Commvault Systems ((CVLT)) has held its Q1 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Commvault Systems was overwhelmingly positive, showcasing strong revenue growth and significant customer achievements. The company highlighted its strategic partnerships and acquisitions as key drivers of success. However, there were some concerns regarding the dilution impact from the Satori acquisition and flat operating margins.
Strong Revenue Growth
Commvault Systems reported impressive financial results, with total annual recurring revenue (ARR) growing by 24% to $996 million. Subscription ARR saw a substantial increase of 33%, reaching $844 million, while total revenue rose by 26% to $282 million. Notably, SaaS ARR experienced a remarkable 63% growth, totaling $307 million.
Record Land and Expand Quarter
The company achieved its best land and expand quarter ever, surpassing 8,000 customers and setting a trajectory to exceed its $330 million ARR target ahead of schedule. This milestone underscores Commvault’s successful customer acquisition and retention strategies.
Notable Customer Wins
Commvault secured significant customer wins during the quarter, including prominent names such as Honeywell, Equifax, U-Haul, NTT DATA Services, and Chaucer Lloyd’s. These wins reflect the company’s strong market position and ability to attract major clients.
Geographical and Segment Expansion
Commvault demonstrated healthy growth across various geographies, industries, and customer segments, ranging from large enterprises to small and medium-sized businesses (SMBs). This expansion highlights the company’s broad market appeal and adaptability.
Partner Ecosystem Success
The company achieved triple-digit growth in marketplace transactions and announced major partnerships with industry leaders such as Deloitte, CrowdStrike, HPE, and Kyndryl. These partnerships are expected to enhance Commvault’s market reach and service offerings.
Recognition in Gartner Magic Quadrant
Commvault was named a leader in the Gartner Magic Quadrant for Backup and Data Protection Platforms for the 14th consecutive time. The company was also ranked #1 in five out of six use cases, reinforcing its reputation as a top player in the industry.
Strategic Acquisition of Satori Cyber
Commvault announced its intent to acquire Satori Cyber, aiming to enhance its data security offerings. The acquisition is expected to close later this quarter, marking a strategic move to bolster its cybersecurity capabilities.
Dilution Impact from Satori Acquisition
The acquisition of Satori Cyber is anticipated to be modestly dilutive to margins over the next several quarters. This impact reflects the integration costs and ongoing investments associated with the acquisition.
Flat Operating Margins
Commvault reported a non-GAAP EBIT margin of 20.7%, with expectations for Q2 margins to be approximately 20%. These figures indicate flat operating margins, attributed to continued investments and the integration of Satori Cyber.
Forward-Looking Guidance
Looking ahead, Commvault provided optimistic guidance, expecting Q2 subscription revenue to range between $174 million and $176 million, and total revenue to be between $272 million and $274 million. For the full fiscal year 2026, the company anticipates total ARR growth of 18% year-over-year, reflecting its confidence in sustained financial performance.
In conclusion, Commvault Systems’ earnings call conveyed a positive outlook, driven by strong revenue growth, strategic partnerships, and significant customer wins. Despite some concerns about the Satori acquisition’s impact on margins, the company’s forward-looking guidance suggests continued success and expansion in the coming quarters.