Rate Risk Foreign Currency Risk Item 4. Controls and Procedures Management confirmed effective disclosure controls and procedures as of June 30, 2025, with no material internal control changes, acknowledging inherent limitations - Disclosure controls and procedures were evaluated and concluded to be effective as of June 30, 2025[141] - No material changes in internal control over financial reporting occurred during the first quarter of fiscal 2026[142] - Management acknowledges that control systems provide only reasonable, not absolute, assurance and have inherent limitations, such as faulty judgments, simple errors, collusion, or management override[143] Evaluation of Disclosure Controls and Procedures Changes in Internal Control over Financial Reporting Inherent Limitations on Internal Controls Part II – OTHER INFORMATION Item 1. Legal Proceedings Commvault Systems, Inc. is not involved in any legal proceedings expected to materially adversely affect its business or operating results - The company does not believe it is currently involved in any pending legal action that could reasonably be expected to have a material adverse effect on its business or operating results[145] Item 1A. Risk Factors Risk factors are incorporated from the Annual Report on Form 10-K for fiscal year ended March 31, 2025, with no material changes reported - Risk factors are incorporated by reference from the Annual Report on Form 10-K for the year ended March 31, 2025[146] - There have been no material changes from the risk factors set forth in the Annual Report on Form 10-K[146] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The Board approved a $250.0 million share repurchase program increase, with $15.1 million repurchased and $235.0 million remaining - On April 17, 2025, the Board approved an increase of the existing share repurchase program, making $250.0 million available with no expiration date[147] Issuer Purchases of Equity Securities (Three Months Ended June 30, 2025) | Period | Total shares purchased | Average price paid per share | Total number of shares purchased as part of publicly announced programs | Approximate dollar value of shares that may yet be purchased under the program (in thousands) | | :--------------------------- | :--------------------- | :--------------------------- | :-------------------------------------------------------------------- | :------------------------------------------------------------------------------------------ | | April 1, 2025 - April 30, 2025 | — | $— | — | $250,000 | | May 1, 2025 - May 31, 2025 | — | $— | — | $250,000 | | June 1, 2025 - June 30, 2025 | 82,102 | $183.30 | 82,102 | $234,950 | | Three months ended June 30, 2025 | 82,102 | $183.30 | | | Item 3. Defaults Upon Senior Securities Commvault Systems, Inc. reported no defaults upon senior securities during the period - There were no defaults upon senior securities[148] Item 4. Mine Safety Disclosures Mine Safety Disclosures are not applicable to Commvault Systems, Inc. - Mine Safety Disclosures are not applicable[149] Item 5. Other Information The company disclosed Rule 10b5-1 trading arrangements adopted or modified by its CFO and CCO for common stock sales during the quarter - Jennifer DiRico, CFO, adopted a Rule 10b5-1 trading arrangement on June 10, 2025, for the sale of up to approximately 21,000 shares, effective until March 6, 2026[150] - Gary Merrill, CCO, modified his Rule 10b5-1 trading arrangement on June 13, 2025, to increase shares for sale to approximately 34,000, effective until May 31, 2027[151] Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including key agreements, certifications, and XBRL documents - Key exhibits include the Lease Agreement (effective April 28, 2025), Credit Agreement (dated April 15, 2025), and certifications from the CEO and CFO[153] - The report also includes various XBRL Taxonomy Extension Documents and the Cover Page Interactive Data File[153] SIGNATURES SIGNATURES The Form 10-Q report was signed on July 30, 2025, by Sanjay Mirchandani (CEO) and Jennifer DiRico (CFO), certifying its contents - The report was signed by Sanjay Mirchandani, Director, President and Chief Executive Officer, and Jennifer DiRico, Chief Financial Officer, on July 30, 2025[157]