Commvault Systems Reports Q3 2024 Results

Ticker: CVLT · Form: 10-Q · Filed: Jan 29, 2025 · CIK: 1169561

Commvault Systems Inc 10-Q Filing Summary
FieldDetail
CompanyCommvault Systems Inc (CVLT)
Form Type10-Q
Filed DateJan 29, 2025
Risk Levellow
Pages15
Reading Time18 min
Key Dollar Amounts$0.01
Sentimentneutral

Sentiment: neutral

Topics: 10-Q, earnings, software

TL;DR

CVLT Q3 results are in, check the 10-Q for the full financial picture.

AI Summary

Commvault Systems Inc. reported its third-quarter results for the period ending December 31, 2024. The company's filing indicates a fiscal year end of March 31st. Specific financial figures for the quarter and year-to-date are detailed within the report.

Why It Matters

This 10-Q filing provides investors with the latest financial performance data for Commvault Systems, crucial for understanding the company's current health and future prospects.

Risk Assessment

Risk Level: low — This is a standard quarterly financial filing with no immediate red flags.

Key Numbers

  • 2024-12-31 — Period End Date (Third quarter of fiscal year 2025)
  • 2024-04-01 — Year-to-Date Start Date (Beginning of the fiscal year)

Key Players & Entities

  • COMMVAULT SYSTEMS INC (company) — Filer
  • 2024-12-31 (date) — Period of Report
  • 2025-01-29 (date) — Filed as of Date
  • 0331 (date) — Fiscal Year End

FAQ

What is Commvault Systems Inc.'s fiscal year end?

Commvault Systems Inc.'s fiscal year ends on March 31st (0331).

What period does this 10-Q filing cover?

This 10-Q filing covers the period ending December 31, 2024.

When was this 10-Q filing submitted?

This filing was submitted on January 29, 2025.

What is the company's standard industrial classification?

The company's SIC code is 7372, for Services-Prepackaged Software.

What is the company's SEC file number?

The SEC file number for Commvault Systems Inc. is 001-33026.

Filing Stats: 4,527 words · 18 min read · ~15 pages · Grade level 16.3 · Accepted 2025-01-29 12:21:25

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, 2024 and March 31, 2024 1 Unaudited Consolidated Statements of Operations for the three and nine months ended December 31, 2024 and 2023 2 Unaudited Consolidated Statements of Comprehensive Income for the three and nine months ended December 31, 2024 and 2023 3 Unaudited Consolidated Statements of Stockholders' Equity for the three and nine months ended December 31, 2024 and 2023 4 Unaudited Consolidated Statements of Cash Flows for the nine months ended December 31, 2024 and 2023 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 23

Quantitative and Qualitative Disclosures about Market Risk

Item 3. Quantitative and Qualitative Disclosures about Market Risk 36

Controls and Procedures

Item 4. Controls and Procedures 37

– OTHER INFORMATION

Part II – OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 38

Risk Factors

Item 1A. Risk Factors 38

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 38

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 38

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 38

Other Information

Item 5. Other Information 39

Exhibits

Item 6. Exhibits 39

SIGNATURES

SIGNATURES 40 2 Table of Contents Commvault Systems, Inc. Consolidated Balance Sheets (In thousands, except per share data) (Unaudited) December 31, 2024 March 31, 2024 ASSETS Current assets: Cash and cash equivalents $ 243,575 $ 312,754 Trade accounts receivable, net 271,363 222,683 Assets held for sale 34,770 38,680 Other current assets 27,025 21,009 Total current assets 576,733 595,126 Deferred tax assets, net 117,575 111,181 Property and equipment, net 7,273 7,961 Operating lease assets 10,907 10,545 Deferred commissions cost 67,839 62,837 Intangible assets, net 21,912 1,042 Goodwill 186,406 127,780 Other assets 35,111 27,441 Total assets $ 1,023,756 $ 943,913 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 88 $ 299 Accrued liabilities 128,957 117,244 Current portion of operating lease liabilities 4,970 4,935 Deferred revenue 377,723 362,450 Total current liabilities 511,738 484,928 Deferred revenue, less current portion 210,530 168,472 Deferred tax liabilities 3,344 1,717 Long-term operating lease liabilities 6,631 7,155 Other liabilities 3,664 3,556 Commitments and contingencies (Note 8) 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, 44,022 shares and 43,548 shares issued and outstanding at December 31, 2024 and March 31, 2024, respectively 440 435 Additional paid-in capital 1,440,617 1,349,603 Accumulated deficit ( 1,136,861 ) ( 1,056,011 ) Accumulated other comprehensive loss ( 16,347 ) ( 15,942 ) Total stockholders' equity 287,849 278,085 Total liabilities and stockholders' equity $ 1,023,756 $ 943,913 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 M

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," the "Company," "we," "us," or "our") provides its customers with a scalable platform that enhances customers' cyber resiliency by protecting their data in a world of increasing threats. We provide these products and services across many types of environments, including on-premises, hybrid and multi-cloud. Our offerings are delivered via self-managed software, software-as-a-service ("SaaS"), integrated appliances, or managed by partners. Customers use our Commvault Cloud platform to protect themselves from threats like ransomware and recover their data efficiently. The consolidated financial statements of Commvault as of December 31, 2024 and for the three and nine months ended December 31, 2024 and 2023 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 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 2024. 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

Notes to Consolidated Financial Statements - Unaudited (continued)

Notes to Consolidated Financial Statements - Unaudited (continued) (In thousands, except per share data) 2. Summary of Significant Accounting Policies Reclassification of Prior Year Balances Certain prior year amounts have been reclassified for consistency with the current year presentation. Beginning in fiscal 2025, changes in operating lease assets are being classified as a noncash lease adjustment to reconcile net income to net cash provided by operating activities. This reclassification has no impact on the amount of cash flows from operating activities. Recently Adopted Accounting Standards 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 is effective for us for our annual period beginning April 1, 2024 and interim periods beginning April 1, 2025. We expect this standard to impact our disclosures with no material impacts to our results of operations, cash flows, or financial condition. Recently Issued Accounting Standards Not Yet Adopted Standard Description Effective Date Effect on the Consolidated Financial Statements (or Other Significant Matters) 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 recon

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. Credit losses relating to these customers have been minimal. Sales through our distribution agreement with Arrow Enterprise Computing Solutions, Inc. ("Arrow") totaled 35 % of total revenues for both the three months ended December 31, 2024 and 2023, and 35 % and 36 % for the nine months ended December 31, 2024 and 2023, respectively. Arrow accounted for approximately 30 % and 29 % of total accounts receivable as of December 31, 2024 and March 31, 2024, respectively. Sales through our original equipment manufacturing agreement with Hitachi Vantara resulted in approximately 10 % of total accounts receivable as of December 31, 2024. Fair Value of Financial Instruments Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for such asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value should maximize the use of observable inputs and minimize the use of unobservable inputs. To measure fair value, we use the following fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable: Level 1 — Observable inputs such as quoted prices in active markets for identical assets or liabilities; Level 2 — Inputs other than Level 1, that are observable for the asset or liability, either directly or indirectly; and Level 3 — Unobservable inputs that are supported by little or no market activity and that require the reporting entity to develop its own assumptions. The carrying amounts of our cash, cash equivalents, accounts receivable and accounts payable approx

Notes to Consolidated Financial Statements - Unaudited (continued)

Notes to Consolidated Financial Statements - Unaudited (continued) (In thousands, except per share data) Goodwill and Intangible Assets Goodwill is recorded when the consideration paid for an acquisition exceeds the fair value of net tangible and intangible assets acquired. The carrying value of goodwill is tested for impairment on an annual basis on January 1, or more often if an event occurs or circumstances change that would more likely than not reduce the fair value of its carrying amount. For the purpose of impairment testing, we have a single reporting unit. The impairment test consists of comparing the fair value of the reporting unit with its carrying amount that includes goodwill. If the carrying amount of the reporting unit exceeds the fair value of the reporting unit, an impairment loss would be recognized to reduce the carrying amount to its fair value. Our finite-lived purchased intangible assets consist of developed technology and customer relationships. Developed technology purchased in fiscal 2025 was valued using the multi-period excess earnings method and is being amortized on a straight-line basis over its economic life of five years . Customer relationships purchased in fiscal 2025 were valued using the distributor method and are being amortized on a straight-line basis over their economic life of ten years . Developed technology purchased in fiscal 2022 was valued using the replacement cost method and is being amortized on a straight-line basis over its economic life of three years . We believe these methods most closely reflect the pattern in which the economic benefits of the assets will be consumed. Impairment losses are recognized if the carrying amount of an intangible asset is both not recoverable and exceeds its fair value. Deferred Commissions Cost Sales commissions, bonuses, and related payroll taxes earned by our employees are considered incremental and recoverable costs of obtaining a contract with a customer. Our typical cont

Notes to Consolidated Financial Statements - Unaudited (continued)

Notes to Consolidated Financial Statements - Unaudited (continued) (In thousands, except per share data) 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 licenses. Other Services Other services consist primarily of revenues related to professional service offerings, including consultation, assessment and design, installation services, and customer education. Revenues related to other services can vary period over period based on the timing services are delivered and are typically recognized as the services are performed. We do not customize our software licenses (both perpetual and term-based) and installation services are not required. Software licenses are delivered before related services are provided and are functional without professional services, updates, or technical support. We have concluded that our software licenses (both perpetual and term-based) are functional intellectual property that is distinct, as the user can benefit from the software on its own. Revenues for both perpetual and term-based licenses are typically recognized when the software is delivered and/or made available for download as this is the point the user of the software can direct the use o

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

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