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]

Commvault Earnings Call Summary Company Overview - **Company**: Commvault - **Industry**: Cyber Resilience, Data Protection, and Security Key Points and Arguments Cyber Resilience Market - Commvault is positioned as a leading player in the cyber resilience space, which combines data protection and data security [5][6] - Cyber resilience is a top priority for CIOs and CSOs, with multiple surveys indicating it as a key focus for businesses [6] Product Offerings - Commvault supports over 40 workloads, including SaaS applications, AI data, and on-premise solutions, emphasizing the importance of breadth and depth in workloads for effective cyber resilience [7][8] - The company provides security components that help customers identify critical assets and test their cyber resiliency [9][10] Competitive Advantages - Commvault offers ultimate choice and flexibility in how customers consume their products, whether through software, SaaS, or appliances [11] - The company emphasizes a single pane of glass for managing data across multiple environments, which enhances recovery speed and efficiency [12][13] Market Size and Growth - The total addressable market (TAM) for Commvault is estimated at $24 billion, split evenly between core data backup and recovery and data security/cloud security [14][17] - The core backup and recovery market is valued at $12 billion, with $9 billion on-premise and $3 billion in the cloud, projected to grow to $4 billion by FY27 [15][16] - The data security and cloud security segment is also estimated at $12 billion, with expected growth in the high teens [18] Financial Performance - Subscription revenue grew 45% year-over-year, with the SaaS platform reaching $281 million, marking a 68% growth year-over-year [19][20] - The SaaS net dollar retention rate is at 127%, driven by 70% upsell and 30% cross-sell opportunities [20] - Commvault has maintained a profit margin of over 20% EBIT in recent years, with a margin of 21.5% last year [21] Strategic Focus - The company is focused on cross-selling its products, with 70% of SaaS customers using only one product out of nearly 15 offerings [20][49] - Commvault is investing in go-to-market strategies, including increasing sales capacity and enhancing partner enablement [82] Market Dynamics - The competitive landscape includes legacy players that dominate the on-premise market but are losing share due to a lack of hybrid support [26][32] - Commvault's strategy includes addressing the needs of both cloud and hybrid enterprises, which is crucial for cyber resilience [27][28] Future Outlook - The overall market is expected to grow at 12% for the foreseeable future, with Commvault positioned to capture market share [18][68] - The company anticipates sustaining low to mid-teen growth rates over the next few years [68] Perception and Brand Awareness - There is a perception shift occurring, with Commvault moving away from its legacy image to being recognized as a cloud-first company [87][88] - The company is actively working on improving brand awareness and positioning itself as a leader in the cyber resilience space [82][87] Additional Important Insights - Commvault's recent acquisitions aim to expand its portfolio and enhance its market position [85][86] - The company is focused on ensuring that its security features complement existing perimeter security, providing a second layer of defense [52] This summary encapsulates the key insights from Commvault's earnings call, highlighting the company's strategic positioning, market dynamics, financial performance, and future growth prospects.