Key Highlights

  • Non-GAAP diluted EPS was $1.38 versus $0.91, and GAAP diluted EPS was $0.69 versus $0.33.
  • Total revenue was $312.4 million, up 13%, with subscription revenue of $268.5 million, up 21%.
  • Subscription ARR reached $1,103.9 million, up 20%, and SaaS ARR was $454.4 million, up about 35%.
  • Free cash flow was $70.9 million, and the company repurchased $107.7 million of stock in the quarter.
  • Full-year subscription ARR guidance is $1,205 million to $1,215 million, up from $1,200 million to $1,210 million.

Commvault Earnings: Why Is ARR Growth Slowing While Guidance Rises?

Commvault (NASDAQ:CVLT) reported fiscal second-quarter results on Tuesday, October 27, with non-GAAP diluted EPS of $1.38, up from $0.91 and above the $1.24 estimate as screened. GAAP diluted EPS was $0.69, versus $0.33. Revenue was $312.4 million, up 13% from $276.2 million.

Subscription ARR grew 20% to $1,103.9 million, a step down from the 22% growth reported for the first quarter, while management still raised the full-year ARR, revenue, margin and cash flow ranges. Net new subscription ARR was $49.6 million on a reported basis. Subscription net dollar retention was 113%.

Commvault sells data protection and cyber resilience software, delivered increasingly as a cloud service. From fiscal 2027 it counts term-based support within subscription revenue and enterprise support within subscription ARR, with prior periods restated.

SaaS and Subscription Mix: Which Lines Drove the Quarter?

Subscription revenue rose 21% to $268.5 million, above the $264 million to $268 million guided in July. SaaS revenue rose 33% to $106.2 million, and SaaS ARR reached $454.4 million, up about 35%, compared with growth of about 38% in the first quarter (calculated from reported figures).

Americas revenue rose 15% to $194.1 million, while international revenue rose 9% to $118.3 million. The chief executive said AI is accelerating both innovation and risk in the enterprise, making resilience a business imperative.

Product updates in the release included Active Directory Pre Recover, aimed at cutting clean recovery time from hours to minutes, and FedRAMP High authorization for cyber resilience services offered through managed service providers.

Margins, Cash and Buybacks: How Much Came Through to Profit?

Non-GAAP operating income was $68.3 million, a 21.9% margin. GAAP operating income was $30.4 million, a 9.7% margin. Operating cash flow was $74.8 million and free cash flow $70.9 million, compared with $73.6 million a year earlier.

Cash and equivalents were $897.3 million at September 30. Commvault repurchased $107.7 million of stock in the quarter on a cash basis, and about 906,000 shares for $119 million over the first six months. Diluted shares were about 42 million.

Guidance: What Did Commvault Raise, and What Comes Next?

For the third quarter, subscription revenue is guided to $293 million to $297 million, which is 13.9% to 15.4% above the $257.3 million of a year earlier (calculated), with a non-GAAP operating margin of 20.5% to 21.0%.

Full-year subscription revenue is now guided to $1,127 million to $1,133 million, from $1,119 million to $1,129 million. Subscription ARR is guided to $1,205 million to $1,215 million, from $1,200 million to $1,210 million. Non-GAAP operating margin is guided to 21.0% to 21.5%, from about 21%, and free cash flow to $255 million to $265 million, from $250 million to $260 million.

Next up is the fiscal third-quarter report, where subscription revenue against the $293 million to $297 million range and the pace of SaaS ARR growth will show whether the slowdown in total ARR growth is easing.