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Commvault reports strong Q3 results with 11% revenue growth
Tue, 13th Feb 2024

Commvault, the data management company, has released promising financial results for its third quarter for fiscal 2024, which ended December 31, 2023. The reported total revenues were USD$216.8 million, marking an 11% year-on-year increase. The firm also demonstrated considerable growth in its total annual recurring revenue (ARR), which rose to USD$752 million, a 17% increase from the previous year.

Subscription-based revenues were also on the upswing, with the report showcasing a remarkable 31% increase, reaching USD$114.2 million. In addition, the subscription ARR rose by a significant 29% year-on-year, amassing to USD$571 million. This quarter's results demonstrate impressive growth rates across all significant performance metrics, reflecting the company's overall robust performance.

Sanjay Mirchandani, President and CEO, reflected on these results with optimism: "This was one of the strongest quarters in our history with double-digit ARR and revenue growth, and robust free cash flow generation." Mirchandani attributed this success partly to Commvault's newly launched cloud platform, which aims to bolster the resilience of enterprises facing continuous cyber threats. "As enterprises face non-stop cyberattacks and threats, the introduction of our new Commvault Cloud platform gives our customers groundbreaking strategies to stay resilient," said the CEO.

The solid financial results were reflected across the board. Operating margins were positive, with an income from operations (EBIT) of USD$21.1 million standing at an operating margin of 9.7%. The non-GAAP EBIT was USD$46.7 million, signaling an operating margin of 21.5%. The overall operating cash flow was also positive, totaling to USD$44.4 million with a free cash flow of USD$42.6 million.

As part of its capital management strategy, Commvault bought back around 711,000 shares of common stock, which amounted to USD$51.3 million, during the third quarter.

Looking forward, Commvault has outlined its financial outlook for the fourth quarter of fiscal year 2024. Total revenues are envisioned to be between USD$210 million and USD$214 million, with subscription revenues between USD$111 million and USD$115 million. The company expects the non-GAAP operating margin to be somewhere between 20% and 21%.

Meanwhile, the updated guidance for the full fiscal year 2024 projects total revenues to be between USD$826 million and USD$830 million, with the total ARR growing 15% year-on-year. Subscription revenue is anticipated to be between USD$420 million and USD$424 million, with subscription ARR expected to grow 25% year on year. The non-GAAP operating margin is also projected to witness an upward trend, growing 50 to 100 basis points from last year. The free cash flow is expected to be approximately USD$170 million.

While these statements, including their forward-looking nature, provide insight into the enterprise's optimistic growth trajectory moving forward, Commvault clarified they are based on actual third quarter results and current targets. Consequently, actual results may differ materially from anticipated results.