Executive Summary
Commvault Systems Inc (CVLT) cements its position as a leading player in data protection and information management software, reporting robust financial metrics for Q2 2025. The company achieved total revenue of $233 million, a 16% increase year-over-year (YoY) and marked its fourth consecutive quarter of double-digit growth. Subscription Annual Recurring Revenue (ARR) showed remarkable growth of 30%, reaching $687 million, while SaaS ARR soared by 64% to $215 million. Management's focus on cyber resilience and innovation drives this growth, as highlighted in the earnings call. A promising outlook for fiscal Q3, with expected revenue of up to $247 million, underscores a committed approach to sustained financial health and market expansion.
Key Performance Indicators
QoQ: -18.78% | YoY:-15.12%
QoQ: -15.99% | YoY:19.57%
QoQ: -14.29% | YoY:20.00%
Key Insights
**Revenue Growth**: Total revenue rose 16% YoY to $233 million and 3.83% quarter-over-quarter. Subscription revenue expanded by 37%, indicating success in converting customers to long-term relationships.
**Profitability**: Gross profit was $190.4 million, yielding a gross margin of 81.6%. Operating income, however, experienced a decline of 15.1% YoY, reflecting increased operational costs from strategic investments.
**EPS**: Earnings per share (EPS) reached $0.36 with diluted EPS at $0.35, dem...
Financial Highlights
Revenue Growth: Total revenue rose 16% YoY to $233 million and 3.83% quarter-over-quarter. Subscription revenue expanded by 37%, indicating success in converting customers to long-term relationships.
Profitability: Gross profit was $190.4 million, yielding a gross margin of 81.6%. Operating income, however, experienced a decline of 15.1% YoY, reflecting increased operational costs from strategic investments.
EPS: Earnings per share (EPS) reached $0.36 with diluted EPS at $0.35, demonstrating growth of 20% YoY.
Cash Flow: Free cash flow grew by 34% to $54 million, with a significant share repurchase worth $52 million, representing 97% of free cash flow for the quarter.
Deferred Revenue: Q2 saw growth in deferred revenue, contributing to expectations of sustained revenue.
Management underscored confidence in future metrics, projecting a total revenue increase of approximately 14% for FY 2025 and ARR growth of 27% for Q3.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
233.28M |
16.06% |
3.83% |
| Gross Profit |
190.42M |
16.72% |
2.99% |
| Operating Income |
14.97M |
-15.12% |
-18.78% |
| Net Income |
15.57M |
19.57% |
-15.99% |
| EPS |
0.36 |
20.00% |
-14.29% |
Key Financial Ratios
operatingProfitMargin
6.42%
operatingCashFlowPerShare
$1.27
freeCashFlowPerShare
$1.23
priceEarningsRatio
108.16
Management Commentary
Revenue Growth Strategy:
- CEO Sanjay Mirchandani remarked, "Q2 was an exceptional quarter with momentum once again accelerating across all our primary KPIs."
- On subscription growth, Mirchandani noted, "Subscription ARR rose 30% to $687 million."
Cyber Resilience Focus:
- The introduction of Commvault Cloud Rewind reflects strategic innovation amid evolving threats: "We introduced Commvault Cloud Rewind, it's a truly unique offering that transforms and simplifies recovery of the cloud."
Partnership and Integration:
- Management also highlighted significant partnerships with AWS and Google Cloud, enhancing Commvault’s multi-cloud resilience capabilities.
"It has never been clearer that what we do matters. In an age of nonstop threats and cyber-attacks, organizations need to be ready." - Sanjay Mirchandani
— Sanjay Mirchandani
"We are on track for a strong second half of the year and are well positioned to see the market opportunities ahead." - Jen DiRico},
— Jen DiRico
Forward Guidance
Commvault's management provided an optimistic outlook for Q3 2025, anticipating total revenue between $243 million and $247 million, equating to a growth of 13% YoY. They expect Subscription revenue in the range of $143 million to $147 million, translating to a midpoint growth rate of 27%. For fiscal 2025, Commvault expects total revenue of approximately $952 million to $957 million, reflecting continued investment in innovation and strategic acquisitions. Free cash flow is projected to exceed $200 million, emphasizing financial health and operational efficiency.