Commvault Systems delivered robust Q1 FY2025 earnings numbers, marked by significant growth in revenue and ARR, along with a strong emphasis on cyber resilience and cloud modernization. The company reported total revenue of $225 million, a 13% year-over-year increase, and an impressive 66% surge in SaaS ARR to $188 million.
The company achieved these results while maintaining profitability and hitting record Q1 free cash flow margins. Its strategic focus on cyber resilience, readiness, and recovery has positioned Commvault as a key player in the security conversation, driving substantial engagements with CISOs and CIOs.
Key Financial Metrics
- Total Revenue: $225 million (+13% YoY)
- Total ARR: $803 million (+17% YoY)
- Subscription ARR: $636 million (+27% YoY)
- SaaS ARR: $188 million (+66% YoY)
- Non-GAAP EBIT: $48 million
- Free Cash Flow: $44 million (+16% YoY)
Strategic Highlights
- Cyber Resilience Focus:
- ThreatWise: Advanced threat detection capabilities, with sales doubling year-over-year.
- Active Insights: AI-enabled real-time threat analysis for enhanced cyber resilience.
- Air Gap Protect: Providing immutable air gap copies of data to over 3,000 customers.
- Cleanroom Recovery: Enabling businesses to test cyber recovery plans easily and affordably.
- Cloud Modernization:
- Appranix Technology: Acquired to significantly reduce data recovery time from weeks or months to days or hours.
- Data Migration: Facilitated the movement of approximately 5 exabytes of data to the public cloud, reducing total cost of ownership for customers like Lendlease and ENOC Group.
- Government Sector Expansion:
- FedRAMP High Authorization: Achieved, positioning Commvault Cloud as a trusted solution for government agencies.
- AWS Marketplace: Commvault Cloud is now available for the U.S. federal government, enhancing accessibility.
- Executive Team Strengthening:
- Gary Merrill: Appointed as Chief Commercial Officer, leveraging his experience as CFO to lead sales and partner teams.
- Jen DiRico: Joining as CFO, bringing extensive financial and operational experience from Toast, Inc.
Financial Outlook
Commvault raised its guidance for FY2025, reflecting confidence in sustained growth and market momentum.
- Q2 FY2025:
- Total Revenue: $218-$222 million (+9% YoY)
- Non-GAAP EBIT Margin: 19%-20%
- Full Year FY2025:
- Total ARR Growth: 15% YoY
- Subscription ARR Growth: 23%-25% YoY
- Total Revenue: $915-$925 million (+9.5% YoY)
- Non-GAAP EBIT Margins: 20%-21%
- Free Cash Flow: At least $200 million
Analysis
Commvault’s focus on cyber resilience is proving to be a strategic advantage. The company’s ThreatWise and Active Insights offerings are gaining traction, evidenced by the doubling of ThreatWise sales year-over-year. The emphasis on readiness, with solutions like Air Gap Protect and Cleanroom Recovery, addresses critical needs in the market, ensuring that businesses can recover swiftly from cyber incidents and other disruptions.
Its acquisition of Appranix technology is another strategic move that’s paying off, significantly enhancing Commvault’s data recovery capabilities by reducing recovery times from weeks or months to just days or hours. This capability will be a compelling solution for customers facing stringent recovery time objectives.
Commvault Systems remains well-positioned for sustained growth, driven by its strategic focus on cyber resilience, successful transition to a subscription-based revenue model, and expansion into new markets. Its robust financial performance and positive outlook make it a compelling investment opportunity in the cybersecurity and cloud data management sectors.
