Commvault(US:CVLT)2025-10-28 13:32Financial 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]