Commvault Systems (CVLT) Q2 2025 earnings summary

Executive summary

• Q2 FY25 delivered record results with total revenue of $233.3 million, up 16% year-over-year, driven by strong subscription and SaaS growth.

• Subscription revenue reached $134 million, up 37% year-over-year, and SaaS ARR grew 64% to $215 million, now representing up to 33% of total ARR.

• Total ARR increased 20% to $853 million, with subscription ARR up 30% to $687 million.

• Free cash flow was $54 million, up 34% year-over-year, with 97% returned via share repurchases.

• Continued innovation in cloud-first and cyber resilience, highlighted by the Clumio and Appranix acquisitions and new offerings like Cloud Rewind.

Financial highlights

• Gross margin improved to 82.2% in Q2 FY25, up 20 basis points year-over-year.

• Non-GAAP EBIT margin was 20.5% in Q2 FY25; GAAP operating margin was 6.4%.

• Net income for Q2 FY25 was $15.6 million, with diluted EPS of $0.35.

• Cash and cash equivalents at quarter-end were $303.1 million.

• Share repurchases in Q2 FY25 totaled $52 million, representing 97% of free cash flow.

Outlook and guidance

• Q3 FY25 revenue guidance is $243–$247 million, with subscription revenue of $143–$147 million.

• Full-year FY25 revenue guidance raised to $952–$957 million, with ARR expected to grow 18% and subscription ARR up 26–28%.

• FY25 free cash flow expected to exceed $200 million; non-GAAP EBIT margin projected at 20–21%.

• FY26 aspiration includes $1B+ ARR and $330M+ SaaS ARR.

• Management continues to focus on subscription and SaaS growth, with investments in channel and direct sales.