Commvault — Second Quarter Fiscal 2027 Earnings Summary

Financial Performance:

• Total revenue was $312.4 million, a 13% increase year over year.
• Subscription revenue was $269 million, up 21% year over year, including SaaS revenue of $106 million, up 33% year over year.
• Subscription Annualized Recurring Revenue (ARR) reached $1,104 million, up 20% year over year; constant currency subscription ARR was $1,107 million.
• Net new subscription ARR on a constant currency basis was $51 million.
• Income from operations (GAAP) was $30 million, representing an operating margin of 9.7%.
• Non-GAAP income from operations (EBIT) was $68 million, representing an operating margin of 21.9%.
• Operating cash flow was $75 million, with free cash flow of $71 million.
• Net income was $29.1 million ($0.69 diluted EPS), compared to $14.7 million ($0.33 diluted EPS) in the prior year period.
• Non-GAAP net income was $58.3 million ($1.38 diluted EPS).
• Subscription net dollar retention rate was 113%.
• Cash and cash equivalents totaled $897 million as of September 30, 2026.
• Deferred revenue was $763.9 million ($472.7 million current, $291.1 million non-current).
• Convertible notes, net, were $883 million.
• Stock repurchases totaled $119 million for approximately 906,000 shares during the six months ended September 30, 2026.

Guidance and Future Outlook:

• Q3 Fiscal 2027 subscription revenue is expected to be between $293 million and $297 million.
• Q3 Fiscal 2027 non-GAAP EBIT margin is expected to be between 20.5% and 21.0%.
• Full Year Fiscal 2027 subscription revenue is expected to be between $1,127 million and $1,133 million.
• Full Year Fiscal 2027 subscription ARR is expected to be between $1,205 million and $1,215 million.
• Full Year Fiscal 2027 non-GAAP EBIT margin is expected to be between 21.0% and 21.5%.
• Full Year Fiscal 2027 free cash flow is expected to be between $255 million and $265 million.
• Diluted shares outstanding are expected to be approximately 42 million for the full year.

Business Segments and Product Lines:

• Term-based license revenue was $105 million, up 13% year over year.
• Term-based support revenue was $57 million, up 15% year over year.
• Perpetual license revenue was $7.2 million, down 40% year over year.
• Perpetual support revenue was $23.5 million, down 23% year over year.
• Other services revenue was $13.2 million, up 18% year over year.
• Americas region revenue was $194.1 million, up 15% year over year.
• International region revenue was $118.3 million, up 9% year over year.
• Commvault introduced Commvault Active Directory Pre Recover, an Identity Resilience innovation.
• Commvault expanded FedRAMP High Authorized Cyber Resilience Services to managed services providers.
• Commvault integrated Threat Scan with Google Threat Intelligence.

Market and Competitive Landscape:

• Management stated that AI is accelerating both innovation and risk in the enterprise, driving resilience as a business imperative.
• Enterprises are increasingly turning to Commvault to manage more data, identities, and complexity.
• The company operates in the data protection and cyber resilience market, focusing on cloud-native and hybrid environments.

Risks and Challenges:

• Forward-looking statements are subject to risks including restructuring plans, competitive factors, and difficulties in software product development and sales.
• General economic conditions, litigation outcomes, and foreign currency fluctuations may impact results.
• Noncash stock-based compensation is a significant recurring expense excluded from non-GAAP measures.
• Restructuring activities, including workforce reductions and office closures, are ongoing with remaining activities anticipated to complete in fiscal 2027.

Management Commentary and Tone:

• Sanjay Mirchandani, President and CEO, stated that strong Q2 results reflect momentum in the enterprise resilience market.
• Management expressed confidence in driving durable growth and shareholder value.
• The tone is confident regarding the company's ability to navigate data complexity and AI-driven risks.

Other Key Points:

• The company reclassified Customer support revenue into "Term-based support" and "Perpetual support" for fiscal 2027, and reclassified Subscription ARR to include enterprise support.
• Total ARR (including perpetual maintenance) is no longer disclosed.
• The company finalized the sale of its corporate headquarters in Q1 Fiscal 2026 and entered into a lease for a portion of the premises.
• Non-recurring strategic pricing initiative costs of $6.5 million were incurred in Q1 Fiscal 2027 and excluded from non-GAAP results.
• A conference call to discuss results was held on October 27, 2026, at 8:30 a.m. Eastern Time.