Commvault Announces Fiscal 2020 Fourth Quarter Financial Results

TINTON FALLS, N.J., May 12, 2020 /PRNewswire/ --

Fourth Quarter and Fiscal 2020 Highlights Include:

                                                 Fourth Quarter         Fiscal 2020



                            GAAP Results:



     Revenues                                
      $164.7 million  
       $670.9 million


      Loss from Operations                    
      $(2.2) million 
       $(17.5) million



     EBIT Margin                                        (1.3)%              (2.6)%


      Diluted Income (Loss)
       Per Share                                          $0.19              ($0.12)




                            Non-GAAP Results:


      Income from
       Operations (EBIT)                       
      $18.3 million   
       $87.5 million



     EBIT Margin                                         11.1%               13.0%


      Diluted Earnings Per
       Share                                              $0.30                $1.45

Commvault (NASDAQ: CVLT), a recognized global enterprise software leader in the management of data across cloud and on-premises environments, today announced its financial results for the fourth quarter and fiscal year ended March 31, 2020.

"We remain focused on keeping our employees safe while supporting customers during these challenging times," said Commvault President and CEO Sanjay Mirchandani. "Like most, our quarterly results were impacted by the pandemic. However, we are confident in the long-term opportunities for the company, our strategy, and our return to profitable growth. Our products are mission critical; our large enterprise customer base remains strong; and our employees are resilient. All of this, when combined with our financial stability, will enable us to weather these challenges and continue to deliver industry-leading solutions to our customers."

Total revenues for the fourth quarter of fiscal 2020 were $164.7 million, a decrease of 9% year-over-year and 7% sequentially. Software and products revenue in the fourth quarter of fiscal 2020 was $66.4 million, a decrease of 18% year-over-year and 13% sequentially. Software and products revenue excludes approximately $10.0 million of completed subscription renewals that will be recognized in the first quarter of fiscal 2021, when the current subscriptions are due to expire. Services revenue in the fourth quarter of fiscal 2020 was $98.3 million, a decrease of 2% year-over-year and 1% sequentially.

For the full fiscal year, total revenues were $670.9 million, a decrease of 6% from fiscal 2019. Software and products revenue for the full fiscal year was $275.3 million, a decrease of 11% from fiscal 2019. Services revenue for the full fiscal year was $395.6 million, a decrease of 1% from fiscal 2019.

On a GAAP basis, loss from operations (EBIT) was $2.2 million for the fourth quarter compared to income of $0.3 million in the same period of the prior year. Non-GAAP income from operations (EBIT) was $18.3 million in the fourth quarter of fiscal 2020 compared to $30.9 million in the fourth quarter of the prior year.

On a GAAP basis, loss from operations (EBIT) for the full fiscal year was $17.5 million. Non-GAAP income from operations (EBIT) was $87.5 million in fiscal 2020 compared to $111.9 million in fiscal 2019.

For the fourth quarter of fiscal 2020, Commvault reported net income of $8.9 million, which includes the recognition of approximately $10.0 million of tax benefits related to net operating losses Commvault can carry back as a result of the CARES Act. Non-GAAP net income for the quarter was $13.8 million, or $0.30 per diluted share.

For the full fiscal year, Commvault reported a net loss of $5.6 million. Non-GAAP net income for the full fiscal year was $67.5 million, or $1.45 per diluted share.

Operating cash flow totaled $32.5 million for the fourth quarter of fiscal 2020 compared to $36.6 million in the fourth quarter of fiscal 2019. For the full fiscal year, operating cash flow was $88.5 million, compared to $110.2 million for fiscal 2019. Total cash, restricted cash and short-term investments were $339.7 million as of March 31, 2020.

During the fiscal fourth quarter, Commvault repurchased $37.2 million of common stock (872 thousand shares), bringing the fiscal 2020 total repurchases to $77.2 million (1.7 million shares).

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 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 Inc. (Hedvig), the noncash amortization of intangible assets, certain costs related to key employees of Hedvig and the net change in fair value of the contingent consideration associated with the purchase of Hedvig from its non-GAAP results. These net 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. Similarly, any changes in fair value of contingent consideration associated with the purchase price of business combinations is a noncash item. Commvault believes the exclusion of the amortization expense and net change in contingent consideration 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 and fair value remeasurements 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 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.

Commvault considers non-GAAP net income and non-GAAP diluted EPS useful metrics for Commvault management and its investors for the same 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 12, 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 2,500 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, Be Ready 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                        
       
             Year Ended
                                                                 March 31,                                                            March 31,


                                                      2020                           2019                    2020                            2019

                                                                                                                                           ---


     Revenues:



     Software and products                                 $
            66,408                                       $
       80,830                     $
      275,308            $
      309,899



     Services                                      98,341                                  100,597                              395,577                401,058




     Total revenues                               164,749                                  181,427                              670,885                710,957



     Cost of revenues:



     Software and products                          5,144                                   10,429                               28,082                 25,691



     Services                                      21,450                                   23,245                               88,996                 91,315




     Total cost of revenues                        26,594                                   33,674                              117,078                117,006




     Gross margin                                 138,155                                  147,753                              553,807                593,951



     Operating expenses:



     Sales and marketing                           82,877                                   88,586                              335,785                370,088



     Research and development                      32,710                                   20,430                              110,020                 92,647



     General and administrative                    21,006                                   34,411                               92,130                100,946



     Net change in contingent consideration       (3,783)                                                                     (3,783)



     Restructuring                                  2,397                                    1,423                               21,348                 14,765



     Depreciation and amortization                  5,134                                    2,636                               15,815                 10,597




     Total operating expenses                     140,341                                  147,486                              571,315                589,043




     Income (loss) from operations                (2,186)                                     267                             (17,508)                 4,908



     Interest income                                  692                                    1,759                                4,962                  5,519




     Income (loss) before income taxes            (1,494)                                   2,026                             (12,546)                10,427



     Income tax expense (benefit)                (10,429)                                   4,189                              (6,901)                 6,866




     Net income (loss)                                      $
            8,935                                      $
       (2,163)                    $
      (5,645)             $
      3,561




     Net income (loss) per common share:



     Basic                                                   $
            0.19                                       $
       (0.05)                     $
      (0.12)              $
      0.08




     Diluted                                                 $
            0.19                                       $
       (0.05)                     $
      (0.12)              $
      0.07




     Weighted average common shares outstanding:



     Basic                                         46,420                                   45,901                               45,793                 45,827




     Diluted                                       46,718                                   45,901                               45,793                 47,601


                                                                                                                              
           
          Table II


                                                       
           
              Commvault Systems, Inc.


                                                     
       
             Condensed Consolidated Balance Sheets


                                                         
           
                (In thousands)


                                                           
           
                (Unaudited)




                                                                                                      March 31,                         March 31,



                                                                                                           2020                  2019



                                                             
           
                ASSETS



     Current assets:



     Cash and cash equivalents                                                                                 $
        288,082                   $
        327,992



     Restricted cash                                                                                     8,000



     Short-term investments                                                                             43,645                 130,338



     Trade accounts receivable, net                                                                    146,990                 176,836



     Prepaid expenses and other current assets                                                          26,969                  19,836



     Total current assets                                                                              513,686                 655,002





     Property and equipment, net                                                                       114,519                 122,716



     Operating lease assets                                                                             15,009



     Deferred commissions cost                                                                          31,394                  33,619



     Intangible assets, net                                                                             46,350



     Goodwill                                                                                          112,435



     Other assets                                                                                       11,683                  11,116




     Total assets                                                                                              $
        845,076                   $
        822,453





                                                     
       
             LIABILITIES AND STOCKHOLDERS' EQUITY



     Current Liabilities:



     Accounts payable                                                                                             $
         307                     $
        2,186



     Accrued liabilities                                                                                87,051                  85,721



     Current portion of operating lease liabilities                                                      7,699



     Deferred revenue                                                                                  233,497                 238,439




     Total current liabilities                                                                         328,554                 326,346





     Deferred revenue, less current portion                                                             92,723                  99,257



     Deferred tax liabilities, net                                                                         849                   2,594



     Long-term operating lease liabilities                                                               8,808



     Other liabilities                                                                                   2,238                   2,953





     Total stockholders' equity                                                                        411,904                 391,303




     Total liabilities and stockholders' equity                                                                $
        845,076                   $
        822,453


                                                                                                                                                                                                         
            
     Table III


                                                                                                 
         
             Commvault Systems, Inc.


                                                                                               
       
          Consolidated Statements of Cash Flows


                                                                                                    
        
                (In thousands)


                                                                                                     
        
                (Unaudited)




                                                                                                                                    Three Months Ended           
      
               Year Ended
                                                                                                                                              March 31,                               March 31,


                                                                                                              2020                                        2019         2020                  2019




     
                Cash flows from operating activities



     Net income (loss)                                                                                                $
              8,935                         $
      (2,163)                      $
        (5,645)               $
     3,561



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



     Depreciation and amortization                                                                          5,447                                         2,948                  17,065                   12,060



     Noncash stock-based compensation                                                                      17,307                                        28,901                  65,888                   80,487



     Noncash change in contingent consideration                                                           (3,783)                                                             (3,783)



     Deferred income taxes                                                                                (1,783)                                          314                 (1,783)                     164



     Amortization of deferred commissions cost                                                              4,567                                         4,342                  17,717                   17,348



     Impairment of operating assets                                                                           566                                                                2,761



     Changes in operating assets and liabilities:



     Trade accounts receivable                                                                             13,361                                       (6,174)                 26,096                 (24,092)



     Operating lease assets and liabilities, net                                                            (714)                                                             (1,226)



     Other current assets and Other assets                                                                (6,832)                                          975                 (1,246)                  11,400



     Deferred commissions cost                                                                            (4,711)                                      (5,202)               (16,063)                (18,967)



     Accounts payable                                                                                       (748)                                          848                 (2,474)                   1,485



     Accrued liabilities                                                                                       21                                         (270)                (1,997)                   5,075



     Deferred revenue                                                                                          32                                        12,351                 (6,230)                  21,719



     Other liabilities                                                                                        791                                         (284)                  (616)                    (60)




     Net cash provided by operating activities                                                             32,456                                        36,586                  88,464                  110,180



     
                Cash flows from investing activities



     Purchase of short-term investments                                                                  (10,845)                                     (32,188)                (43,645)               (130,338)



     Proceeds from maturity of short-term investments                                                      32,188                                        32,394                 130,338                  131,637



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



     Purchase of property and equipment                                                                   (1,292)                                      (1,456)                (3,203)                 (6,560)




     Net cash provided by (used in) investing activities                                                   20,051                                       (1,250)               (74,005)                 (5,261)



     
                Cash flows from financing activities



     Repurchase of common stock                                                                          (37,172)                                     (40,014)                (77,198)               (132,697)



     Proceeds from stock-based compensation plans                                                           6,851                                         9,155                  37,795                   41,984




     Net cash used in financing activities                                                               (30,321)                                     (30,859)                (39,403)                (90,713)



     Effects of exchange rate - changes in cash                                                           (6,129)                                      (3,883)                (6,966)                (16,998)




     Net increase (decrease) in cash, cash equivalents and restricted cash                                 16,057                                           594                (31,910)                 (2,792)



     Cash, cash equivalents and restricted cash at beginning of period                                    280,025                                       327,398                 327,992                  330,784




     Cash, cash equivalents and restricted cash at end of period                                                    $
              296,082                         $
      327,992                       $
        296,082              $
     327,992


                                                                                                                                                                                                                                                       
       
     Table IV


                                                                                                                 
              
                Commvault Systems, Inc.


                                                                                                  
              
                Reconciliation of GAAP to Non-GAAP Financial Measures


                                                                                                          
              
                 (In thousands, except per share data)


                                                                                                                       
              
                (Unaudited)




                                                                                                            Three Months Ended                                                  
           
                Year Ended
                                                                                                     March 31,                                                                            March 31,


                                                                                      2020                               2019                         2020                                             2019




              
                Non-GAAP financial measures and reconciliation:



              GAAP income (loss) from operations                                           $
              (2,186)                                                $
              267                                                      $
              (17,508)              $
        4,908



              Noncash stock-based compensation (1)                                 17,236                                            27,751                                                        64,135                                          77,855



              FICA and related payroll tax expense related to stock-based             381                                               650                                                         1,571                                           3,034
      compensation (2)



              Restructuring (3)                                                     2,397                                             1,423                                                        21,348                                          14,765



              Non-routine shareholder matter (4)                                                                                       853                                                         7,628                                           9,966



              Litigation settlement (5)                                                                                                                                                                                                          1,400



              Acquisition costs (6)                                                                                                                                                               5,639



              Amortization of intangible assets (7)                                 2,825                                                                                                          5,650



              Hedvig deferred payments (8)                                          1,406                                                                                                          2,812



              Net change in contingent consideration (9)                          (3,783)                                                                                                       (3,783)




              
                Non-GAAP income from operations                                  $
              18,276                                              $
              30,944                                                        $
              87,492             $
        111,928






              GAAP net income (loss)                                                         $
              8,935                                             $
              (2,163)                                                      $
              (5,645)              $
        3,561



              Noncash stock-based compensation (1)                                 17,236                                            27,751                                                        64,135                                          77,855



              FICA and related payroll tax expense related to stock-based             381                                               650                                                         1,571                                           3,034
      compensation (2)



              Restructuring (3)                                                     2,397                                             1,423                                                        21,348                                          14,765



              Non-routine shareholder matter (4)                                                                                       853                                                         7,628                                           9,966



              Litigation settlement (5)                                                                                                                                                                                                          1,400



              Acquisition costs (6)                                                                                                                                                               5,639



              Amortization of intangible assets (7)                                 2,825                                                                                                          5,650



              Hedvig deferred payments (8)                                          1,406                                                                                                          2,812



              Net change in contingent consideration (9)                          (3,783)                                                                                                       (3,783)



              Non-GAAP provision for income taxes adjustment (10)                (15,550)                                          (4,639)                                                     (31,863)                                       (24,843)




              
                Non-GAAP net income                                              $
              13,847                                              $
              23,875                                                        $
              67,492              $
        85,738






              Diluted weighted average shares outstanding (11)                     46,718                                            47,239                                                        46,440                                          47,601




              
                Non-GAAP diluted net income per share                              $
              0.30                                                $
              0.51                                                          $
              1.45                $
        1.80







                                                                                                            Three Months Ended                                                  
           
                Year Ended

                                                                                          
             
                March 31,                                                       
           
                March 31,


                                                                                      2020                               2019                         2020                                             2019




              Subscription and utility software and related support services                $
              38,424                                              $
              46,513                                                       $
              153,920             $
        147,378



              Recurring support and services                                       79,180                                            81,976                                                       323,038                                         339,037



              Total recurring revenue                                                      $
              117,604                                             $
              128,489                                                       $
              476,958             $
        486,415



              Percentage of Total Revenues                                   71
            %                                     71
            %                                                 71
            %                                   68
            %





              Perpetual software and product revenue                                        $
              40,018                                              $
              43,235                                                       $
              162,869             $
        185,833



              Other professional services                                           7,127                                             9,703                                                        31,058                                          38,709



              Total non-recurring revenue                                                   $
              47,145                                              $
              52,938                                                       $
              193,927             $
        224,542



              Percentage of Total Revenues                                   29
            %                                     29
            %                                                 29
            %                                   32
            %





              Total Revenue (12)                                                           $
              164,749                                             $
              181,427                                                       $
              670,885             $
        710,957







                                                                                                                                                                                   March 31, 2019               December 31, 2019 March 31, 2020



              Subscription and Utility Annual Contract Value (13)                          $
              105,000                                             $
              140,000                                                       $
              147,000

                                    
            
        Three Months Ended March 31, 2020


                       Americas            EMEA                   APJ               Total

                                                                                      ---

     Software and
      Products Revenue           $
          34,481                                            $
      23,434           $
      8,493  $
      66,408


     Customer Support
      Revenue            56,776                                 23,155                          10,183  90,114


     Professional
      Services            4,599                                  2,424                           1,204   8,227



     Total Revenue               $
          95,856                                            $
      49,013          $
      19,880 $
      164,749





                                    
            
        Three Months Ended March 31, 2019


                       Americas            EMEA                   APJ               Total

                                                                                      ---

     Software and
      Products Revenue           $
          44,824                                            $
      25,289          $
      10,717  $
      80,830


     Customer Support
      Revenue            58,514                                 21,496                           9,883  89,893


     Professional
      Services            5,609                                  3,435                           1,660  10,704



     Total Revenue              $
          108,947                                            $
      50,220          $
      22,260 $
      181,427





                                      
             
         Year Ended March 31, 2020


                       Americas            EMEA                   APJ               Total

                                                                                      ---

     Software and
      Products Revenue          $
          141,856                                            $
      95,356          $
      38,096 $
      275,308


     Customer Support
      Revenue           230,226                                 88,965                          40,939 360,130


     Professional
      Services           18,778                                 10,459                           6,210  35,447



     Total Revenue              $
          390,860                                           $
      194,780          $
      85,245 $
      670,885





                                      
             
         Year Ended March 31, 2019


                       Americas            EMEA                   APJ               Total

                                                                                      ---

     Software and
      Products Revenue          $
          170,114                                            $
      95,913          $
      43,872 $
      309,899


     Customer Support
      Revenue           237,190                                 82,895                          38,662 358,747


     Professional
      Services           23,076                                 12,380                           6,855  42,311



     Total Revenue              $
          430,380                                           $
      191,188          $
      89,389 $
      710,957


                                                                                                      Three Months Ended                                     Year Ended
                                                                                             March 31, 2020                                    March 31, 2020



                                                                                        Sequential                               Year Over Year                                  Year Over Year




              
                Non-GAAP software and products revenue reconciliation



                GAAP software and products revenue                                                   $
              66,408                                      $
             66,408                         $
     275,308



                    Adjustment for currency impact                                            671                         1,228                                                 4,624




              
                Non-GAAP software and products revenue on a constant                      $
              67,079                                      $
             67,636                         $
     279,932
    currency basis (14)





                                                                                                      Three Months Ended                                     Year Ended
                                                                                             March 31, 2020                                    March 31, 2020



                                                                                        Sequential                               Year Over Year                                  Year Over Year




              
                Non-GAAP services revenue reconciliation



                GAAP services revenue                                                                $
              98,341                                      $
             98,341                         $
     395,577



                    Adjustment for currency impact                                            317                         1,180                                                 5,939




              
                Non-GAAP services revenue on a constant currency basis (14)               $
              98,658                                      $
             99,521                         $
     401,516





                                                                                                      Three Months Ended                                     Year Ended
                                                                                             March 31, 2020                                    March 31, 2020



                                                                                        Sequential                               Year Over Year                                  Year Over Year




              
                Non-GAAP total revenue reconciliation



                GAAP total revenues                                                       164,749                       164,749                                                         $
         670,885



                    Adjustment for currency impact                                            988                         2,408                                                10,563




              
                Non-GAAP total revenues on a constant currency basis (14)                $
              165,737                                     $
             167,157                         $
     681,448



              
                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                        Year Ended
                                                    March 31,
                                                                                    
          
             March 31,


                                         2020                                2019             2020             2019



     
     Cost of services revenue                  $
              581                        $
          705                  $
      2,604   $
      2,922


     
     Sales and marketing              7,646                                 7,884                  31,779              34,874


     
     Research and development         5,368                                 2,054                  14,594               8,601


     
     General and administrative       3,641                                17,108                  15,158              31,458



     
     Stock-based compensation expense       $
              17,236                     $
          27,751                 $
      64,135  $
      77,855






            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 better 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
              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.




     
      (6) 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.




     
      (7) Represents noncash
              amortization of
              intangible
              assets.




     
      (8) 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.




     
      (9) Represents the
              change in fair
              value of the
              contingent
              consideration
              associated with
              the acquisition
              of Hedvig.





      (10) The provision for
              income taxes is
              adjusted to
              reflect
              Commvault's
              estimated non-
              GAAP effective
              tax rate of
              approximately 27%
              in fiscal years
              2020 and 2019.





      (11) 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.





      (12) This table
              includes the
              following
              financial metric
              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
                           the sale of
                           perpetual
                           software
                           transactions.
                           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
              recurring 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.
              Metallic,
              Commvault's new
              software-as-a-
              service offering
              is a hosted
              solution.
              Revenue from
              Metallic is
              recognized
              ratably over the
              course of the
              contractual
              period within
              services revenue.





      (13) This table
              includes the
              Subscription and
              Utility Annual
              Contract ("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.  Over the past eight
                                              quarters, 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
              recurring revenue
              streams.





      (14) 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