Commvault Announces Fiscal 2021 First Quarter Financial Results

TINTON FALLS, N.J., July 28, 2020 /PRNewswire/ --

First quarter highlights include:

                                                     First quarter


                              GAAP Results:



     Revenues                                  
       $173.0 million


      Income from Operations (EBIT)               
       $6.7 million



     EBIT Margin                                             3.9%


      Diluted Earnings Per Share                             $0.05




                              Non-GAAP Results:


      Income from Operations (EBIT)              
       $32.5 million



     EBIT Margin                                            18.8%


      Diluted Earnings Per Share                             $0.51

Commvault (NASDAQ: CVLT) today announced its financial results for the first quarter ended June 30, 2020.

"I could not be prouder of the team. Our first quarter results are validation that our streamlined operations and reinvigorated go-to-market engine are starting to execute well," said Sanjay Mirchandani, President and CEO, Commvault. "Together with our new product portfolio and robust partner program, our customers are starting to embrace our intelligent data management vision."

Total revenues for the first quarter of fiscal 2021 were $173.0 million, an increase of 7% year over year and 5% sequentially. Total recurring revenue was $141.1 million, an increase of 24% year over year.

Annualized recurring revenue (ARR), which is the annualized value of all active Commvault recurring revenue streams at the end of the reporting period, was $471.6 million as of June 30, 2020, up 9% from June 30, 2019.

Software and products revenue was $76.6 million, an increase of 20% year over year and 15% sequentially. The year over year increase in software and products revenue was driven by a 41% increase in larger deals (deals greater than $0.1 million in software and products revenue). The volume of these transactions was up 5% and the average dollar amount of these transactions increased 35% to $403,000.

Services revenue in the quarter was $96.4 million, a decrease of 2% both year over year and sequentially.

On a GAAP basis, income from operations was $6.7 million for the first quarter compared to loss of $6.7 million in the prior year. Non-GAAP EBIT was $32.5 million in the quarter compared to $15.5 million in the prior year.

For the first quarter of fiscal 2021, Commvault reported GAAP net income of $2.3 million, or $0.05 per diluted share. Non-GAAP net income for the quarter was $23.9 million, or $0.51 per diluted share.

Operating cash flow totaled $15.3 million for the first quarter of fiscal 2021 compared to $31.1 million in the prior year quarter. Total cash and short-term investments were $356.3 million as of June 30, 2020 compared to $339.7 million as of March 31, 2020.

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 annualized recurring revenue (ARR). 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. In fiscal 2020, Commvault also excluded costs related to a non-routine shareholder matter. Commvault has also excluded 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 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.

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, July 28, 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
                                                    June 30,


                                           2020                             2019



     Revenues:


      Software and products                      $
              76,554                               $
        63,674



     Services                           96,446                                       98,529


      Total revenues                    173,000                                      162,203



     Cost of revenues:


      Software and products               5,847                                        6,030



     Services                           18,704                                       22,690


      Total cost of revenues             24,551                                       28,720



     Gross margin                      148,449                                      133,483



     Operating expenses:


      Sales and marketing                81,676                                       87,385


      Research and
       development                       31,142                                       23,580


      General and
       administrative                    21,559                                       22,507


      Restructuring                       2,324                                        4,079


      Depreciation and
       amortization                       5,065                                        2,606


      Total operating
       expenses                         141,766                                      140,157


      Income (loss) from
       operations                         6,683                                      (6,674)


      Interest income                       343                                        1,923


      Income (loss) before
       income taxes                       7,026                                      (4,751)


      Income tax expense                  4,743                                        2,095


      Net income (loss)                           $
              2,283                              $
        (6,846)


      Net income (loss) per common share:



     Basic                                        $
              0.05                               $
        (0.15)



     Diluted                                      $
              0.05                               $
        (0.15)


      Weighted average common shares
       outstanding:



     Basic                              46,191                                       45,451



     Diluted                            46,503                                       45,451


                                                                                      
           
           Table II




                                    
           
              Commvault Systems, Inc.




                                  
       
             Condensed Consolidated Balance Sheets

                                      
           
                (In thousands)

                                        
           
                (Unaudited)




                                                     June 30,                                   March 31,


                                                         2020                            2020


                                          
           
                ASSETS



     Current assets:


      Cash and cash equivalents                                 $
              345,432                      $
         288,082



     Restricted cash                                                                    8,000


      Short-term investments                           10,845                            43,645


      Trade accounts receivable,
       net                                            149,778                           146,990


      Other current assets                             27,415                            26,969


      Total current assets                            533,470                           513,686




      Property and equipment, net                     113,657                           114,519


      Operating lease assets                           13,445                            15,009


      Deferred commissions cost                        32,928                            31,394


      Intangible assets, net                           43,525                            46,350



     Goodwill                                        112,435                           112,435



     Other assets                                     16,377                            11,683



     Total assets                                              $
              865,837                      $
         845,076




                                  
       
             LIABILITIES AND STOCKHOLDERS' EQUITY


      Current Liabilities:



     Accounts payable                                              $
              152                          $
         307


      Accrued liabilities                              81,243                            87,051


      Current portion of
       operating lease
       liabilities                                      7,130                             7,699



     Deferred revenue                                234,287                           233,497


      Total current liabilities                       322,812                           328,554




      Deferred revenue, less
       current portion                                 95,562                            92,723


      Deferred tax liabilities,
       net                                                771                               849


      Long-term operating lease
       liabilities                                      7,785                             8,808


      Other liabilities                                 4,672                             2,238




      Total stockholders' equity                      434,235                           411,904


      Total liabilities and
       stockholders' equity                                     $
              865,837                      $
         845,076


                                                                                       
              
     Table III




                                  
              
                Commvault Systems, Inc.




                           
              
                Consolidated Statements of Cash Flows

                                       
              
                (In thousands)

                                        
              
                (Unaudited)




                                                                  Three Months Ended June 30,


                                                2020                               2019


                   Cash flows from operating activities



     Net income (loss)                                  $
              2,283                              $
        (6,846)


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


      Depreciation and
       amortization                            5,378                                          2,918


      Noncash stock-based
       compensation                           18,951                                         14,750


      Amortization of deferred
       commissions cost                        4,567                                          4,503


      Impairment of operating
       lease assets                              467                                            718


      Changes in operating assets and liabilities:


      Trade accounts receivable             (11,384)                                        43,165


      Operating lease assets and
       liabilities, net                        (520)                                           848


      Other current assets and
       Other assets                            7,289                                        (5,881)


      Deferred commissions cost              (5,646)                                       (3,369)



     Accounts payable                         (159)                                       (1,217)


      Accrued liabilities                    (7,699)                                      (10,038)



     Deferred revenue                         (543)                                       (7,922)



     Other liabilities                        2,301                                          (489)


      Net cash provided by
       operating activities                   15,285                                         31,140


                   Cash flows from investing activities


      Purchase of short-term
       investments                                 -                                      (32,800)


      Proceeds from maturity of
       short-term investments                 32,800                                         32,813


      Purchase of property and
       equipment                             (1,643)                                         (841)


      Net cash provided by (used
       in) investing activities               31,157                                          (828)


                   Cash flows from financing activities


      Repurchase of common stock                   -                                      (40,026)


      Proceeds from stock-based
       compensation plans                        231                                            663


      Net cash provided by (used
       in) financing activities                  231                                       (39,363)


      Effects of exchange rate -
       changes in cash                         2,677                                          1,880


      Net increase (decrease) in
       cash, cash equivalents and
       restricted cash                        49,350                                        (7,171)


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


      Cash, cash equivalents and
       restricted cash at end of
       period                                          $
              345,432                              $
        320,821


                                                                                                                                                                                                         
     
          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
                                                                                                                                                                  June 30,


                                                                                                                                                 2020                                      2019



     
                Non-GAAP financial measures and reconciliation:



     GAAP income (loss) from operations                                                                                                                              $
              6,683                              $
        (6,674)



     Noncash stock-based compensation (1)                                                                                                     18,894                                             14,382



     FICA and payroll tax expense related to stock-based compensation (2)                                                                        332                                                415



     Restructuring (3)                                                                                                                         2,324                                              4,079



     Non-routine shareholder matters (4)                                                                                                           -                                             3,303



     Amortization of intangible assets (5)                                                                                                     2,825



     Hedvig deferred payments (6)                                                                                                              1,406



     
                Non-GAAP income from operations                                                                                                      $
              
                32,464                      $
          
          15,505





     GAAP net income (loss)                                                                                                                                          $
              2,283                              $
        (6,846)



     Noncash stock-based compensation (1)                                                                                                     18,894                                             14,382



     FICA and payroll tax expense related to stock-based compensation (2)                                                                        332                                                415



     Restructuring (3)                                                                                                                         2,324                                              4,079



     Non-routine shareholder matters (4)                                                                                                           -                                             3,303



     Amortization of intangible assets (5)                                                                                                     2,825



     Hedvig deferred payments (6)                                                                                                              1,406



     Non-GAAP provision for income taxes adjustment (7)                                                                                      (4,115)                                           (2,611)



     
                Non-GAAP net income                                                                                                                  $
              
                23,949                      $
          
          12,722





     Diluted weighted average shares outstanding                                                                                              46,503                                             46,273



     
                Non-GAAP diluted net income per share                                                                                                  $
              
                0.51                        $
          
          0.27







                                                                                                                                                
              
                Three Months Ended
                                                                                                                                                                  June 30,


                                                                                                                                                 2020                                      2019



     Subscription and Utility Software and Related Support Services                                                                                                 $
              63,619                               $
        32,289



     Recurring Support and Services                                                                                                           77,472                                             81,845



     Total Recurring Revenue                                                                                                                                       $
              141,091                              $
        114,134



     
                Percentage of Total Revenues                                                                                                   82%                                               70%





     Perpetual Software and Product Revenue                                                                                                                         $
              25,360                               $
        40,117



     Other Professional Services                                                                                                               6,549                                              7,952



     Total Non-recurring Revenue                                                                                                                                    $
              31,909                               $
        48,069



     
                Percentage of Total Revenues                                                                                                   18%                                               30%





     
                Total Revenue (8)                                                                                                                                $
              173,000                              $
        162,203


                                        Measures at period ending ($000s)


                  June 30, 2019                                      March 31, 2020            June 30, 2020


     Annualized
      Repeatable
      Revenue (9)               $
     430,957                                          $
     451,667               $
     471,608



                                             
         
            Three Months Ended June 30, 2020


                                    Americas            EMEA                                  APJ              Total



     Software and Products Revenue             $
        50,645                  $
              18,795            $
        7,114            $
             76,554



     Customer Support Revenue        55,238                       23,310                           10,095                 88,643



     Professional Services            4,113                        2,555                            1,135                  7,803



     Total Revenue                            $
        109,996                  $
              44,660           $
        18,344           $
             173,000



                                             
         
            Three Months Ended June 30, 2019


                                    Americas               EMEA                                   APJ                Total



     Software and Products Revenue             $
        31,221                  $
              21,375           $
        11,078            $
             63,674



     Customer Support Revenue        57,730                       21,667                           10,085                            89,482



     Professional Services            4,866                        2,682                            1,499                             9,047



     Total Revenue                             $
        93,817                  $
              45,724           $
        22,662           $
             162,203


                                                      Three Months Ended June 30, 2020


                                                    Sequential                               Year Over Year


                 Non-GAAP software and products
                  revenue reconciliation


      GAAP software and products
       revenue                                                      $
              76,554                             $
         76,554


          Adjustment for currency impact              (266)                                                  409


                 Non-GAAP software and products
                  revenue on a constant currency
                  basis (10)                                        $
              76,288                             $
         76,963




                                                   Three Months Ended June 30, 2020


                                                 Sequential                               Year Over Year


                 Non-GAAP services revenue
                  reconciliation


      GAAP services revenue                                         $
              96,446                             $
         96,446


          Adjustment for currency impact                548                                                 1,193


                 Non-GAAP services revenue on a
                  constant currency basis (10)                         $
              96,994                             $
         97,639




                                                   Three Months Ended June 30, 2020


                                                 Sequential                               Year Over Year


                 Non-GAAP total revenue
                  reconciliation



     GAAP total revenues                                          $
              173,000                            $
         173,000


          Adjustment for currency impact                282                                                 1,602


                 Non-GAAP total revenues on a
                  constant currency basis (10)                        $
              173,282                            $
         174,602





              
                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 June 30,


                                         2020                    2019


     
     Cost of services revenue                  $
        666                          $
        690


     
     Sales and marketing              7,204                              7,646


     
     Research and development         5,941                              1,993


     
     General and administrative       5,083                              4,053


       Stock-based compensation expense       $
        18,894                       $
        14,382




             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 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) Represents noncash amortization of
              intangible assets.




     
      (6) In connection with the acquisition of
              Hedvig Inc., certain Hedvig
              shareholders will receive cash
              payments for the 30 months following
              the date of acquisition, subject to
              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.




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




     
      (8) 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 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




     
      (9) Annualized Recurring Revenue (ARR) is
              defined as the annualized recurring
              value of all active contracts at the
              end of a reporting period.  It
              includes the following contract
              types: subscription agreements
              (including utility), maintenance
              contracts related to perpetual
              licenses, other extended maintenance
              contracts (enterprise support),
              managed services, and Metallic.  It
              excludes any element of the deal
              arrangement that is not expected to
              recur, primarily perpetual licenses
              and most professional services.
              Contracts will be annualized by
              dividing the total contract value by
              the number of days in the contract
              term, then multiplying by 365.




            Management believes that reviewing
              this metric, in addition to GAAP
              results, helps investors and
              financial analysts understand the
              value of Commvault's recurring
              revenue streams versus prior
              periods.





      (10) 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 2021. 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