Q2 2025 Earnings Summary
- Robust SaaS Momentum: The company delivered record SaaS ARR of over $250 million with a net dollar retention rate of 127%, driven by strong upsell and cross-sell dynamics—supporting sustained revenue growth and market expansion.
- Strategic Integration of Acquisitions: Ongoing integration of Clumio and Appranix is broadening its technology platform and adding innovative recovery capabilities—positioning the firm for organic growth enhancements and future accretive contributions.
- Comprehensive, Hybrid Platform Advantage: The firm’s unique offering in both cloud and on-premise environments—with a “no workload, no cloud, no application left behind” philosophy—allows it to capture market share from both legacy incumbents and competitors, reinforcing a diversified revenue base.
- Integration risk: The company’s reliance on acquisitions—with Clumio’s impact expected to add only “a few million dollars per quarter” and integration still in early stages—could delay organic growth and limit near-term synergy realization.
- Margin pressure: Operating margins remaining in the 20% to 21% range, which some analysts noted as low for a near-$1 billion revenue company, may indicate ongoing challenges in balancing growth investments with profitability.
- Moderate ARR acceleration: Despite a record first half, guidance suggests a reliance on sustaining an average net new ARR of about $29 million per quarter, implying a more conservative growth outlook compared to the earlier momentum.
-
Margin Outlook
Q: How will operating margins evolve post-1B revenue?
A: Management reaffirmed their commitment to responsible, profitable growth with margins gradually expanding as they hit $1B revenue at 20–21% EBIT margins, emphasizing steady improvement over time. -
SaaS Growth
Q: What is the SaaS ARR growth rate this quarter?
A: The team reported robust performance with 37% subscription revenue growth and a record $250M SaaS ARR, driven by strong upsell and cross-sell efforts with a 127% net retention rate. -
Net New ARR
Q: Is net new ARR showing acceleration seasonally?
A: Management noted that seasonality is expected to yield around $29M in net new ARR per quarter, indicating steady organic momentum with only modest contributions from recent acquisitions. -
Acquisition Impact
Q: How significant are Clumio and Appranix’s contributions?
A: They are in early integration; Clumio is accretive by a few million dollars per quarter, with overall growth driven predominantly by organic performance. -
On-Premise Strategy
Q: How does the on-premise subscription business perform?
A: The company is successfully capturing market share in on-premise subscriptions by leveraging its broad, integrated platform to drive workload expansion and beat competitors. -
Backup Consolidation
Q: What is driving backup systems consolidation?
A: Management stressed that end-to-end capabilities are key to consolidating disparate backup systems, aligning with a long-term industry trend toward platform consolidation. -
Dell Partnership
Q: How does the Dell data domain relationship impact growth?
A: The collaboration with Dell is progressing well, though its contribution is still being developed and is not yet a major growth driver. -
Revenue Growth Disclosure
Q: Is the overall revenue growth rate disclosed?
A: They do not disclose the overall growth rate, instead focusing on specific metrics like the 37% growth in software subscriptions.