EPS of $0.24 decreased by 35.9% from previous year
Gross margin of 81.5%
Net income of 11.02M
""Customers are thrilled. Commvault’s innovation with Active Directory will provide us with the confidence and peace of mind that not only can we recover our active directory data but will be able to do so quickly and accurately."" - Sanjay Mirchandani
Commvault Systems Inc (CVLT) Q3 2025 Financial Results: Strong Growth in Subscription Revenue Amidst Cyber Resilience Demand
Executive Summary
Commvault Systems Inc (CVLT) delivered an impressive performance in Q3 2025, reporting a total revenue of $263 million, which represents a 21% year-over-year (YoY) increase. Subscription revenue surged by 39% to $158 million, driven by heightened demand for data protection and cyber resilience solutions amidst rising cybersecurity threats. The company achieved a record non-GAAP EBIT margin of 20.8%, demonstrating efficiency in operations.
CEO Sanjay Mirchandani highlighted three growth drivers: the dynamic cyber resilience market, innovative product offerings, and a strong go-to-market strategy that resonates with customers. Additionally, Commvault's robust annual recurring revenue (ARR) of $890 million, a YoY growth of 18%, positions it favorably for the future, supported by a solid pipeline and expansions across key partnerships, particularly in cloud services.
Key Performance Indicators
Revenue
262.63M
QoQ: 12.58% | YoY:21.13%
Gross Profit
214.01M
81.49% margin
QoQ: 12.39% | YoY:20.40%
Operating Income
13.62M
QoQ: -9.04% | YoY:-35.32%
Net Income
11.02M
QoQ: -29.19% | YoY:-35.70%
EPS
0.25
QoQ: -30.56% | YoY:-35.90%
Revenue Trend
Margin Analysis
Key Insights
Total Revenue: $263 million (YoY +21%)
- Subscription Revenue: $158 million (YoY +39%)
- ARR: $890 million (YoY +18%, Constant Currency +21%)
- Non-GAAP EBIT Margins: 20.8%
- Net Income: $11.02 million (Net Income Margin: 4.2%)
2. Profitability Metrics:
- Gross Profit Margin: 81.5% (Gross Profit: $214 million)
- Operating Income: $13.6 million (Operating Income Margin: 5.2%)
- EPS: $0.25 (Diluted EPS: $0.24)
Cash at End of Period: $244 million
- Free Cash Flow: $30 million
- Debt: $11.6 million (No Long-Term Debt)
4. Key Ratios:
- Current Ratio: 1.127
- Quick Ratio: 1.127
- Return on Equity: 3.83%
Financial Highlights
1. Financial Performance:
- Total Revenue: $263 million (YoY +21%)
- Subscription Revenue: $158 million (YoY +39%)
- ARR: $890 million (YoY +18%, Constant Currency +21%)
- Non-GAAP EBIT Margins: 20.8%
- Net Income: $11.02 million (Net Income Margin: 4.2%)
3. Cash Flow and Balance Sheet:
- Cash at End of Period: $244 million
- Free Cash Flow: $30 million
- Debt: $11.6 million (No Long-Term Debt)
4. Key Ratios:
- Current Ratio: 1.127
- Quick Ratio: 1.127
- Return on Equity: 3.83%
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
262.63M
21.13%
12.58%
Gross Profit
214.01M
20.40%
12.39%
Operating Income
13.62M
-35.32%
-9.04%
Net Income
11.02M
-35.70%
-29.19%
EPS
0.25
-35.90%
-30.56%
Key Financial Ratios
currentRatio
1.13
grossProfitMargin
81.5%
operatingProfitMargin
5.18%
netProfitMargin
4.2%
returnOnAssets
1.08%
returnOnEquity
3.83%
debtEquityRatio
0.04
operatingCashFlowPerShare
$0.69
freeCashFlowPerShare
$0.68
priceToBookRatio
23.01
priceEarningsRatio
150.24
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Cyber Resilience Market Potential:
Sanjay Mirchandani emphasized: "...the cyber resilience market has never been more dynamic or full of promise. We are uniquely positioned to capitalize on this."
Product Revision Focus:
Regarding the Commvault Cloud platform enhancements, Mirchandani stated, "Our Commvault cloud platform enables customers to easily protect and secure vast amounts of data, including AI and ML data sets across clouds, and given most customers are utilizing multiple clouds, we are innovating across all major providers."
Operational Efficiency:
Jen DiRico noted: "...our continued investments to accelerate revenue momentum include higher commission and bonuses on record sales results. Non-GAAP EBIT grew 17% to $55 million, and non-GAAP EBIT margins of 20.8% came in at the high end of our guidance range."
"Customers are thrilled. Commvault’s innovation with Active Directory will provide us with the confidence and peace of mind that not only can we recover our active directory data but will be able to do so quickly and accurately."
— Sanjay Mirchandani
"...we’ve been quite open and transparent about the way we’re aligning our go-to-market resources and driving efficiency and productivity across it, getting closer to our customers. I think all of that is beginning to take great shape and come together well for us."
— Sanjay Mirchandani
Forward Guidance
Commvault has revised its fiscal year 2025 guidance upward, now expecting total ARR growth of 19% to 20% YoY and subscription ARR growth between 28% to 30%. For Q4, management anticipates subscription revenue between $160 million to $164 million, signaling strong ongoing demand. The company’s proactive positioning in the fast-evolving cyber resilience landscape is expected to yield continued growth, alongside well-planned investments in key initiatives for fiscal year 2026.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
CVLT Focus
81.49%
5.18%
3.83%
150.24%
ENV
98.40%
2.03%
-0.32%
-520.95%
MANH
55.50%
28.20%
22.90%
67.46%
AGYS
63.00%
10.70%
1.49%
237.86%
AZPN
44.40%
-6.94%
0.01%
2,195.74%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Commvault’s strategic focus on enhancing its cyber resilience offerings, combined with a strong financial performance and positive outlook for sustained growth in subscription services, presents a compelling case for investors. With superior ARR growth expectations and an emphasis on maintaining operational efficiency, Commvault appears well-positioned for future success in a rapidly advancing sector.
Key Investment Factors
Growth Potential
Commvault's focus on cyber resilience and multi-cloud data protection is expected to drive sustained demand, with subscription and SaaS ARR experiencing significant upward momentum.
Profitability Risk
Dependence on customer adoption of cloud services and the impact of fluctuating foreign exchange rates may pose risks to revenue growth. The competitive dynamics in the cyber resilience space could also introduce challenges.
Financial Position
Commvault maintains a strong balance sheet with considerable cash reserves ($244 million), low debt levels, and consistent free cash flow generation, positioning the company for further growth and strategic investments.
SWOT Analysis
Strengths
Strong revenue growth driven by subscription services
Robust cash reserves and financial stability
Leading position in cyber resilience solutions with differentiating products
Weaknesses
Heavy investment in growth and technology integrations may impact near-term profitability
Dependent on continued growth in the SaaS model to maintain margins
Opportunities
Expansion of cloud capabilities and partnerships with major cloud service providers
Innovation in AI-driven data protection solutions for enterprise customers
Threats
Increased competition in the rapidly evolving data protection market
Cybersecurity threats may affect customer retention or push competitive pricing
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