Analysis: Commvault announces Q2 FY2025 financial results

Commvault Systems, Inc. has announced financial results for the second quarter of FY2025, achieving revenue of $233.3 million for the period, up 16.1% year-on-year and 3.8% sequentially. Annual recurring revenue was up 20%. The company recently held a customer and analyst event in London, highlighting the ongoing transition to a service model, which continues to drive revenues in a positive direction.

Background

Commvault Systems has posted financial data for Q2 FY2025, showing an increase in revenue year-on-year by 16.1% to $233.3 million compared to Q2 in FY2024. The data shows subscription revenue has increased by 37.1%, while perpetual licence income continues to drop, in this instance, by 26.9% year-on-year. Customer support revenue was flat, while “other services” declined by 6.8%. We’ve presented the data in five graphs labelled Figures 1 to 5.

Subscription

Commvault continues to pivot the business towards a SaaS model, transforming customers from perpetual licensing to a subscription model. This, of course, doesn’t mean all customers have been moved to an entirely SaaS-based solution, but clearly, that is part of the transition. In the post-earnings call, CFO Jen DiRico indicated that Commvault added 600 new subscription customers, taking the total past 10,000 subscription customers, of which 6000 are SaaS customers. The net-dollar retention rate for SaaS customers is 127%, meaning, on average, existing customers were retained and increased their consumption of Commvault Cloud by 27%.

Figure 4 shows the scale of the transition towards subscriptions, with almost 60% of revenue from that line item, compared to just over 40% two years ago. In absolute revenue terms, subscriptions have increased 71.3% over that two-year period.

Subscriptions have become an essential aspect of Commvault’s business, with annualised recurring revenue up 20% to $853 million, of which subscription ARR grew 30%.

Shift

Commvault acquired Clumio, a data protection start-up focusing on AWS and S3 data, in September 2024, the deal closing quite quickly on 1 October 2024. Earlier in the year, Commvault acquired Appranix, a start-up that developed a disaster recovery service for the public cloud. Both company CEOs attended Shift in London and were onstage to discuss the acquisitions.

Appranix has now been branded Cloud Rewind, providing the capability to recover from a cloud failure or ransomware attack within a public cloud account. This capability is vital for businesses, as within a cloud environment, the infrastructure is essentially virtual (to the user) and deployed with code. Should something unforeseen occur, such as the accidental deletion of an entire account (a rare but not impossible scenario), then Cloud Rewind can “reseed” the environment, including all the virtual infrastructure definitions and the data.

All computing environments experience “configuration drift” where the expected configuration is modified due to business-specific requirements. Many of these updates are never reflected back into the code used to build the systems, resulting in a drift or difference between the initial and current configurations. Cloud Rewind puts things back without losing those additional changes.

Clumio

The acquisition of Clumio provides Commvault with an entry into the AWS ecosystem, as we highlighted in coverage at the time of the announcement. The company had some interesting IP around the protection of S3 data, an area that is becoming increasingly important for businesses processing large amounts of unstructured data. We expect Clumio will be integrated into Commvault Cloud and rebranded in much the same way as has already been achieved with Appranix.

The Architect’s View®

Moving to a subscription-based model is one aspect of Commvault’s evolution, but that’s not the whole story. Commvault Cloud enables the company to move to a SaaS model that was started with the launch of Metallic. The acquisitions of Clumio and Appranix expand the capabilities of the SaaS offering, forming a fully-rounded cyber-resilience solution – what Commvault now likes to call Continuous Business (a cheeky play on the term business continuity).

Cyber-resiliency is where data protection is headed. It’s no longer enough to be able to simply protect and restore data; the process must be completed irrespective of the outage reason – user error, hardware failure or cyber-attack. Commvault is moving closer towards proactive, rather than reactive response to all types of data loss scenarios. This ability to be as proactive as possible will be a measure of all future data protection solutions as we see recovery from ransomware attacks become a “business as usual” process.

As part of the financials announcement, Commvault provided updated guidance for the remainder of FY2025, with total revenue expected to be between $852 million and $957 million. ARR is expected to grow 18% year-on-year, with subscription ARR expected to achieve between 26% and 28% year-on-year. Commvault has almost reached the psychological $1 billion revenue mark and looks sure to achieve that target in FY2026, if not earlier.

Background

Subscription

Shift

Clumio

The Architect’s View®

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