Commvault Q4 2025 slides: subscription growth accelerates, exceeding guidance

Introduction & Market Context

Commvault Systems Inc (NASDAQ:CVLT) reported strong fourth-quarter fiscal 2025 results on April 29, 2025, exceeding guidance across all key metrics. The data protection and cyber resilience provider’s stock responded positively, rising 5.53% in premarket trading to $175.13, reflecting investor confidence in the company’s growth trajectory and strategic direction.

The company continues to benefit from growing demand for cyber resilience solutions in an expanding market. Commvault estimates its Total (EPA:TTEF) Addressable Market (TAM) at $24 billion, with projections to reach $38 billion by 2028, representing a 12% compound annual growth rate. This growth is driven by increasing concerns around ransomware attacks, which Commvault describes as a "$57 billion global crisis."

As shown in the following chart illustrating the company’s market opportunity:

Quarterly Performance Highlights

Commvault delivered impressive fourth-quarter results, with total revenue reaching $275 million, representing a 23% year-over-year increase (25% in constant currency). This significantly exceeded the company’s guidance of $260-264 million. Subscription revenue, a key growth driver, surged 45% year-over-year to $173 million, also surpassing guidance of $160-164 million.

The company’s quarterly performance is summarized in the following financial summary:

The strong subscription revenue growth reflects Commvault’s successful transition to a recurring revenue model. Annual Recurring Revenue (ARR) reached $930 million in Q4, up 21% year-over-year, putting the company on pace to exceed its $1 billion ARR target ahead of schedule.

As shown in the following chart of Total ARR growth:

Subscription ARR, which includes both term-based licenses and SaaS revenue, grew 31% year-over-year to $780 million and now represents 84% of total ARR, up from 77% in the previous year. The subscription ARR trend demonstrates consistent growth over the past eight quarters:

SaaS continues to be a standout performer for Commvault, with SaaS ARR growing 68% year-over-year to $281 million. The company’s SaaS business is driving overall ARR growth, as illustrated in the following chart:

Commvault maintained strong profitability with a non-GAAP EBIT margin of 21.5% in Q4, exceeding guidance of 20-21% and representing a 130 basis point improvement year-over-year. Free cash flow for the quarter was $76 million, though this represented a 4% year-over-year decline.

Full Year FY25 Results

For the full fiscal year 2025, Commvault reported total revenue of $996 million, a 19% increase from the previous year. Subscription revenue grew 37% to $590 million and now accounts for 59% of total revenue, up from 51% in fiscal 2024.

The company’s full-year performance is summarized in the following financial overview:

Commvault’s subscription customer base expanded to 12,200, representing 31% growth year-over-year, indicating strong market adoption of the company’s cloud platform. Free cash flow for the full year was $204 million, a modest 2% increase from the previous year, with free cash flow per share of $4.51.

The company maintained consistent profitability throughout the year with a non-GAAP EBIT margin of 21.1%, flat compared to fiscal 2024. This demonstrates Commvault’s ability to balance growth investments with operational efficiency.

Strategic Positioning in Cyber Resilience

Commvault continues to position itself as a leader in the cyber resilience market, emphasizing its comprehensive approach to data protection and recovery. The company highlights several key differentiators that contribute to its competitive advantage, including:

1. Cloud app and infrastructure rebuild capabilities

2. Cloud resource discovery and mapping

3. Rapid recovery of AI workloads

4. Cloud-scale recovery across the entire platform

5. Multi-cloud air-gapping to support compliance requirements

The company’s investment highlights showcase its market position and growth drivers:

Commvault emphasizes its recovery advantage, claiming to provide 2.7x faster recovery on average compared to traditional solutions. This is particularly important in the context of ransomware attacks, where minimizing downtime is critical for businesses.

The company’s key business metrics reflect the success of its strategic focus on subscription and SaaS offerings:

FY26 Guidance and Outlook

Looking ahead to fiscal 2026, Commvault provided guidance indicating continued strong growth, albeit at a slightly moderated pace compared to fiscal 2025. The company expects:

• Total ARR growth of 16-17% year-over-year
• Subscription ARR growth of 22-23% year-over-year
• Total revenue of $1,130-1,140 million, representing 14% growth at the midpoint
• Subscription revenue of $727-732 million, representing 24% growth at the midpoint
• Non-GAAP EBIT margin of 21%, consistent with fiscal 2025
• Free cash flow of $210-215 million, a modest increase from fiscal 2025

The detailed guidance is presented in the following chart:

The guidance suggests Commvault expects to maintain its growth momentum while continuing to invest in its platform and go-to-market capabilities. The company’s focus on subscription and SaaS offerings is expected to drive recurring revenue growth, providing increased visibility and stability.

Commvault’s performance in fiscal 2025 and its outlook for fiscal 2026 reflect the company’s successful execution of its strategic shift toward subscription-based offerings and its strong positioning in the growing cyber resilience market. With ransomware threats continuing to escalate and organizations increasingly adopting hybrid and multi-cloud environments, Commvault appears well-positioned to capitalize on these market trends.

Full presentation:

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