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CS

COMMVAULT SYSTEMS INC (CVLT)·Q1 2026 Earnings Summary

Executive Summary

  • Q1 FY26 delivered record revenue of $281.978M (+26% y/y) and non-GAAP EPS of $1.01, with strong subscription momentum (term license $109.282M, SaaS $72.445M); GAAP EPS was $0.52 .
  • Results beat Wall Street: revenue beat consensus by ~$14.0M and non-GAAP EPS beat by ~$0.04; prior two quarters also came in ahead of estimates (see Estimates Context) *.
  • FY26 guidance raised across top-line metrics: total revenue to $1.161–$1.165B (from $1.13–$1.14B), subscription revenue to $753–$757M (from $727–$732M), ARR growth to 18% (from 16–17%), with non-GAAP EBIT margin now ~20.5% (from ~21%) and free cash flow unchanged at $210–$215M .
  • Narrative catalysts: accelerating SaaS ARR (+63% y/y to $306.874k), robust land-and-expand, expanded hyperscaler marketplace traction, and strategic intent to acquire Satori Cyber to strengthen AI/data security governance .

What Went Well and What Went Wrong

What Went Well

  • Subscription engine strength: subscription revenue grew 46% y/y to $181.727k with SaaS up 66% and term license up 36%, driving record total revenue .
  • Land-and-expand momentum and marketplace growth: “best land and expand quarter ever,” triple-digit marketplace transaction growth, multi–six/7-figure deals; SaaS NDR at 125 in Q1 .
  • Strategic positioning and innovation: management emphasized leadership in cyber resilience with Clean Room Recovery, Active Directory forest-level recovery, Cloud Rewind, and Clumio Backtrack; “we are well-positioned to continue to take share in fiscal 2026 and beyond” .

What Went Wrong

  • Margin mix headwinds: non-GAAP gross margin slipped to 82.4% vs 83.1% in Q4 and 82.0–82.3% GAAP; higher SaaS mix carries lower margins .
  • Perpetual license shrinkage: perpetual revenue fell 47% y/y to $7.335k, consistent with pivot to subscription .
  • Operating cash flow was lower than prior-year Q1 ($31.681M vs $44.692M), reflecting higher commissions/bonuses and working capital dynamics despite strong deferred revenue .

Financial Results

Headline Metrics vs Prior Periods

MetricQ3 2025Q4 2025Q1 2026
Revenue ($USD Millions)$262.630 $275.039 $281.978
GAAP Diluted EPS ($USD)$0.24 $0.69 $0.52
Non-GAAP Diluted EPS ($USD)$0.94 $1.03 $1.01
GAAP Gross Margin %——82.0%
Non-GAAP Gross Margin %82.0% 83.1% 82.4%
GAAP Operating Margin % (EBIT)5.2% 9.7% 8.9%
Non-GAAP EBIT Margin %20.8% 21.5% 20.7%
Operating Cash Flow ($USD Millions)$30.146 $76.955 $31.681
Free Cash Flow ($USD Millions, Non-GAAP)$29.884 $76.172 $29.802

Revenue Components (Subscription/Perpetual/Support/Services)

($USD Thousands)

ComponentQ3 2025Q4 2025Q1 2026
Term-based license$97,625 $107,954 $109,282
SaaS$60,696 $65,274 $72,445
Total Subscription$158,321 $173,228 $181,727
Perpetual License$16,423 $14,962 $7,335
Customer Support$77,078 $76,509 $79,021
Other Services$10,808 $10,340 $13,895
Total Revenues$262,630 $275,039 $281,978

Geographic Mix

($USD Thousands)

GeographyQ3 2025Q4 2025Q1 2026
Americas$155,435 $169,384 $170,928
International$107,195 $105,655 $111,050
Total Revenues$262,630 $275,039 $281,978

KPIs (ARR)

($USD Thousands)

KPIQ3 2025Q4 2025Q1 2026
Total ARR$889,628 $930,051 $996,202
Subscription ARR$734,212 $780,098 $843,873
SaaS ARR$258,957 $281,045 $306,874

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total RevenueFY26$1.130–$1.140B $1.161–$1.165B Raised
Subscription RevenueFY26$727–$732M $753–$757M Raised
Total ARR Growth (cc)FY2616–17% y/y 18% y/y Raised
Subscription ARR Growth (cc)FY2622–23% y/y 24% y/y Raised
Non-GAAP Gross MarginFY2681–82% 81–82% Maintained
Non-GAAP EBIT MarginFY26~21% ~20.5% Lowered (~50 bps)
Free Cash FlowFY26$210–$215M $210–$215M Maintained
Total RevenueQ2 FY26—$272–$274M New
Subscription RevenueQ2 FY26—$174–$176M New
Non-GAAP Gross MarginQ2 FY26—81–82% New
Non-GAAP EBIT MarginQ2 FY26—~20% New

Earnings Call Themes & Trends

TopicQ3 FY25 (Jan)Q4 FY25 (Apr)Q1 FY26 (Jul)Trend
AI/data security & product innovationAnnounced Active Directory recovery, Backtrack for S3; Cloud Rewind momentum Highlighted AD forest-level recovery, Cloud Rewind, Clumio Backtrack; scale to hundreds of PB, 10x restore speed SaaS ARR +63%; continued innovation; intent to acquire Satori to govern AI/structured data Strengthening
Partner ecosystemAlliances with Hitachi, HPE, Dell; marketplace transactions more than doubled Expanded HPE, Kyndryl wins; marketplace +50% q/q, +250% y/y Expanded partnerships (CrowdStrike, Deloitte, HPE, Kyndryl) Broadening
Federal exposure & certificationsFedRAMP High cited; regulatory support (GDPR/DORA) Continued regulatory wins (DORA, APRA) Fed seasonality strong in H1; GovRAMP at state level complements FedRAMP High Steady/positive
Cross-sell & multiproduct adoption~30% SaaS customers with multiple products; NDR 127% Emphasis on bundling resilience capabilities 45% increase in customers using ≥2 SaaS products; security SKUs double-digit growth; 20% of net-new ARR Improving
Margin mix & Rule of 40Non-GAAP EBIT 20.8%; gross margin ~82% as SaaS mix rises Non-GAAP EBIT 21.5%; Rule of 41 for FY25 Non-GAAP EBIT 20.7%; Rule of 47 in Q1; ~50 bps margin dilution from Satori Balanced growth with mix headwind
Marketplace/channel motionMore than doubled (Q3), pipeline and velocity +50% q/q marketplace transactions Triple-digit marketplace growth in Q1 Acceleration

Management Commentary

  • “Commvault delivered a strong start to the fiscal year, fueled by customer growth, disciplined execution, and rising demand for our industry-leading cyber resilience platform.” — Sanjay Mirchandani, CEO .
  • “Total ARR grew 24% to $996,000,000... Subscription ARR grew 33% to $844,000,000... SaaS ARR soared 63% to $307,000,000.” — CEO prepared remarks .
  • “Fiscal Q1 gross margins were 82.4%... Non-GAAP EBIT grew 21% to $58,000,000 and non-GAAP EBIT margin was 20.7%.” — Jen DiRico, CFO .
  • “We are raising our fiscal year 2026 guidance... expect total revenue of $1,161,000,000 to $1,165,000,000... non-GAAP EBIT margins ~20.5% including the dilutive impact of Satori.” — CFO .

Q&A Highlights

  • Satori revenue impact and margins: CFO expects Satori to be immaterial to revenue but modestly dilutive to margins (~50 bps), with no uplift assumed in top-line guidance .
  • Cross-sell ramp: 45% increase in customers using ≥2 SaaS products; security SKUs contributed 20% of net-new ARR; SaaS NDR mix shifted toward cross-sell (40%) .
  • Net-new ARR cadence: SaaS net-new ARR can be “north of $20M” per quarter; total net-new ARR targeted ~$40M per quarter for remainder of year; Q1 linearity benefited from late-quarter large deals .
  • Federal seasonality: Guidance embeds typical stronger H1; FedRAMP High remains a competitive advantage .
  • Margin philosophy: Investment behind momentum and SaaS mix drives lower gross margin profile; Rule of 40 maintained (47 in Q1) .

Estimates Context

  • Q1 FY26: Actual revenue $281.978M vs consensus $267.98M*; actual non-GAAP EPS $1.01 vs consensus $0.97* — both beats *.
  • Q4 FY25: Actual revenue $275.039M vs consensus $262.38M*; non-GAAP EPS $1.03 vs $0.93* — beats *.
  • Q3 FY25: Actual revenue $262.630M vs consensus $245.61M*; non-GAAP EPS $0.94 vs $0.87* — beats *.
    Values retrieved from S&P Global.

Estimates vs Actuals (for reference)

MetricQ3 2025Q4 2025Q1 2026
Revenue Consensus ($USD)$245.611M*$262.378M*$267.978M*
Revenue Actual ($USD)$262.630M $275.039M $281.978M
Primary EPS Consensus Mean ($USD)$0.872*$0.928*$0.970*
Non-GAAP Diluted EPS Actual ($USD)$0.94 $1.03 $1.01

Key Takeaways for Investors

  • Strong beat-and-raise quarter: revenue and EPS above consensus, with FY26 revenue and subscription guidance raised; headline margin guide trimmed slightly given mix and Satori integration * .
  • Subscription and SaaS momentum is durable: term-license and SaaS both strong; perpetual declining as expected in the model transition .
  • Land-and-expand and marketplace channels are accelerating, supporting net-new ARR velocity and cross-sell penetration (multi-product adoption rising), a key driver of durable growth and estimate revisions .
  • ARR trajectory supports earlier achievement of $1B total ARR and ~$330M SaaS ARR targets; Q1 total ARR $996.2k and SaaS ARR $306.9k .
  • Watch margins: mix to SaaS and Satori (~50 bps dilutive) temper margin expansion near term; management still targets ~20.5% FY26 non-GAAP EBIT margin with low-80s gross margin .
  • Strategic M&A (Satori) sharpens AI/data governance narrative; anticipate product bundling and integrated policy/enforcement capabilities to enhance platform differentiation and pricing power .
  • Near-term trading lens: beats + raised revenue guide + AI/data narrative + marketplace traction are positive catalysts; any margin concerns likely mitigated by Rule-of-40 delivery and FCF guide intact .