Commvault Announces Second Quarter Fiscal 2027 Financial Results
Subscription revenue 1 climbs +21% year over year to $269 million
Subscription annualized recurring revenue (ARR) 1, 2 reaches $1,104 million, up +20% year over year
Operating cash flow of $75 million, with free cash flow 3 of $71 million
TINTON FALLS, N.J. , Oct. 27, 2026 /PRNewswire/ -- Commvault (Nasdaq: CVLT) today announced its financial results for the fiscal second quarter ended September 30, 2026.
"With AI accelerating both innovation and risk in the enterprise, resilience continues to be a business imperative," said Sanjay Mirchandani, President and CEO, Commvault. "Enterprises globally are increasingly turning to Commvault to stay resilient as they navigate more data, more identities, and greater complexity. We believe our strong Q2 results reflect that momentum, driving durable growth and shareholder value."
Notes are contained at the end of this press release
Second Quarter Fiscal 2027 Highlights -
Recent Business Highlights -
Financial Outlook for Third Quarter and Full Year Fiscal 2027 4 -
We are providing the following guidance for the third quarter of fiscal year 2027:
We are providing the following updated guidance for the full fiscal year 2027:
Financial Outlook for Full Year Fiscal 2027 Subscription ARR -
($ in millions)
FY'27 guidance as of June 30, 2026 (midpoint)
$ 1,205
YTD currency impact using March 31, 2026 rates
(3)
Adjustment on revised annual outlook
8
FY'27 updated guidance as of September 30, 2026 (midpoint)
$ 1,210
The above guidance metrics contemplate current macroeconomic conditions. These statements are forward-looking and made pursuant to the safe harbor provisions discussed in detail below. We do not undertake any obligation to update these forward-looking statements. Actual results may differ materially from anticipated results.
Conference Call Information
Commvault will host a conference call today, October 27, 2026 at 8:30 a.m. Eastern Time (5:30 a.m. Pacific Time) to discuss quarterly results. The live webcast and call dial-in numbers can be accessed by registering under the "News & Events" section of Commvault's website at ir.commvault.com under the "Investor Events" heading. An archived webcast of this conference call will also be available following the call.
About Commvault
Commvault (Nasdaq: CVLT) delivers continuous recovery for the AI era. We help organizations stay ready for constant disruption by returning critical data, applications, identities, and AI systems to a clean, trusted state. Our purpose-built recovery solutions span cloud-native and hybrid environments, leveraging AI to enable resilience at enterprise scale.
Safe Harbor Statement
This press release may contain forward-looking statements, including statements regarding financial projections, which are subject to risks and uncertainties, such as those related to our restructuring plans, competitive factors, difficulties and delays inherent in the development, manufacturing, marketing and sale of software products and related services, general economic conditions, outcome of litigation and others. For a discussion of these and other risks and uncertainties affecting Commvault's business, see "Item 1A. Risk Factors" in our annual report on Form 10-K and "Item 1A. Risk Factors" in our most recent quarterly report on Form 10-Q. Statements regarding Commvault's beliefs, plans, expectations or intentions regarding the future are forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from anticipated results. Commvault does not undertake to update its forward-looking statements.
Overview
($ in thousands)
Q2'26
Q3'26
Q4'26
Q1'27
Q2'27
Revenue
Y/Y
Growth
Revenue
Y/Y
Growth
Revenue
Y/Y
Growth
Revenue
Y/Y
Growth
Revenue
Y/Y
Growth
Subscription:
Term-based license
$ 92,647
10 %
$ 118,950
22 %
$ 114,445
6 %
$ 110,420
1 %
$ 105,002
13 %
Term-based support
49,686
19 %
50,962
18 %
53,933
21 %
56,057
18 %
57,307
15 %
SaaS
80,018
61 %
87,379
44 %
93,139
43 %
100,550
39 %
106,203
33 %
Total subscription
222,351
26 %
257,291
28 %
261,517
20 %
267,027
16 %
268,512
21 %
Perpetual license
12,073
15 %
13,675
(17) %
10,129
(32) %
8,695
19 %
7,205
(40) %
Perpetual support
30,543
(15) %
29,309
(14) %
26,972
(15) %
25,475
(19) %
23,482
(23) %
Other services
11,221
2 %
13,557
25 %
13,074
26 %
12,934
(7) %
13,190
18 %
Total revenues
$ 276,188
18 %
$ 313,832
19 %
$ 311,692
13 %
$ 314,131
11 %
$ 312,389
13 %
Constant Currency - Revenue
($ in thousands)
The constant currency impact is calculated using the average foreign exchange rates from the prior year period and applying these rates to foreign-denominated revenues in the current corresponding period. Commvault analyzes revenue growth on a constant currency basis in order to provide a comparable framework for assessing how the business performed excluding the effect of foreign currency fluctuations. The non-GAAP financial measures presented in this press release should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP.
Q2'26
Revenue as
Reported
(GAAP)
Q2'27
Revenue as
Reported
(GAAP)
Constant
Currency
Impact
% Change Y/Y
(GAAP)
% Change Y/Y
Constant
Currency
Subscription:
Term-based license
$ 92,647
$ 105,002
$ 430
13 %
14 %
Term-based support
49,686
57,307
136
15 %
16 %
SaaS
80,018
106,203
(1)
33 %
33 %
Total subscription
222,351
268,512
565
21 %
21 %
Perpetual license
12,073
7,205
128
(40) %
(39) %
Perpetual support
30,543
23,482
255
(23) %
(22) %
Other services
11,221
13,190
(14)
18 %
17 %
Total
$ 276,188
$ 312,389
$ 934
13 %
13 %
Disaggregation of Revenues
($ in thousands)
Our Americas region includes the United States, Canada, and Latin America. Our International region primarily includes Europe, the Middle East, Africa, Australia, India, and Southeast Asia.
Q2'26
Q3'26
Q4'26
Q1'27
Q2'27
Revenue
Y/Y
Growth
Revenue
Y/Y
Growth
Revenue
Y/Y
Growth
Revenue
Y/Y
Growth
Revenue
Y/Y
Growth
Americas
$ 168,125
16 %
$ 178,852
15 %
$ 184,977
9 %
$ 186,779
9 %
$ 194,103
15 %
International
108,063
22 %
134,980
26 %
126,715
20 %
127,352
15 %
118,286
9 %
Total revenues
$ 276,188
18 %
$ 313,832
19 %
$ 311,692
13 %
$ 314,131
11 %
$ 312,389
13 %
Subscription ARR and SaaS ARR
($ in thousands)
Q2'26
Q3'26
Q4'26
Q1'27
Q2'27
Subscription ARR
918,130
966,260
1,014,729
1,054,311
1,103,909
SaaS ARR
335,669
363,732
400,157
424,337
454,406
Constant Currency - Subscription ARR
($ in thousands)
Constant currency ARR is calculated using the foreign exchange spot rates from March 31, 2026 and applying these rates to foreign-denominated results in the periods presented.
Q1'27
Q2'27
Constant Currency Subscription ARR
Term-based Software ARR
$ 630,864
$ 651,402
SaaS ARR
424,879
455,387
Constant Currency Subscription ARR
$ 1,055,743
$ 1,106,789
Constant Currency Subscription Net New ARR
Term-based Software ARR
$ 16,457
$ 20,538
SaaS ARR
24,827
30,508
Constant Currency Subscription Net New ARR
$ 41,284
$ 51,046
Additional Financial Information
Commvault Systems, Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended
September 30,
Six Months Ended
September 30,
2026
2025
2026
2025
Revenues:
Subscription:
Term-based license
$ 105,002
$ 92,647
$ 215,422
$ 201,929
Term-based support
57,307
49,686
113,364
97,268
Software-as-a-service
106,203
80,018
206,753
152,463
Total subscription
268,512
222,351
535,539
451,660
Perpetual license
7,205
12,073
15,900
19,408
Perpetual support
23,482
30,543
48,957
61,982
Other services
13,190
11,221
26,124
25,116
Total revenues
312,389
276,188
626,520
558,166
Cost of revenues:
Term-based license
3,465
2,414
7,708
4,656
Software-as-a-service
31,812
29,187
61,464
55,159
Perpetual license
228
194
399
439
Customer support
14,347
14,847
29,046
29,054
Other services
9,018
8,402
17,862
16,513
Total cost of revenues
58,870
55,044
116,479
105,821
Gross margin
253,519
221,144
510,041
452,345
Operating expenses:
Sales and marketing
135,529
122,240
275,324
244,719
Research and development
42,292
39,859
81,834
79,921
General and administrative
42,211
42,553
88,962
83,823
Depreciation and amortization
2,786
2,572
5,105
5,179
Restructuring
324
1,429
2,720
1,666
Change in contingent consideration
—
—
—
(545)
Total operating expenses
223,142
208,653
453,945
414,763
Income from operations
30,377
12,491
56,096
37,582
Interest income
8,439
3,087
16,126
5,096
Interest expense
(1,482)
(637)
(2,955)
(915)
Other income, net
1,420
159
1,689
220
Income before income taxes
38,754
15,100
70,956
41,983
Income tax expense
9,643
370
20,706
3,757
Net income
$ 29,111
$ 14,730
$ 50,250
$ 38,226
Net income per common share:
Basic
$ 0.71
$ 0.33
$ 1.22
$ 0.86
Diluted
$ 0.69
$ 0.33
$ 1.19
$ 0.84
Weighted average common shares outstanding:
Basic
41,261
44,406
41,303
44,366
Diluted
42,221
45,195
42,057
45,264
Commvault Systems, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
September 30,
March 31,
2026
2026
ASSETS
Current assets:
Cash and cash equivalents
$ 897,250
$ 899,987
Trade accounts receivable, net
280,575
330,483
Other current assets
62,295
56,040
Total current assets
1,240,120
1,286,510
Deferred tax assets, net
145,975
153,766
Property and equipment, net
13,479
9,750
Operating lease assets
35,956
34,920
Deferred commissions cost
113,437
103,892
Intangible assets, net
17,204
19,715
Goodwill
209,168
209,322
Other assets
99,723
68,430
Total assets
$ 1,875,062
$ 1,886,305
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
$ 493
$ 651
Accrued liabilities
159,107
165,583
Current portion of operating lease liabilities
7,443
6,963
Deferred revenue
472,746
484,973
Total current liabilities
639,789
658,170
Convertible notes, net
882,989
880,863
Deferred revenue, less current portion
291,114
293,725
Deferred tax liabilities
1,134
1,565
Long-term operating lease liabilities
30,937
29,675
Other liabilities
16,565
14,813
Total stockholders' equity
12,534
7,494
Total liabilities and stockholders' equity
$ 1,875,062
$ 1,886,305
Commvault Systems, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended
September 30,
Six Months Ended
September 30,
2026
2025
2026
2025
Cash flows from operating activities
Net income
$ 29,111
$ 14,730
$ 50,250
$ 38,226
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization
2,786
2,572
5,105
5,179
Amortization of debt issuance costs
1,166
409
2,330
494
Amortization of deferred commissions costs
15,835
11,221
30,417
22,210
Noncash stock-based compensation
35,780
32,224
71,070
62,404
Noncash operating lease expense
2,008
1,774
3,924
3,410
Noncash change in fair value of contingent consideration
—
—
—
(545)
Noncash adjustment on headquarters sale leaseback
—
—
—
495
Deferred income taxes
4,244
5,668
7,206
9,576
Other
67
(138)
(115)
(199)
Changes in operating assets and liabilities:
Trade accounts receivable, net
(9,599)
20,258
49,115
24,006
Other current assets and Other assets
(5,281)
(8,281)
(28,471)
(5,903)
Deferred commissions cost
(18,923)
(13,712)
(40,222)
(28,784)
Accounts payable
341
232
(165)
(88)
Accrued liabilities
18,072
2,030
(8,209)
(45,230)
Operating lease liabilities
(1,325)
(1,739)
(3,214)
(3,647)
Deferred revenue
169
10,513
(12,139)
27,953
Other liabilities
347
(992)
(414)
(1,107)
Net cash provided by operating activities
74,798
76,769
126,468
108,450
Cash flows from investing activities
Purchase of property and equipment
(3,932)
(3,187)
(4,501)
(5,066)
Purchase of investments
(144)
(482)
(8,039)
(6,626)
Proceeds from sale of headquarters, net
—
—
—
34,849
Business combination, net of cash acquired
—
(26,015)
—
(26,015)
Net cash used in investing activities
(4,076)
(29,684)
(12,540)
(2,858)
Cash flows from financing activities
Repurchase of common stock
(107,741)
(131,023)
(117,872)
(146,073)
Proceeds from stock-based compensation plans
6,585
6,974
6,585
6,974
Proceeds from issuance of convertible notes
—
900,000
—
900,000
Purchase of capped calls
—
(99,630)
—
(99,630)
Payment of debt issuance costs
—
(20,396)
—
(22,242)
Other
(113)
(18)
(188)
(30)
Net cash provided by (used in) financing activities
(101,269)
655,907
(111,475)
638,999
Effect of exchange rate changes on cash and cash equivalents
(2,040)
(2,671)
(5,190)
16,861
Net increase (decrease) in cash and cash equivalents
(32,587)
700,321
(2,737)
761,452
Cash and cash equivalents at beginning of period
929,837
363,234
899,987
302,103
Cash and cash equivalents at end of period
$ 897,250
$ 1,063,555
$ 897,250
$ 1,063,555
Supplemental disclosures of noncash activities
Operating lease liabilities arising from obtaining right-of-use assets
$ 4,262
$ 1,913
$ 5,194
$ 22,165
Debt issuance costs accrued but not paid, included in accrued liabilities
$ —
$ 984
$ —
$ 984
Share repurchases accrued but not paid, included in accrued liabilities
$ 1,419
$ —
$ 1,419
$ —
Commvault Systems, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)
(Unaudited)
Three Months Ended
September 30,
Six Months Ended
September 30,
2026
2025
2026
2025
Non-GAAP financial measures and reconciliation:
GAAP income from operations
$ 30,377
$ 12,491
$ 56,096
$ 37,582
Noncash stock-based compensation 6
35,680
31,813
70,405
61,918
FICA and payroll tax expense related to stock-based compensation 7
712
838
1,589
2,637
Restructuring 8
324
1,429
2,720
1,666
Amortization of intangible assets 9
1,255
1,140
2,511
2,211
Business combination costs 10
—
1,890
—
1,890
Change in contingent consideration 11
—
—
—
(545)
Adjustment on headquarters sale leaseback 12
—
—
—
495
Non-recurring strategic pricing initiative costs 13
—
—
6,500
—
Other non-recurring charges 14
—
1,805
—
1,805
Non-GAAP income from operations
$ 68,348
$ 51,406
$ 139,821
$ 109,659
GAAP net income
$ 29,111
$ 14,730
$ 50,250
$ 38,226
Noncash stock-based compensation
35,680
31,813
70,405
61,918
FICA and payroll tax expense related to stock-based compensation
712
838
1,589
2,637
Restructuring
324
1,429
2,720
1,666
Amortization of intangible assets
1,255
1,140
2,511
2,211
Business combination costs
—
1,890
—
1,890
Change in contingent consideration
—
—
—
(545)
Adjustment on headquarters sale leaseback
—
—
—
495
Non-recurring strategic pricing initiative costs
—
—
6,500
—
Other non-recurring charges
—
1,805
—
1,805
Non-GAAP provision for income taxes adjustment 15
(8,771)
(12,593)
(16,417)
(23,617)
Non-GAAP net income
$ 58,311
$ 41,052
$ 117,558
$ 86,686
GAAP diluted earnings per share
$ 0.69
$ 0.33
$ 1.19
$ 0.84
Noncash stock-based compensation
0.85
0.70
1.67
1.37
FICA and payroll tax expense related to stock-based compensation
0.02
0.02
0.04
0.06
Restructuring
0.01
0.03
0.06
0.04
Amortization of intangible assets
0.03
0.03
0.06
0.05
Business combination costs
—
0.04
—
0.04
Change in contingent consideration
—
—
—
(0.01)
Adjustment on headquarters sale leaseback
—
—
—
0.01
Non-recurring strategic pricing initiative costs
—
—
0.15
—
Other non-recurring charges
—
0.04
—
0.04
Non-GAAP provision for income taxes adjustment
(0.22)
(0.28)
(0.37)
(0.52)
Non-GAAP diluted earnings per share
$ 1.38
$ 0.91
$ 2.80
$ 1.92
GAAP diluted weighted average shares outstanding
42,221
45,195
42,057
45,264
Three Months Ended
September 30,
Six Months Ended
September 30,
2026
2025
2026
2025
Non-GAAP free cash flow reconciliation:
GAAP net cash provided by operating activities
$ 74,798
$ 76,769
$ 126,468
$ 108,450
Purchase of property and equipment
(3,932)
(3,187)
(4,501)
(5,066)
Non-GAAP free cash flow
$ 70,866
$ 73,582
$ 121,967
$ 103,384
We monitor subscription annualized recurring revenue ("Subscription ARR"), SaaS ARR and subscription net dollar retention rate ("Subscription NRR") to help evaluate the state of our business. We believe these metrics are material to investors to understand the growth and performance of our business, as they help normalize certain variable factors and provide a consistent view of our recurring revenue profile. Subscription ARR and SaaS ARR exclude non-recurring elements and reflect the annualized value of active contracts, while subscription NRR measures net expansion within our existing subscription customer base. Together, we believe these metrics offer meaningful insight into the health and trajectory of our recurring revenue streams. Commvault has also provided its Subscription ARR on a constant currency basis in order to provide a comparable framework for assessing how the business performed excluding the effect of foreign currency fluctuations. Total ARR, which also included the annualized maintenance contract on perpetual licenses, is no longer disclosed.
Use of Non-GAAP Financial Measures
We have provided in this press release the following non-GAAP financial measures: non-GAAP income from operations (EBIT), non-GAAP EBIT margin, non-GAAP net income, non-GAAP diluted earnings per share, and non-GAAP free cash flow. This financial information has not been prepared in accordance with GAAP. Commvault uses these non-GAAP financial measures internally to understand, manage and evaluate its business and make operating decisions. Commvault believes that the use of these non-GAAP financial measures, when used as a supplement to GAAP financial measures, provides an additional tool for investors to use in evaluating ongoing operating results and trends, and in comparing its financial results with other companies in Commvault's industry, many of which present similar non-GAAP financial measures to the investment community. Commvault has also provided its revenues on a constant currency basis. We analyze revenue growth on a constant currency basis in order to provide a comparable framework for assessing how the business performed excluding the effect of foreign currency fluctuations.
All of these non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures, which are included in this press release.
Non-GAAP EBIT and non-GAAP EBIT margin. These non-GAAP financial measures exclude noncash stock-based compensation expense and additional Federal Insurance Contribution Act (FICA) and related payroll tax expense incurred by Commvault related to stock-based compensation. Commvault has also excluded restructuring costs, noncash amortization of intangible assets, business combination costs, the change in the estimated fair value of contingent consideration, adjustments from the sale and leaseback of headquarters, non-recurring strategic pricing initiative costs, and other non-recurring charges from its non-GAAP results. These adjustments are further discussed in the reconciliation of GAAP to non-GAAP financial measures. Commvault believes that these non-GAAP financial measures are useful metrics for management and investors because they compare Commvault's core operating results over multiple periods. When evaluating the performance of Commvault's operating results and developing short- and long-term plans, Commvault does not consider such expenses.
Although noncash stock-based compensation expense and the additional FICA and related payroll tax expense are necessary to attract and retain employees, Commvault places its primary emphasis on stockholder dilution as compared to the accounting charges related to such equity compensation plans. Commvault believes that providing non-GAAP financial measures that exclude noncash stock-based compensation expense and the additional FICA and related payroll tax expense allow investors to make meaningful comparisons between Commvault's operating results and those of other companies.
There are a number of limitations related to the use of non-GAAP EBIT and non-GAAP EBIT margin. The most significant limitation is that these non-GAAP financial measures exclude certain operating costs, primarily related to noncash stock-based compensation, which is of a recurring nature. Noncash stock-based compensation has been, and will continue to be for the foreseeable future, a significant recurring expense in Commvault's operating results. In addition, noncash stock-based compensation is an important part of Commvault's employees' compensation and can have a significant impact on their performance. The following table presents the stock-based compensation expense included in cost of revenues, sales and marketing, research and development and general and administrative ($ in thousands):
Three Months Ended
September 30,
Six Months Ended
September 30,
2026
2025
2026
2025
Cost of revenues
$ 1,435
$ 1,323
$ 2,838
$ 2,572
Sales and marketing
14,642
12,757
28,810
25,343
Research and development
8,034
7,752
16,318
14,822
General and administrative
11,569
9,981
22,439
19,181
Stock-based compensation expense
$ 35,680
$ 31,813
$ 70,405
$ 61,918
The table above excludes stock-based compensation expense related to the Company's restructuring activities described below in Note 8.
The components that Commvault excludes in its non-GAAP financial measures may differ from the components that its peer companies exclude when they report their non-GAAP financial measures. Due to the limitations related to the use of non-GAAP measures, Commvault's management assists investors by providing a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure. Commvault's management uses non-GAAP financial measures only in addition to, and in conjunction with, results presented in accordance with GAAP.
Non-GAAP net income and non-GAAP diluted earnings per share (EPS). In addition to the adjustments discussed in non-GAAP EBIT, non-GAAP net income and non-GAAP diluted EPS incorporates a non-GAAP effective tax rate of 24%.
Commvault anticipates that in any given period its non-GAAP tax rate may be either higher or lower than the GAAP tax rate as evidenced by historical fluctuations. Commvault defines its cash tax rate as the total amount of cash income taxes payable for the fiscal year divided by consolidated GAAP pre-tax income. Over time, Commvault believes its GAAP and cash tax rates will align.
Commvault considers non-GAAP net income and non-GAAP diluted EPS useful metrics for Commvault management and its investors for the same basic reasons that Commvault uses non-GAAP EBIT and non-GAAP EBIT margin. In addition, the same limitations as well as management actions to compensate for such limitations described above also apply to Commvault's use of non-GAAP net income and non-GAAP diluted EPS.
Non-GAAP free cash flow. Commvault defines this non-GAAP financial measure as net cash provided by operating activities less purchases of property and equipment. Commvault considers non-GAAP free cash flow a useful metric for Commvault management and its investors in evaluating Commvault's ability to generate cash from its business operations. In addition, the same limitations as well as management actions to compensate for such limitations described above also apply to Commvault's use of non-GAAP free cash flow.
Forward-looking non-GAAP measures. In this press release, Commvault presents non-GAAP EBIT margin and free cash flow on a forward-looking basis. The most directly comparable GAAP measures are not accessible on a forward-looking basis without unreasonable efforts, because certain items that impact these GAAP measures, cannot be reasonably predicted or quantified. The probable significance of these items may be material, and as a result, the corresponding GAAP measures and a quantitative reconciliation to those GAAP measures are not available on a forward-looking basis.
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SOURCE COMMVAULT