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    CVLT
    Earnings call· Mar 2026(Q4 FY26)

    COMMVAULT SYSTEMS Q4 FY26 earnings call CVLT

    Apr 28, 2026 Source

    Executive summary

    Commvault Q4 FY26 — Strong ARR Growth and Record Free Cash Flow

    Commvault concluded Q4 FY26 with robust subscription ARR growth and record free cash flow, driven by strong SaaS performance and multiproduct adoption. The company is leveraging its unified platform to address increasing data complexity and cyber threats, positioning itself for continued growth in the AI era. New financial reporting for FY27 emphasizes key subscription metrics and margin expansion.

    Highlights

    5

    • Subscription ARR increased 27% year-over-year to $989 million.

    • SaaS business ARR grew 42% year-over-year to reach $400 million.

    • Generated a record free cash flow of $132 million in Q4, contributing to $237 million for the fiscal year, up 16% year-over-year.

    • SaaS net dollar retention improved to 122%.

    • Identity resilience and data security offerings represented 33% of net new ARR in Q4.

    Concerns

    3

    • Macro Headwinds

    • Memory and Component Pricing

    • Competitive Market

    Guidance & targets

    16
    CategoryTargetConfidence
    Subscription ARR growth
    18% to 19% year-over-year
    high materiality
    High
    Subscription ARR
    $1.20 billion to $1.21 billion
    high materiality
    High
    SaaS ARR
    exceed $0.5 billion
    high materiality
    High
    Subscription Revenue
    $1.115 billion to $1.125 billion
    high materiality
    High
    Subscription Revenue growth
    approximately 15% year-over-year
    high materiality
    High
    Total Revenue
    $1.30 billion to $1.31 billion
    medium materiality
    High
    Non-GAAP EBIT margin
    20.5%
    high materiality
    High
    Free Cash Flows
    $250 million to $260 million
    high materiality
    High
    Diluted Share Count
    approximately 42 million shares
    medium materiality
    High
    Subscription Revenue
    $263 million to $265 million
    medium materiality
    High
    Subscription Revenue growth
    approximately 15% year-over-year
    medium materiality
    High
    Total Revenue
    approximately $310 million
    medium materiality
    High
    EBIT margins
    approximately 19%
    medium materiality
    High
    Diluted Share Count
    approximately 42 million shares
    medium materiality
    High
    Share Repurchase Authorization
    $250 million
    high materiality
    High
    Share Repurchase Allocation
    approximately 60% of annual free cash flow
    high materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Subscription
    Led by robust SaaS growth.
    ARR: $989M
    		$208M20%——
    SaaS
    Major milestone reached in ARR, reflecting new customer growth and healthy expansion from existing customers. Multiproduct adoption increased by 500 basis points year-over-year.
    ARR: $400MCustomers using >1 offering: 48%
    		$93M43%——
    Pure Software License
    Growth against a challenging comparison, driven by strong renewals and existing customer business.
    		—6%——

    Operational metrics

    24
    Subscription ARR
    $989Mup 27% YoY
    Q4 FY26

    Strong finish to the fiscal year.

    SaaS ARR
    $400Mup 42% YoY
    Q4 FY26

    Reached a major milestone, reflecting new customer growth and healthy expansion.

    Net New Subscription ARR
    $53M
    Q4 FY26

    Strongest performance of the fiscal year.

    Total ARR
    $1.12Bup 21% YoY
    Q4 FY26

    Includes subscription ARR and maintenance associated with perpetual licenses.

    Net New Total ARR
    $44M
    Q4 FY26

    During fiscal Q4.

    Stock Repurchases
    $259M
    Q4 FY26

    Accelerated stock repurchases, reflecting confidence in long-term shareholder value.

    Stock Repurchases
    $446M
    FY26

    Total fiscal year 2026 stock repurchases.

    Total Revenue
    $312Mup 13% YoY
    Q4 FY26

    Overall revenue performance.

    Subscription Revenue
    $208Mup 20% YoY
    Q4 FY26

    Led by robust SaaS growth.

    SaaS Revenue
    $93Mup 43% YoY
    Q4 FY26

    Strong growth in SaaS offerings.

    Pure Software License Revenue growth
    6%
    Q4 FY26

    Against a challenging comparison, driven by strong renewals and existing customer business.

    Revenue from transactions over $100,000 growth
    9%
    Q4 FY26

    Driven by higher deal volumes in large enterprise accounts.

    Consolidated Gross Margin
    81.8%up 30 bps sequentially
    Q4 FY26

    Reflects continued improvement in SaaS hosting margins due to scale efficiencies and product optimization.

    Operating Expenses
    $187Mup 11% YoY
    Q4 FY26

    Reflects benefits of past optimization programs.

    Non-GAAP EBIT
    $66M
    Q4 FY26

    Non-GAAP EBIT and margin for Q4.

    Subscription Revenue as % of Total Revenue (recast)
    82%
    FY26

    Under the recast presentation for fiscal year 2026.

    Subscription ARR as % of Total ARR (recast)
    90%
    FY26

    Under the recast presentation for fiscal year 2026.

    Subscription Net Dollar Retention
    114%
    FY26

    New reporting metric, includes term software and SaaS offerings.

    New Subscription Customers
    >2,500
    FY26

    Growth-oriented investments paid off.

    New Subscription Customers
    ~600
    Q4 FY26

    Added in Q4 FY26.

    SaaS Customers using more than 1 offering
    48%up 500 bps from Q4 last year
    Q4 FY26

    Steady progress in driving multiproduct adoption, a core pillar of growth strategy.

    Net New ARR from Identity Resilience and Data Security
    33%
    Q4 FY26

    Represents a significant portion of net new ARR.

    Active Directory ARR growth
    doubled
    Q4 FY26

    One of the fastest-growing SaaS offerings.

    SaaS Gross Margin Target
    well north of 70%
    Next couple of years

    North Star target for SaaS gross margins through product optimization.

    Industry KPIs

    8
    MetricValueDetails
    Revenue growth$312MUSD
    Arr net new arr$989MUSD
    Customer account count>2,500customers
    Large deal new logo metrics9%%
    Multi product platform attach48%%
    Operating FCF margin rule of 4021.3%%
    Ai product adoption monetization33%%
    Net revenue net dollar retention122%%

    Product announcements

    3
    ProductTypeDetails
    Satoriupdate
    Data Activate and AI Studiolaunch
    Glumio platform for Google Cloudexpansion

    Deals & partnerships

    3
    SatoriAcquisition of a data security company.

    Satori acquisition is now fully integrated into the Commvault Cloud, enhancing data security capabilities.

    Major storage providersTechnical partnerships for supply and technical alignment.

    Commvault maintains strong relationships and broad technical partnerships with major storage providers to navigate supply chain and technical alignment challenges.

    Hyperscalers (Google, Amazon AWS)Strategic partnerships for cloud and multi-cloud deployments.

    Pivotal relationships with hyperscalers, including deep integrations into marketplaces and evolving platform support for cloud-native offerings and AI agent frameworks.

    Risks & headwinds

    3
    Macro HeadwindsCurrent

    Discussed, not quantified.

    Mitigation: Current trends are baked into guidance; managed through pipeline, platform flexibility, technical partnerships, and SaaS platform.

    Memory and Component PricingCurrent

    Discussed, not quantified.

    Mitigation: Navigated through broad technical partnerships, helping customers 'sweat the assets' longer, and leveraging the SaaS platform for workload migration.

    Competitive MarketOngoing

    Discussed, not quantified.

    Mitigation: No significant change in discounting trends; focus on hybrid approach and resilience budget as a priority.

    What to watch in Q1 FY27

    5

    Subscription ARR Growth

    FY27
    Current27% YoY ($989M)
    Target18% to 19% YoY ($1.20B-$1.21B)

    Why it matters

    This is a key North Star metric for the company, indicating the overall health and growth trajectory of its subscription business.

    For the full fiscal year 2027, we expect subscription ARR growth of 18% to 19% year-over-year, representing a range of $1.20 billion to $1.21 billion.

    Q&A highlights

    8

    What is the high-level FY27 sales compensation structure and what behaviors is it designed to drive, especially regarding multiproduct sales?

    The FY27 compensation plan is geared towards new customer acquisition and cross-sell/platform expansion in the hybrid environment. The company aims to build on the progress of multiproduct expansion, especially with SaaS customers, where 48% now license at least two products.

    “The first is new customer acquisition. And the second is cross-sell. So platform expansion in our hybrid environment.”

    asked by Todd Weller · answered by Gary Merrill

    2 min read6 chapters

    Detailed Narrative

    01

    AI as a Powerful Tailwind

    Commvault views AI as a significant tailwind, driving increased data, complexity, and risk, which directly elevates the demand for data protection, governance, and trusted recovery solutions. The company positions itself as providing the 'picks and shovels' for customers to adopt AI securely and responsibly. This includes protecting AI datasets and workloads, leveraging AI for faster threat detection and recovery at scale, automating resilience operations, and bringing governance to AI data.

    02

    Commvault Cloud Platform and Consolidation Trend

    The Commvault Cloud unifies data protection, data security, identity resilience, and recovery on a single scalable control plane. This integrated platform is driving customer consolidation, as enterprises seek to move away from fragmented tools and standardize on a unified solution. This trend is evidenced by the growth across Commvault's business and increased multiproduct adoption among its SaaS customers.

    03

    Key Growth Drivers and Multiproduct Adoption

    Commvault's growth is fueled by three main drivers: adding new subscription customers (over 2,500 in FY26, with ~600 in Q4), expanding multiproduct adoption, particularly within its SaaS base (48% of SaaS customers now use more than one off📎ering, a 500 basis point improvement YoY), and strong momentum in emerging revenue streams like identity resilience. Identity resilience and data security offerings collectively represented 33% of net new ARR in Q4.

    04

    Identity Resilience Momentum

    Identity resilience is highlighted as a rapidly growing area, with Active Directory protection being one of the fastest-growing SaaS offerings, doubling its ARR year-over-year. This solution helps customers significantly reduce recovery times, for example, from two days to under 90 minutes for a Fortune 500 retailer. The company continues to focus on innovation in this area as identity threats evolve.

    05

    New Financial Reporting Structure

    Effective Q1 FY27, Commvault is transitioning to a new financial reporting framework. This involves recasting revenue and ARR classifications to align term software-related support revenue with subscription revenue, and presenting perpetual support revenue separately. The company will streamline its key guided metrics to focus on subscription ARR, free cash flow, subscription revenue, and non-GAAP EBIT, and will report subscription net dollar retention on an annualized basis.

    06

    Navigating Macro and Supply Chain Challenges

    Management acknowledges macro headwinds🌐 and challenges related to memory and component pricing. These factors are incorporated into the FY27 guidance. Commvault mitigates these challenges through strong technical partnerships with major storage providers, enabling customers to 'sweat their assets' longer, and by leveraging its flexible SaaS platform to migrate workloads, ensuring project continuity regardless of broader economic or supply chain issues.

    AI-generated summary of the company’s earnings call. Not investment advice.