Commvault Announces Fiscal 2022 Second Quarter Financial Results

October 26, 2021 at 7:45 AM EDT
--- Annualized recurring revenue (ARR) up 12% year over year ---
--- Second quarter software and products revenue up 4% year over year ---
--- $90 million of share repurchases ---

TINTON FALLS, N.J., Oct. 26, 2021 /PRNewswire/ -- 

Second quarter highlights include:



Second quarter

GAAP Results:



Revenues


$177.8 million

Income from Operations (EBIT)


$2.3 million

EBIT Margin


1.3%

Diluted Earnings Per Share


$0.04




Non-GAAP Results:



Income from Operations (EBIT)


$31.0 million

EBIT Margin


17.4%

Diluted Earnings Per Share


$0.48

Commvault [NASDAQ: CVLT] today announced its financial results for the second quarter ended September 30, 2021

"During the quarter we saw a significant increase in new customer revenue," said Sanjay Mirchandani, President and CEO. "Winning new customers and taking market share is foundational to meeting our longer-term financial objectives.  At the same time, we did not meet our expectations for the quarter. We believe the impact was principally isolated to delayed software opportunities that are part of larger IT Transformation projects. In addition, we believe industry-wide supply chain issues are impacting our customers sourcing of hardware components and associated software orders."

Total revenues for the second quarter of fiscal 2022 were $177.8 million, an increase of 4% year over year.  Total recurring revenue was $140.7 million, representing 79% of total revenue. 

Annualized recurring revenue (ARR), which is the annualized value of all active Commvault recurring revenue streams at the end of the reporting period, was $542.6 million as of September 30, 2021, up 12% from September 30, 2020.

Software and products revenue was $75.3 million, an increase of 4% year over year.  Excluding pass through hardware revenue, software revenue was up 9% year over year. The year over year increase in software and products revenue was driven by a 6% increase in larger deals (deals greater than $0.1 million in software and products revenue).

Larger deal revenue (deals with greater than $0.1 million and software and products revenue) represented 67% of our software and products revenue in the three months ended September 30, 2021.  The number of larger deal revenue transactions increased 9% year over year to 163 deals for the three months ended September 30, 2021. The average dollar amount of larger deal revenue transactions was approximately $311,000.

Services revenue in the quarter was $102.6 million, an increase of 4% year over year.  The increase in services revenue was driven primarily by the increase in Metallic software as a service revenue.  

On a GAAP basis, income from operations (EBIT) was $2.3 million for the second quarter compared to loss of $42.0 million in the prior year.  Non-GAAP EBIT was $31.0 million in the quarter compared to $28.9 million in the prior year.

Operating cash flow totaled $26.1 million for the second quarter of fiscal 2022 compared to $27.0 million in the prior year quarter.  Total cash and short-term investments were $295.8 million as of September 30, 2021 compared to $397.2 million as of March 31, 2021.

During the second quarter of fiscal 2022, Commvault repurchased approximately 1,159,000 shares of its common stock totaling $90.0 million at an average price of approximately $77.70 per share.  

A reconciliation of GAAP to non-GAAP results has been provided in Financial Statement Table IV included in this press release.  An explanation of these measures is also included below under the heading "Use of Non-GAAP Financial Measures."

Use of Non-GAAP Financial Measures

Commvault has provided in this press release the following non-GAAP financial measures: non-GAAP income from operations, non-GAAP income from operations margin, non-GAAP net income, non-GAAP diluted earnings per share and annualized recurring revenue (ARR).  This selected financial information has not been prepared in accordance with GAAP.  Commvault uses these non-GAAP financial measures internally to understand, manage and evaluate its business and make operating decisions.  In addition, Commvault believes these non-GAAP operating measures are useful to investors, when used as a supplement to GAAP financial measures, in evaluating Commvault's ongoing operational performance.  Commvault believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends, and in comparing its financial results with other companies in Commvault's industry, many of which present similar non-GAAP financial measures to the investment community.  Commvault has also provided software and products, services and total revenues on a constant currency basis. Commvault analyzes revenue growth on a constant currency basis in order to provide a comparable framework for assessing how the business performed excluding the effect of foreign currency fluctuations.

All of these non-GAAP financial measures should be considered as a supplement to, and not as a substitute for or superior to, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures, which are provided in Table IV included in this press release.

Non-GAAP income from operations and non-GAAP income from operations margin.  These non-GAAP financial measures exclude noncash stock-based compensation charges and additional FICA and related payroll tax expense incurred by Commvault when employees exercise in the money stock options or vest in restricted stock awards as well as restructuring costs.  Commvault has also excluded certain costs related to key employees of Hedvig and, for fiscal year 2021, the noncash amortization of intangible assets and the impairment of the intangible assets from its non-GAAP results. These expenses are further discussed in Table IV.  Commvault believes that these non-GAAP financial measures are useful metrics for management and investors because they compare Commvault's core operating results over multiple periods.  When evaluating the performance of Commvault's operating results and developing short- and long-term plans, Commvault does not consider such expenses. 

Although noncash stock-based compensation and the additional FICA and related payroll tax expenses are necessary to attract and retain employees, Commvault places its primary emphasis on stockholder dilution as compared to the accounting charges related to such equity compensation plans.  Commvault believes that providing non-GAAP financial measures that exclude noncash stock-based compensation expense and the additional FICA and related payroll tax expenses incurred on stock option exercises and vesting of restricted stock awards allow investors to make meaningful comparisons between Commvault's operating results and those of other companies.

There are a number of limitations related to the use of non-GAAP income from operations and non-GAAP income from operations margin.  The most significant limitation is that these non-GAAP financial measures exclude certain operating costs, primarily related to noncash stock-based compensation, which is of a recurring nature.  Noncash stock-based compensation has been, and will continue to be for the foreseeable future, a significant recurring expense in Commvault's operating results.  In addition, noncash stock-based compensation is an important part of Commvault's employees' compensation and can have a significant impact on their performance.  Lastly, the components that Commvault excludes in its non-GAAP financial measures may differ from the components that its peer companies exclude when they report their non-GAAP financial measures.  

Commvault's management generally compensates for the limitations described above related to the use of non-GAAP financial measures by providing investors with a reconciliation of the non-GAAP financial measure to the most directly comparable GAAP financial measure. Further, Commvault management uses non-GAAP financial measures only in addition to, and in conjunction with, results presented in accordance with GAAP.

Non-GAAP net income and non-GAAP diluted earnings per share (EPS).  In addition to the adjustments discussed in non-GAAP income from operations, non-GAAP net income and non-GAAP diluted EPS incorporates a non-GAAP effective tax rate of 27%. 

Commvault anticipates that in any given period its non-GAAP tax rate may be either higher or lower than the GAAP tax rate as evidenced by historical fluctuations. The GAAP tax rates in recent fiscal years were not meaningful percentages due to the dollar amount of GAAP pre-tax income.  For the same reason as the GAAP tax rates, the estimated cash tax rates in recent fiscal years are not meaningful percentages. Commvault defines its cash tax rate as the total amount of cash income taxes payable for the fiscal year divided by consolidated GAAP pre-tax income. Over time, Commvault believes its GAAP and cash tax rates will align.

Commvault considers non-GAAP net income and non-GAAP diluted EPS useful metrics for Commvault management and its investors for the same basic reasons that Commvault uses non-GAAP income from operations and non-GAAP income from operations margin. In addition, the same limitations as well as management actions to compensate for such limitations described above also apply to Commvault's use of non-GAAP net income and non-GAAP EPS.

Conference Call Information

Commvault will host a conference call today, October 26, 2021 at 8:30 a.m. Eastern Time (5:30 a.m. Pacific Time) to discuss quarterly results. To access this call, dial 844-742-4247 (domestic) or 661-378-9470 (international). The live webcast can be accessed under the "Events" section of Commvault's website. An archived webcast of this conference call will also be available following the call.

About Commvault
Commvault is the recognized leader in data backup and recovery. Commvault's converged data management solution redefines what backup means for the progressive enterprise through solutions that protect, manage and use their most critical asset — their data. Commvault software, solutions and services are available from the company and through a global ecosystem of trusted partners. Commvault employs more than 2,600 highly-skilled individuals across markets worldwide, is publicly traded on NASDAQ (CVLT), and is headquartered in Tinton Falls, New Jersey in the United States. To learn more about Commvault visit www.commvault.com

Safe Harbor Statement
This press release may contain forward-looking statements, including statements regarding financial projections, which are subject to risks and uncertainties, such as competitive factors, difficulties and delays inherent in the development, manufacturing, marketing and sale of software products and related services, general economic conditions, outcome of litigation and others. For a discussion of these and other risks and uncertainties affecting Commvault's business, see "Item IA. Risk Factors" in our annual report in Form 10-K and "Item 1A. Risk Factors" in our most recent quarter report in Form 10-Q. Statements regarding Commvault's beliefs, plans, expectations or intentions regarding the future are forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. All such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from anticipated results. Commvault does not undertake to update its forward-looking statements. The development and timing of any product release as well as any of its features or functionality remain at our sole discretion.

©1999-2021 Commvault Systems, Inc. All rights reserved. Commvault, Commvault and logo, the "C hexagon" logo, Commvault Systems, Commvault HyperScale, ScaleProtect, Commvault OnePass, Unified Data Management, Quick Recovery, QR, CommNet, GridStor, Vault Tracker, InnerVault, Quick Snap, QSnap, IntelliSnap, Recovery Director, CommServe, CommCell, APSS, Commvault Edge, Commvault GO, Commvault Advantage, Commvault Complete, Commvault Activate, Commvault Orchestrate, Commvault Command Center, Hedvig, Universal Data Plane, the "Cube" logo, Metallic, the "M Wave" logo, Be Ready and CommValue are trademarks or registered trademarks of Commvault Systems, Inc. All other third party brands, products, service names, trademarks, or registered service marks are the property of and used to identify the products or services of their respective owners. All specifications are subject to change without notice.

Commvault Systems, Inc.


Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)



Three Months Ended
September 30,


Six Months Ended
September 30,


2021


2020


2021


2020

Revenues:








Software and products

$

75,261



$

72,309



$

157,423



$

148,863


Services

102,579



98,830



203,838



195,276


Total revenues

177,840



171,139



361,261



344,139


Cost of revenues:








Software and products

2,894



7,903



5,200



13,750


Services

23,680



18,896



46,649



37,600


Total cost of revenues

26,574



26,799



51,849



51,350


Gross margin

151,266



144,340



309,412



292,789


Operating expenses:








Sales and marketing

82,928



79,069



159,289



160,745


Research and development

37,726



30,955



73,861



62,097


General and administrative

25,358



24,748



51,787



46,307


Restructuring

636



5,767



2,082



8,091


Impairment of intangible assets



40,700





40,700


Depreciation and amortization

2,352



5,053



4,633



10,118


Total operating expenses

149,000



186,292



291,652



328,058


Income (loss) from operations

2,266



(41,952)



17,760



(35,269)


Interest income

289



249



423



592


Income (loss) before income taxes

2,555



(41,703)



18,183



(34,677)


Income tax expense (benefit)

824



(532)



2,555



4,211


Net income (loss)

$

1,731



$

(41,171)



$

15,628



$

(38,888)


Net income (loss) per common share:








Basic

$

0.04



$

(0.89)



$

0.34



$

(0.84)


Diluted

$

0.04



$

(0.89)



$

0.33



$

(0.84)


Weighted average common shares outstanding:








Basic

45,743



46,516



45,960



46,354


Diluted

47,599



46,516



47,936



46,354


 

 

Commvault Systems, Inc.




Consolidated Balance Sheets
(In thousands)
(Unaudited)







September 30,


March 31,




2021


2021

ASSETS


Current assets:






Cash and cash equivalents



$

295,807



$

397,237


Trade accounts receivable, net



166,272



188,126


Other current assets



20,651



22,237


Total current assets



482,730



607,600








Property and equipment, net



109,557



112,779


Operating lease assets



17,925



20,778


Deferred commissions cost



42,351



38,444


Goodwill



112,435



112,435


Other assets



14,756



12,137


Total assets



$

779,754



$

904,173








LIABILITIES AND STOCKHOLDERS' EQUITY


Current Liabilities:






Accounts payable



$

178



$

374


Accrued liabilities



85,604



112,148


Current portion of operating lease liabilities



6,455



7,469


Deferred revenue



247,578



253,211


Total current liabilities



339,815



373,202








Deferred revenue, less current portion



124,833



119,231


Deferred tax liabilities, net



762



761


Long-term operating lease liabilities



13,009



15,419


Other liabilities



1,557



1,526








Total stockholders' equity



299,778



394,034


Total liabilities and stockholders' equity



$

779,754



$

904,173


 

 

Commvault Systems, Inc.


Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)



Three Months Ended
September 30,


Six Months Ended
September 30,


2021


2020


2021


2020

Cash flows from operating activities








Net income (loss)

$

1,731



$

(41,171)



$

15,628



$

(38,888)


Adjustments to reconcile net income to net cash provided by operating
activities:








Depreciation and amortization

2,665



5,365



5,258



10,743


Noncash stock-based compensation

26,449



20,584



48,260



39,535


Impairment of intangible assets



40,700





40,700


Amortization of deferred commissions cost

4,484



4,959



8,650



9,526


Impairment of operating lease assets



225





692


Changes in operating assets and liabilities:








Trade accounts receivable, net

(6,535)



15,021



27,519



3,637


Operating lease assets and liabilities, net

(391)



(288)



(544)



(808)


Other current assets and Other assets

3,248



2,693



(4,346)



9,982


Deferred commissions cost

(6,956)



(4,319)



(12,897)



(9,965)


Accounts payable

48



92



(193)



(67)


Accrued liabilities

115



(9,452)



(25,952)



(17,151)


Deferred revenue

1,162



(9,679)



1,831



(10,222)


Other liabilities

39



2,227



56



4,528


Net cash provided by operating activities

26,059



26,957



63,270



42,242


Cash flows from investing activities








Proceeds from maturity of short-term investments







32,800


Purchases of investments

(2,706)





(2,706)




Purchase of property and equipment, net

(551)



(2,019)



(1,993)



(3,662)


Net cash (used in) provided by investing activities

(3,257)



(2,019)



(4,699)



29,138


Cash flows from financing activities








Repurchase of common stock

(90,044)





(180,092)




Proceeds from stock-based compensation plans

7,826



5,040



23,261



5,271


Net cash (used in) provided by financing activities

(82,218)



5,040



(156,831)



5,271


Effects of exchange rate — changes in cash

(3,926)



7,743



(3,170)



10,420


Net (decrease) increase in cash and cash equivalents

(63,342)



37,721



(101,430)



87,071


Cash and cash equivalents at beginning of period

359,149



345,432



397,237



296,082


Cash and cash equivalents at end of period

$

295,807



$

383,153



$

295,807



$

383,153


 

 

Commvault Systems, Inc.


Reconciliation of GAAP to Non-GAAP Financial Measures and Other Financial Information
(In thousands, except per share data)
(Unaudited)



Three Months Ended
September 30,


Six Months Ended
September 30,


2021


2020


2021


2020

Non-GAAP financial measures and reconciliation:








GAAP income (loss) from operations

$

2,266



$

(41,952)



$

17,760



$

(35,269)


Noncash stock-based compensation (1)

26,199



19,937



47,888



38,831


FICA and payroll tax expense related to stock-based compensation (2)

495



188



1,458



520


Restructuring (3)

636



5,767



2,082



8,091


Hedvig deferred payments (4)

1,405



1,406



2,811



2,812


Amortization of intangible assets (5)



2,825





5,650


Impairment of intangible assets (6)



40,700





40,700


Non-GAAP income from operations

$

31,001



$

28,871



$

71,999



$

61,335










GAAP net income (loss) 

$

1,731



$

(41,171)



$

15,628



$

(38,888)


Noncash stock-based compensation (1)

26,199



19,937



47,888



38,831


FICA and payroll tax expense related to stock-based compensation (2)

495



188



1,458



520


Restructuring (3)

636



5,767



2,082



8,091


Hedvig deferred payments (4)

1,405



1,406



2,811



2,812


Amortization of intangible assets (5)



2,825





5,650


Impairment of intangible assets (6)



40,700





40,700


Non-GAAP provision for income taxes adjustment (7)

(7,624)


(8,394)


(16,999)


(12,509)

Non-GAAP net income

$

22,842



$

21,258



$

52,868



$

45,207










Diluted weighted average shares outstanding

47,599


47,106


47,936


46,821

Non-GAAP diluted earnings per share

$

0.48



$

0.45



$

1.10



$

0.97


 


Three Months Ended
September 30,


Six Months Ended
September 30,


2021


2020


2021


2020

Subscription software and products revenue

$

47,605



$

38,395



$

97,123



$

89,589


Perpetual software and products revenue

27,656



33,914



60,300



59,274


Total software and products revenue

$

75,261



$

72,309



$

157,423



$

148,863


Subscription as a % of total software and products revenue

63%


53%


62%


60%

 


Three Months Ended
September 30,


Six Months Ended
September 30,


2021


2020


2021


2020

Subscription software and products revenue

$

47,605



$

38,395



$

97,123



$

89,589


Recurring support and services revenue

93,109



90,694



185,759



180,591


Total recurring revenue

$

140,714



$

129,089



$

282,882



$

270,180


Percentage of total revenues

79%


75%


78%


79%









Perpetual software and products revenue

$

27,656



$

33,914



$

60,300



$

59,274


Non-recurring services revenue

9,470



8,136



18,079



14,685


Total non-recurring revenue

$

37,126



$

42,050



$

78,379



$

73,959


Percentage of total revenues

21%


25%


22%


21%









Total Revenue (8)

$

177,840



$

171,139



$

361,261



$

344,139


 



Measures at period ending ($000s)



September 30, 2020


March 31, 2021


September 30, 2021

Annualized Recurring Revenue (9)


$

483,455



$

517,948



$

542,564















 


Three Months Ended September 30, 2021


Americas

EMEA

APJ

Total

Software and Products Revenue

$

44,185


$

22,280


$

8,796


$

75,261


Customer Support Revenue

51,207


26,288


9,958


87,453


Other Services Revenue

9,393


4,114


1,619


15,126


Total Revenue

$

104,785


$

52,682


$

20,373


$

177,840


 


Three Months Ended September 30, 2020


Americas

EMEA

APJ

Total

Software and Products Revenue

$

39,241


$

22,063


$

11,005


$

72,309


Customer Support Revenue

54,177


24,911


10,359


89,447


Other Services Revenue

4,794


3,084


1,505


9,383


Total Revenue

$

98,212


$

50,058


$

22,869


$

171,139


 


Six Months Ended September 30, 2021


Americas

EMEA

APJ

Total

Software and Products Revenue

$

95,972


$

43,621


$

17,830


$

157,423


Customer Support Revenue

103,081


53,062


20,279


176,422


Other Services Revenue

16,703


7,542


3,171


27,416


Total Revenue

$

215,756


$

104,225


$

41,280


$

361,261







 


Six Months Ended September 30, 2020


Americas

EMEA

APJ

Total

Software and Products Revenue

$

89,886


$

40,858


$

18,119


$

148,863


Customer Support Revenue

109,415


48,221


20,454


178,090


Other Services Revenue

8,907


5,639


2,640


17,186


Total Revenue

$

208,208


$

94,718


$

41,213


$

344,139







 



Three Months Ended September 30,
2021


Six Months Ended
September 30, 2021



Sequential


Year Over Year


Year Over Year

Non-GAAP software and products revenue reconciliation







  GAAP software and products revenue


$

75,261



$

75,261



$

157,423


      Adjustment for currency impact


770



(836)



(3,916)


Non-GAAP software and products revenue on a constant currency basis (10)


$

76,031



$

74,425



$

153,507











Three Months Ended September 30,
2021


Six Months Ended September 30, 2021



Sequential


Year Over Year


Year Over Year

Non-GAAP services revenue reconciliation







  GAAP services revenue


$

102,579



$

102,579



$

203,838


      Adjustment for currency impact


1,012



(1,241)



(5,691)


Non-GAAP services revenue on a constant currency basis (10)


$

103,591



$

101,338



$

198,147











Three Months Ended September 30,
2021


Six Months Ended September 30, 2021



Sequential


Year Over Year


Year Over Year

Non-GAAP total revenue reconciliation







  GAAP total revenues


$

177,840



$

177,840



$

361,261


      Adjustment for currency impact


1,782



(2,077)



(9,607)


Non-GAAP total revenues on a constant currency basis (10)


$

179,622



$

175,763



$

351,654


 

 

Footnotes - Adjustments


(1) Represents noncash stock-based compensation charges associated with restricted stock units granted and
our Employee Stock Purchase Plan.  Those amounts are represented as follows:



Three Months Ended
September 30,


Six Months Ended
September 30,


2021


2020


2021


2020

Cost of services revenue

$

1,042



$

740



$

2,227



$

1,406


Sales and marketing

9,974



8,988



17,282



16,192


Research and development

8,410



5,578



15,595



11,519


General and administrative

6,773



4,631



12,784



9,714


Stock-based compensation expense

$

26,199



$

19,937



$

47,888



$

38,831



The table above excludes stock-based compensation expense related to the Company's restructuring
activities described below in footnote three.


(2)

Represents additional FICA and related payroll tax expenses incurred by Commvault when employees
exercise in the money stock options or vest in restricted stock awards.



(3)

In recent fiscal years, Commvault initiated restructuring plans to increase efficiency in its sales, marketing
and distribution functions as well as reduce costs across all functional areas.  These restructuring charges
relate primarily to severance and related costs associated with headcount reductions, as well as the closure
of offices.  Restructuring includes stock-based compensation related to modifications of awards granted to
former employees.  Management believes, when used as a supplement to GAAP results, that the exclusion
of these charges will help investors and financial analysts understand Commvault's operating results and
underlying operational trends as compared to prior periods.



(4)

In connection with the acquisition of Hedvig Inc., certain Hedvig shareholders will receive cash payments for the
30 months following the date of acquisition, subject to their continued employment with Commvault.  While
these payments are proportionate to these shareholders' ownership of Hedvig, under GAAP they are
accounted for as compensation expense within Research and development expenses over the course of the
30 month service period.  Management believes, when used as a supplement to GAAP results, that the
exclusion of these non-routine expenses will help investors and financial analysts understand Commvault's
operating results and underlying operational trends as compared to prior periods.



(5)

Represents noncash amortization of intangible assets.



(6)

In the second quarter of fiscal 2021, Commvault recorded impairment of its acquired intangible assets. These
non-cash charges are not representative of ongoing costs to the business and are not expected to recur. As
a result, these charges are being excluded to provide investors with a more comparable measure of costs
associated with ongoing operations.



(7)

The provision for income taxes is adjusted to reflect Commvault's estimated non-GAAP effective tax rate of 27%.



(8)

This table includes the following financial metrics that are derived from Commvault's GAAP recognized revenue:




Subscription software and products revenue - The amounts included on this line include the software and
product portion of a) non-cancellable term-based, or subscription, licenses that expire at the end of the
contractual term; and b) "pay-as-you-go" utility arrangements based on product usage that are structured
with no guaranteed minimums.  These revenues are included in Software and Products Revenue on
Commvault's Consolidated Statement of Operations.




Perpetual software and products revenue - The amounts included on this line are primarily associated with
revenue from the sale of perpetual software licenses.  These revenues are included in Software and Products
Revenue on Commvault's Consolidated Statement of Operations.




Recurring support and services revenue - The amounts included on this line consist primarily of maintenance
and support revenues associated with the sale of both subscription and perpetual software arrangements. 
This revenue is included in Services Revenue on Commvault's Consolidated Statement of Operations. This
line also includes revenue from software-as-a-service arrangements.




Non-recurring services revenue - The amounts included on this line are primarily revenues associated with
Commvault's installation and consultation services.  These revenues are included in Services Revenue on
Commvault's Consolidated Statement of Operations.




Management believes that reviewing these metrics, in addition to GAAP results, helps investors and financial
analysts understand the recurring nature of certain revenue amounts and trends as compared to prior
periods. 




Note that nearly all of Commvault's software and product revenue is related to solutions that are run in the
customer's environment.  As a result, as required under ASC 606, substantially all of Commvault's software
and product revenue is recognized at a point in time, when it is delivered to the customer, and not ratably
over the course of a contractual period.  This is the case for both perpetual software licenses and subscription
software licenses. Metallic, Commvault's software-as-a-service offering is recognized over time as services
revenue.



(9)

Annualized Recurring Revenue (ARR) is defined as the annualized recurring value of all active contracts at
the end of a reporting period.  It includes the following contract types: subscription agreements (including
utility), maintenance contracts related to perpetual licenses, other extended maintenance contracts
(enterprise support), managed services, and Metallic.  It excludes any element of the deal arrangement that
is not expected to recur, primarily perpetual licenses and most professional services.  Contracts will be
annualized by dividing the total contract value by the number of days in the contract term, then multiplying
by 365.




ARR should be viewed independently of GAAP revenue, deferred revenue and unbilled revenue and is not
intended to be combined with or to replace those items. ARR is not a forecast of future revenue. Management
believes that reviewing this metric, in addition to GAAP results, helps investors and financial analysts
understand the value of Commvault's recurring revenue streams versus prior periods. 



(10)

Revenues on a constant currency basis are calculated using the average foreign exchange rates from a
previous period and applying these rates to foreign-denominated revenues in the corresponding period of
fiscal 2022. The difference between revenue calculated based on these foreign exchange rates and
revenues calculated in accordance with GAAP is listed as Adjustment for currency impact in the table above.

 

 

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SOURCE Commvault

Investor Relations Contact, Michael J. Melnyk, CFA, 732-870-4581, mmelnyk@commvault.com; Media Relations Contact, Miranda Foster, 732-728-5378, mfoster@commvault.com