Market Overview

Commvault Announces Fiscal 2021 Second Quarter Financial Results

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TINTON FALLS, N.J., Oct. 27, 2020  /PRNewswire/ --

Second quarter highlights include:




Second quarter

GAAP Results:



Revenues


$171.1 million

Loss from Operations (EBIT)


$(42.0) million

Operating Margin


(24.5)%

Diluted Loss Per Share


$(0.89)




Non-GAAP Results:



Income from Operations (EBIT)


$28.9 million

EBIT Margin


16.9%

Diluted Earnings Per Share


$0.45

Commvault (NASDAQ:CVLT) today announced its financial results for the second quarter ended September 30, 2020. 

"We are pleased by this quarter's solid financial performance and are on track to deliver continued growth and operating margin expansion," said Sanjay Mirchandani, President and CEO, Commvault. "The Commvault portfolio has never been stronger. New product announcements including Commvault HyperScale X, Commvault Disaster Recovery, and Metallic Cloud Storage Service represent a series of first-mover advantages, addressing critical needs like cloud transformation and ransomware."

Total revenues for the second quarter of fiscal 2021 were $171.1 million, an increase of 2% year over year and a decrease of 1% sequentially.  Total recurring revenue was $129.1 million, an increase of 6% year over year. 

Annualized recurring revenue (ARR), which is the annualized value of all active Commvault recurring revenue streams at the end of the reporting period, was $483.5 million as of September 30, 2020, up 9% from September 30, 2019.

Software and products revenue was $72.3 million, an increase of 5% year over year and a decrease of 6% sequentially.  The year over year increase in software and products revenue was driven by an 8% increase in larger deals (deals greater than $0.1 million in software and products revenue).     

Services revenue in the quarter was $98.8 million, flat year over year and an increase of 2% sequentially.

On a GAAP basis, loss from operations was $42.0 million for the second quarter compared to a loss of $8.2 million in the prior year. The current quarter loss was driven by $40.7 million of non-cash impairment charges of intangible assets recognized in the acquisition of Hedvig, Inc. The impairments are primarily due to a moderated view of the acquisition assumptions. The Hedvig technology has now been fully integrated into Hyperscale X software and appliances. The integration of this technology will lessen reliance on third party vendors, begin driving meaningful gross margin expansion on our Hyperscale technology, and improve the customer experience. Non-GAAP EBIT, which excludes the non-cash impairment charges, was $28.9 million in the quarter compared to $24.8 million in the prior year.

Operating cash flow totaled $27.0 million for the second quarter of fiscal 2021 compared to $24.0 million in the prior year quarter.  Total cash and short-term investments were $394.0 million as of September 30, 2020 compared to $339.7 million as of March 31, 2020.

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.  In fiscal 2020, Commvault also excluded costs related to a non-routine shareholder matter. Commvault has also excluded the noncash amortization and impairment of intangible assets and certain costs related to key employees of Hedvig 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.

Amortization and impairment charges of intangible assets are noncash items.  Commvault believes the exclusion of these expenses provide for a useful comparison of operating results to prior periods and to 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 incorporate 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 27, 2020, at 8:30 a.m. Eastern Time (5:30 a.m. Pacific Time) to discuss its financial 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 2,500 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.

©1999-2020 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.

                                                                               

Table I


Commvault Systems, Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)



Three Months Ended September 30,


Six Months Ended September 30,


2020


2019


2020


2019

Revenues:








Software and products

$

72,309



$

68,595



$

148,863



$

132,269


Services

98,830



98,987



195,276



197,516


Total revenues

171,139



167,582



344,139



329,785


Cost of revenues:








Software and products

7,903



8,831



13,750



14,861


Services

18,896



22,410



37,600



45,100


Total cost of revenues

26,799



31,241



51,350



59,961


Gross margin

144,340



136,341



292,789



269,824


Operating expenses:








Sales and marketing

79,069



80,960



160,745



168,345


Research and development

30,955



23,227



62,097



46,807


General and administrative

24,748



24,753



46,307



47,260


Restructuring

5,767



12,851



8,091



16,930


Impairment of intangible assets

40,700





40,700




Depreciation and amortization

5,053



2,719



10,118



5,325


Total operating expenses

186,292



144,510



328,058



284,667


Loss from operations

(41,952)



(8,169)



(35,269)



(14,843)


Interest income

249



1,561



592



3,484


Loss before income taxes

(41,703)



(6,608)



(34,677)



(11,359)


Income tax expense (benefit)

(532)



476



4,211



2,571


Net loss

$

(41,171)



$

(7,084)



$

(38,888)



$

(13,930)


Net loss per common share:








Basic

$

(0.89)



$

(0.16)



$

(0.84)



$

(0.31)


Diluted

$

(0.89)



$

(0.16)



$

(0.84)



$

(0.31)


Weighted average common shares outstanding:








Basic

46,516



45,277



46,354



45,363


Diluted

46,516



45,277



46,354



45,363


 

 

Table II


Commvault Systems, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)




September 30,


March 31,



2020


2020

ASSETS

Current assets:





Cash and cash equivalents


$

383,153



$

288,082


Restricted cash




8,000


Short-term investments


10,845



43,645


Trade accounts receivable, net


138,957



146,990


Other current assets


26,038



26,969


Total current assets


558,993



513,686







Property and equipment, net


113,014



114,519


Operating lease assets


18,691



15,009


Deferred commissions cost


32,726



31,394


Intangible assets, net




46,350


Goodwill


112,435



112,435


Other assets


16,119



11,683


Total assets


$

851,978



$

845,076







LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:





Accounts payable


$

253



$

307


Accrued liabilities


79,112



87,051


Current portion of operating lease liabilities


7,563



7,699


Deferred revenue


227,777



233,497


Total current liabilities


314,705



328,554







Deferred revenue, less current portion


97,506



92,723


Deferred tax liabilities, net


739



849


Long-term operating lease liabilities


12,574



8,808


Other liabilities


6,978



2,238







Total stockholders' equity


419,476



411,904


Total liabilities and stockholders' equity


$

851,978



$

845,076


 

Table III


Commvault Systems, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)



Three Months Ended
September 30,


Six Months Ended
September 30,


2020


2019


2020


2019

Cash flows from operating activities








Net loss

$

(41,171)



$

(7,084)



$

(38,888)



$

(13,930)


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








Depreciation and amortization

5,365



3,136



10,743



6,054


Noncash stock-based compensation

20,584



14,857



39,535



29,607


Impairment of intangible assets

40,700





40,700




Amortization of deferred commissions cost

4,959



4,227



9,526



8,730


Impairment of operating lease assets

225



1,332



692



2,050


Changes in operating assets and liabilities:








Trade accounts receivable

15,021



2,460



3,637



45,625


Operating lease assets and liabilities, net

(288)



(806)



(808)



42


Other current assets and Other assets

2,693



4,085



9,982



(1,796)


Deferred commissions cost

(4,319)



(3,593)



(9,965)



(6,962)


Accounts payable

92



792



(67)



(425)


Accrued liabilities

(9,452)



9,023



(17,151)



(1,015)


Deferred revenue

(9,679)



(4,157)



(10,222)



(12,079)


Other liabilities

2,227



(293)



4,528



(782)


Net cash provided by operating activities

26,957



23,979



42,242



55,119


Cash flows from investing activities








Purchase of short-term investments







(32,800)


Proceeds from maturity of short-term investments



32,706



32,800



65,519


Purchase of property and equipment

(2,019)



(616)



(3,662)



(1,457)


Net cash provided by (used in) investing activities

(2,019)



32,090



29,138



31,262


Cash flows from financing activities








Repurchase of common stock







(40,026)


Proceeds from stock-based compensation plans

5,040



5,662



5,271



6,325


Net cash provided by (used in) financing activities

5,040



5,662



5,271



(33,701)


Effects of exchange rate — changes in cash

7,743



(4,927)



10,420



(3,047)


Net increase in cash, cash equivalents and restricted cash

37,721



56,804



87,071



49,633


Cash, cash equivalents and restricted cash at beginning of period

345,432



320,821



296,082



327,992


Cash, cash equivalents and restricted cash at end of period

$

383,153



$

377,625



$

383,153



$

377,625


 

Table IV


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,


2020


2019


2020


2019

Non-GAAP financial measures and reconciliation:








GAAP loss from operations

$

(41,952)



$

(8,169)



$

(35,269)



$

(14,843)


Noncash stock-based compensation (1)

19,937



14,252



38,831



28,634


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

188



225



520



640


Restructuring (3)

5,767



12,851



8,091



16,930


Non-routine shareholder matters (4)



4,325





7,628


Amortization of intangible assets (5)

2,825





5,650




Hedvig deferred payments (6)

1,406





2,812




Acquisition costs (7)



1,283





1,283


Impairment of intangible assets (8)

40,700





40,700




Non-GAAP income from operations

$

28,871



$

24,767



$

61,335



$

40,272










GAAP net loss

$

(41,171)



$

(7,084)



$

(38,888)



$

(13,930)


Noncash stock-based compensation (1)

19,937



14,252



38,831



28,634


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

188



225



520



640


Restructuring (3)

5,767



12,851



8,091



16,930


Non-routine shareholder matters (4)



4,325





7,628


Amortization of intangible assets (5)

2,825





5,650




Hedvig deferred payments (6)

1,406





2,812




Acquisition costs (7)



1,283





1,283


Impairment of intangible assets (8)

40,700





40,700




Non-GAAP provision for income taxes adjustment (9)

(8,394)



(6,633)



(12,509)



(9,244)


Non-GAAP net income

$

21,258



$

19,219



$

45,207



$

31,941










Diluted weighted average shares outstanding

47,106



45,718



46,821



45,946


Non-GAAP diluted net income per share

$

0.45



$

0.42



$

0.97



$

0.70


 


Three Months Ended
September 30,


Six Months Ended
September 30,


2020


2019


2020


2019

Subscription and Utility Software and Related Support Services

$

53,045



$

40,405



$

116,664



$

72,694


Recurring Support and Services

76,044



81,372



153,516



163,217


Total Recurring Revenue

$

129,089



$

121,777



$

270,180



$

235,911


Percentage of Total Revenues

75%



73%



79%



72%










Perpetual Software and Product Revenue

$

33,914



$

37,852



$

59,274



$

77,969


Other Professional Services

8,136



7,953



14,685



15,905


Total Non-recurring Revenue

$

42,050



$

45,805



$

73,959



$

93,874


Percentage of Total Revenues

25%



27%



21%



28%










Total Revenue (10)

$

171,139



$

167,582



$

344,139



$

329,785


 



Measures at period ending ($000s)



September 30, 2019


March 31, 2020


September 30, 2020

Annualized Recurring Revenue (11)


$

443,064



$

451,667



$

483,455















 


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




Three Months Ended September 30, 2019


Americas

EMEA

APJ

Total

Software and Products Revenue

$

35,863


$

21,440


$

11,292


$

68,595


Customer Support Revenue

57,864


21,906


10,233


90,003


Other Services Revenue

4,430


2,680


1,874


8,984


Total Revenue

$

98,157


$

46,026


$

23,399


$

167,582




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




Six Months Ended September 30, 2019


Americas

EMEA

APJ

Total

Software and Products Revenue

$

67,084


$

42,815


$

22,370


$

132,269


Customer Support Revenue

115,594


43,573


20,318


179,485


Other Services Revenue

9,296


5,362


3,373


18,031


Total Revenue

$

191,974


$

91,750


$

46,061


$

329,785







 



Three Months Ended
September 30, 2020


Six Months Ended
September 30, 2020



Sequential


Year Over Year


Year Over Year

Non-GAAP software and products revenue reconciliation







  GAAP software and products revenue


$

72,309



$

72,309



$

148,863


      Adjustment for currency impact


(1,441)



(1,118)



(709)


Non-GAAP software and products revenue on a constant currency basis (12)


$

70,868



$

71,191



$

148,154











Three Months Ended
September 30, 2020


Six Months Ended
September 30, 2020



Sequential


Year Over Year


Year Over Year

Non-GAAP services revenue reconciliation







  GAAP services revenue


$

98,830



$

98,830



$

195,276


      Adjustment for currency impact


(2,281)



(1,618)



(425)


Non-GAAP services revenue on a constant currency basis (12)


$

96,549



$

97,212



$

194,851











Three Months Ended
September 30, 2020


Six Months Ended
September 30, 2020



Sequential


Year Over Year


Year Over Year

Non-GAAP total revenue reconciliation







  GAAP total revenues


$

171,139



$

171,139



$

344,139


      Adjustment for currency impact


(3,722)



(2,736)



(1,134)


Non-GAAP total revenues on a constant currency basis (12)


$

167,417



$

168,403



$

343,005


 

Footnotes - Adjustments


(1)

Represents noncash stock-based compensation charges associated with stock options, 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,


2020


2019


2020


2019

Cost of services revenue

$

740



$

698



$

1,406



$

1,388


Sales and marketing

8,988



7,359



16,192



15,005


Research and development

5,578



2,011



11,519



4,004


General and administrative

4,631



4,184



9,714



8,237


Stock-based compensation expense

$

19,937



$

14,252



$

38,831



$

28,634


 


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 fiscal 2019, Commvault initiated a restructuring plan 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)

During fiscal 2020, Commvault incurred costs related to a non-routine shareholder matter.  The costs
are for professional fees related to the settlement agreement with the shareholder and consulting fees
incurred with the operational review which was agreed to as part of the settlement. Management believes,
when used as a supplement to GAAP results, that the exclusion of these costs will better 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 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.



(7)

During the second quarter of fiscal 2020, Commvault incurred costs related to the acquisition of Hedvig, Inc.
Management believes, when used as a supplement to GAAP results, that the exclusion of these costs will
help investors and financial analysts understand Commvault's operating results and underlying operational
trends as compared to other periods.



(8)

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.



(9)

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



(10)

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




Subscription and Utility Software and Related Support Services - The amounts included on this line include
a) non-cancellable term-based, or subscription, licenses (inclusive of both recognized software and
recognized maintenance and support revenues) that expire at the end of the contractual term; and b)
"pay-as-you-go" utility arrangements based on product usage (inclusive of both recognized software and
maintenance and support revenues) that are structured with no guaranteed minimums.  The amount includes
both Software and Products Revenue and Services Revenue.




Recurring Support and Services - The amounts included on this line consist primarily of maintenance and
support revenues associated with the sale of perpetual software arrangements.  This revenue is included in
Services Revenue on Commvault's Consolidated Statement of Operations.  




Perpetual Software and Product Revenues - 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.  




Other Professional Services - 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.  Commvault currently does not have material revenue related to hosted, or software
as a solution products.  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.



(11)

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.




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. 



(12)

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 2021. 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.

   

 

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/commvault-announces-fiscal-2021-second-quarter-financial-results-301160040.html

SOURCE Commvault

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