Delaware | 22-3447504 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Dated: | January 24, 2018 | /S/ BRIAN CAROLAN |
Brian Carolan Vice President and Chief Financial Officer |
Third quarter | ||
GAAP Results: | ||
Revenues | $180.4 million | |
Income from Operations (EBIT) | $3.5 million | |
EBIT Margin | 1.9% | |
Diluted Loss Per Share | $(1.30) | |
Non-GAAP Results: | ||
Income from Operations (EBIT) | $22.0 million | |
EBIT Margin | 12.2% | |
Diluted Earnings Per Share | $0.30 |
• | Commvault GO 2017, Commvault's annual customer event, was held Nov. 6-8, 2017 in Washington D.C., with an agenda that included more than 95 breakout, 30 mini theater and 25 structured lab speaking sessions, as well as industry-specific and other expert-led learning sessions. The conference, which grew significantly from the previous year, offered business leaders a unique opportunity to explore how they can protect, manage and activate data to unlock new business opportunities and address some of today’s most pressing data challenges, with presentations by industry thought leaders, customers, and partners, including executives from Commvault, Google, Microsoft and Cisco. At the conference, Commvault announced a new analytics portfolio of applications, capabilities, solutions and services, all built on the Commvault Data Platform. The platform is designed to help customers have access to the right data and analytics in order to gain the insights needed to improve business outcomes. |
• | On November 7, 2017, Commvault announced a new strategic partnership with Google Cloud to help enterprises leverage the range of cloud services available on one of the industry’s fastest growing cloud platforms, Google Cloud Platform™. The partnership was highlighted at Commvault GO 2017 with a keynote delivered by Google executive Adam Massey on how this new relationship addresses the increasing need for data protection for fast growing multi-cloud, hybrid IT environments requiring flexibility, security, high data availability and business agility. |
• | On November 7, 2017, Commvault launched Commvault Endpoint Data Protection as a Service to simplify and streamline the backup and recovery of corporate data stored on laptops, desktops and other devices in one flexible, easy-to-use software as a service (SaaS) offering. Fully managed by Commvault in the cloud with 24/7 customer support, Commvault Endpoint Data Protection as a Service eliminates the need for in-house infrastructure installation and reduces application management resources. |
• | On October 25, 2017, Commvault was named a winner in the Disaster recovery/business continuity solution category at NetworkWorld Asia’s 2017 Readers' Choice/Rising Star Awards. The 12th Readers’ Choice Product Excellence Awards recognizes both established and new solution providers that have made the most impact on Asian end-user organizations. Commvault has been recognized for the best solution in getting organizations back up and continuously running after a disaster or downtime, based on votes from qualified readers of NetworkWorld Asia, Asia Cloud Forum, Security Asia and Storage Asia. |
• | On October 24, 2017, Commvault announced ScaleProtect™ with Cisco UCS, a powerful unique scale-out data protection solution combining Commvault HyperScale™ Software with Cisco’s Unified Computing System (UCS). ScaleProtect™ with Cisco UCS provides enterprises a single, integrated solution that delivers infrastructure simplicity, elasticity, resiliency, flexibility and scale for managing secondary data, while replacing legacy back-up tools with a modern cloud-enabled data management solution. As the first solution launched as a Commvault HyperScale™ Software reference architecture, and is available to customers directly from Cisco’s Global Price List, making it easy for Cisco and its powerful network of resellers to sell and deliver to the market. |
• | On October 17, 2017, Commvault launched Commvault HyperScale™ Appliance and Commvault HyperScale™ Software, two powerful, cloud-ready data infrastructure offerings that provide customers with on-premises simplicity, elasticity, resiliency, flexibility and scale for managing secondary data. Commvault’s HyperScale Technology brings scale-out infrastructure to the Commvault Data in support of true hybrid IT environments, Commvault HyperScale Technology is uniquely positioned in the market to protect and securely move workloads across any type of infrastructure including public cloud, private cloud and on-premises. Initial program participants in the reference architecture software program include: Fujitsu, Cisco, Lenovo, HPE, Super Micro Computer, Huawei and Dell-EMC. |
Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||||||
2017 | 2016 (1) | 2017 | 2016 (1) | ||||||||||||
Revenues: | |||||||||||||||
Software and products | $ | 81,443 | $ | 78,655 | $ | 228,224 | $ | 212,473 | |||||||
Services | 98,923 | 88,406 | 286,254 | 265,800 | |||||||||||
Total revenues | 180,366 | 167,061 | 514,478 | 478,273 | |||||||||||
Cost of revenues: | |||||||||||||||
Software and products | 1,234 | 772 | 3,125 | 2,306 | |||||||||||
Services | 23,723 | 20,394 | 66,760 | 61,512 | |||||||||||
Total cost of revenues | 24,957 | 21,166 | 69,885 | 63,818 | |||||||||||
Gross margin | 155,409 | 145,895 | 444,593 | 414,455 | |||||||||||
Operating expenses: | |||||||||||||||
Sales and marketing | 105,106 | 97,053 | 305,610 | 283,979 | |||||||||||
Research and development | 23,981 | 21,227 | 69,451 | 60,676 | |||||||||||
General and administrative | 20,387 | 21,610 | 67,858 | 62,862 | |||||||||||
Depreciation and amortization | 2,457 | 2,163 | 7,212 | 6,382 | |||||||||||
Total operating expenses | 151,931 | 142,053 | 450,131 | 413,899 | |||||||||||
Income (loss) from operations | 3,478 | 3,842 | (5,538 | ) | 556 | ||||||||||
Interest expense | (232 | ) | (233 | ) | (698 | ) | (724 | ) | |||||||
Interest income | 588 | 312 | 1,560 | 843 | |||||||||||
Equity in loss of affiliate | (158 | ) | (300 | ) | (281 | ) | (544 | ) | |||||||
Income (loss) before income taxes | 3,676 | 3,621 | (4,957 | ) | 131 | ||||||||||
Income tax expense | 62,621 | 1,662 | 55,282 | 836 | |||||||||||
Net income (loss) | $ | (58,945 | ) | $ | 1,959 | $ | (60,239 | ) | $ | (705 | ) | ||||
Net income (loss) per common share: | |||||||||||||||
Basic | $ | (1.30 | ) | $ | 0.04 | $ | (1.33 | ) | $ | (0.02 | ) | ||||
Diluted | $ | (1.30 | ) | $ | 0.04 | $ | (1.33 | ) | $ | (0.02 | ) | ||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 45,291 | 45,099 | 45,340 | 44,645 | |||||||||||
Diluted | 45,291 | 47,115 | 45,340 | 44,645 |
December 31, | March 31, | |||||||
2017 | 2017 (1) | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 314,494 | $ | 329,491 | ||||
Short-term investments | 130,993 | 120,693 | ||||||
Trade accounts receivable, net | 146,750 | 140,084 | ||||||
Other current assets | 24,181 | 15,791 | ||||||
Total current assets | 616,418 | 606,059 | ||||||
Deferred tax assets, net | — | 50,228 | ||||||
Property and equipment, net | 129,632 | 132,319 | ||||||
Equity method investment | 3,340 | 3,621 | ||||||
Deferred commissions cost | 31,372 | 30,378 | ||||||
Other assets | 8,512 | 7,273 | ||||||
Total assets | $ | 789,274 | $ | 829,878 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current Liabilities: | ||||||||
Accounts payable | $ | 193 | $ | 117 | ||||
Accrued liabilities | 79,179 | 78,701 | ||||||
Deferred revenue | 227,532 | 209,099 | ||||||
Total current liabilities | 306,904 | 287,917 | ||||||
Deferred revenue, less current portion | 80,035 | 70,803 | ||||||
Deferred tax liabilities, net | 2,504 | — | ||||||
Other liabilities | 3,749 | 4,226 | ||||||
Total stockholders’ equity | 396,082 | 466,932 | ||||||
Total liabilities and stockholders’ equity | $ | 789,274 | $ | 829,878 |
Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||||||
2017 | 2016 (1) | 2017 | 2016 (1) | ||||||||||||
Cash flows from operating activities | |||||||||||||||
Net income (loss) | $ | (58,945 | ) | $ | 1,959 | $ | (60,239 | ) | $ | (705 | ) | ||||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||||||
Depreciation and amortization | 2,879 | 2,569 | 8,446 | 7,573 | |||||||||||
Noncash stock-based compensation | 17,753 | 19,110 | 57,138 | 55,153 | |||||||||||
Excess tax benefits from stock-based compensation (2) | — | (3,575 | ) | — | (4,776 | ) | |||||||||
Deferred income taxes | 56,471 | (554 | ) | 53,682 | (7,398 | ) | |||||||||
Equity in loss of affiliate | 158 | 300 | 281 | 544 | |||||||||||
Amortization of deferred commissions cost | 3,975 | 4,096 | 12,314 | 11,784 | |||||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Trade accounts receivable | (17,030 | ) | (14,902 | ) | (4,591 | ) | (6,651 | ) | |||||||
Other current assets and Other assets | 5,677 | 4,513 | (7,101 | ) | 1,060 | ||||||||||
Deferred commissions cost | (4,748 | ) | (4,981 | ) | (12,262 | ) | (12,563 | ) | |||||||
Accounts payable | 11 | 43 | 71 | (159 | ) | ||||||||||
Accrued liabilities | 15,457 | 10,102 | (3,652 | ) | 10,858 | ||||||||||
Deferred revenue | 10,550 | 8,219 | 17,963 | 16,282 | |||||||||||
Other liabilities | (998 | ) | (131 | ) | (1,222 | ) | 52 | ||||||||
Net cash provided by operating activities | 31,210 | 26,768 | 60,828 | 71,054 | |||||||||||
Cash flows from investing activities | |||||||||||||||
Purchase of short-term investments | (33,007 | ) | (27,302 | ) | (110,181 | ) | (93,911 | ) | |||||||
Proceeds from maturity of short-term investments | 33,272 | 24,387 | 99,881 | 72,236 | |||||||||||
Purchase of property and equipment | (2,663 | ) | (2,405 | ) | (5,297 | ) | (4,485 | ) | |||||||
Net cash used in investing activities | (2,398 | ) | (5,320 | ) | (15,597 | ) | (26,160 | ) | |||||||
Cash flows from financing activities | |||||||||||||||
Repurchase of common stock | (80,050 | ) | (24,997 | ) | (91,309 | ) | (24,997 | ) | |||||||
Proceeds from stock-based compensation plans | 978 | 2,818 | 17,713 | 14,271 | |||||||||||
Excess tax benefits from stock-based compensation (2) | — | 3,575 | — | 4,776 | |||||||||||
Net cash used in financing activities | (79,072 | ) | (18,604 | ) | (73,596 | ) | (5,950 | ) | |||||||
Effects of exchange rate — changes in cash | 1,423 | (8,226 | ) | 13,368 | (10,639 | ) | |||||||||
Net increase (decrease) in cash and cash equivalents | (48,837 | ) | (5,382 | ) | (14,997 | ) | 28,305 | ||||||||
Cash and cash equivalents at beginning of period | 363,331 | 321,794 | 329,491 | 288,107 | |||||||||||
Cash and cash equivalents at end of period | $ | 314,494 | $ | 316,412 | $ | 314,494 | $ | 316,412 | |||||||
Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||||||
2017 | 2016 (7) | 2017 | 2016 (7) | ||||||||||||
Non-GAAP financial measures and reconciliation: | |||||||||||||||
GAAP income (loss) from operations | $ | 3,478 | $ | 3,842 | $ | (5,538 | ) | $ | 556 | ||||||
Noncash stock-based compensation (1) | 17,753 | 19,110 | 57,138 | 55,153 | |||||||||||
FICA and related payroll tax expense on stock option exercises and vesting on restricted stock awards (2) | 794 | 722 | 1,887 | 1,188 | |||||||||||
Non-GAAP income from operations | $ | 22,025 | $ | 23,674 | $ | 53,487 | $ | 56,897 | |||||||
GAAP net income (loss) | $ | (58,945 | ) | $ | 1,959 | $ | (60,239 | ) | $ | (705 | ) | ||||
Noncash stock-based compensation (1) | 17,753 | 19,110 | 57,138 | 55,153 | |||||||||||
FICA and related payroll tax expense on stock option exercises and vesting on restricted stock awards (2) | 794 | 722 | 1,887 | 1,188 | |||||||||||
Equity in loss of affiliate (3) | 158 | 300 | 281 | 544 | |||||||||||
Non-GAAP provision for income taxes adjustment (4) | 54,340 | (7,127) | 35,173 | (20,260) | |||||||||||
Non-GAAP net income | $ | 14,100 | $ | 14,964 | $ | 34,240 | $ | 35,920 | |||||||
Diluted weighted average shares outstanding (5) | 47,261 | 47,115 | 47,648 | 46,601 | |||||||||||
Non-GAAP diluted net income per share | $ | 0.30 | $ | 0.32 | $ | 0.72 | $ | 0.77 |
Three Months Ended December 31, 2017 | Nine Months Ended December 31, 2017 | |||||||||||
Sequential | Year Over Year | Year Over Year | ||||||||||
Non-GAAP software and products revenue reconciliation | ||||||||||||
GAAP software and products revenue | $ | 81,443 | $ | 81,443 | $ | 228,224 | ||||||
Adjustment for currency impact | 309 | (3,339) | (3,523) | |||||||||
Non-GAAP software and products revenue on a constant currency basis (6) | $ | 81,752 | $ | 78,104 | $ | 224,701 | ||||||
Three Months Ended December 31, 2017 | Nine Months Ended December 31, 2017 | |||||||||||
Sequential | Year Over Year | Year Over Year | ||||||||||
Non-GAAP services revenue reconciliation | ||||||||||||
GAAP services revenue | $ | 98,923 | $ | 98,923 | $ | 286,254 | ||||||
Adjustment for currency impact | 298 | (2,287) | (2,252) | |||||||||
Non-GAAP services revenue on a constant currency basis (6) | $ | 99,221 | $ | 96,636 | $ | 284,002 | ||||||
Three Months Ended December 31, 2017 | Nine Months Ended December 31, 2017 | |||||||||||
Sequential | Year Over Year | Year Over Year | ||||||||||
Non-GAAP total revenue reconciliation | ||||||||||||
GAAP total revenues | $ | 180,366 | $ | 180,366 | $ | 514,478 | ||||||
Adjustment for currency impact | 607 | (5,626) | (5,775) | |||||||||
Non-GAAP total revenues on a constant currency basis (6) | $ | 180,973 | $ | 174,740 | $ | 508,703 |
Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Non-GAAP free cash flow reconciliation: | |||||||||||||||
Net cash provided by operating activities | $ | 31,210 | $ | 26,768 | $ | 60,828 | $ | 71,054 | |||||||
Purchase of property and equipment | (2,663 | ) | (2,405 | ) | (5,297 | ) | (4,485 | ) | |||||||
Non-GAAP free cash flow | $ | 28,547 | $ | 24,363 | $ | 55,531 | $ | 66,569 |
Three Months Ended December 31, 2017 | ||||||||||||
Americas | EMEA | APAC | Total | |||||||||
Software and Products Revenue | $ | 40,783 | $ | 29,472 | $ | 11,188 | $ | 81,443 | ||||
Customer Support Revenue | 59,225 | 19,478 | 9,151 | 87,854 | ||||||||
Professional Services | 6,287 | 2,944 | 1,838 | 11,069 | ||||||||
Total Revenue | $ | 106,295 | $ | 51,894 | $ | 22,177 | $ | 180,366 |
Three Months Ended December 31, 2016 | ||||||||||||
Americas | EMEA | APAC | Total | |||||||||
Software and Products Revenue | $ | 41,804 | $ | 26,228 | $ | 10,623 | $ | 78,655 | ||||
Customer Support Revenue | 54,738 | 16,323 | 8,079 | 79,140 | ||||||||
Professional Services | 5,385 | 2,574 | 1,307 | 9,266 | ||||||||
Total Revenue | $ | 101,927 | $ | 45,125 | $ | 20,009 | $ | 167,061 |
Nine Months Ended December 31, 2017 | ||||||||||||
Americas | EMEA | APAC | Total | |||||||||
Software and Products Revenue | $ | 121,498 | $ | 74,293 | $ | 32,433 | $ | 228,224 | ||||
Customer Support Revenue | 173,619 | 55,214 | 26,688 | 255,521 | ||||||||
Professional Services | 17,113 | 8,248 | 5,372 | 30,733 | ||||||||
Total Revenue | $ | 312,230 | $ | 137,755 | $ | 64,493 | $ | 514,478 |
Nine Months Ended December 31, 2016 | ||||||||||||
Americas | EMEA | APAC | Total | |||||||||
Software and Products Revenue | $ | 121,527 | $ | 61,014 | $ | 29,932 | $ | 212,473 | ||||
Customer Support Revenue | 162,223 | 49,385 | 24,237 | 235,845 | ||||||||
Professional Services | 17,770 | 8,143 | 4,042 | 29,955 | ||||||||
Total Revenue | $ | 301,520 | $ | 118,542 | $ | 58,211 | $ | 478,273 |
(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 December 31, | Nine Months Ended December 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Cost of services revenue | $ | 846 | $ | 1,060 | $ | 2,348 | $ | 2,895 | |||||||
Sales and marketing | 9,464 | 9,100 | 27,888 | 25,061 | |||||||||||
Research and development | 2,170 | 1,924 | 6,310 | 5,372 | |||||||||||
General and administrative | 5,273 | 7,026 | 20,592 | 21,825 | |||||||||||
Stock-based compensation expense | $ | 17,753 | $ | 19,110 | $ | 57,138 | $ | 55,153 |
(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) | Represents Commvault's share of income or loss from its investment in Laitek, Inc. |
(4) | The provision for income taxes is adjusted to reflect Commvault’s estimated non-GAAP effective tax rate of approximately 37% in fiscal 2018 and fiscal 2017. |
(5) | 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 the periods ended December 31, 2017 and 2016 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. |
(6) | 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 2018. 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. |
(7) | Adjusted for the retrospective adoption of ASC 606, Revenue from Contracts with Customers |
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