Financial Data and Key Metrics Changes - Commvault achieved a record $47 million in Net New ARR, with Subscription ARR rising 30% to $894 million and total revenue growing 18% to $276 million [4][14] - Total ARR grew 22%, surpassing $1 billion two quarters earlier than the original target [4][14] - SaaS ARR increased 56% to $336 million, exceeding the original target of $330 million [15] Business Line Data and Key Metrics Changes - Subscription ARR now constitutes 86% of total ARR, up from 81% a year ago [15] - Strong double-digit growth was observed in identity and resilience offerings, which represented nearly 40% of Net New ARR [16] - Active Directory usage tripled year-over-year, indicating strong demand for identity protection services [16] Market Data and Key Metrics Changes - Commvault moved and protects approximately eight exabytes of customer data in the cloud, reflecting a greater than 40% CAGR over the past five years [8] - The number of SaaS customers grew to nearly 9,000, representing a 40% increase year-over-year [9] Company Strategy and Development Direction - The company focuses on three key growth drivers: demand for the Commvault Cloud Cyber Resilience platform, the shift to the cloud, and innovation in product offerings [5][10] - Commvault aims to enhance its partner ecosystem and has announced a partnership with BeyondTrust to strengthen identity security [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued strong market demand and the ability to take market share, driven by innovation and customer support [22][23] - The company anticipates total ARR growth of 18%-19% year-over-year for fiscal 2026, with subscription ARR expected to increase by 24%-25% [21][22] Other Important Information - Commvault closed a private offering of $900 million in convertible senior notes, enhancing its capital flexibility [19] - The company repurchased $131 million of stock during the quarter, indicating a commitment to returning value to shareholders [19] Q&A Session Summary Question: Can you elaborate on the shift in term duration? - Management noted that customers are opting for shorter contract durations to maintain flexibility as they transition to the cloud, which has impacted average deal size [26] Question: How does Commvault view the competitive landscape? - Management believes that while the market is competitive, Commvault is gaining share, particularly in the SaaS segment, which is growing at 55% ARR [31][33] Question: Is the backup modernization cycle winding down? - Management disagreed, stating that the frequency and scale of cyber attacks continue to drive demand for modernization and resilience solutions [36] Question: What are the drivers of the term subscription business? - On-premise data growth remains a significant driver, alongside the increasing importance of identity and data security offerings [50][52] Question: Are you seeing increased cross-sell between term and SaaS customers? - Management confirmed that the percentage of SaaS customers also using term products is increasing, reflecting a growing trend towards hybrid solutions [54] Question: What is the outlook for capital allocation and share buybacks? - The company maintains a consistent capital allocation strategy, with a focus on share buybacks, M&A, and organic investments [83]

Financial Data and Key Metrics Changes - Commvault achieved a total revenue growth of 18% to $276 million, with subscription ARR increasing by 30% to $894 million [4][15] - Total ARR grew by 22% to exceed $1 billion, reaching this milestone two quarters earlier than the original target [4][14] - SaaS ARR rose 56% to $336 million, also surpassing the initial target two quarters ahead of schedule [15][20] Business Line Data and Key Metrics Changes - Subscription ARR now constitutes 86% of total ARR, up from 81% a year ago, indicating a strong shift towards subscription-based revenue [15] - Identity and data security-focused offerings contributed nearly 40% of net new ARR, showcasing strong momentum in this segment [7][16] - Active Directory usage tripled year over year, reflecting increased adoption of data and identity recovery solutions [16] Market Data and Key Metrics Changes - The number of SaaS customers grew to nearly 9,000, representing a 40% year-over-year increase [9] - Commvault moved and protects approximately eight exabytes of customer data in the cloud, with a CAGR of over 40% over the past five years [8] - Net dollar retention remained healthy at 125%, indicating strong customer loyalty and upsell opportunities [10] Company Strategy and Development Direction - Commvault's growth is driven by strong demand for its Cloud Cyber Resilience platform, the ongoing shift to the cloud, and a commitment to innovation [5][10] - The company is focusing on integrating identity security with data protection to enhance cyber resilience [38] - Recent acquisition of Satori Cyber aims to bolster capabilities in monitoring and protecting large language models and structured data [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued market demand, driven by the need for enhanced cyber resilience amid rising cyber threats [36][23] - The company anticipates a total ARR growth of 18% to 19% for fiscal 2026, with subscription ARR expected to increase by 24% to 25% [21][22] - Management highlighted the importance of innovation and customer-centric strategies to maintain competitive advantage in a rapidly evolving market [47] Other Important Information - Commvault's fiscal Q2 gross margins were reported at 80.5%, reflecting the impact of the SaaS business mix [18] - The company raised $900 million in convertible senior notes to optimize its balance sheet and enhance capital allocation flexibility [19] - Free cash flow grew 37% year over year to $74 million, supported by strong cash collections and deferred revenue from SaaS contracts [19] Q&A Session Summary Question: Can you elaborate on the shift in term duration? - Management noted that customers are opting for shorter contract durations to maintain flexibility as they transition to the cloud, which has impacted average deal size [26] Question: How does Commvault view the competitive landscape? - Management believes that while the market is competitive, Commvault is gaining share due to its innovative solutions and strong growth in both SaaS and software segments [31][33] Question: Is the backup modernization cycle winding down? - Management disagreed, stating that the frequency and scale of cyber attacks continue to drive demand for modernization and resilience solutions [36] Question: What are the drivers of the term subscription business? - On-premise data growth remains a significant driver, alongside the increasing integration of identity and data security offerings [52] Question: Are you seeing increased cross-sell between term and SaaS customers? - Management confirmed that the percentage of SaaS customers also using term products is gradually increasing, reflecting a positive trend in cross-selling [55]

Financial Data and Key Metrics Changes - Commvault achieved a record $47 million in net new ARR, with subscription ARR rising 30% to $894 million and total revenue growing 18% to $276 million [3][12] - Total ARR grew 22%, reaching $1 billion two quarters earlier than the original target [3][12] - SaaS ARR grew 56% to $336 million, also exceeding the original target two quarters ahead of schedule [12][13] - Fiscal Q2 gross margins were 80.5%, reflecting the shift towards SaaS and the integration costs from Satori [17][66] Business Line Data and Key Metrics Changes - Subscription ARR now constitutes 86% of total ARR, up from 81% a year ago [13] - Strong double-digit growth was observed in identity and data security offerings, which represented nearly 40% of net new ARR [5][15] - Active Directory usage tripled year over year, indicating strong demand for identity protection services [15][46] Market Data and Key Metrics Changes - Commvault protects approximately eight exabytes of customer data in the cloud, with a CAGR of over 40% over the past five years [7] - The number of SaaS customers grew to nearly 9,000, representing a 40% increase year over year [8] - Net dollar retention remained healthy at 125%, indicating strong adoption of SaaS offerings from existing customers [9][15] Company Strategy and Development Direction - The company focuses on three key growth drivers: demand for the Commvault Cloud Cyber Resilience platform, the shift to the cloud, and ongoing innovation [4][10] - Commvault aims to address evolving resilience requirements as enterprises increasingly adopt AI technologies [10] - The acquisition of Satori Cyber is expected to enhance the company's capabilities in monitoring and protecting large language models [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued strong market demand, driven by innovation and growth-focused investments [21] - The competitive landscape remains challenging, but Commvault is positioned to take market share through its innovative platform [28][39] - The company anticipates a total revenue range of $1.161 to $1.165 billion for fiscal year 2026, reflecting a 17% increase at the midpoint [20] Other Important Information - Commvault's capital allocation strategy includes share buybacks, M&A, and organic investments [72] - The company repurchased $131 million of stock during the quarter, with a total of $146 million year to date [18][72] Q&A Session Summary Question: Can you elaborate on the shift in term duration? - Management noted that customers are opting for shorter contract durations to maintain flexibility as they transition to the cloud, which has impacted average deal size [24][62] Question: How does Commvault view the competitive landscape? - Management indicated that while the landscape is competitive, Commvault continues to take market share, particularly in the SaaS segment, which is growing at a faster rate than the overall market [28][30] Question: Are there signs of a slowdown in backup modernization? - Management disagreed, stating that the demand for cyber resilience remains strong due to ongoing cyber threats and the need for innovative solutions [31] Question: What are the drivers of the term subscription business? - Management highlighted that on-premise data growth continues to be a significant driver, alongside the increasing importance of identity and data security [43][46] Question: Is there increased cross-sell between term and SaaS customers? - Management confirmed that the percentage of SaaS customers also using term services is gradually increasing, reflecting a positive trend in cross-selling [47][48]

Core Insights - A hacker accessed the Federal Emergency Management Agency's (FEMA) networks for several months, stealing sensitive employee information [1][4][6] Incident Overview - The Department of Homeland Security (DHS) informed FEMA on July 7 about the breach, which occurred through Citrix Systems Inc.'s remote desktop software using compromised credentials [2] - The breach affected FEMA's Region 6, which includes Arkansas, Louisiana, New Mexico, Oklahoma, and Texas, with data stolen from servers in that region [2][5] - The hacker was active in the network from June 22 until August 5, 2023 [5] Response and Consequences - Following the breach, DHS Secretary Kristi Noem terminated two dozen FEMA employees, including several IT executives, citing failures in cybersecurity protocols [3][6] - FEMA disconnected the Citrix remote access tool for Region 6 on July 16 and mandated multifactor authentication for employees [5] - Noem criticized the agency's IT leadership for incompetence, highlighting a lack of multifactor authentication as a significant issue [6] Data Compromised - The hacker successfully accessed Microsoft Corp.'s Active Directory, which is used for managing access control, and stole information about employees from both FEMA and Customs and Border Protection [4][6] - Although Noem stated that no sensitive data was extracted from DHS networks, the internal investigation later confirmed that federal employee identity data had been stolen [6]

Financial Data and Key Metrics Changes - Total Annual Recurring Revenue (ARR) grew 24% to $996 million, with Subscription ARR increasing 33% to $844 million [4][19] - Total revenue increased 26% to $282 million, driven by a 46% rise in subscription revenue [4][20] - Non-GAAP EBIT grew 21% to $58 million, with a non-GAAP EBIT margin of 20.7% [24][25] - Gross margins for fiscal Q1 were 82.4%, consistent with expectations [24] Business Line Data and Key Metrics Changes - Subscription revenue increased 46% to $182 million, with SaaS ARR soaring 63% to $307 million [5][19] - The number of subscription customers approached 13,000, with approximately 700 net new subscription customers added [20] - SaaS net dollar retention was 125%, indicating strong customer expansion [20] Market Data and Key Metrics Changes - The company achieved triple-digit growth in marketplace transactions, with multiple six-figure and seven-figure deals [6] - Significant growth was observed across geographies, industries, and customer segments, from enterprise to SMB [7] Company Strategy and Development Direction - The company is focused on the booming cyber resilience market, enhancing offerings to meet the needs of CIOs and CISOs [8][12] - Strategic partnerships were formed with Deloitte, CrowdStrike, and HPE to enhance cyber resilience and data protection capabilities [11][12] - The company plans to acquire Satori Cyber to strengthen data security offerings and support responsible AI usage [14][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand for the cyber resilience platform and the ability to capture market share [31] - The company raised its fiscal year 2026 guidance, expecting total ARR growth of 18% year-over-year [29][30] - Management noted that the overall market strength is driving performance, with no signs of budget pull-forward from customers [82] Other Important Information - The company ended Q1 with no debt and a cash position of $363 million, with free cash flow of $30 million [26] - The company repurchased $15 million of stock during the quarter [26] Q&A Session Summary Question: Revenue contributions from the Satori acquisition - Management indicated that the Satori acquisition will not materially impact revenue guidance [34] Question: Cross-sell and upsell opportunities - Management reported a 45% increase in customers using two or more products, with strong traction in cross-sell initiatives [35] Question: Bundling strategy - The company offers logical bundles that enhance customer experience, with plans for more integrated offerings in the future [39] Question: Future growth through M&A - Management highlighted past acquisitions that enhanced core capabilities and indicated a focus on integrating new technologies into the platform [46] Question: Net new ARR dynamics - Management noted that the SaaS business performed as expected, with strong performance in software contributing to net new ARR [52] Question: Federal business performance - The federal business performed in line with expectations, benefiting from FedRAMP High certification [58] Question: Operating margins and performance - Management explained that operating expenses included planned headcount growth and higher commissions, balancing growth and profitability [60] Question: Contribution of newer solutions - Older products like M365 and AirGap Protect continue to dominate ARR, but newer security offerings are also growing significantly [67] Question: Customer budget pull-forward - Management confirmed no evidence of budget pull-forward, attributing strong performance to overall market strength [82]

Financial Data and Key Metrics Changes - Total Annual Recurring Revenue (ARR) grew 24% to $996 million, with Subscription ARR increasing 33% to $844 million [3][17] - Total revenue increased 26% to $282 million, driven by a 46% rise in subscription revenue [4][20] - Non-GAAP EBIT grew 21% to $58 million, with a non-GAAP EBIT margin of 20.7% [24] - Gross margins for Q1 were 82.4%, consistent with expectations [24][29] Business Line Data and Key Metrics Changes - Subscription revenue increased 46% to $182 million, with SaaS ARR soaring 63% to $307 million [4][19] - The number of subscription customers approached 13,000, with approximately 700 net new subscription customers added [20] - SaaS net dollar retention rate was 125%, indicating strong customer expansion [20] Market Data and Key Metrics Changes - The company achieved triple-digit growth in marketplace transactions, with multiple six-figure and seven-figure deals [5] - Significant growth was observed across geographies, industries, and customer segments, from enterprise to SMB [6] Company Strategy and Development Direction - The company is focused on the booming cyber resilience market, enhancing offerings to meet the needs of CIOs and CISOs [7][10] - Strategic partnerships were formed with Deloitte, CrowdStrike, and HPE to enhance cyber resilience and data protection capabilities [11][12] - The company plans to acquire Satori Cyber to strengthen data security offerings and support responsible AI usage [14][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand for the cyber resilience platform and the ability to capture market share [30] - The updated guidance reflects confidence in future opportunities despite broader macroeconomic considerations [30] Other Important Information - The company ended Q1 with no debt and a cash position of $363 million, with free cash flow of $30 million [25] - The acquisition of Satori Cyber is expected to be modestly dilutive to margins for the next several quarters [26][29] Q&A Session Summary Question: Revenue contributions from Satori acquisition - Management indicated that the Satori acquisition will not materially impact revenue guidance [33] Question: Cross-sell and upsell opportunities - Management reported a 45% increase in customers using two or more products, with a focus on expanding this further [35] Question: Bundling strategy - The company has logical bundles that make sense for customers, with more capabilities expected to be integrated [38] Question: Future growth through M&A - Management highlighted a focus on core security and cloud-native capabilities for future acquisitions [42] Question: Federal business performance - The federal business performed in line with expectations, with strong seasonality anticipated for the first half of the year [57] Question: Net new ARR dynamics - The SaaS business performed as expected, with strong performance in software contributing to net new ARR [50] Question: Pull forward of customer budgets - Management stated there is no evidence of budget pull forward, attributing strong performance to overall market strength [81]

Financial Data and Key Metrics Changes - Total revenue increased by 21% to $263 million, driven by a 39% increase in subscription revenue [4][21] - Non-GAAP EBIT margins were reported at 20.8%, reflecting strong profitability [4][26] - Total ARR grew by 18% to $890 million, with a constant currency increase of 21% to $911 million [23] Business Line Data and Key Metrics Changes - Subscription ARR, which includes term-based licenses and SaaS contracts, increased by 29% to $734 million, accounting for 83% of total ARR [23] - SaaS ARR grew by 71% to $259 million, with a constant currency growth of 75% [23] - Revenue from term software transactions over $100,000 increased by 18%, benefiting from a 30% rise in volume [21] Market Data and Key Metrics Changes - The company saw increased transaction volumes and strong close rates across various geographies and market segments [16] - The healthcare sector contributed to significant enterprise wins, including partnerships with major organizations [21][24] Company Strategy and Development Direction - The company is focused on capitalizing on the dynamic cyber resilience market, emphasizing the need for a unified resilience platform [5][6] - Innovations such as Cloud Rewind and enhanced Active Directory recovery capabilities are positioned as key differentiators in the market [9][12] - The strategy includes a strong go-to-market motion and an expanding partner ecosystem to scale globally [16][17] Management's Comments on Operating Environment and Future Outlook - Management highlighted the increasing frequency of cyber attacks as a driving force behind demand for their solutions [46] - The company is optimistic about achieving fiscal year 2026 targets earlier than initially planned, with a focus on continued investment in growth initiatives [33][30] - The outlook for fiscal Q4 includes expected subscription revenue growth of 35% year-over-year at the midpoint [29] Other Important Information - The company ended the quarter with no debt and $240 million in cash, reflecting a strong balance sheet [27] - Free cash flow for Q3 was reported at $30 million, with stock repurchases totaling $32 million [28] Q&A Session Summary Question: Momentum in SaaS customer base - Management noted that approximately 200 of the 1,000 new subscription customers came from Clumio, with the remainder being organic growth [36] Question: Acceleration from external factors - Management attributed growth to both external market conditions and internal execution, emphasizing the importance of their platform in addressing customer needs [46] Question: Seasonality in net new ARR - Management acknowledged that Q4 is typically stronger, but emphasized strong pipeline and field execution as key factors for continued growth [48] Question: Operating leverage outlook - Management indicated that FY 2025 is a year of investment, with expectations for improved operating leverage in the future [55] Question: Greenfield opportunity for protecting SaaS apps - Management expressed confidence in expanding offerings for cloud-native workloads, highlighting recent partnerships and innovations [82] Question: Impact of foreign exchange on guidance - Management confirmed that foreign exchange impacts were considered in the revised guidance, with organic growth remaining strong [89]