Commvault Reports Transformation Progress
The core of Commvault Advance is to simplify the business, drive improved and sustainable revenue growth, and improve profitability through increasing operating leverage. Commvault Advance began implementation internally nearly 18 months ago with an agenda of product development enhancements designed to make products more powerful and simple, continued with strategic partner actions in 2017 and 2018, and is most recently evidenced by reorganization and restructuring efforts in fiscal 2018. It was publicly announced at the beginning of the company's new fiscal year, starting
"We have made substantial progress across a range of initiatives in the Commvault Advance transformation, which has been a journey designed to position the company for its next phase of growth and profitability," said
- Significant sales and marketing resource moves in support of a partner-led strategy, with a material portion of field resources being re-deployed in support of partner routes to market.
- Commvault Advance prioritized improvements to the company's bottom line performance, efforts that have shown substantial progress since being first announced in May 2018: The Company successfully completed a first round of cost reductions, with actions worldwide that reduced, consolidated and aligned resources across all functional areas. These efforts included an examination of contracted and full-time resources, T & E, and third-party expenses and resulted in a 61% increase in Q2FY19 year-over-year non-GAAP(1) operating income.
Commvaultalso reported substantial progress on a series of strategic governance initiatives announced as part of Commvault Advance and in agreement with Elliott Management: Commvaultand its Board of Directors have initiated a CEO search, which is on track and well underway; appointed two new independent members to its Board (in addition to two other new independent directors appointed by the Company on its own); formed an operations committee of the board whose work is ongoing; and has engaged and successfully completed projects with an outside strategic consultant focused on company operations and go-to-market – activities all designed to identify additional opportunities for improvement and value creation.
Commvault Delivers on Partner-Led Strategy
- In addition to the resource shifts that established robust route-to-market teams,
Commvaultlaunched a new Partner Success Desk, an improved Quote Center, a strong new Partner Demand Center, and updated its Partner Portal, all in a multi-pronged effort to demonstrate its commitment to being a strong and committed partner for its expanding ecosystem. Those efforts were underscored by the hiring of known partner-facing executives into global leadership roles. Commvaultsaid its partner-led initiatives were creating momentum: the company continued to announce new and enhanced strategic partnerships like those with NetApp, HPE, Cisco, IBM, Alibaba, and Huawei); partners applauded the timeliness of Commvault'sofferings for GDPR use cases; and the company's first partner summit was over-subscribed with more than 400 participants.
- Since the public launch of Commvault Advance, the company has smartly consolidated its leading backup & recovery and data management portfolio from 20 to 6 SKUs into four core products (Commvault Complete Backup & Recovery, Commvault HyperScale, Commvault Orchestrate and Commvault Activate); simplified its pricing structure and competitiveness; and streamlined the process to take products to market from development through to sales. The result:
Commvault'sproducts are easier for customer to buy and easier for partners to sell.
"I couldn't be more impressed with the energy and commitment I see from
Commvault Accelerates Subscription Revenue Model Transition
Beginning in fiscal 2018,
As part of the subscription revenue model transition,
Multi-Year Business Model Transformation
As a result of the Commvault Advance initiatives,
- Revenue growth of approximately 2% in FY2019, driven by a combination of continued subscription revenue headwinds and temporary disruption from the transformational changes
- Revenue growth of approximately 9% in FY2020 and FY2021 as the partner-led strategy gains momentum and subscription revenue streams continue to build
- Non-GAAP operating margin targets of approximately 20% in FY2020 and 25%+ in FY2021 based on targeted cost actions and ongoing efficiency initiatives to drive productivity
Safe Harbor Statement: Customers' results may differ materially from those stated herein;
(1) See our financial press release from
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Leo Tignini, Commvault, 732-728-5378, email@example.com, @leotignini; Investor Relations Contact: Michael Picariello, Commvault, 732-728-5380, firstname.lastname@example.org