Commvault Announces Fiscal 2020 Third Quarter Financial Results

TINTON FALLS, N.J., Jan. 29, 2020 /PRNewswire/ --

Third quarter highlights include:

                                                    Third quarter



                              GAAP Results:



     Revenues                                  
      $176.4 million



     Loss from Operations                      
      $(0.5) million



     Operating Margin                                     (0.3)%



     Diluted Loss Per Share                              $(0.01)




                              Non-GAAP Results:


      Income from Operations (EBIT)              
      $28.9 million



     EBIT Margin                                           16.4%


      Diluted Earnings Per Share                            $0.47

Commvault [NASDAQ: CVLT] today announced its financial results for the third quarter ended December 31, 2019.

"I am pleased to report that we again delivered results above expectations and that we did it while refreshing our data management portfolio, launching our new SaaS offering, Metallic, and integrating Hedvig, our first major acquisition," said Sanjay Mirchandani, Commvault's President and CEO. "Our ability to achieve these results is a direct reflection of the progress we are making on the simplification, innovation and execution priorities we established at the start of the fiscal year. These priorities will be the foundation for our return to growth."

Total revenues for the third quarter of fiscal 2020 were $176.4 million, a decrease of 4% year over year and an increase of 5% sequentially. Total repeatable revenue was $123.4 million, an increase of 2% year over year and 1% sequentially. Subscription and utility annual contract value (ACV) grew 56% year over year to approximately $140.0 million.

Software and products revenue was $76.6 million, a decrease of 9% year over year, and an increase of 12% sequentially.

Services revenue in the quarter was $99.7 million, flat year over year and an increase of 1% sequentially.

On a GAAP basis, loss from operations was $0.5 million for the third quarter compared to income of $10.4 million in the prior year. The third quarter GAAP results in fiscal 2020 included $4.4 million of transactions expenses associated with the acquisition of Hedvig, Inc. ("Hedvig"), $2.8 million of amortization related to the intangible assets recognized in the acquisition of Hedvig and a portion of the additional compensation expenses related to the retained employees of Hedvig. These expenses have been excluded from our non-GAAP results and are further discussed in Table IV. Non-GAAP EBIT was $28.9 million in the quarter compared to $33.1 million in the prior year.

For the third quarter of fiscal 2020, Commvault reported GAAP net loss of $0.7 million, or $0.01 per diluted share. Non-GAAP net income for the quarter was $21.7 million, or $0.47 per diluted share.

Operating cash flow totaled $0.9 million for the third quarter of fiscal 2020 compared to $31.1 million in the prior year quarter. Operating cash flow in the third quarter of fiscal 2020 included approximately $5.0 million of payments related to Hedvig transaction costs and approximately $8.0 million of severance payments related to recent restructuring actions. Total cash, restricted cash, and short-term investments were $345.0 million as of December 31, 2019 compared to $458.3 million as of March 31, 2019.

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 subscription and utility annual contract value (ACV). This selected 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 that 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 or superior to, 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 FICA and related payroll tax expense incurred by Commvault when employees exercise in the money stock options or vest in restricted stock awards, as well as restructuring costs and costs related to a non-routine shareholder matter. In fiscal 2020, Commvault also excluded transaction costs related to the acquisition of Hedvig, the noncash amortization of intangible assets and certain costs related to key employees of Hedvig 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.

Amortization of intangible assets and transaction costs related to business combinations result from mergers and acquisitions. Expense for the amortization of intangible assets is a noncash item. Commvault believes the exclusion of this amortization expense provides for a useful comparison of operating results to prior periods and to other companies. Business combinations result in non-routine operating expenses which would not otherwise have been incurred in the normal course of business operations. The exclusion of acquisition related expenses allows for financial results that are more indicative of continuing operations and provides for a useful comparison of Commvault's operating results to prior periods and to 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.

Commvault's management generally compensates for the limitations described above related to the use of non-GAAP financial measures by providing investors with a reconciliation of the non-GAAP financial measure to the most directly comparable GAAP financial measure. Further, Commvault 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 incorporate 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. The GAAP tax rates in recent fiscal years were not meaningful percentages due to the dollar amount of GAAP pre-tax income. For the same reason as the GAAP tax rates, the estimated cash tax rates in recent fiscal years are not meaningful percentages. 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, January 29, 2020, 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 is the recognized leader in data backup and recovery. Commvault's converged data management solution redefines what backup means for the progressive enterprise through solutions that protect, manage and use their most critical asset -- their data. Commvault software, solutions and services are available from the company and through a global ecosystem of trusted partners. Commvault employs more than 2,300 highly-skilled individuals across markets worldwide, is publicly traded on NASDAQ (CVLT), and is headquartered in Tinton Falls, New Jersey in the United States. To learn more about Commvault visit www.commvault.com

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.

©1999-2020 Commvault Systems, Inc. All rights reserved. Commvault, Commvault and logo, the "C hexagon" logo, Commvault Systems, Commvault HyperScale, ScaleProtect, Commvault OnePass, Unified Data Management, Quick Recovery, QR, CommNet, GridStor, Vault Tracker, InnerVault, Quick Snap, QSnap, IntelliSnap, Recovery Director, CommServe, CommCell, APSS, Commvault Edge, Commvault GO, Commvault Advantage, Commvault Complete, Commvault Activate, Commvault Orchestrate, Commvault Command Center, Hedvig, Universal Data Plane, the "Cube" logo, Metallic, the "M Wave" logo, and CommValue 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                                           Nine Months Ended
                                                           December 31,                                               December 31,


                                                     2019                            2018                      2019                              2018

                                                                                                                                               ---


     Revenues:



     Software and products                               $
              76,631                                         $
              84,515                 $
       208,900            $
      229,069



     Services                                     99,720                                      99,760                                        297,236          300,461




     Total revenues                              176,351                                     184,275                                        506,136          529,530



     Cost of revenues:



     Software and products                         8,077                                       6,093                                         22,938           15,262



     Services                                     22,446                                      22,760                                         67,546           68,070




     Total cost of revenues                       30,523                                      28,853                                         90,484           83,332




     Gross margin                                145,828                                     155,422                                        415,652          446,198



     Operating expenses:



     Sales and marketing                          84,563                                      94,392                                        252,908          281,502



     Research and development                     30,503                                      22,005                                         77,310           69,751



     General and administrative                   23,864                                      20,900                                         71,124           69,001



     Restructuring                                 2,021                                       4,953                                         18,951           13,342



     Depreciation and amortization                 5,356                                       2,728                                         10,681            7,961




     Total operating expenses                    146,307                                     144,978                                        430,974          441,557




     Income (loss) from operations                 (479)                                     10,444                                       (15,322)           4,641



     Interest income                                 786                                       1,721                                          4,270            3,760




     Income (loss) before income taxes               307                                      12,165                                       (11,052)           8,401



     Income tax expense (benefit)                    957                                     (1,235)                                         3,528            2,677




     Net income (loss)                                    $
              (650)                                        $
              13,400                $
       (14,580)             $
      5,724




     Net income (loss) per common share:



     Basic                                               $
              (0.01)                                          $
              0.29                  $
       (0.32)              $
      0.12




     Diluted                                             $
              (0.01)                                          $
              0.28                  $
       (0.32)              $
      0.12




     Weighted average common shares outstanding:



     Basic                                        46,028                                      46,074                                         45,586           45,803




     Diluted                                      46,028                                      47,357                                         45,586           47,674


                                                                                                                          
        
           T
            able II




                                                        
           
             Commvault Systems, Inc.




                                                     
        
            Condensed Consolidated Balance Sheets


                                                           
          
                (In thousands)


                                                            
          
                (Unaudited)




                                                                                                     December 31,                         March 31,



                                                                                                             2019                 2019



                                                              
           
                ASSETS



     Current assets:



     Cash and cash equivalents                                                                                   $
       272,025                     $
        327,992



     Restricted cash                                                                                       8,000



     Short-term investments                                                                               64,988                130,338



     Trade accounts receivable                                                                           161,626                176,836



     Other current assets                                                                                 18,774                 19,836




     Total current assets                                                                                525,413                655,002





     Property and equipment, net                                                                         115,972                122,716



     Operating lease assets                                                                               15,248



     Deferred commissions cost                                                                            31,990                 33,619



     Intangible assets, net                                                                               49,175



     Goodwill                                                                                            112,435



     Other assets                                                                                         12,335                 11,116




     Total assets                                                                                                $
       862,568                     $
        822,453





                                                      
        
            LIABILITIES AND STOCKHOLDERS' EQUITY



     Current Liabilities:



     Accounts payable                                                                                              $
       1,069                       $
        2,186



     Accrued liabilities                                                                                  89,474                 85,721



     Current portion of operating lease liabilities                                                        7,730



     Deferred revenue                                                                                    235,513                238,439




     Total current liabilities                                                                           333,786                326,346





     Deferred revenue, less current portion                                                               97,730                 99,257



     Deferred tax liabilities, net                                                                         1,726                  2,594



     Long-term operating lease liabilities                                                                 9,223



     Other liabilities                                                                                     2,470                  2,953





     Total stockholders' equity                                                                          417,633                391,303




     Total liabilities and stockholders' equity                                                                  $
       862,568                     $
        822,453


                                                                                                                                                                                            
          
     Table III




                                                                                   
            
               Commvault Systems, Inc.




                                                                                 
       
               Consolidated Statements of Cash Flows


                                                                                      
             
                (In thousands)


                                                                                       
             
                (Unaudited)




                                                                                                                Three Months Ended                              Nine Months Ended
                                                                                                        December 31,                                   December 31,



                                                                                           2019                              2018             2019                     2018

                                                                                                                                                                     ---


              
                Cash flows from operating activities



              Net income (loss)                                                                   $
              (650)                               $
     13,400                      $
        (14,580)               $
     5,724



              Adjustments to reconcile net loss to net cash provided by
    operating activities:



              Depreciation and amortization                                              5,564                                         3,040                       11,618                   9,112



              Noncash stock-based compensation                                          18,974                                        15,832                       48,581                  51,586



              Deferred income taxes                                                          -                                          123                                               (150)



              Amortization of deferred commissions cost                                  4,420                                         4,090                       13,150                  13,006



              Impairment of operating lease assets                                         145                                                                     2,195



              Changes in operating assets and liabilities:



              Trade accounts receivable                                               (32,890)                                     (39,413)                      12,735                (17,918)



              Operating lease assets and liabilities, net                                (554)                                                                    (512)



              Other current assets and Other assets                                      7,382                                         5,541                        5,586                  10,425



              Deferred commissions cost                                                (4,390)                                      (4,899)                    (11,352)               (13,765)



              Accounts payable                                                         (1,301)                                        1,019                      (1,726)                    637



              Accrued liabilities                                                      (1,003)                                       19,081                      (2,018)                  5,345



              Deferred revenue                                                           5,817                                        13,164                      (6,262)                  9,368



              Other liabilities                                                          (625)                                           86                      (1,407)                    224




              Net cash provided by operating activities                                    889                                        31,064                       56,008                  73,594



              
                Cash flows from investing activities



              Purchase of short-term investments                                             -                                     (32,631)                    (32,800)               (98,150)



              Proceeds from maturity of short-term investments                          32,631                                        33,006                       98,150                  99,243



              Business combination, net of cash acquired                             (157,495)                                                                (157,495)



              Purchase of property and equipment                                         (454)                                      (1,106)                     (1,911)                (5,104)




              Net cash used in investing activities                                  (125,318)                                        (731)                    (94,056)                (4,011)



              
                Cash flows from financing activities



              Repurchase of common stock                                                     -                                     (54,380)                    (40,026)               (92,683)



              Proceeds from stock-based compensation plans                              24,619                                         3,203                       30,944                  32,829




              Net cash provided by (used in) financing activities                       24,619                                      (51,177)                     (9,082)               (59,854)



              Effects of exchange rate - changes in cash                                 2,210                                       (4,939)                       (837)               (13,115)




              Net decrease in cash, cash equivalents and restricted cash              (97,600)                                     (25,783)                    (47,967)                (3,386)



              Cash, cash equivalents and restricted cash at beginning of period        377,625                                       353,181                      327,992                 330,784



              Cash, cash equivalents and restricted cash at end of period                       $
              280,025                               $
     327,398                       $
        280,025              $
     327,398


                                                                                                                                                                                                                                    
     
     Table IV




                                                                                      
              
                Commvault Systems, Inc.




                                                                           
     
     Reconciliation of GAAP to Non-GAAP Financial Measures and Other Financial Information


                                                                               
              
                (In thousands, except per share data)


                                                                                            
              
                (Unaudited)




                                                                                                         Three Months Ended                                                  Nine Months Ended
                                                                                                 December 31,                                                       December 31,



                                                                                  2019                                           2018                      2019                                         2018

                                                                                                                                                                                                      ---


     
                Non-GAAP financial measures and reconciliation:



     GAAP income (loss) from operations                                                               $
              (479)                                                     $
              10,444                   $
         (15,322)                     $
      4,641



     Noncash stock-based compensation (1)                                      18,265                                                     15,564                                                    46,899                  50,104



     FICA and payroll tax expense related to stock-based compensation (2)         550                                                        781                                                     1,190                   2,384



     Restructuring (3)                                                          2,021                                                      4,953                                                    18,951                  13,342



     Non-routine shareholder matters (4)                                            -                                                     1,358                                                     7,628                   9,113



     Acquisition costs (5)                                                      4,356                                                                                                               5,639



     Amortization of intangible assets (6)                                      2,825                                                                                                               2,825



     Hedvig deferred payments (7)                                               1,406                                                                                                               1,406



     Litigation settlement (8)                                                      -                                                                                                                                     1,400




     
                Non-GAAP income from operations                                       $
              
                28,944                                         $
              
                33,100             $
         
           69,216               $
       
        80,984






     GAAP net income (loss)                                                                           $
              (650)                                                     $
              13,400                   $
         (14,580)                     $
      5,724



     Noncash stock-based compensation (1)                                      18,265                                                     15,564                                                    46,899                  50,104



     FICA and payroll tax expense related to stock-based compensation (2)         550                                                        781                                                     1,190                   2,384



     Restructuring (3)                                                          2,021                                                      4,953                                                    18,951                  13,342



     Non-routine shareholder matters (4)                                            -                                                     1,358                                                     7,628                   9,113



     Acquisition costs (5)                                                      4,356                                                                                                               5,639



     Amortization of intangible assets (6)                                      2,825                                                                                                               2,825



     Hedvig deferred payments (7)                                               1,406                                                                                                               1,406



     Litigation settlement (8)                                                      -                                                                                                                                     1,400



     Non-GAAP provision for income taxes adjustment (9)                       (7,069)                                                  (10,637)                                                 (16,313)               (20,204)




     
                Non-GAAP net income                                                   $
              
                21,704                                         $
              
                25,419             $
         
           53,645               $
       
        61,863






     Diluted weighted average shares outstanding (10)                          46,598                                                     47,357                                                    46,272                  47,674




     
                Non-GAAP diluted net income per share                                   $
              
                0.47                                           $
              
                0.54               $
         
           1.16                 $
       
        1.30


                                                                     
           
               Three Months Ended            
     
                Nine Months Ended
                                                                                 December 31,                                December 31,



                                                                         2019                               2018          2019                              2018




     Subscription and Utility Software and Related Support Services            $
              42,802                               $
              37,425              $
     115,496  $
     100,865



     Recurring Support and Services                                   80,641                                    83,614                                 243,858      257,061



     Total repeatable revenue                                                 $
              123,443                              $
              121,039              $
     359,354  $
     357,926




     
                Percentage of Total Revenues                           70%                               66%          71%                              68%





     Perpetual software and product revenue                                    $
              44,882                               $
              53,232              $
     122,851  $
     142,598



     Other professional services                                       8,026                                    10,004                                  23,931       29,006



     Total non-repeatable revenue                                              $
              52,908                               $
              63,236              $
     146,782  $
     171,604



     
                Percentage of Total Revenues                           30%                               34%          29%                              32%





     
                Total Revenue (11)                                          $
              176,351                              $
              184,275              $
     506,136  $
     529,530


                                                                              Measures at period ending ($000s)



                                                          December 31,                                     March 31,            December 31,
                                                                  2018                         2019                       2019




     Subscription and Utility Annual Contract Value (12)              $
     90,000                                     $
     105,000              $
     140,000

                                                 
         
       Three Months Ended December 31, 2019


                                    Americas          EMEA                  APAC                Total



     Software and Products Revenue           $
        40,291                                            $
     29,107          $
      7,233  $
      76,631



     Customer Support Revenue        57,856                               22,237                         10,438 90,531



     Professional Services            4,883                                2,673                          1,633  9,189



     Total Revenue                          $
        103,030                                            $
     54,017         $
      19,304 $
      176,351


                                                 
         
       Three Months Ended December 31, 2018


                                    Americas          EMEA                  APAC                Total



     Software and Products Revenue           $
        41,798                                            $
     31,073         $
     11,644  $
      84,515



     Customer Support Revenue        58,575                               20,597                          9,669 88,841



     Professional Services            6,193                                3,014                          1,712 10,919



     Total Revenue                          $
        106,566                                            $
     54,684         $
     23,025 $
      184,275


                                                
          
      Nine Months Ended December 31, 2019


                                    Americas         EMEA                 APAC                Total



     Software and Products Revenue          $
       107,375                                            $
      71,922          $
     29,603 $
     208,900



     Customer Support Revenue       173,450                             65,810                           30,756 270,016



     Professional Services           14,179                              8,035                            5,006  27,220



     Total Revenue                          $
       295,004                                           $
      145,767          $
     65,365 $
     506,136


                                                
          
      Nine Months Ended December 31, 2018


                                    Americas         EMEA                 APAC                Total



     Software and Products Revenue          $
       125,290                                            $
      70,624          $
     33,155 $
     229,069



     Customer Support Revenue       178,676                             61,399                           28,779 268,854



     Professional Services           17,467                              8,945                            5,195  31,607



     Total Revenue                          $
       321,433                                           $
      140,968          $
     67,129 $
     529,530


                                                                                                            Three Months Ended December                                                             Nine Months Ended
                                                                                                                                                    31, 2019                       December 31, 2019



                                                                                            Sequential                                  Year Over Year             Year Over Year




     
                Non-GAAP software and products revenue reconciliation



       GAAP software and products revenue                                                              $
      76,631                                                                  $
              76,631                $
     208,900



           Adjustment for currency impact                                                       (469)                                                         405                                           3,396




     
                Non-GAAP software and products revenue on a constant currency basis (13)             $
      76,162                                                                  $
              77,036                $
     212,296





                                                                                                            Three Months Ended December                                                             Nine Months Ended
                                                                                                                                                    31, 2019                      December 31, 2019



                                                                                            Sequential                                  Year Over Year             Year Over Year




     
                Non-GAAP services revenue reconciliation



       GAAP services revenue                                                                           $
      99,720                                                                  $
              99,720                $
     297,236



           Adjustment for currency impact                                                       (199)                                                         787                                           4,759




     
                Non-GAAP services revenue on a constant currency basis (13)                          $
      99,521                                                                 $
              100,507                $
     301,995





                                                                                                            Three Months Ended December                                                             Nine Months Ended
                                                                                                                                                    31, 2019                      December 31, 2019



                                                                                            Sequential                                  Year Over Year             Year Over Year




     
                Non-GAAP total revenue reconciliation



       GAAP total revenues                                                                            $
      176,351                                                                 $
              176,351                $
     506,136



           Adjustment for currency impact                                                       (668)                                                       1,192                                           8,155




     
                Non-GAAP total revenues on a constant currency basis (13)                           $
      175,683                                                                 $
              177,543                $
     514,291


Footnotes - Adjustments


              (1)              Represents noncash stock-based
                                  compensation charges associated
                                  with stock options, restricted
                                  stock units granted and our
                                  Employee Stock Purchase Plan.
                                  Those amounts are represented as
                                  follows:

                                                         Three Months Ended                           Nine Months Ended
                                             December 31,                              December 31,



                                        2019                          2018        2019                           2018




     Cost of services revenue                  $
              635                           $
              705                $
      2,023   $
      2,217



     Sales and marketing              9,128                                8,395                             24,133         26,990



     Research and development         5,222                                2,058                              9,226          6,547



     General and administrative       3,280                                4,406                             11,517         14,350




     Stock-based compensation expense       $
              18,265                        $
              15,564               $
      46,899  $
      50,104


           The table above
             excludes stock-
             based
             compensation
             expense related
             to the Company's
             restructuring
             activities
             described below
             in footnote
             three.





     (2)  Represents
             additional FICA
             and related
             payroll tax
             expenses incurred
             by Commvault when
             employees
             exercise in the
             money stock
             options or vest
             in restricted
             stock awards.





     (3)  In fiscal 2019,
             Commvault
             initiated a
             restructuring
             plan to increase
             efficiency in its
             sales, marketing
             and distribution
             functions as well
             as reduce costs
             across all
             functional areas.
              These
              restructuring
             charges relate
             primarily to
             severance and
             related costs
             associated with
             headcount
             reductions, as
             well as the
             closure of
             offices.
             Restructuring
             includes stock-
             based
             compensation
             related to
             modifications of
             awards granted to
             former employees.
              Management
              believes, when
             used as a
             supplement to
             GAAP results,
             that the
             exclusion of
             these charges
             will help
             investors and
             financial
             analysts
             understand
             Commvault's
             operating results
             and underlying
             operational
             trends as
             compared to prior
             periods.





     (4)  During fiscal 2019
             and 2020
             Commvault
             incurred costs
             related to a non-
             routine
             shareholder
             matter.  The
             costs are for
             professional fees
             related to the
             settlement
             agreement with
             the shareholder
             and consulting
             fees incurred
             with the
             operational
             review which was
             agreed to as part
             of the
             settlement.
             Management
             believes, when
             used as a
             supplement to
             GAAP results,
             that the
             exclusion of
             these costs will
             better help
             investors and
             financial
             analysts
             understand
             Commvault's
             operating results
             and underlying
             operational
             trends as
             compared to prior
             periods.





     (5)  During the second
             and third
             quarters of
             fiscal 2020,
             Commvault
             incurred costs
             related to the
             acquisition of
             Hedvig, Inc.
             Management
             believes, when
             used as a
             supplement to
             GAAP results,
             that the
             exclusion of
             these costs will
             help investors
             and financial
             analysts
             understand
             Commvault's
             operating results
             and underlying
             operational
             trends as
             compared to prior
             periods.





     (6)  Represents noncash
             amortization of
             intangible
             assets.





     (7)  In connection with
             the acquisition
             of Hedvig Inc.,
             certain Hedvig
             shareholders will
             receive cash
             payments for the
             30 months
             following the
             date of
             acquisition,
             contingent on
             their continued
             employment with
             Commvault.  While
             these payments
             are proportionate
             to these
             shareholders'
             ownership of
             Hedvig, under
             GAAP they are
             accounted for as
             compensation
             expense within
             Research and
             development
             expenses over the
             course of the 30
             month service
             period.
             Management
             believes, when
             used as a
             supplement to
             GAAP results,
             that the
             exclusion of
             these non-
             routine expenses
             will help
             investors and
             financial
             analysts
             understand
             Commvault's
             operating results
             and underlying
             operational
             trends as
             compared to prior
             periods.





     (8)  During the second
             quarter of fiscal
             2019 Commvault
             incurred costs
             related to a
             litigation
             settlement.
             Management
             believes, when
             used as a
             supplement to
             GAAP results,
             that the
             exclusion of
             these costs will
             help investors
             and financial
             analysts
             understand
             Commvault's
             operating results
             and underlying
             operational
             trends as
             compared to prior
             periods.





     (9)  The provision for
             income taxes is
             adjusted to
             reflect
             Commvault's
             estimated non-
             GAAP effective
             tax rate of 27%.





     (10) For GAAP purposes
             the potentially
             dilutive impact
             of options and
             shares associated
             with our stock-
             based
             compensation
             programs were
             excluded from the
             calculation of
             GAAP loss per
             share in certain
             periods because
             they would have
             been anti-
             dilutive.  For
             purposes of non-
             GAAP income per
             share the impact
             of dilutive
             options and
             shares has been
             included.





     (11) This table
             includes the
             following
             financial metrics
             that are derived
             from Commvault's
             GAAP recognized
             revenue:




                        Subscription and
                          Utility Software
                          and Related
                          Support Services
                          - The amounts
                          included on this
                          line include a)
                          non-cancellable
                          term-based, or
                          subscription,
                          licenses
                          (inclusive of
                          both recognized
                          software and
                          recognized
                          maintenance and
                          support revenues)
                          that expire at
                          the end of the
                          contractual term;
                          and b) "pay-as-
                          you-go" utility
                          arrangements
                          based on product
                          usage (inclusive
                          of both
                          recognized
                          software and
                          maintenance and
                          support revenues)
                          that are
                          structured with
                          no guaranteed
                          minimums.  The
                          amount includes
                          both Software and
                          Products Revenue
                          and Services
                          Revenue.




                        Recurring Support
                          and Services -
                          The amounts
                          included on this
                          line consist
                          primarily of
                          maintenance and
                          support revenues
                          associated with
                          the sale of
                          perpetual
                          software
                          arrangements.
                          This revenue is
                          included in
                          Services Revenue
                          on Commvault's
                          Consolidated
                          Statement of
                          Operations.




                        Perpetual Software
                          and Product
                          Revenues -The
                          amounts included
                          on this line are
                          primarily
                          associated with
                          revenue from the
                          sale of perpetual
                          software
                          licenses.  These
                          revenues are
                          included in
                          Software and
                          Products Revenue
                          on Commvault's
                          Consolidated
                          Statement of
                          Operations.




                        Other Professional
                          Services -The
                          amounts included
                          on this line are
                          primarily
                          revenues
                          associated with
                          Commvault's
                          installation and
                          consultation
                          services.  These
                          revenues are
                          included in
                          Services Revenue
                          on Commvault's
                          Consolidated
                          Statement of
                          Operations.




           Management
             believes that
             also reviewing
             these metrics, in
             addition to GAAP
             results, helps
             investors and
             financial
             analysts
             understand the
             repeatable nature
             of certain
             revenue amounts
             and trends as
             compared to prior
             periods.




           Note that nearly
             all of
             Commvault's
             software and
             product revenue
             is related to
             solutions that
             are run in the
             customer's
             environment.
             Commvault
             currently does
             not have material
             revenue related
             to hosted, or
             software as a
             solution
             products.  As a
             result, as
             required under
             ASC 606,
             substantially all
             of Commvault's
             software and
             product revenue
             is recognized at
             a point in time,
             when it is
             delivered to the
             customer, and not
             ratably over the
             course of a
             contractual
             period.  This is
             the case for both
             perpetual
             software licenses
             and subscription
             software
             licenses.





     (12) This table
             includes the
             Subscription and
             Utility Annual
             Contract Value
             (ACV) metric that
             is comprised of:




           a.                                  Subscription ACV - the annualized
                                                 equivalent of the total contract
                                                 value (both software and related
                                                 support services) of all non-
                                                 cancellable subscription
                                                 agreements. In recent fiscal
                                                 periods, the weighted average
                                                 contract length of subscription
                                                 agreements has been approximately
                                                 three years.  The total contract
                                                 value includes all active
                                                 contracts at the end of each
                                                 fiscal quarter.




           b.                                  Utility ACV - "pay-as-you-go"
                                                 utility arrangements based on
                                                 product usage (inclusive of both
                                                 software and related support
                                                 services) that are structured with
                                                 no guaranteed minimums.  The
                                                 amounts included in Utility ACV
                                                 have been annualized based on the
                                                 actual reported quarterly amount
                                                 in the most recent fiscal quarter.




            Management believes that reviewing
                                                 this ACV metric, in addition to
                                                 our GAAP results, helps investors
                                                 and financial analysts understand
                                                 the value of arrangements that may
                                                 potentially result in future
                                                 revenues. Commvault believes this
                                                 metric normalizes the variations
                                                 in contractual length among our
                                                 subscription and utility
                                                 transactions and will help
                                                 investors and analysts to track
                                                 Commvault's transition to more
                                                 potentially repeatable revenue
                                                 streams.





     (13) Revenues on a
             constant currency
             basis are
             calculated using
             the average
             foreign exchange
             rates from a
             previous period
             and applying
             these rates to
             foreign-
             denominated
             revenues in the
             corresponding
             period of fiscal
             2020. The
             difference
             between revenue
             calculated based
             on these foreign
             exchange rates
             and revenues
             calculated in
             accordance with
             GAAP is listed as
             Adjustment for
             currency impact
             in the table
             above.

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SOURCE Commvault