Core Insights - The company reported strong financial results with total revenue increasing 19% year over year to $314 million on a non-GAAP basis, driven by a 30% rise in subscription revenue to $206 million and a 44% increase in SaaS revenue [2][4] - The company added approximately 700 new subscription customers, ending the quarter with over 14,000 subscription customers and a SaaS customer base exceeding 9,000 [3][4][7] - Management raised guidance for fiscal year 2026, projecting total revenue between $1.177 billion and $1.18 billion, and subscription revenue between $764 million and $768 million [5][20] Financial Performance - Subscription revenue rose 30% year over year to $206 million, with SaaS revenue increasing by 44% [2][7] - Total annual recurring revenue (ARR) increased 22% to $1.085 billion, with subscription ARR growing 28% to $941 million and SaaS ARR up 40% to $364 million [8][11] - Gross margin for Q3 was reported at 81.5%, reflecting improved economies of scale and product efficiencies [14] Product and Innovation - The company launched the Commvault Cloud Unity Platform, which integrates data security, identity resilience, and recovery capabilities [6][12] - The company received its 1,600th lifetime patent, reinforcing its position as an innovation leader [3] - Partnerships and product releases aimed at unifying data security and recovery capabilities were highlighted, including recognition from AWS [6][12] Customer Engagement - The company reported a SaaS net dollar retention rate of 121%, indicating strong customer loyalty and expansion [9][10] - The addition of new subscription customers contributed to a strong quarter, with a noted increase in identity resilience offerings [10][17] Guidance and Future Outlook - For fiscal Q4 2026, the company expects subscription revenue of $203 million to $207 million and total revenue of $305 million to $308 million [19] - Full-year free cash flow is projected to be between $215 million and $220 million, reflecting one-time payments related to a cost optimization program [20] - The company initiated a cost optimization program to align its cost structure with business needs, which includes a voluntary retirement program [18]

Financial Data and Key Metrics Changes - Subscription revenue grew 30% to $206 million, driven by a record addition of 700 new subscription customers [4][13] - Total revenue increased 19% to $314 million, with a 22% growth in term software revenue to $119 million [13][14] - Subscription ARR rose 28% to $941 million, with SaaS ARR increasing 40% to $364 million [15][20] - Gross margins improved 100 basis points sequentially to 81.5% [16] - Non-GAAP EBIT was $61 million, reflecting a margin of 19.6% [16] Business Line Data and Key Metrics Changes - SaaS revenue saw a robust 44% increase, contributing significantly to overall subscription revenue growth [13] - Term software transactions over $100,000 grew 25%, indicating strong performance in large enterprise accounts [14] - ARR from identity resilience offerings doubled year over year, highlighting strong customer adoption [9] Market Data and Key Metrics Changes - Commvault achieved AWS resilience competency in the recovery category and was named the 2025 AWS Global Storage Partner of the Year [10] - The company reported strong growth across all geographies and customer sizes, particularly from large enterprises [14] Company Strategy and Development Direction - Commvault is focusing on innovation through the Commvault Cloud Unity Platform, which integrates data security, identity resilience, and cyber recovery [6][10] - The company aims to capitalize on the growing demand for cyber resilience in an AI-driven, hybrid, and multi-cloud environment [4][11] - Commvault is also addressing data sovereignty requirements by supporting regional sovereign clouds, including a partnership with AWS for the European Sovereign Cloud [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position, citing record customer engagement and adoption [12] - The company anticipates finishing the year with solid results, reflecting its leadership in the market and customer trust [12] - Management noted that the business is in a good place, with strong performance in both software and SaaS customer acquisitions [29] Other Important Information - The company initiated a cost optimization program to align its cost structure with evolving business needs [17] - Commvault repurchased $41 million of stock during the quarter, with a total of $187 million year-to-date [17][21] Q&A Session Summary Question: Free cash flow and accounts receivable increase - Management explained that Q3 typically sees pressure on free cash flow due to sales cycles, with over 60% of deals closing in the last weeks of the quarter [25] Question: Long-term growth narrative and TAM expectations - Management refrained from providing guidance beyond the current fiscal year but indicated confidence in outpacing market growth [28][29] Question: Currency impact on revenue and ARR - Management confirmed that currency was in line with expectations for reported revenue, while ARR guidance is provided on a constant currency basis [36] Question: SaaS net retention rate drop - Management attributed the drop to a larger customer base and strong new customer acquisition, which does not immediately reflect in the NRR [55] Question: Term duration elongation and its impact - Management noted that the increase in term duration was influenced by large new customer deals, which may have affected term ARR [66][110]

Financial Data and Key Metrics Changes - Subscription revenue grew 30% to $206 million, driven by a record addition of 700 new subscription customers [4][13] - Total revenue increased 19% to $314 million, with subscription revenue leading the growth [13] - Subscription ARR rose 28% to $941 million, while total ARR increased by 22% to $1.085 billion [15][20] - Gross margins improved 100 basis points sequentially to 81.5% [16] - Non-GAAP EBIT was $61 million, reflecting a margin of 19.6% [16] Business Line Data and Key Metrics Changes - SaaS ARR increased 40% to $364 million, representing a significant portion of the subscription growth [4][15] - Term software revenue grew 22% to $119 million, indicating strong demand for traditional software offerings [13] - Revenue from term software transactions over $100,000 grew 25%, highlighting strength in large enterprise accounts [14] Market Data and Key Metrics Changes - Strong growth was observed across all geographies and customer sizes, particularly from large enterprises [14] - The company added approximately 700 new subscription customers, ending the quarter with over 14,000 subscription customers [14] Company Strategy and Development Direction - Commvault is focusing on innovation through the Commvault Cloud Unity Platform, which integrates data security, identity resilience, and cyber recovery [6][12] - The company aims to capitalize on the growing need for cyber resilience in an AI-driven, hybrid, and multi-cloud environment [4][11] - Commvault is also addressing data sovereignty requirements by supporting regional sovereign clouds, including a partnership with AWS for the European Sovereign Cloud [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position, citing strong customer engagement and adoption of new platforms [12][20] - The company anticipates finishing the year with solid results, reflecting leadership in the market and customer trust [12] - Management acknowledged the evolving competitive landscape and the importance of maintaining a balance between growth and profitability [16][20] Other Important Information - The company initiated a cost optimization program to align its cost structure with business needs [17] - Commvault repurchased $41 million of stock during the quarter, with a year-to-date total of $187 million [17][21] - The board approved a share repurchase authorization of up to $250 million [21] Q&A Session Summary Question: Free cash flow and accounts receivable increase - Management explained that Q3 typically sees pressure on free cash flow due to sales cycles, with over 60% of deals closing in the last weeks of the quarter [24][25] Question: Long-term growth narrative and TAM expectations - Management refrained from providing guidance beyond the current fiscal year but indicated confidence in outpacing market growth [27][29] Question: Currency impact on revenue and ARR - Currency was in line with expectations for reported revenue, while ARR guidance is provided on a constant currency basis [33][36] Question: SaaS net retention rate drop - Management attributed the drop to a larger customer base and strong new customer acquisition, which does not immediately reflect in NRR [55][56] Question: Impact of Unity on term to SaaS shift - Unity is expected to enhance customer management capabilities, but its impact is still early to quantify [53][91] Question: Term duration elongation - Management noted that large deals influenced term duration, leading to variability in ARR [66][110]

Financial Data and Key Metrics Changes - Subscription revenue grew 30% to $206 million, driven by a record addition of 700 new subscription customers [3][12] - Total revenue increased 19% to $314 million, with a 22% growth in term software revenue to $119 million [12][13] - Subscription ARR rose 28% to $941 million, with SaaS ARR increasing 40% to $364 million [12][14] - Gross margins improved 100 basis points sequentially to 81.5% [15] - Non-GAAP EBIT was $61 million, reflecting a margin of 19.6% [15] Business Line Data and Key Metrics Changes - SaaS revenue saw a robust 44% increase, contributing significantly to overall subscription revenue growth [12] - Term software transactions over $100,000 grew 25%, indicating strong demand from large enterprise accounts [13] - ARR from identity resilience offerings doubled year over year, highlighting growth in this segment [8] Market Data and Key Metrics Changes - Commvault achieved AWS resilience competency in the recovery category and was named the 2025 AWS Global Storage Partner of the Year [9] - The company is a launch partner for the AWS European Sovereign Cloud, addressing regional data sovereignty needs [10][11] Company Strategy and Development Direction - Commvault is focusing on innovation through the Commvault Cloud Unity Platform, which integrates data security, identity resilience, and cyber recovery [4][10] - The company aims to capitalize on the growing demand for cyber resilience in an AI-driven, hybrid, and multi-cloud environment [3][10] - A cost optimization program was initiated to align the cost structure with evolving business needs [15][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position, citing strong customer engagement and adoption [11] - The company anticipates solid results for the year, reflecting leadership in the market and customer trust [11] - Management noted that the business is in a good place, with expectations to outpace market growth [27] Other Important Information - The company repurchased $41 million of stock during the quarter, with a year-to-date total of $187 million [16][19] - Free cash flow for Q3 was impacted by the timing of collections and an additional payroll cycle, but is expected to normalize in Q4 [16][24] Q&A Session Summary Question: Free cash flow and accounts receivable increase - Management explained that Q3 typically sees pressure on free cash flow due to sales cycles, with over 60% of deals closing in the last weeks of the quarter [22][24] Question: Long-term growth narrative and TAM expectations - Management refrained from discussing guidance beyond the fiscal year but acknowledged the total addressable market (TAM) growth expectations [25][26] Question: Currency impact on revenue and ARR - Currency was in line with expectations for revenue, while ARR guidance is provided on a constant currency basis [32][34] Question: SaaS NRR and customer acquisition - Management noted that the increase in new SaaS customers does not immediately reflect in NRR, as those dollars do not show up yet [53][54] Question: Unity platform impact on SaaS growth - The Unity platform is expected to enhance customer capabilities and facilitate cross-selling, although it is still early in its adoption [91][92] Question: Term duration and ARR expectations - Management indicated that longer duration deals impacted term ARR, but emphasized the importance of looking at annualized performance [108][109]