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CommVault Reports Record Quarterly Revenues & Non-GAAP Earnings
Second Quarter Fiscal 2014 Highlights Include:
Download Financial Tables – http://webdocs.commvault.com/assets/commvault-q2-fy14-financial-tables-6637395769357681.pdf
OCEANPORT, N.J. – October 29, 2013 – CommVault [NASDAQ: CVLT] today announced its financial results for the second quarter ended September 30, 2013.
N. Robert Hammer, CommVault’s chairman, president and CEO stated, “Our fiscal second quarter results continued our trend of delivering consistent, double-digit revenue and non-GAAP operating income growth. Quarterly results were highlighted by a year-over-year revenue increase of 20% and a non-GAAP operating income increase of 31%. Our pace of innovation and high level of customer satisfaction continue to be important contributors to our success. Given the opportunity ahead of us, we will continue to heavily invest for growth and innovation, particularly in our sales and technical teams.”
Total revenues for the second quarter of fiscal 2014 were $141.9 million, an increase of 20% over the second quarter of fiscal 2013 and an increase of 6% sequentially. Software revenue in the second quarter of fiscal 2014 was $70.8 million, an increase of 20% year-over-year and 8% over the first quarter. Services revenue in the second quarter of fiscal 2014 was $71.0 million, an increase of 21% year-over-year and 3% sequentially.
On a GAAP basis, income from operations (EBIT) was $26.4 million for the second quarter, an 18% increase from the $22.4 million in the same period of the prior year. Non-GAAP income from operations (EBIT) increased 31% to $37.8 million in the second quarter of fiscal 2014 compared to $28.8 million in the second quarter of the prior year. On a sequential basis, non-GAAP income from operations (EBIT) increased 20% in the second quarter of fiscal 2014.
For the second quarter of fiscal 2014, CommVault reported net income of $17.4 million, an increase of $3.5 million compared to the same period of the prior year. Non-GAAP net income for the quarter increased 31% to $23.9 million, or $0.48 per diluted share, from $18.3 million, or $0.38 per diluted share, in the same period of the prior year.
Operating cash flow totaled $24.5 million for the second quarter of fiscal 2014 which was an increase of less than $0.1 million compared to the second quarter of fiscal 2013. Total cash and short-term investments were $485.1 million as of September 30, 2013 compared to $435.9 million as of March 31, 2013. There were no share repurchases during the second quarter of fiscal 2014.
On October 24, 2013, the Company’s Board of Directors authorized a $47.2 million increase to the Company’s existing stock repurchase program and extended the expiration of the stock repurchase program to March 31, 2015. As of October 29, 2013, the Company has repurchased $117.2 million of common stock (5.74 million shares). With the additional $47.2 million authorized by the Board of Directors, there is $150.0 million remaining in the repurchase program.
A reconciliation of GAAP to non-GAAP results has been provided in Financial Statement Table IV. An explanation of these measures is also included below under the heading “Use of Non-GAAP Financial Measures.”
Recent Business Highlight:
Use of Non-GAAP Financial Measures
These non-GAAP financial measures should be considered as a supplement to, and not as a substitute for or superior to, 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 provided in Table IV.
Non-GAAP income from operations and non-GAAP income from operations margin
There are a number of limitations related to the use of non-GAAP income from operations and non-GAAP income from operations 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. Lastly, the components 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.
CommVault’s management generally compensates for limitations described above related to the use of non-GAAP financial measures by providing investors with a reconciliation of the non-GAAP financial measure to the most directly comparable GAAP financial measure. Further, CommVault 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 EPS
CommVault anticipates that in any given quarter its non-GAAP tax rate may be either higher or lower than the GAAP tax rate as evidenced by historical fluctuations. The GAAP tax rate for the six months ended September 30, 2013 was 36% and the GAAP tax rate for the six months ended September 30, 2012 was 39%. On an annual basis, the GAAP tax rate over the past six fiscal years was 35% for fiscal 2013, 36% for fiscal 2012, 42% for fiscal 2011, 43% for fiscal 2010, 44% for fiscal 2009, and 23% for fiscal 2008. In addition, CommVault’s cash tax rate has been significantly lower than its GAAP tax rate in recent fiscal years. The cash tax rate over the prior three fiscal years is estimated to be approximately 12% for fiscal 2013, approximately 14% for fiscal 2012 and approximately 11% for fiscal 2011. Also, the cash tax rate for fiscal 2014 is estimated to be in the mid to high teen percentage range. CommVault expects that its cash tax rate will remain lower than its GAAP tax rate through fiscal 2014 and into fiscal 2015. 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.
CommVault measured itself to non-GAAP tax rates of 37% in fiscal 2013 and anticipates that it will continue to measure itself to a non-GAAP tax rate of 37% through fiscal 2014. CommVault believes that the use of a non-GAAP tax rate is a useful measure as it allows management and investors to compare its operating results on a more consistent basis over the multiple periods presented in its earnings release without the impact of significant variations in the tax rate as more fully described above. It is also more reflective of the increase in the cash tax rate as it approaches the GAAP tax rate over the next one to two fiscal years. Non-GAAP EPS is derived from non-GAAP net income divided by the weighted average shares outstanding on a fully diluted basis.
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 income from operations and non-GAAP income from operations 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 EPS.
Conference Call Information
. HDI, 2012 HDI Support Center Practices & Salary Report, by Jenny Rains
Safe Harbor Statement
©1999-2013 CommVault Systems, Inc. All rights reserved. CommVault, CommVault and logo, the “CV” logo, CommVault Systems, Solving Forward, SIM, Singular Information Management, Simpana, Simpana OnePass, CommVault Galaxy, CommVault Edge, Unified Data Management, QiNetix, Quick Recovery, QR, CommNet, GridStor, Vault Tracker, InnerVault, Quick Snap, QSnap, Recovery Director, CommServe, CommCell, IntelliSnap, ROMS and CommValue, are trademarks or registered trademarks of CommVault Systems, Inc. All other third party brands, products, service names, trademarks, or registered service marks are the property of and used to identify the products or services of their respective owners. All specifications are subject to change without notice.
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