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1. Company Snapshot

1.a. Company Description

Commvault Systems, Inc.provides data protection and information management software applications and related services in the United States and internationally.The company offers Commvault Backup and Recovery, a backup and recovery solution; Commvault Disaster Recovery, a replication and disaster recovery solution; and Commvault Complete Data Protection, a data protection solution.


It also provides Commvault HyperScale X, an easy-to-deploy scale-out solution; Commvault Distributed Storage Platform that offers software-defined storage built on a hyperscale architecture; Metallic Cloud Storage service, which is the easy button to adopt secure and scalable cloud storage; and Metallic Software-as-a-Service.In addition, the company provides technology and business consulting, education, and remote managed services.Further, it sells appliances that integrate the software with hardware for use in a range of business needs and use cases; and offers professional and customer support services that include data management-as-a-service under the Metallic brand.


The company sells its products and services directly through its sales force, and indirectly through its network of distributors, value-added resellers, systems integrators, corporate resellers, and original equipment manufacturers to large enterprises, small and medium sized businesses, and government agencies.It supports customers in a range of industries, including banking, insurance and financial services, government, healthcare, pharmaceuticals and medical services, technology, legal, manufacturing, utilities, and energy.Commvault Systems, Inc.


was founded in 1988 and is headquartered in Tinton Falls, New Jersey.

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1.b. Last Insights on CVLT

Commvault Systems' recent performance was negatively impacted by a weaker-than-expected earnings announcement, with EPS missing estimates. The company's Q2 earnings release showed $0.91 per share, falling short of the Zacks Consensus Estimate of $0.94 per share. Despite subscriber growth and a critical role in data loss solutions, margins and debt-to-equity metrics require improvement. The company has ample liquidity and actively engages in share buybacks, which is a positive event for shareholders as it reduces outstanding shares. A recent business acquisition also contributed to its operations.

1.c. Company Highlights

2. Commvault's Strong Q2 Earnings: Growth Momentum Continues

Commvault reported a strong Q2 with total revenue growth of 18% to $276 million, driven by a record $47 million net new ARR and 30% growth in subscription ARR to $894 million. The company's SaaS ARR grew 56% to $330 million, and it achieved $1 billion in total ARR, 2 quarters earlier than the original target. Gross margins were 80.5%, and non-GAAP EBIT was $51 million. However, EPS came out at $0.3259, missing estimates of $0.939. The company's guidance for Q3 implies total revenue of $298-300 million, with subscription revenue expected to be $195-197 million.

Publication Date: Oct -29

📋 Highlights
  • Record Net New ARR:: Achieved $47M net new ARR, accelerating organic ARR growth to 19% at constant currency.
  • SaaS ARR Surge:: SaaS ARR grew 56% to $330M, driving 60% of expected 2H 2024 net new ARR.
  • Total ARR Milestone:: Reached $1B total ARR two quarters ahead of original target, with 27% SaaS ARR contribution.
  • Financial Strength:: $900M convertible notes issuance, $131M stock buybacks YTD, and 80.5% gross margins in Q2.
  • Market Expansion:: Total addressable market (TAM) for software grew 12%, with Commvault targeting growth above TAM pace.

Growth Drivers and ARR Momentum

Commvault's Cyber Resilience platform is driving growth, particularly in hybrid cloud customers, with strong momentum in identity and data security offerings. The company's SaaS product saw significant growth this quarter, with 60% of net new ARR expected to come from SaaS in the second half. The acquisition of Clumio and the company's identity and security offerings are also contributing to net new ARR. As Sanjay Mirchandani mentioned, "We're working on making it easy for customers to consume additional services and capabilities beyond the core platform."

Margin Pressure and Investment Strategy

The company's gross margin pressure is due to the acceleration of SaaS and the shift in term duration. Commvault expects its SaaS business to continue to grow, with a mid-60s gross margin. The average duration of contracts is around 3 years for new deals, but has decreased about 9% quarter-over-quarter. The investments made by Commvault are focused on accelerating its SaaS motion, with a focus on ease of consumption and packaging.

Valuation and Outlook

With a P/S Ratio of 5.91 and EV/EBITDA of 66.05, the market is pricing in significant growth expectations. Analysts estimate next year's revenue growth at 18.4%, which is in line with Commvault's updated FY '26 guidance. The company's ROE is 27.01%, indicating strong profitability. Given the growth momentum and the company's strategy to accelerate its SaaS motion, it remains to be seen whether Commvault can continue to meet the market's expectations.

3. NewsRoom

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Commvault Systems (CVLT) Stock Slides as Market Rises: Facts to Know Before You Trade

Dec -04

Source:

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Commvault Announces CFO Transition

Dec -04

Source: prnewswire.com

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Commvault Showcases Unified Cyber Resilience at Gartner IT Infrastructure, Operations & Cloud Strategies (IOCS) Conference 2025

Dec -03

Source: prnewswire.com

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Commvault Awarded 2025 AWS Global Storage Partner of the Year

Dec -02

Source: prnewswire.com

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Commvault Achieves AWS Resilience Competency Status

Dec -01

Source: prnewswire.com

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Charles Schwab Investment Management Inc. Boosts Stock Position in CommVault Systems, Inc. $CVLT

Nov -29

Source: defenseworld.net

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Rep. Gilbert Ray Cisneros, Jr. Purchases Shares of NVIDIA Corporation (NASDAQ:NVDA)

Nov -24

Source: defenseworld.net

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CommVault Systems (NASDAQ:CVLT) & Adobe (NASDAQ:ADBE) Head-To-Head Review

Nov -21

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.83%)

6. Segments

Subscription

Expected Growth: 12%

Commvault's subscription growth is driven by increasing demand for data protection and management, expansion into cloud and edge computing, strategic partnerships, and a growing need for ransomware protection and disaster recovery solutions, resulting in a 12% growth rate.

Customer Support

Expected Growth: 10%

Commvault Systems, Inc.'s 10% growth in Customer Support is driven by increasing demand for data management and protection, expansion into new markets, and strategic partnerships. Additionally, the company's focus on customer satisfaction, innovative solutions, and competitive pricing have contributed to the growth.

Perpetual License

Expected Growth: 8%

Commvault's perpetual license growth is driven by increasing demand for data protection and management, expansion into cloud and hybrid environments, and strategic partnerships. Additionally, the company's focus on innovation, customer satisfaction, and competitive pricing strategy contribute to its growth. Furthermore, the rising need for data analytics, artificial intelligence, and machine learning capabilities also fuels the demand for Commvault's solutions.

Other Services

Expected Growth: 9%

Commvault's Other Services segment growth is driven by increasing demand for data management and protection, expansion into new markets, and strategic partnerships. The company's focus on cloud-based solutions, artificial intelligence, and machine learning also contributes to growth. Additionally, the rise of remote work and digital transformation initiatives among enterprises fuels the need for Commvault's services, resulting in a 9% growth rate.

7. Detailed Products

Commvault Complete Backup & Recovery

A comprehensive data protection solution that provides backup, recovery, and archiving for a wide range of data sources, including virtual machines, databases, and applications.

Commvault HyperScale

A scale-out data protection solution that provides a converged backup and storage platform for large-scale data environments.

Commvault Orchestrate

An automated workflow management solution that enables organizations to automate and orchestrate data protection, migration, and disaster recovery processes.

Commvault Activate

A data analytics and insights platform that provides visibility into data usage, storage, and protection, enabling data-driven decision making.

Commvault Metallic

A SaaS-based data protection solution that provides automated backup and recovery for cloud-native applications and data.

8. Commvault Systems, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Commvault Systems, Inc. operates in a niche market with a unique product offering, reducing the threat of substitutes. However, the company faces competition from larger companies that offer similar products, which could lead to a moderate threat of substitutes.

Bargaining Power Of Customers

Commvault Systems, Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products are often critical to its customers' operations, making it difficult for customers to switch to alternative products.

Bargaining Power Of Suppliers

Commvault Systems, Inc. has a diverse supplier base, which reduces the bargaining power of individual suppliers. The company also has a strong financial position, which gives it the ability to negotiate favorable terms with its suppliers.

Threat Of New Entrants

The data management and protection industry has high barriers to entry, including significant research and development costs and the need for specialized expertise. This makes it difficult for new entrants to compete with established companies like Commvault Systems, Inc.

Intensity Of Rivalry

The data management and protection industry is highly competitive, with several established companies competing for market share. Commvault Systems, Inc. faces intense competition from companies like Veritas Technologies, Dell EMC, and IBM, which could lead to a high intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 4.17%
Debt Cost 3.95%
Equity Weight 95.83%
Equity Cost 7.18%
WACC 7.04%
Leverage 4.35%

11. Quality Control: Commvault Systems, Inc. passed 8 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Commvault Systems

A-Score: 4.2/10

Value: 0.7

Growth: 6.9

Quality: 6.6

Yield: 0.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

121.34$

Current Price

121.34$

Potential

-0.00%

Expected Cash-Flows