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– Commvault ends fiscal year strong, overachieves on both fourth quarter revenue and earnings expectations –
– Record total quarterly revenue of $159.6 million; third straight quarter of sequential growth –
– The move to the cloud acts as a major catalyst for growth –
Fourth Quarter and Fiscal 2016 Highlights Include:
(Download Financial Tables)
TINTON FALLS, N.J. – May 3, 2016 — /BackupReview.info/ — Commvault [NASDAQ: CVLT] today announced its financial results for the fourth quarter and fiscal year ended March 31, 2016.
N. Robert Hammer, Commvault’s Chairman, President and CEO stated, “We delivered record quarterly revenue of $159.6 million, representing constant currency growth of 8% over the prior year quarter and 3% sequentially. Operating performance for the fourth quarter was highlighted by non-GAAP operating profit of $26.2 million, representing increases of 29% year-over-year and 25% sequentially. Our customers continue to embrace our market-leading integrated solutions, particularly those that enable customers to manage the transition to the cloud. Our industry leading technology coupled with solid sales execution continue to give us increased confidence in our future. In addition, our latest software release has been very well received by the market, in particular for our platform and expanded cloud functionality, and is expected to drive momentum into fiscal 2017. We remained opportunistic during the fourth fiscal quarter, repurchasing a total of $56.9 million of our common stock.”
Total revenues for the fourth quarter of fiscal 2016 were $159.6 million, an increase of 6% year-over-year, an increase of 2% sequentially and an increase of 8% on a year-over-year constant currency basis. Software revenue in the fourth quarter of fiscal 2016 was $73.3 million, an increase of 5% year-over-year, an increase of 3% sequentially and an increase of 6% on a year-over-year constant currency basis. Services revenue in the fourth quarter of fiscal 2016 was $86.2 million, an increase of 7% year-over-year, an increase of 2% sequentially and an increase of 9% on a year-over-year constant currency basis.
For the full fiscal year, total revenues were $595.1 million, a decrease of 2% from fiscal 2015. On a constant currency basis, total revenues for the full fiscal year increased 3% over fiscal 2015. Software revenue for the full fiscal year was $258.8 million, a decrease of 9% from fiscal 2015. On a constant currency basis, software revenue for the full fiscal year decreased 4%. Services revenue for the full fiscal year was $336.3 million, an increase of 4% from fiscal 2015. On a constant currency basis, services revenue for the full fiscal year increased 9%.
On a GAAP basis, income from operations (EBIT) increased 95% to $9.3 million for the fourth quarter compared to $4.8 million in the same period of the prior year. Non-GAAP income from operations (EBIT) increased to $26.2 million in the fourth quarter of fiscal 2016 compared to $20.3 million in the fourth quarter of the prior year.
On a GAAP basis, income from operations (EBIT) for the full fiscal year was $2.0 million. Non-GAAP income from operations (EBIT) decreased to $67.3 million in fiscal 2016 compared to $104.7 million in fiscal 2015.
For the fourth quarter of fiscal 2016, Commvault reported net income of $5.8 million. Non-GAAP net income for the quarter increased to $16.6 million, or $0.36 per diluted share, from $12.8 million, or $0.27 per diluted share, in the same period of the prior year.
For the full fiscal year, Commvault reported a net income of $0.1 million. Non-GAAP net income for the full fiscal year decreased to $42.4 million, or $ 0.91 per diluted share, from $66.0 million, or $1.40 per diluted share, in fiscal 2015.
Operating cash flow totaled $37.2 million for the fourth quarter of fiscal 2016 which was an increase of $1.2 million, or 3%, compared to the fourth quarter of fiscal 2015. For the full fiscal year, operating cash flow was $84.4 million, compared to $123.8 million for fiscal 2015. Total cash and short-term investments were $387.2 million as of March 31, 2016 compared to $387.6 million as of March 31, 2015. During the fiscal fourth quarter, Commvault repurchased $56.9 million of our common stock (1.60 million shares) bringing our fiscal 2016 total repurchases to $91.5 million (2.56 million shares). As of May 3, 2016, there is $93.1 million available under the share repurchase program that currently expires on March 31, 2017. We made no borrowings against our line of credit during fiscal 2016.
A reconciliation of GAAP to non-GAAP results has been provided in Financial Statement Table IV. (Download Financial Tables) An explanation of these measures is also included below under the heading “Use of Non-GAAP Financial Measures.”
Recent Business Highlights:
Use of Non-GAAP Financial Measures
Commvault has provided in this press release the following non-GAAP financial measures: non-GAAP income from operations, non-GAAP income from operations margin, non-GAAP net income and non-GAAP diluted earnings per share. This selected 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. In addition, Commvault believes these non-GAAP operating measures are useful to investors, when used as a supplement to GAAP financial measures, in evaluating Commvault’s ongoing operational performance. Commvault believes that the use of these non-GAAP financial measures provide 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. Finally, Commvault has provided software, services and total revenues on a constant currency basis. 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.
All of 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 (Download Financial Tables).
Non-GAAP income from operations and non-GAAP income from operations margin. These non-GAAP financial measures exclude noncash stock-based compensation charges and additional FICA and related payroll tax expense incurred by Commvault when employees exercise in the money stock options or vest in restricted stock awards. In fiscal 2015, Commvault also excluded certain expenses related to its planned move into a new corporate campus headquarters. 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 and the additional FICA and related payroll tax expenses 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. In addition, because of the varying available valuation methodologies, subjective assumptions such as volatility, which are outside of Commvault’s control and the variety of awards that companies can issue, Commvault believes that providing non-GAAP financial measures that exclude noncash stock-based compensation expense and the additional FICA and related payroll tax expenses incurred on stock option exercises and vesting of restricted stock awards 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 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. Non-GAAP net income excludes noncash stock-based compensation, the additional FICA and related payroll tax expenses incurred by Commvault when employees exercise in the money stock options or vest in restricted stock awards, and in fiscal 2015 certain expenses related to the move into a new corporate campus headquarters. In fiscal 2016, Commvault has also excluded its share of earnings from its equity method investment. In addition, non-GAAP net income and non-GAAP diluted EPS incorporate a non-GAAP effective tax rate of 37% in fiscal 2016 and fiscal 2015.
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. On an annual basis, the GAAP tax rate over the prior two fiscal years was 34% for fiscal 2015 and 37% for fiscal 2014. The fiscal 2016 tax rate is not a meaningful percentage due to the dollar amount of GAAP pre-tax income. The cash tax rate over the past two fiscal years is estimated to be 26% for fiscal 2015 and 18% for fiscal 2014. Cash taxes paid in fiscal 2016 have declined compared to fiscal 2015 and fiscal 2014. 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 the next few years, Commvault believes its GAAP and cash tax rates will align.
Commvault measured itself to non-GAAP tax rates of 37% in fiscal 2016 and will continue to measure itself to a non-GAAP tax rate of 37% in fiscal 2017. 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. 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
Safe Harbor Statement
©1999-2016 Commvault Systems, Inc. All rights reserved. Commvault, Commvault and logo, the “C hexagon” logo, Commvault Systems, Solving Forward, SIM, Singular Information Management, OnePass, Commvault Galaxy, Unified Data Management, QiNetix, Quick Recovery, QR, CommNet, GridStor, Vault Tracker, InnerVault, Quick Snap, QSnap, IntelliSnap, Recovery Director, CommServe, CommCell, ROMS, Commvault Edge, 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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