Commvault Systems (CVLT) Q1 2025 earnings summary

Executive summary

• Q1 FY25 total revenue grew 13% year-over-year to $225 million, driven by strong subscription and SaaS momentum, with ARR up 17% to $803 million and subscription ARR up 27% to $636 million.

• SaaS ARR surged 66% to $188 million, now representing over 23% of total ARR, and subscription revenue reached $124 million, up 28% year-over-year.

• Non-GAAP EBIT was $48 million (21.5% margin), GAAP net income was $18.5 million ($0.41 per diluted share), and free cash flow was $44 million, up 16% year-over-year.

• Completed the acquisition of Appranix, Inc. to enhance cyber resiliency offerings, contributing $494,000 in revenue and a $134,000 net loss for the period.

• Repurchased $51 million in shares during the quarter, with $205 million remaining under the current authorization.

Financial highlights

• Subscription revenue grew 28% year-over-year to $124 million, now over 55% of total revenue; SaaS revenue up 69%.

• Total ARR reached $803 million, up 17% year-over-year; SaaS net dollar retention was 127%.

• Gross margin was 83%, flat year-over-year, with continued SaaS margin improvement.

• Operating expenses increased 15% year-over-year, reflecting investments in growth and higher commissions.

• Cash and cash equivalents totaled $288 million as of June 30, 2024.

Outlook and guidance

• Q2 2025 revenue expected between $218 million and $222 million; subscription revenue between $120 million and $124 million.

• Full-year 2025 guidance raised: total revenue $915–$925 million (9.5% growth at midpoint), ARR growth of 15%, and subscription ARR up 23–25%.

• Non-GAAP EBIT margin expected at 20–21%; free cash flow guidance at least $200 million.

• Share repurchases to continue at 75%+ of annual free cash flow; non-GAAP tax rate lowered to 24%.

• Confident in reaching fiscal 2026 ARR target of $1 billion, with subscription ARR at 90% of total and SaaS ARR of $310–$330 million.