Commvault Systems (NASDAQ:CVLT) Q3 Sales Beat Estimates

Kayode Omotosho /
2022/01/25 8:26 am EST
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Data backup provider Commvault (NASDAQ:CVLT) reported Q3 FY2022 results beating Wall St's expectations, with revenue up 7.65% year on year to $202.3 million. Commvault Systems made a GAAP profit of $10 million, improving on its profit of $1.67 million, in the same quarter last year.

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Commvault Systems (CVLT) Q3 FY2022 Highlights:

  • Revenue: $202.3 million vs analyst estimates of $195 million (3.76% beat)
  • EPS (non-GAAP): $0.67 vs analyst estimates of $0.65 (3.53% beat)
  • Free cash flow of $25.4 million, roughly flat from previous quarter
  • Customers: 225 customers paying more than $100,000 annually
  • Gross Margin (GAAP): 85.1%, in line with same quarter last year

"The team executed well across the board, delivering another record quarter," said Sanjay Mirchandani, President and CEO.

Originally formed in 1988 as part of Bell Labs, Commvault (NASDAQ: CVLT) provides enterprise software used for data backup and recovery, cloud and infrastructure management, retention and compliance.

Sales Growth

As you can see below, Commvault Systems's revenue growth has been slow over the last year, growing from quarterly revenue of $187.9 million, to $202.3 million.

Commvault Systems Total Revenue

Commvault Systems's quarterly revenue was only up 7.65% year on year, which would likely disappoint many shareholders. On top of that, revenue increased $24.5 million quarter on quarter, a strong improvement on the $5.58 million decrease in Q2 2022, and a sign of re-acceleration of growth, which is very nice to see indeed.

Analysts covering the company are expecting the revenues to grow 4.67% over the next twelve months, although estimates are likely to change post earnings.

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Large Customers Growth

You can see below that at the end of the quarter Commvault Systems reported 225 enterprise customers paying more than $100,000 annually, an increase of 62 on last quarter. That is a bit more contract wins than last quarter and quite a bit above what we have typically seen lately, demonstrating that the business itself has good sales momentum. We've no doubt shareholders will take this as an indication that the company's go-to-market strategy is working very well.

Commvault Systems customers paying more than $100,000 annually

Key Takeaways from Commvault Systems's Q3 Results

With a market capitalization of $3.07 billion Commvault Systems is among smaller companies, but its more than $233.6 million in cash and positive free cash flow over the last twelve months give us confidence that Commvault Systems has the resources it needs to pursue a high growth business strategy.

It was good to see Commvault Systems outperform Wall St’s revenue expectations this quarter. That feature of these results really stood out as a positive. On the other hand, it was less good to see that the revenue growth was quite weak. Overall, this quarter's results were not the best we've seen from Commvault Systems. The company is down 0.6% on the results and currently trades at $67.35 per share.

Commvault Systems may have had a tough quarter, but does that actually create an opportunity to invest right now? It is important that you take into account its valuation and business qualities, as well as what happened in the latest quarter. We look at that in our actionable report which you can read here, it's free.

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The author has no position in any of the stocks mentioned.