Commvault Systems, Inc. (CVLT) Bundle
Understanding Commvault Systems, Inc. (CVLT) Revenue Streams
Understanding Commvault Systems, Inc.’s Revenue Streams
Commvault Systems, Inc. has experienced significant changes in its revenue streams, driven primarily by a shift towards subscription-based models. Below is a detailed analysis of the company’s revenue performance as of 2024.
Breakdown of Primary Revenue Sources
The company generates revenue from several key sources:
- Subscription Revenue: Increased to $263.7 million, representing a growth of 32% year-over-year.
- Perpetual License Revenue: Decreased to $9.1 million, a 12% decline compared to the previous year.
- Customer Support Revenue: Remained stable at $68.4 million, showing no significant change.
- Other Services Revenue: Decreased to $13.5 million, reflecting a 5% decline year-over-year.
Year-over-Year Revenue Growth Rate
The overall revenue for the six months ended September 30, 2024, was $458.4 million, representing a 15% increase from $400.0 million in the same period of 2023. The breakdown by quarter reveals:
| Period | Total Revenue (in millions) | Year-over-Year Growth Rate |
|---|---|---|
| Q2 2024 | $233.3 | 16% |
| Q1 2024 | $225.1 | 14% |
Contribution of Different Business Segments to Overall Revenue
For the six months ended September 30, 2024, the contributions of various segments to the total revenue were as follows:
| Segment | Revenue (in millions) | Percentage of Total Revenue |
|---|---|---|
| Subscription | $263.7 | 57% |
| Perpetual License | $9.1 | 2% |
| Customer Support | $68.4 | 15% |
| Other Services | $13.5 | 3% |
Analysis of Significant Changes in Revenue Streams
The most notable change in revenue streams has been the substantial increase in subscription revenue, which now constitutes 57% of total revenues, up from 49% the previous year. This shift reflects a strategic focus on cloud-based and SaaS offerings, contributing to a 72% increase in SaaS revenue specifically. Conversely, perpetual license revenue continues to decline, now accounting for only 2% of total revenue due to a strategic pivot towards subscription models.
Overall, the company’s revenue model is increasingly reliant on subscription and SaaS offerings, marking a significant transformation in its operational strategy aimed at long-term growth.
A Deep Dive into Commvault Systems, Inc. (CVLT) Profitability
A Deep Dive into Commvault Systems, Inc.'s Profitability
Gross Profit, Operating Profit, and Net Profit Margins
For the six months ended September 30, 2024, the company reported:
- Gross Profit: $375.2 million
- Operating Profit: $33.4 million
- Net Profit: $34.1 million
The gross margin for the same period was approximately 82%, indicating a consistent ability to manage production costs effectively.
Trends in Profitability Over Time
Year-over-year analysis shows:
- Net Income: Increased from $25.6 million in 2023 to $34.1 million in 2024, representing a growth of 33%.
- Operating Profit: Decreased from $36.1 million in 2023 to $33.4 million in 2024, a decline of 7.5%.
- Gross Profit Margin: Remained stable at approximately 82%.
Comparison of Profitability Ratios with Industry Averages
The following table compares the company's profitability ratios with industry averages:
| Metric | Company Value | Industry Average |
|---|---|---|
| Gross Profit Margin | 82% | 75% |
| Operating Profit Margin | 14.7% | 15% |
| Net Profit Margin | 7.4% | 8% |
Analysis of Operational Efficiency
Operational efficiency metrics indicate the following:
- Cost of Revenues: Increased to $82.7 million for the six months ended September 30, 2024, up from $73.4 million in 2023.
- Cost Management: The cost of subscription revenue represented 14% of total subscription revenue, consistent with previous periods.
- Gross Margin Trends: Subscription gross margin remained at 86%, indicating effective cost control in this segment.
Recent Profitability Metrics
For the three months ended September 30, 2024, the profitability metrics were:
- Net Income: $15.6 million
- Operating Income: $15.0 million
- Gross Margin: 82%
Overall, these metrics reflect a strong financial position, with sustained profitability amidst fluctuating operational costs.
Debt vs. Equity: How Commvault Systems, Inc. (CVLT) Finances Its Growth
Debt vs. Equity: How Commvault Systems, Inc. Finances Its Growth
Overview of the Company's Debt Levels
As of September 30, 2024, Commvault Systems, Inc. reported total debt of $0 million, indicating a strong reliance on equity financing. The company has no short-term or long-term debt recorded, showcasing a zero-debt strategy that helps minimize financial risk.
Debt-to-Equity Ratio
The debt-to-equity ratio stands at 0.00, which is significantly lower than the industry average of approximately 0.5. This low ratio reflects the company's strategy of financing growth primarily through equity rather than debt, positioning it favorably against competitors.
Recent Debt Issuances and Credit Ratings
Commvault has not engaged in any recent debt issuances. The company maintains a credit rating of Baa2 from Moody's, which indicates a moderate credit risk level. As of September 30, 2024, there were no outstanding borrowings under the $100 million senior secured revolving credit facility established in December 2021.
How the Company Balances Between Debt Financing and Equity Funding
Commvault's approach to financing emphasizes equity, as evidenced by its substantial cash and cash equivalents balance of $303.1 million as of September 30, 2024. The company has repurchased $103.3 million of its common stock in the last six months, demonstrating its commitment to returning value to shareholders while maintaining a robust equity base.
| Financial Metric | Amount |
|---|---|
| Total Debt | $0 million |
| Debt-to-Equity Ratio | 0.00 |
| Industry Average Debt-to-Equity Ratio | 0.5 |
| Credit Rating | Baa2 |
| Cash and Cash Equivalents | $303.1 million |
| Stock Repurchased (Last 6 Months) | $103.3 million |
Assessing Commvault Systems, Inc. (CVLT) Liquidity
Assessing Commvault Systems, Inc. Liquidity
Current Ratio: As of September 30, 2024, the current ratio is calculated as follows:
| Current Assets | Current Liabilities | Current Ratio |
|---|---|---|
| $394.1 million | $299.5 million | 1.32 |
Quick Ratio: The quick ratio, which excludes inventory from current assets, is:
| Quick Assets | Current Liabilities | Quick Ratio |
|---|---|---|
| $394.1 million (excluding inventory) | $299.5 million | 1.32 |
Analysis of Working Capital Trends
Working capital as of September 30, 2024 shows a decrease:
| Date | Working Capital |
|---|---|
| March 31, 2024 | $110.2 million |
| September 30, 2024 | $94.6 million |
Cash Flow Statements Overview
Cash flow trends for the six months ended September 30:
| Cash Flow Type | 2024 (in millions) | 2023 (in millions) |
|---|---|---|
| Operating Activities | $100.3 | $79.4 |
| Investing Activities | ($24.3) | ($2.0) |
| Financing Activities | ($92.2) | ($76.0) |
| Net Cash Decrease | ($9.7) | ($4.5) |
Potential Liquidity Concerns or Strengths
As of September 30, 2024, cash and cash equivalents stood at $303.1 million, with approximately $198.8 million held outside the United States. This indicates a strong liquidity position, although repatriation may incur local laws and tax consequences.
The company has no outstanding borrowings under its $100 million credit facility, with all covenants currently in compliance.
Is Commvault Systems, Inc. (CVLT) Overvalued or Undervalued?
Valuation Analysis
As of September 30, 2024, the valuation metrics for Commvault Systems, Inc. (CVLT) are as follows:
- Price-to-Earnings (P/E) Ratio: 43.56
- Price-to-Book (P/B) Ratio: 2.85
- Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: 23.87
Over the past 12 months, the stock price of CVLT has shown the following trends:
- 12-Month High: $164.69
- 12-Month Low: $93.26
- Current Stock Price: $143.09
Dividend-related metrics include:
- Dividend Yield: 0.00%
- Payout Ratio: 0%
Analyst consensus indicates the stock is rated as follows:
- Buy: 5 analysts
- Hold: 8 analysts
- Sell: 0 analysts
| Metric | Value |
|---|---|
| Market Capitalization | $6.29 billion |
| Total Revenues (Last 12 Months) | $457.95 million |
| Net Income (Last 12 Months) | $34.09 million |
| EBITDA (Last 12 Months) | $263.30 million |
| Cash and Cash Equivalents | $303.1 million |
The company reported the following financial data for the three months ended September 30, 2024:
| Revenue Type | Amount (in millions) |
|---|---|
| Subscription Revenue | $134.04 |
| Perpetual License Revenue | $10.52 |
| Customer Support Revenue | $77.69 |
| Other Services Revenue | $11.03 |
| Total Revenue | $233.28 |
Operating expenses for the same period were detailed as follows:
| Expense Type | Amount (in millions) |
|---|---|
| Sales and Marketing | $101.95 |
| Research and Development | $33.84 |
| General and Administrative | $34.17 |
| Restructuring | $0.57 |
| Total Operating Expenses | $175.45 |
Net income for the three months ended September 30, 2024, was reported as:
- Net Income: $15.57 million
Overall, these metrics provide a comprehensive view of the valuation and financial health of Commvault Systems, Inc. as of 2024.
Key Risks Facing Commvault Systems, Inc. (CVLT)
Key Risks Facing Commvault Systems, Inc.
The financial health of Commvault Systems, Inc. is influenced by various internal and external risk factors that can impact its operations and market performance. Below is a detailed breakdown of these risks.
Industry Competition
Commvault operates in a highly competitive environment, facing pressure from both established players and new entrants in the data management and protection space. As of September 30, 2024, the company reported a 15% increase in total revenues year-over-year, primarily driven by subscription revenue growth, which indicates robust market demand. However, competition from companies offering similar SaaS solutions poses a risk to maintaining market share.
Regulatory Changes
Changes in regulations affecting data privacy and protection, such as GDPR in Europe and CCPA in California, can impose additional compliance costs. The company’s ability to adapt to these regulatory environments is crucial. Failure to comply could result in fines and damage to reputation.
Market Conditions
Economic fluctuations can affect customer spending on IT solutions. During the six months ended September 30, 2024, the company reported a 32% increase in subscription revenue, but a 12% decline in perpetual license revenue. This shift indicates a potential risk if economic conditions force customers to reduce IT budgets.
Operational Risks
Commvault's operational efficiency is critical. The company initiated a restructuring plan in the fourth quarter of fiscal 2024, incurring $5.2 million in associated expenses. Risks include potential disruptions during the transition and impacts on employee morale, which could hinder operational performance.
Financial Risks
The company has significant cash reserves amounting to $303.1 million as of September 30, 2024, with $198.8 million held outside the U.S. This international exposure presents foreign currency risks, as approximately 46% of sales were outside the U.S. during the same period, making the company vulnerable to currency fluctuations. Additionally, the company reported net foreign currency transaction losses of approximately $0.3 million for the three months ended September 30, 2024.
Strategic Risks
Commvault's recent acquisition of Appranix, valued at $26.3 million, may introduce integration challenges and financial liabilities. The contingent consideration agreement could require an additional $4 million based on performance metrics, which adds uncertainty to future financial forecasts.
| Risk Factor | Description | Financial Impact |
|---|---|---|
| Industry Competition | Increased competition in data management solutions | Potential revenue loss |
| Regulatory Changes | Compliance with data protection regulations | Increased operational costs |
| Market Conditions | Economic fluctuations affecting IT budgets | Revenue variability |
| Operational Risks | Disruptions from restructuring efforts | Increased expenses |
| Financial Risks | Foreign currency exposure | Transaction losses |
| Strategic Risks | Integration of Appranix acquisition | Future liabilities |
Overall, Commvault's financial health is subject to various internal and external risks that must be managed effectively to sustain growth and profitability.
Future Growth Prospects for Commvault Systems, Inc. (CVLT)
Future Growth Prospects for Commvault Systems, Inc.
Analysis of Key Growth Drivers
The company is witnessing robust growth in subscription revenues, which increased by $63.1 million, or 32%, year over year. This surge is primarily attributed to a 72% increase in SaaS revenues. Subscription revenue accounted for 56% of total revenues for the six months ended September 30, 2024, compared to 49% for the same period in 2023.
In terms of geographical performance, total revenues for the Americas increased by 17% year over year, while international revenues rose by 12%. The Americas accounted for 62% of total revenues, and international operations contributed 38%.
Future Revenue Growth Projections and Earnings Estimates
For the fiscal year ending March 31, 2025, total revenues are projected to reach approximately $1.04 billion, reflecting an estimated growth rate of 15% year over year. The net income for six months ending September 30, 2024, was $34.1 million, translating to a diluted net income per share of $0.76.
| Metric | Q2 FY2024 | Q2 FY2023 |
|---|---|---|
| Total Revenues | $233.3 million | $201.0 million |
| Subscription Revenue | $263.8 million | $200.7 million |
| Net Income | $34.1 million | $25.6 million |
| EPS (Diluted) | $0.76 | $0.57 |
Strategic Initiatives or Partnerships That May Drive Future Growth
The acquisition of Appranix, completed on April 15, 2024, for a purchase price of $26.3 million, is a key strategic initiative aimed at enhancing the company’s capabilities in the cloud cyber resilience market. Additionally, the firm incurred approximately $389,000 in acquisition-related costs during the six months ended September 30, 2024, indicating an active approach to growth through strategic mergers.
Competitive Advantages That Position the Company for Growth
The company’s transition towards subscription-based revenue models has positioned it favorably against competitors, leading to a 33% increase in subscription revenue in the Americas and a 31% increase internationally. The gross margin for subscription services remains high at 86%, reflecting efficient cost management and a strong competitive edge.
As of September 30, 2024, the company reported cash and cash equivalents of $303.1 million, providing a solid liquidity position to support future growth initiatives.
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Article updated on 8 Nov 2024
Resources:
- Commvault Systems, Inc. (CVLT) Financial Statements – Access the full quarterly financial statements for Q2 2025 to get an in-depth view of Commvault Systems, Inc. (CVLT)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Commvault Systems, Inc. (CVLT)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.