Commvault’s third quarter earnings shows the company’s subscription business is taking off. The data management vendor pulled in record revenues of $188m, up seven per cent and $16.7m net income (-$650m) for the three months ended December 31.
President and CEO Sanjay Mirchandani said in a statement: “The strategic moves we made over the past two years are delivering results. We have simplified how we do business, dramatically improved our execution, and are innovating faster than ever.”
Total revenue at the 9-month point is $532.1m and, if this growth is sustained through the fourth quarter, we could be looking at a record full year revenue number. Wells Fargo senior analyst Aaron Rakers told subscribers he expects Commvault to earn full fy2021 revenues of $714.7m. This would be a record, exceeding fy2019’s $710.9m.
Commvault is guiding a +6 to 7 per cent revenue CAGR through fiscal 2023.
The good news was spread pretty much all over the results.
- Software and Products Revenue was $88.6m, up 16 per cent and an all-time record.
- Services revenue was flat at $99.4m.
- Annual Recurring Revenue (ARR) grew 11 per cent to $507m.
- Subscription revenue represented 55 per cent of Software and Products Revenue versus 41 per cent a year ago.
- Operating cash flow totalled $17m compared to $0.9m a year ago.
- Total cash and short-term investments were $388.4m at quarter end, compared to $339.7m a year ago.
Commvault said larger-deal revenue represented 68 per cent of its software and products revenue. The number of larger-deal transactions grew three per cent Y/Y to 187 deals and the average dollar amount of larger deal revenue transactions was approximately $322,000 – 15 per cent up on last year.
Mirchandani said in the Q3 earnings letter: “Our regions were all strong, including the best-ever top line result for EMEA. We landed multiple seven-figure deals and recorded balanced growth in small and midsized businesses across all geographic regions.”
He added; “The Metallic software-as-a-service offering has become an integral component of our land and expand strategy. In Q3, nearly 40% of Metallic customers were net new to Commvault.”
Commvault is reorganising its products into four groups, according to William Blair analyst Jason Ader.
- Data Insights (includes file storage optimisation, data governance, eDiscovery, and compliance),
- Data Storage (includes Hedvig distributed storage, Commvault HyperScale X, Metallic Cloud Storage),
- Data Protection (includes backup/recovery and disaster recovery),
- Metallic SaaS Offering (includes VM and Kubernetes backup, database backup, file and object backup, Office 365 backup, Salesforce backup, and endpoint backup).