Commvault Systems Inc. Files 10-Q for Period Ending December 31, 2023

Ticker: CVLT · Form: 10-Q · Filed: Jan 31, 2024 · CIK: 1169561

Commvault Systems Inc 10-Q Filing Summary
FieldDetail
CompanyCommvault Systems Inc (CVLT)
Form Type10-Q
Filed DateJan 31, 2024
Risk Levellow
Pages15
Reading Time18 min
Key Dollar Amounts$0.01
Sentimentneutral

Complexity: simple

Sentiment: neutral

Topics: 10-Q, Commvault Systems, Financial Report, Quarterly Results, Software

AI Summary

COMMVAULT SYSTEMS INC (CVLT) filed a Quarterly Report (10-Q) with the SEC on January 31, 2024. Commvault Systems Inc. reported financial results for the period ending December 31, 2023. The filing covers the third quarter of fiscal year 2024. The company's fiscal year ends on March 31st. Key financial data for the periods ending December 31, 2023, and March 31, 2023, are included. The filing details various financial statement components, including common stock, additional paid-in capital, retained earnings, and accumulated other comprehensive income.

Why It Matters

For investors and stakeholders tracking COMMVAULT SYSTEMS INC, this filing contains several important signals. This 10-Q filing provides investors with an updated view of Commvault's financial health and operational performance for the most recent quarter. Understanding the specific financial figures and trends presented in this report is crucial for assessing the company's current market position and future prospects.

Risk Assessment

Risk Level: low — COMMVAULT SYSTEMS INC shows low risk based on this filing. The filing is a standard quarterly report (10-Q) and does not indicate any unusual or high-risk events.

Analyst Insight

Monitor future filings for trends in subscription revenue growth and profitability to gauge the company's ongoing performance.

Key Numbers

  • 2023-12-31 — Period End Date (Conformed period of report)
  • 2024-01-31 — Filing Date (Filed as of date)
  • 03-31 — Fiscal Year End (Fiscal year end)
  • 2023-10-01 — Subscription Member Start Date (Subscription revenue reporting period)
  • 2023-12-31 — Subscription Member End Date (Subscription revenue reporting period)
  • 2023-09-30 — Balance Sheet Date (Balance sheet reporting date)
  • 2023-03-31 — Prior Period Balance Sheet Date (Prior period balance sheet reporting date)

Key Players & Entities

  • COMMVAULT SYSTEMS INC (company) — Filer name
  • CVLT (company) — Ticker symbol
  • 20231231 (date) — Period of report
  • 20240131 (date) — Filing date
  • DE (jurisdiction) — State of incorporation
  • TINTON FALLS (location) — City
  • NJ (location) — State
  • 732-870-4000 (phone_number) — Business phone

Forward-Looking Statements

  • Commvault's subscription revenue will continue to grow, becoming an even larger percentage of total revenue. (Commvault Systems Inc.) — high confidence, target: 2024-12-31
  • Perpetual license revenue will continue its decline as the company fully transitions to a subscription model. (Commvault Systems Inc.) — medium confidence, target: 2024-12-31

FAQ

When did COMMVAULT SYSTEMS INC file this 10-Q?

COMMVAULT SYSTEMS INC filed this Quarterly Report (10-Q) with the SEC on January 31, 2024.

What is a 10-Q filing?

A 10-Q is a quarterly financial report with unaudited financials, management discussion, and interim business updates. This particular 10-Q was filed by COMMVAULT SYSTEMS INC (CVLT).

Where can I read the original 10-Q filing from COMMVAULT SYSTEMS INC?

You can access the original filing directly on the SEC's EDGAR system. The filing is publicly available and includes all exhibits and attachments submitted by COMMVAULT SYSTEMS INC.

What are the key takeaways from COMMVAULT SYSTEMS INC's 10-Q?

COMMVAULT SYSTEMS INC filed this 10-Q on January 31, 2024. Key takeaways: Commvault Systems Inc. reported financial results for the period ending December 31, 2023.. The filing covers the third quarter of fiscal year 2024.. The company's fiscal year ends on March 31st..

Is COMMVAULT SYSTEMS INC a risky investment based on this filing?

Based on this 10-Q, COMMVAULT SYSTEMS INC presents a relatively low-risk profile. The filing is a standard quarterly report (10-Q) and does not indicate any unusual or high-risk events.

What should investors do after reading COMMVAULT SYSTEMS INC's 10-Q?

Monitor future filings for trends in subscription revenue growth and profitability to gauge the company's ongoing performance. The overall sentiment from this filing is neutral.

Key Dates

  • 2023-12-31: Period End — End of the reporting quarter for the 10-Q filing.
  • 2024-01-31: Filing Date — Date the 10-Q report was officially filed with the SEC.
  • 2024-03-31: Fiscal Year End — Indicates the end of Commvault's fiscal year.

Filing Stats: 4,461 words · 18 min read · ~15 pages · Grade level 16.5 · Accepted 2024-01-31 15:19:05

Key Financial Figures

  • $0.01 — hares of the registrant's common stock, $0.01 par value, outstanding. 1 COMMVAULT

Filing Documents

– FINANCIAL INFORMATION

Part I – FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements Unaudited Consolidated Balance Sheets as of December 31, 2023 and March 31, 2023 1 Unaudited Consolidated Statements of Operations for the three and nine months ended December 31, 2023 and 2022 2 Unaudited Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended December 31, 2023 and 2022 3 Unaudited Consolidated Statements of Stockholders' Equity for the three and nine months ended December 31, 2023 and 2022 4 Unaudited Consolidated Statements of Cash Flows for the nine months ended December 31, 2023 and 2022 6

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 7

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 17

Quantitative and Qualitative Disclosures about Market Risk

Item 3. Quantitative and Qualitative Disclosures about Market Risk 28

Controls and Procedures

Item 4. Controls and Procedures 30

– OTHER INFORMATION

Part II – OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 29

Risk Factors

Item 1A. Risk Factors 29

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 30

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 30

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 30

Other Information

Item 5. Other Information 30

Exhibits

Item 6. Exhibits 31

SIGNATURES

SIGNATURES 32 2 Table of Contents Commvault Systems, Inc. Consolidated Balance Sheets (In thousands, except per share data) (Unaudited) December 31, 2023 March 31, 2023 ASSETS Current assets: Cash and cash equivalents $ 284,310 $ 287,778 Trade accounts receivable, net 223,710 210,441 Assets held for sale 38,680 38,680 Other current assets 19,834 14,015 Total current assets 566,534 550,914 Property and equipment, net 7,933 8,287 Operating lease assets 11,693 11,784 Deferred commissions cost 61,128 59,612 Intangible asset, net 1,354 2,292 Goodwill 127,780 127,780 Other assets 27,652 21,905 Total assets $ 804,074 $ 782,574 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 214 $ 108 Accrued liabilities 101,913 97,888 Current portion of operating lease liabilities 5,178 4,518 Deferred revenue 325,500 307,562 Total current liabilities 432,805 410,076 Deferred revenue, less current portion 184,251 174,393 Deferred tax liabilities, net 736 134 Long-term operating lease liabilities 7,946 8,260 Other liabilities 3,733 3,613 Commitments and contingencies (Note 6) Stockholders' equity: Preferred stock, $ 0.01 par value: 50,000 shares authorized, no shares issued and outstanding — — Common stock, $ 0.01 par value: 250,000 shares authorized, 43,754 shares and 44,140 shares issued and outstanding at December 31, 2023 and March 31, 2023, respectively 436 440 Additional paid-in capital 1,326,468 1,264,608 Accumulated deficit ( 1,136,582 ) ( 1,062,900 ) Accumulated other comprehensive loss ( 15,719 ) ( 16,050 ) Total stockholders' equity 174,603 186,098 Total liabilities and stockholders' equity $ 804,074 $ 782,574 See accompanying unaudited notes to consolidated financial statements 1 Table of Contents Commvault Systems, Inc. Consolidated Statements of Operations (In thousands, except per share data) (Unaudited) Three Months Ended December 31, Nine Months Ended December 31, 2023 2022 2023 2022

Notes to Consolidated Financial Statements - Unaudited

Notes to Consolidated Financial Statements - Unaudited (In thousands, except per share data) 1. Basis of Presentation Commvault Systems, Inc. and its subsidiaries ("Commvault," "we," "us," or "our") provides its customers with a cyber resiliency platform that helps them secure, defend and recover their most precious asset, their data. We provide these products and services for their data across the following environments: on-premises, hybrid, and multi-cloud. Our cyber resiliency offerings are delivered via self-managed software, software-as-a-service ("SaaS"), integrated appliances, or managed by partners. Customers use our technology to protect themselves from threats like ransomware and recover their data efficiently. The consolidated financial statements of Commvault as of December 31, 2023 and for the three and nine months ended December 31, 2023 and 2022 are unaudited, and in the opinion of management, include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the results for the interim periods. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles ("U.S. GAAP") for complete financial statements and should be read in conjunction with the financial statements and notes in our Annual Report on Form 10-K for fiscal 2023. The results reported in these financial statements should not necessarily be taken as indicative of results that may be expected for the entire fiscal year. The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make judgments and estimates that affect the amounts reported in our consolidated financial statements and the accompanying notes. We base our estimates and judgments on historical experience and on various other assumptions that we believe are reasonable under the circumstances. The amounts of assets and liabilities reported in our balance sheets

Notes to Consolidated Financial Statements - Unaudited (continued)

Notes to Consolidated Financial Statements - Unaudited (continued) (In thousands, except per share data) Other services - The amounts included on this line consist primarily of revenues and costs related to professional service offerings, including consultation, assessment and design, installation services, and customer education. Revenues related to other professional services are typically recognized as the services are performed. Recently Adopted and Recently Issued Accounting Standards There were no recently adopted accounting standards that had a material effect on our condensed consolidated financial statements and accompanying disclosures. The table below outlines recently issued accounting standards not yet adopted. Standard Description Effective Date Effect on the Consolidated Financial Statements (or Other Significant Matters) Accounting Standards Update ("ASU") No. 2023-07 (Topic 280): Segment Reporting In November 2023, the Financial Accounting Standards Board ("FASB") issued a new standard to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. This standard will be effective for us beginning April 1, 2024, with early adoption permitted. We are currently evaluating the impact of this standard in our consolidated financial accounting policies, processes, and systems. ASU No. 2023-09 (Topic 740): Income Taxes In December 2023, the FASB issued a new standard to improve income tax disclosures. The standard requires greater disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. This

Notes to Consolidated Financial Statements - Unaudited (continued)

Notes to Consolidated Financial Statements - Unaudited (continued) (In thousands, except per share data) Concentration of Credit Risk We grant credit to customers in a wide variety of industries worldwide and generally do not require collateral. Historically, credit losses relating to these customers have been minimal. Sales through our distribution agreement with Arrow Enterprise Computing Solutions, Inc. ("Arrow") totaled 35 % and 38 % of total revenues for the three months ended December 31, 2023 and 2022, respectively, and 36 % and 37 % for the nine months ended December 31, 2023 and 2022, respectively. Arrow accounted for approximately 31 % and 34 % of total accounts receivable as of December 31, 2023 and March 31, 2023, respectively. Fair Value of Financial Instruments The carrying amounts of our cash, cash equivalents, accounts receivable and accounts payable approximate their fair values due to the short-term maturity of these instruments. Our cash equivalents balance consists primarily of U.S. Treasury Bills with maturities of one month or less. The following table summarizes the composition of our financial assets measured at fair value at December 31, 2023: Level 1 Level 2 Level 3 Total Cash equivalents $ 24,903 — — $ 24,903 There were no financial assets measured at fair value on a recurring basis as of December 31, 2022. Equity Securities Accounted for at Net Asset Value We held equity interests in private equity funds of $ 7,154 as of December 31, 2023, which are accounted for under the net asset value practical expedient as permitted under ASC 820, Fair Value Measurement . These investments are included in other assets in the accompanying consolidated balance sheets. The net asset values of these investments are determined using quarterly capital statements from the funds, which are based on our contributions to the funds, allocation of profit and loss and changes in fair value of the underlying fund investments. Changes in fair value a

Notes to Consolidated Financial Statements - Unaudited (continued)

Notes to Consolidated Financial Statements - Unaudited (continued) (In thousands, except per share data) The incremental costs attributable to professional services are generally amortized over the period the related services are provided and revenue is recognized. Amortization expense related to these costs is included in sales and marketing expenses in the accompanying consolidated statements of operations. 3. Revenue We derive revenues from various sources, including subscriptions, perpetual software licenses, customer support contracts and other services. Subscription Subscription includes the revenues derived from time-based arrangements, including the software portion of term-based licenses and SaaS offerings. The software component of term-based licenses is typically recognized when the software is delivered or made available for download. The term of our subscription arrangements is typically one to three years , but can range between one and five years . For SaaS offerings, revenue is generally recognized ratably over the contract term beginning on the date that the service is made available to the customer. Perpetual License Perpetual license includes the revenues from the sale of perpetual software licenses. Perpetual software license revenue is typically recognized when the software is delivered or made available for download. Customer Support Customer support includes revenues associated with support contracts tied to our software products. Customer support includes software updates on a when-and-if-available basis, telephone support, integrated web-based support, and other premium support offerings, for both subscription software and perpetual software license arrangements. We sell our customer support contracts as a percentage of net software purchases. Customer support revenue is recognized ratably over the term of the customer support agreement, which is typically one year on our perpetual licenses and over the term on our term-based lic

Notes to Consolidated Financial Statements - Unaudited (continued)

Notes to Consolidated Financial Statements - Unaudited (continued) (In thousands, except per share data) Our typical performance obligations include the following: Performance Obligation When Performance Obligation is Typically Satisfied When Payment is Typically Due How Standalone Selling Price is Typically Estimated Subscription Term-based software licenses Upon shipment or made available for download (point in time) Within 90 days of shipment except for certain subscription licenses which are paid for over time Residual approach Software-as-a-service (SaaS) Ratably over the course of the contract (over time) Annually or at the beginning of the contract period Observable in transactions without multiple performance obligations Perpetual License Perpetual software licenses Upon shipment or made available for download (point in time) Within 90 days of shipment Residual approach Customer Support Software updates Ratably over the course of the support contract (over time) At the beginning of the contract period Observable in renewal transactions Customer support Ratably over the course of the support contract (over time) At the beginning of the contract period Observable in renewal transactions Other Services Other professional services (except for education services) As work is performed (over time) Within 90 days of services being performed Observable in transactions without multiple performance obligations Education services When the class is taught (point in time) Within 90 days of services being performed Observable in transactions without multiple performance obligations Judgments related to revenue recognition Most of our contracts contain multiple performance obligations. For these contracts, we evaluate and account for individual performance obligations separately if they are determined to be distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. Standalone se

Notes to Consolidated Financial Statements - Unaudited (continued)

Notes to Consolidated Financial Statements - Unaudited (continued) (In thousands

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