Commvault Systems posts second straight quarter of revenue gains
Data protection vendor Commvault Systems generated $159.6 million in revenues in the fourth quarter, hitting the second consecutive quarter of sequential growth after three quarters of declining revenues.
The company beat Wall Street analysts’ expectations by $2.47 million, with total revenues up by six percent year-over-year and two percent sequentially.
Brian Carolan, Commvault’s chief financial officer, said total revenues for the full fiscal year were about $595 million, which were a decrease of two percent compared to the 2015 fiscal year. Total revenues for fiscal 2016 were up three percent year-over-year. Software revenues for the fourth quarter 2016 were $73.3 million, up three percent sequentially and five percent year-over-year.
Revenue from enterprise deals, defined by Commvault as deals over $100,000 in software revenue, were 58% of total software revenue and the number of enterprise deals increased 13% sequentially.
“Our average enterprise deal size was approximately $272,000 during the current quarter, which was down 2 percent from approximately $278,000 in the third quarter 2016,” Carolan said.
Commvault’s net income was $16.6 million for the quarter and $42.4 million for the year.
President and CEO Bob Hammer attributed the growth to changes Commvault made during a two-year transition, which brought about license revenue from new distribution partnerships with Microsoft, Amazon Web Services (AWS), Cisco, Nutanix and Pure Storage.
The Commvault V11 Data Protection Platform, which was re-branded from Simpana and introduced last fall, is experiencing strong sales. The company added about 450 new customers this last quarter and revenue made via its deal with Arrow distributor was 38% of the company’s total revenue, a nine percent increase year-over-year and flat sequentially.
“The move to the cloud has become a major factor contributing to our increased business momentum since Commvault solutions can holistically solve a broad range of critical new problems that customers are facing as they migrate to the cloud, manage data in private, hybrid and public clouds and deploy new hyper converged and big data infrastructures,” Hammer said.
The company is winning larger enterprise deals, Hammer said.
“However, our ability to grow is more dependent on just big deals or the steady flow of $500,000 and $1 million-plus deals,” he said. “These deals have quarterly revenue and earnings risk due to their complexity and timing. Even with improved funnels, large closure rates may remain lumpy. We still face critical challenges. We need to expand the market visibility and understanding of the strategic value of Commvault’s V11 Data Platform and broader set of standalone products.”
CommVault Systems’ history is in data protection but it has been adding cloud data management as part of its core strategy. Hammer said cloud and software as a service (SaaS) vendors to not replace the need for the type of data management CommVault is offering.
“For example, replication data protection technologies from cloud and SaaS vendors do not replace the need for a backup copy for critical data needs such as compliance, legal and historical business analytics,” he said. “They do not provide the data and information capability to federate the management of data across silos of cloud, mobile, SaaS and new IT infrastructures.”
Hammer said Commvault will expand its Data Platform over the next six months or so, adding user self-service for managing cloud data, improvements for managing data created in the cloud, federated indexing, and intelligent search of online clouds and managed copies.