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Commvault Announces Fiscal 2022 Fourth Quarter Financial Results

·15 min read

---Record quarterly and annual revenue ---

--- Fourth quarter software and products revenue up 12% year over year ---

--- Fourth quarter recurring revenue up 19% year over year ---

---Annualized recurring revenue (ARR) up 13% year over year ---

TINTON FALLS, N.J., May 3, 2022 /PRNewswire/ --

Commvault is the global leader in enterprise backup, recovery, archive and the cloud (PRNewsFoto/Commvault) (PRNewsfoto/Commvault)
Commvault is the global leader in enterprise backup, recovery, archive and the cloud (PRNewsFoto/Commvault) (PRNewsfoto/Commvault)

Fourth quarter and Fiscal 2022 highlights include:


Fourth quarter

Fiscal 2022

GAAP Results:



Revenues

$205.9 million

$769.6 million

Income from Operations (EBIT)

$11.4 million

$41.6 million

EBIT Margin

5.6%

5.4%

Diluted Earnings Per Share

$0.17

$0.71




Non-GAAP Results:



Income from Operations (EBIT)

$46.6 million

$161.7 million

EBIT Margin

22.6%

21.0%

Diluted Earnings Per Share

$0.75

$2.51

Commvault (NASDAQ: CVLT) today announced its financial results for the fourth quarter and fiscal year ended March 31, 2022.

"We are pleased to have delivered another record quarter to cap off the best year in our history," said Sanjay Mirchandani, President and CEO. "Demand is strong for our differentiated portfolio, our team is executing, and we are taking market share. We are excited about our growth prospects in the new fiscal year."

Total revenues for the fourth quarter of fiscal 2022 were $205.9 million, an increase of 8% year over year. Total recurring revenue was $173.2 million, an increase of 19% year over year. For the full fiscal year, total revenues were $769.6 million, an increase of 6% from fiscal year 2021.

Annualized recurring revenue (ARR), which is the annualized value of all active Commvault recurring revenue streams at the end of the reporting period, was $583.3 million as of March 31, 2022, up 13% from March 31, 2021. Software and products revenue in the fourth quarter was $100.5 million, an increase of 12% year over year. The year over year increase in software and products revenue was driven by a 19% increase in revenue from larger deals (deals greater than $0.1 million in software and products revenue).

Larger deal revenue represented 73% of our software and products revenue in the three months ended March 31, 2022. The number of larger deal revenue transactions increased 14% year over year to 226 deals for the three months ended March 31, 2022. The average dollar amount of larger deal revenue transactions was approximately $327,000, representing a 4% increase from the prior year quarter.

Software and products revenue for the full fiscal year was $356.5 million, an increase of 9% from fiscal 2021. The year-over-year increase in software and products revenue was driven by a 13% increase in revenue from larger deals.

Larger deal revenue represented 72% of our software and products revenue in fiscal year 2022. The number of larger deal revenue transactions increased 19% from fiscal year 2021 to 799 deals. The average dollar amount of larger deal revenue transactions was approximately $320,000, representing a 4% decrease from the prior year.

Services revenue in the quarter was $105.5 million, up 3% year over year. For the full fiscal year, services revenue was $413.1 million, up 4% from fiscal 2021. Services revenue growth was driven by Commvault's software-as-a-service offerings.

On a GAAP basis, income from operations (EBIT) was $11.4 million for the fourth quarter compared to $10.3 million in the same period of the prior year. Non-GAAP EBIT was $46.6 million in the quarter compared to $38.8 million in the prior year.

On a GAAP basis, income from operations (EBIT) for the full fiscal year was $41.6 million compared to loss of $22.3 million in fiscal year 2021. Non-GAAP income from operations (EBIT) was $161.7 million in fiscal 2022 compared to $137.5 million in the prior fiscal year quarter.

For the fourth quarter of fiscal 2022, Commvault reported net income of $8.0 million. Non-GAAP net income for the quarter was $34.6 million, or $0.75 per diluted share.

For the full fiscal year, Commvault reported a net income of $33.6 million. Non-GAAP net income for the full fiscal year was $118.7 million, or $2.51 per diluted share.

Operating cash flow totaled $87.1 million for the fourth quarter of fiscal 2022 compared to $64.7 million in the prior year quarter. For the full fiscal year, operating cash flow was $177.2 million, compared to $124.0 million for fiscal year 2021. Total cash and short-term investments were $267.5 million as of March 31, 2022 compared to $397.2 million as of March 31, 2021. There were no borrowings against the revolving line of credit.

During the fiscal fourth quarter, Commvault repurchased approximately 600,000 shares of its common stock totaling $39.8 million at an average price of approximately $66.29 per share. During the full fiscal year, Commvault repurchased approximately 4.3 million shares of its common stock totaling $305.2 million at an average price of approximately $70.87 per share.

On April 21, 2022, the Board of Directors approved a new share repurchase program of up to $250.0 million. The Board's authorization permits Commvault to make purchases of its common stock from time to time in the open market or through privately negotiated transactions, subject to market and other conditions. The Board's authorization has no expiration date.

"We continue to believe that the strength of our balance sheet, coupled with the current and long-term outlook for our business, provides an opportunity to create value for our long-term shareholders," said Mr. Mirchandani.

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 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, 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 Federal Insurance Contribution Act (FICA) and related payroll tax expense incurred by Commvault when employees exercise in the money stock options or vest in restricted stock awards. Commvault has also excluded restructuring costs, certain costs related to key employees of Hedvig, the noncash amortization of intangible assets, acquisition costs related to TrapX, the gain on the sale of its equity method investment in Laitek, Inc. and, for fiscal year 2021, the noncash impairment of intangible assets 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.

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.

Due to the limitations related to the use of non-GAAP measures, Commvault's management assists investors by providing a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure. Further, Commvault's 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 incorporates 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. 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, May 3, 2022 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 (NASDAQ: CVLT) liberates business and IT professionals to do amazing things with their data by ensuring the fundamental integrity of their business. Its industry-leading Intelligent Data Services Platform empowers these professionals to store, protect, optimize, and use their data, wherever it lives. Delivering the ultimate in simplicity and flexibility to customers, its Intelligent Data Services Platform is available as software subscription, an integrated appliance, partner-managed, and software as a service—a critical differentiator in the market. For 25 years, more than 100,000 organizations have relied on Commvault, and today, Metallic is accelerating customer adoption to modernize their environments as they look to SaaS for the future. Driven by its values—Connect, Inspire, Care, and Deliver—Commvault employs more than 2,800 highly-skilled individuals around the world. Visit Commvault.com or follow us at @Commvault.

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.

©1999-2022 Commvault Systems, Inc. All rights reserved. Commvault, Commvault Systems, the "C hexagon" logo & Commvault, the "C hexagon" logo, Hedvig, the "Cube" logo, Metallic, the Metallic "Wave" logo, TrapX, Trap X Security, APSS, CommCell, CommNet, CommServe, Commvault Edge, Commvault GO, CryptoTrap, DeceptionGrid, Edge Drive, GridStor, Hyperscale X, InnerVault, IntelliSnap, Universal Data Plane, and Vault Tracker 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 March 31,


Year Ended March 31,


2022


2021


2022


2021

Revenues:








Software and products

$ 100,489


$ 89,355


$ 356,487


$ 326,843

Services

105,460


101,986


413,104


396,629

Total revenues

205,949


191,341


769,591


723,472

Cost of revenues:








Software and products

4,586


6,552


14,057


27,218

Services

27,461


23,059


99,802


82,155

Total cost of revenues

32,047


29,611


113,859


109,373

Gross margin

173,902


161,730


655,732


614,099

Operating expenses:








Sales and marketing

93,138


86,661


341,644


331,948

Research and development

40,497


35,577


153,615


133,401

General and administrative

22,130


23,205


103,049


92,214

Restructuring

4,110


3,762


6,192


23,471

Depreciation and amortization

2,582


2,187


9,666


14,628

Impairment of intangible assets




40,700

Total operating expenses

162,457


151,392


614,166


636,362

Income (loss) from operations

11,445


10,338


41,566


(22,263)

Interest income

113


269


656


1,028

Interest expense

(90)



(109)


Other income, net

737



1,301


Income (loss) before income taxes

12,205


10,607


43,414


(21,235)

Income tax expense

4,217


4,346


9,790


9,719

Net income (loss)

$ 7,988


$ 6,261


$ 33,624


$ (30,954)

Net income (loss) per common share:








Basic

$ 0.18


$ 0.13


$ 0.74


$ (0.66)

Diluted

$ 0.17


$ 0.13


$ 0.71


$ (0.66)

Weighted average common shares outstanding:








Basic

44,596


46,888


45,443


46,652

Diluted

45,840


48,670


47,220


46,652

Table II






Commvault Systems, Inc.






Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)




March 31,


March 31,







2022


2021





ASSETS





Current assets:









Cash and cash equivalents


$ 267,507


$ 397,237





Trade accounts receivable, net


194,238


188,126





Other current assets


22,336


22,237





Total current assets


484,081


607,600














Property and equipment, net


106,513


112,779





Operating lease assets


14,921


20,778





Deferred commissions cost


52,974


38,444





Intangible assets, net


3,542






Goodwill


127,780


112,435





Other assets


26,269


12,137





Total assets


$ 816,080


$ 904,173














LIABILITIES AND STOCKHOLDERS' EQUITY





Current liabilities:









Accounts payable


$ 432


$ 374





Accrued liabilities


121,837


112,148





Current portion of operating lease liabilities


4,778


7,469





Deferred revenue


267,017


253,211





Total current liabilities


394,064


373,202














Deferred revenue, less current portion


150,180


119,231





Deferred tax liabilities, net


808


761





Long-term operating lease liabilities


11,270


15,419





Other liabilities


3,929


1,526














Total stockholders' equity


255,829


394,034





Total liabilities and stockholders' equity


$ 816,080


$ 904,173





Table III


Commvault Systems, Inc.


Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)



Three Months Ended March 31,


Year Ended March 31,


2022


2021


2022


2021

Cash flows from operating activities








Net income (loss)

$ 7,988


$ 6,261


$ 33,624


$ (30,954)

Adjustments to reconcile net income (loss) to net cash
provided by operating activities:








Depreciation and amortization

2,923


2,499


10,950


15,878

Noncash stock-based compensation

28,370


23,261


105,163


84,833

Noncash change in fair value of equity securities

(737)



(301)


Impairment of intangible assets




40,700

Deferred income taxes

49


(92)


49


(92)

Amortization of deferred commissions cost

4,995


4,571


18,339


18,318

Impairment of operating lease assets


380



1,684

Changes in operating assets and liabilities:








Trade accounts receivable, net

5,175


4,348


(20,371)


(34,622)

Operating lease assets and liabilities, net

(116)


(438)


(925)


(1,157)

Other current assets and Other assets

5,904


4,932


3,732


11,887

Deferred commissions cost

(11,660)


(8,149)


(33,512)


(24,095)

Accounts payable

180


(224)


60


49

Accrued liabilities

13,693


10,176


10,400


10,660

Deferred revenue

28,731


21,021


48,295


31,740

Other liabilities

1,621


(3,838)


1,677


(874)

Net cash provided by operating activities

87,116


64,708


177,180


123,955

Cash flows from investing activities








Proceeds from maturity of short-term investments


10,845



43,645

Purchase of property and equipment, net

(583)


(2,182)


(3,911)


(8,176)

Purchase of equity securities

(612)



(4,139)


Business combination, net of cash acquired

(16,894)



(16,894)


Other



500


Net cash provided by (used in) investing activities

(18,089)


8,663


(24,444)


35,469

Cash flows from financing activities