Commvault Systems (CVLT) 31 Oct 232024 Q2 Earnings call transcript

Good morning. My name is Krista, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Commvault's Second Quarter Fiscal Year 2024 Earnings Conference Call. [Operator Instructions] Thank you. I will now turn the conference over to Michael Melnyk, Head of Investor Relations.

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An Commvault's welcome Melnyk, and by earnings call. posted Commvault's conference Mirchandani, those and recent risks in Commvault key Good statements. metrics not with this for Sanjay? and operating the of to company's Investor Michael these is CFO. Merrill, filed Gary Head CEO; over the joined presentation Relations, I'm with and reconciliation Commvault's financial Investor morning, assume future periodic and to could on does for remarks. and our to are earnings and update the any that non-GAAP financial presented for from basis. cause the made reports Sanjay prospects. our All his and cautionary reference.Statements be to for a will these contemplated subject non-GAAP the website today's you and plans risks, are can on uncertainties A call, to today's call turn statements.During earnings refer include on opening actual forward-looking it Commvault's between forward-looking expectations, statements assumptions. us.Now discussion found forward-looking of I'll language results obligation website.Thank in Relations measures results GAAP most on statements the to uncertainties SEC Sanjay a I'm different about be Please joining again Commvault, materially release such

to to to including to named XXth primary XX% through Subscription we million joining the across continuing metric ARR improved and the these million. measure Magic for Metallic results share return everyone, to Good cash impressive for financial grew and us XX% impressive dollar I SaaS now Metallic the net also KPIs. and with of you, $XXX shareholders Thank $XXX received retention our Gartner consecutive to nearly accelerated ARR year-over-year XX% delivered being growth Quadrant. profitability morning, accolades, ARR. leader accelerated to important use Total year-over-year XX% while total and our industry to in million. improved thanks results, QX an XXXX is year-over-year underlying am today. we up Mike. $XXX rebounded exceeded time XXX% we expectations, most momentum ARR, SaaS pleased we repurchases.Beyond numerous the report

is cloud new then, how gained powerful the resilience report. to attack. data cyber GigaOm's on apply the industry-leading be moves, modern enumerate."Building learned and most empowers to data focused case new workloads leading We combining Metallic, we cloud-native in now Cloud with likely also ranked we've some Large Enterprise was taking out data within imminent enterprises for prided clear, regardless data customers customers X protection $XXX for, cyber the in and highlight and Enterprises. has timing Software We're data cyber intelligence. of how going Since GigaOm latest known Backup never a the range deliver. protects the success occur Solutions hypergrowth to X,XXX that sonar as Leader for best any million at up resilience. for advanced nonstop defend new capabilities We're increasingly data vastly service. resilience theoretically industry. Outperformer protection in sophisticated an like cyber charge of to most been study, the expected today's We point.X Commvault itself together XX are we of a recent highest workload report. It's a bold and opportunity very SaaS Data Recovery in again, an Protection once to process. challenged authors in categories launch to its of from X And to named most overwhelming to for recognition. stereo extremely in platform, new a task it "Metallic tedious Hybrid has in in our critical complexity fully surpassed and Commvault proud introduce us emergent leading is on standard in will from We're We're the took SHIFT technology where by We we've what innovations last The customers and ARR. market, we're week, in enterprise-grade over escalating to now.The AI recent ago, months exceptional security, of to will the and Radar deliver GigaOm data platform. security, and protection protection and to protection cloud-based getting Gartner's protection never what partner XX% this need best-in-class challenges. the data believe the required, is customers a the to our reducing event, our protection the just and delivering a in broad cyber and automation loss Commvault started.Next respondents approach week, partner made in that on that Significantly recovery platform new from data a to with customer protecting ramp always AI-driven laser as a And at recovery threats. the bringing being of been security evolving approach service. has until in shifting we We And ourselves disrupted we're to right named due stand their attack. it address and need the AI-enabled an and to data According we're possible tackle combining and hybrid everything simplified just data trusted Cyber we this infusing next threats. going it data in our IDC we're data noted and vendor time, secure revolutionize years resilience better. and at that's

with world will about time ecosystem event.Now the new how It's discuss to be resilience. problems hope turn we we tune to Gary? think you Next can along this transcend shift approach. the the week that Today's exciting some to category. I'll that Gary with at to solved numbers. the partnerships enable us will cannot SHIFT, yesterday's to it exciting over into unveil We

revenue Thanks, during good an QX KPIs strong to acceleration Sanjay, $XXX and morning, increase quarter. across outperformance am driven earnings our of QX I report our X% in that by million, pleased everyone. and key revenue total year-over-year. was the was

growth increase was led revenue year-over-year. an of million, XX% $XX total of Our subscription by revenue

both subscription existing increased double-digit Term XX% growth and combined SaaS the saw in range.Overall an year-over-year. a year-over-year motion. our software X perpetual term driven license expansion includes quarter, revenue, our in in performance QX subscription As revenue growth continued software accelerating $XX with its customer improvements to licenses dollar revenue revenue were term our remaining license was during deal our historical up reminder, licenses within total renewals of compared by was year driven is its retention by velocity net with strong volume SaaS million. approaching software of term revenues XX% software XX% contribution ago. now Subscription over and offerings.We which

subscription. by As is a led reminder, our motion go-to-market

year.Moving perpetual perpetual licenses of licenses customer term to support At trajectory, normalize business arrangements from to customer revenue Year-to-date, to retention underlying These growth in This of ARR. strength for accelerated the revenue customer million, which So software we term-based we an to software. and to $XXX license become base. an gross than year perpetual contracts the $XXX includes run $XX fewer we had support subscription expect accelerating Subscription 'XX year-over-year growth annualized both the Fiscal XX% in year of on conversions headwind includes term our support ARR last revenue represents revenue impact existing XX% which expenses without quarter our carries from term-based our net of saw QX revenue million, XXX% 'XX dollar million, fiscal to presented XXX margins for year-over-year. of support to licenses SaaS total licenses. customer year.QX within the SaaS fiscal year-over-year. our current software support year. were grew licenses. was we perpetual as of Fiscal term-based up year-over-year year-over-year and which reported the majority was XX% software to basis our million, exit from software customer reflect customer sale expenses balance the Fiscal metrics million. revenue support with perpetual XX% cost from expansion from benefited point at versus start this QX prior revenue and and basis geographies. as finished from $XXX sales and fiscal a increase sales the We QX support reflect and current approximately revenue sold profitability. length QX license next certain growth reported software in XXX% a 'XX. X% At when revenue and SaaS discuss $XXX compression.SaaS quarter.Now higher rate, these the to of license to new in accelerated revenue, growth our rate perpetual from coming compared operating are ARR software I'll XX% well were XX% total as customers compares to believe impact ARR, contracts year healthy customer term verticals generally XX% our support fiscal

declined headcount the XXX driving year-over-year employees, priorities.We expenses our a ended our basis facilities As revenue, revenue, a total third-party margin of most reflecting X% and of X,XXX decline focusing expenses a to people, points as EBIT global percentage operating of leverage investment year-over-year. we on manage with total critical quarter XX% by

continued velocity related point in balance XXX renewals QX customer million, Our expense to no which non-GAAP EBIT quarter The and sales expansion some to increased motion. success million ended year-over-year was $XXX relative margin discipline the to balance [ $XX year-over-year. metrics. our of and cash the flow support margins teams, and United Non-GAAP revenue.Moving a our teams were the and additional million EBIT strong line basis XX.X%, sheet We States. XX% key inside within driven includes customer with by current to in headcount for and accelerating debt $XX journey top operating ] improvement earnings EBIT cash, sales

flow under an additional QX stock repurchased and of of our $XX fiscal million the discuss of $XX first fiscal half we flow.Now year The million stock, we the XXX% cash repurchased repurchase multiyear the our and had is revenue typically on cash our year flow was In half free million, includes strength driver was which 'XX of SaaS $XX and free QX software renewals, flow $XX of year-over-year. deferred full contracts. upfront of QX, representing and 'XX. fiscal subscription cash fiscal I'll first at our cash program free million free for point up XX% 'XX, biggest payments our outlook Our halfway year

to We should free of continue flow believe viewed momentum. underlying ARR as be KPIs primary our cash that and business

rates. All metrics currency following of are guidance on based foreign our exchange current

revenue, term-based For includes million. the fiscal software which the This SaaS midpoint. and QX, growth $XXX licenses to million both portion year-over-year expect to of be subscription XX% $XXX at represents we

while be with mentioned margins at to to XX%.As subscription million which expand revenue our our we We last motion levels, base. $XXX expect renewal executing changes, opportunities EBIT At some growing expect to midpoint. call, to approximately $XXX our on revenue consolidated million these secure margin our foundational also of discrete I amplifying focus includes our are on the go-to-market gross growth earnings and X% of land QX approximately scaling total year-over-year be XX.X% we

to focused as we margin hire in segmentation the inside resources velocity investments These continue model. market SaaS will continuing our our guidance. and We reflected on refine reps field sales solely are additional

QX like total outlook count updated an ARR total diluted and to the fiscal 'XX, for fiscal share includes full give projected year on expectations year. would both full is our shares.Now which for XX.X I Our raising the revenue million

high range year-over-year, XX% total to perspective, XXX subscription at includes revenue year-over-year 'XX of now We XX% increase reflects year-over-year. revenue to XX% guidance. a At the as in software continued conversions term-based year be million midpoint. subscription for environment. expect subscription lowered over expect basis a transactions to in from licenses point exceed the spending to expect relative ARR, SaaS well number contracts as revenue growing reflects lower prior of which $XXX prior our due mix subscription to to total a perpetual From over revenues.Our updated these fiscal multiyear support rate ARR revenue measured of million, year XX% the compared from our levels, $XXX We increase which term will we now and guidance of a a shift interest growth

$XXX million $XXX total to to $XXX range $XXX of an to to expect range increase the our we in total result, a million As be revenue million. of prior million. This compared revenue is

improved momentum cash revenue flow trends in the reflects historically fiscal business the that strong year.Moving the year renewal velocity our outlook activity, fiscal we year half stronger SaaS of the total to and in outlook. Our full second 'XX EBIT 'XX seasonally fiscal and ongoing margin see

margins We to continue XX% gross expansion XX% year-over-year. of of to EBIT expect non-GAAP and consolidated XX points XXX basis margin to

our million. of expected maintaining cash flow $XXX also are We year full free

September the target, we well of XX, we $XXX authorization, quarter. cash our we repurchases and cash. expect intend share excess a as share momentum of share on free the during of primary repurchase of share As our are remaining flows.We pacing had to Year-to-date, continue view XX% existing annual use to of current repurchasing continue ahead we our repurchase annual million repurchase our and at with existing least practice

and to review we've over of take our multifaceted earnings metrics, investor contained long durable the built on ARR, Relations us to For a should objectives the additional our of time deck model exceed Investor details total please that term. allow and website.In all revenue and our in trends key section closing, revenue

City we We open you of to York line future, many look hosting next the questions. at our for in event now about are excited can SHIFT the week.Operator, and you forward New

comes line Rakers of [Operator Instructions] question the Fargo. first from from Wells The Aaron

than ARR I my our bit obviously, should prior then further? I Can a remarks, Congratulations XX% understand subscription but little could on midpoint. clearly, a little guidance in in the revenue XX%. bit prepared me I quarter. at execution -- on updated question little the just guidance -- unpack to say, bit you bit It know And relative some guide, a I change side, little lower lower help your looks you in you made the like guess is that the the is your more. a just comments

think morning. Aaron, about it's I full And to I or first. you're specifically, the Gary. Please QX think talk you the to outlook outlook this year asking

clarify Let that me just on --

XX% XX% million. million year. The Yes, and full the more $XXX versus I'm to to $XXX versus $XXX million talking prior million prior $XXX

Got it.

show increasing on all, first success the success, also guidance half QX that bit accelerate half. on our to that at When right? able at of me half. or making specifically, metrics, especially our Okay. our were reported seeing expectations.But the past in thought total with are lot that the ARR. up I'm From sure of think, a to a I just of of and things drive there's revenue really your full Well, year guiding Awesome. perspective, of to coming ended we of did guided lot lot particular, as first at that as reported well, off half, million couple kind of reflect on fiscal on revenue that We're revenue. that does the business also a I increase a that we everything. first where it I of think second ARR revenue about success, little that first of about our up as pleased on not the subscription let going A well as there. we the pleased we're reflective the that in XX% as directly of $XXX we hit raise guidance. SaaS XX% is we're question, we all A revenue total Previously,

commitment, environment, cost the are being of We usually well commitment money come journey In interest existing to factors some with support software converted and are interest in a the those their conversions as and so rate as where conversions, today's of a conversions X-year our customers the cloud same fewer seeing perpetual multiyear at doing term from licenses. rate contracts time.

as seeing modestly on some on well continued length. term declines conversion we're just year-over-year the So as trend piece the subscription

sell average to So is about years. our now subscriptions, when we term term down X

on keeping a the on real deal, big are ARR, we have that the the just results.And a see impact watching we're and in environment out on So that little hold in cautious cycles revenue the and performance could today. short-term being mind then the the bit reported deal and mega there while keeps spending ARR momentum of that it trends approval thirdly,

color. Yes. that helpful. appreciate That's I very

is linearity cautionary quarter, final would with or So customers sticking geopolitical macro, look this environment the on forward? the topic. in maybe point? the just demand? question, so the you How it more we you that projects in seen this any characterize out environment the Have spending as more Or delay at push just this

trends deteriorated. We that cautionary. not More see do

consistent over rates being Our just deals. close But with it close trends and seen what on few real and are the of the some we're on what's on to relative geopolitical quarters. the in of time takes linearity to nature business that big past those going seeing the cautionary we've

Your of Securities. Guggenheim next question Howard comes line from the Ma from

but wouldn't the in want from also the perpetual in continued the I translate Metallic comment, maintenance to I migrations? time guess think revenue ARR that least weighted such the big. didn't understand renew just as are any migrations perpetual on Because deal year, print. a you ARR understand of for did Is comment you at back-end offset was -- side? I Metallic guidance over are here. or forwards pushouts? some any to revenue, half negative I rather second -- in mean, an Can given the for mean strength this and you any renewal takes stellar only you in pull the change lower And then understand it's that it I so because expecting factors too, I lower otherwise the ARR wouldn't seems that subscription, Gary, I other there can were believe to be -- So impact weighted QX the back the better the -- there subscription in to to half, I strength pretty I

first, SaaS Yes. on the the quickly Howard, Metallics. maybe side of

ARR higher to increase side ARR than seen over quarters. the the for seen from accelerated of actually than SaaS prior at went That $XXX SaaS, million we'd seeing accelerating If faster the is the periods, in past $XXX look right? So we've we're on ARR. sequential you current we million actually

dollar saw SaaS kind what can you out coupled as So we the turned on the net the see acceleration we of with, rate and of XXX%. there, that Howard, ARR retention

really the guidance retention.When net viewer on it's subscription, is side, a at is on dollar expectations, right? So revenue biggest how you you the that's the I the focus And see of good that driving can see look conversions. also prior support on relative support that's that you'll kind where the So -- the acceleration and strong overperformance you the factor custom see to if you the look see see the there, you offset. meaning at customer acceleration where

where our We're pipeline getting it's in just conversions last what So based the we're you of offset we customer a that's of what transitional well we X metrics, on as the basically see year about as the about just term half to year, about length of down see kind pay in deals, few years current last And right? the monitoring on average. I So did is it did that environment side which positive doing half on there. is the of just the about conversions. for

year. year-on-year. trying in very it's -- subscription be XX% mind, is out it's a Howard, mix nothing XXX grew at what, just We're mix shift. we're to -- customers ]. If growing QX. whole a healthy clip added, given over for In Metallic realistic the my We there's just the there's in ARR we Sanjay. [ looking

we've this and this mix And and just raised the had very the quarter, -- year. ARR but it. don't pipeline pragmatic the for a that's anything, good we what business, looking about we're in very raised be. revenue shift might mean the for So read being into year, isn't at and I great we've

of their in they or -- shift mind, inside buying interest it's customer journey. a the in cloud So it be straightforward migration whether are as my where mix patterns, as rate

order then follow-up, XXX%, a has is -- do strong was want I And ARR Can expansion it you cross-sell is want workload from, prior. mentioned, I of do And guys remind Metallic rating growth of pretty then we to I again, quarter in it between Metallic been in Is you for variability this because just expect per variable. forward? believe, Metallic a going which to quarter us growth products? of up what of kind XXX% drivers hone strong, quarter very -- to rank XXX% is as ago additional and really and for as should the rate, on the a it the Metallic but

Howard, it's that. hit Gary. I'll

few The There's mean dollar there's good by key a things. at foundation I we really the all, we're first what motion. mature that foundation, So have net in by the things. acceleration saw of is we that point the Metallic a now retention renal

we it that strong net retention. of when renewal motion on rates, So see and renewal dollar downside really get limits the we mature the any

that And the and foundation. the doing with onboarding built on it's on focus we're what foundation is adoption. So really

get integrated get our to is to their field the opportunity.The backup, and other teams. fully success driving that expansion them drives between onboarded, get that motion customer adopted, thing have So we our then an sales now first customers the them

teams expansion. field combined teams customers' driving success are our as with So driving the the adoption the

time on back starts consumption. to first time it So up and all accelerating to the the

expansion seeing of think being products. I'll generally which this the derivative As use between upsell, more about the split by upsell, majority the I point, and the of we're at cross-sell is same

of it's of value now growth emerging cloud, are mission-critical though now seeing to is more threat-wise, less but than upsell. we're see, on of the by become driven majority we or dollar Xx percent that the workloads year-over-year.So whether sales databases, it's of hybrid those now total, force the contribution Xx the some of contribution dynamics, is However, because it's of even material, those a starting a it less up the

ends. So we're from getting it all

upsell, mature so that We're we're And get start as them the more in kick same on starting to cross-sell adopted summary, products. now rental can in expand the we motion. see of getting to we're getting the getting Just well.

on like customers I'd It's well. a little to vehicle land quarter. add some which the hundreds growth. is a It It driver Howard, business. growing overall And the just we by on color new of bit is SaaS of a

I the that is Our for which of We Sonar talked security quoted, too think more platform mission-critical IQ, the hybrid future for and customer. capabilities. to we're it we've to report Gary cloud ahead investing having go-to-market out our was delivery one our that compete.You Security -- Giga that doing integrated capabilities about workloads the step mission-critical thought inside well. with talked Metallic the there in I tedious of had is about more we if are be workloads. have And customers the

to think the got And we've last and exactly to -- we get they the back what of want been sort was workload NRR, on and -- it we that to ready it we would And You we that mentioned anomaly an doing. And protect. for it sort it. focusing normal that, be we quarter of I have is we thought pattern. was keep -- we'll

still a with effect, old, where do. there's It's to X happy is, lot but very a business. it So years we're in it's young

great and strong growth engine the the kicking congrats it's Sanjay, Metallic see quarter. to on in

James of Fish from comes question line the Piper Sandler. next from Your

couple of retention internally this the understand of confident material the Maybe the year both Metallic for what and of to should about sustainably? made is catch we are of building sustainable. just guess for be or from like And rate more what in last how we're next here. kind you targeting workloads makes especially Metallic of net some moving here, years? if you Metallic? you substitution here some past on I to guys rate mission-critical kind strength net boost of this that due business, of Like off points for up have talking Just to term X trying couple quarter, the retention isn't thinking that example, your

it start I'll Gary. it's James, off.

explicitly we're the not guiding to I think -- SaaS ARR. the

meaning $XXX if I of million-ish SaaS ARR. of kind at of maturity think our you that business, what's see our of level in

between I think NRR to are XXX%. world-class somewhere rates XXX%

that's that we're on in think every a quarter. end that delivered is range continues piece of between XXX%, basis last measure. think this think the that, probably -- good as and somewhere consistent base this quarter XXX% bracketed little XXX% to sustainable right, grow a we that's I working the quarter quarter, to so somewhere a and If on especially a I high towards I on

seeing are We --

XXX% -- XXX XXX%. to

Yes.

Sorry, XXX% to XXX%. sorry,

on on Sorry, about that, more are clarify we very SaaS some Jim. cloud mission-critical that, the just from to seeing a start good of then -- sorry workloads, hybrid And growth that the business.

right cloud were of committing the term. see length to up are Now time, taking in and taking growth and they They're of the cloud near that cannibalizing make the with only spending, to deals the customers perspective, term-based time migration. right enough of they're ASPs they deal truly in sure innings journey, the journey what part to from in they incremental. actual in that shows and measure the be early of are now their though, it not early It's periods licenses measure their and is software the cloud an innings to So their right?

that Got happened Helpful. we And me revenue but it. now end remind at essentially revenue for QX? a ARR. actually QX Metallic stable be fiscal Was revenue for outpacing here, the SaaS should just versus accelerated, quarter Metallic? growth Metallic a ARR it deceleration essentially is about really back-end loaded being saw expecting it more ARR a what the XX% we secondly, growth quarter of With of that

we second half impact. of in No, little revenue the signed contracts Metallic I the very, stable. Any quarter very Yes. that think have

get past the impact an of not relative less anything, Metallic half has much linearity So prior was or of get quarters. you linear sorry, much first the because once you of anything anything, don't -- just not quarter to of

unusual, unusual nothing there. So nothing

Your Kessinger next line question from Rudy from of comes Davidson. the D.A.

both It's down Metallic growth flip to last customer be your that Metallic, new side quarter at on you new it you great on what when a perspective as of quarter. conditions I rate I financial see the versus customers customers, you I on Or given percentage macro are net is basis, to subscription guess basis was rebound customers look But a at about retention on ARR growth and of in new your know look that this the point are Metallic? or dollar the X.X%. adds continue Metallic. if from constraints have? dollar-based start the a customers seeing smaller just seeing from

of we're good year, And Rudy, to it's that. the Metallic on I'll Gary. in first hit from good the new shape the hear half customer. with you. At

just quarter with back look stronger probably hit over We the think X young, in your new. and But stronger QX math the at hard business our is. trajectory it's to of our was existing sure than over kind happening, now make And that relatively this it I probably little on. that We evened X, existing we're X, a little on half, or quarters And out. X, look QX, first that's trend. customer to pleased then one as on where new customer. in a were both long-term some a new of

majority the still vast We are over customers added So into quarter, X SaaS. saw quarter. the of we're XXX during those not reading new subscription the and

ASPs and time focus expansion, our expansion or made to the drive and go still back then expansion seeing it.Now with as driving sizes the on deal I that net and yes, that and that first the and They're future smaller, but recovery retention okay on dollar we're if we're So I the to to commentary ability backup well. on workload betting because adoption, we're smaller.

business ASPs is lend velocity of And this have is where Sanjay, plan we because the deals. we Rudy. smaller kind a of smaller part The

We business, deal. with a have marketplace smaller

MSPs have deals we bring time. over We expand smaller that that in

sell we the We the So to We got mix. it's said through range. a MSPs. and enterprise we've sell whole

Okay. Got we seeing it. just license term subscription your fair. for you on then I the guess That's And hear look your business. conversions, at I if conversion,

that just year. going tweak year, as growth should double-digit be If we to the our you a ex quarters couple low for know conversions, intermediate subscription models fiscal single-digit Is near business this start of strip a out business license, term? there expecting I over a What growth we ago got we But a forward? conversions, forward? to next going for

Yes.

giving that And even QX, you about talk saw we if we down term conversion year-over-year. time and that's grew right? our digits, with So bit substantially digits. license in within double our guidance. little But So obviously software term not can what grew I license we're the double what interrelate our software longer-term saw a subscription, QX

roughly double the If within currently very at double-digit will with guiding trend. term fiscal same for situation, that be there it's year-over-year a quarter Where guidance I you software growth that look digit down gave to in, year-over-year. QX, the we're similar we're conversions

So we're which a conversions that The we're variable driving there, that little are fine. in conversions. doing regardless growth, the of and is

based we I think giving just kind of We're an we see they'll kind stabilize outlook where on that over journey. currently time. customers what see of and in

mission-critical going migrate, calls, about customers -- rearchitect, rebuild, definitely next we're cloud what stacks to the in got shift, And hard. and we're where going make as of just that's There's to but customers cloud. journey that. -- independently talk to week hybrid through they've part some into got that And is are workloads, not how help they've tough --

it's how say, complexity get at I you of you that, to make say, if look and something. at when side about I I'd I to it, to the am got it the other okay, shift the on I So have before a would look -- customer, think

well with or the cyber the So that, you look After to you decisions when which these model on look is at a lot are that, capabilities help risk.So security are, the we platform. customers there's from we look our we new you license software are and SaaS momentum security in the and subscription see if at SaaS, going up and positioned important very journey that, and the plus cloud. XXX and why with of term, in hybrid the new customers using software factors, at customers to adding

critical would that's I in it's mass, say getting So they're crosshairs seeing one you're what of too read and in kind -- from the of I other sort wouldn't side much. to of there. the it into

That's SaaS helpful. the figures quarter. in Congrats on the good

from next of [Operator Markets. the Instructions] comes line Eric Street Lake question Capital Your from Martinuzzi

about you've 'XX. for the I for expectation for past year, to quarters, fiscal license in perpetual $XX think million million The $XX Yes. talked

million million $XX range? about at here $XX you're are $XX million midpoint, Given the at to thinking you that still

verticals first the correct. think fiscal for I will out the become We seen of that subscription maybe term half still That's have motion that Yes. limited day. be we've the trend every year, those there SaaS is second It's slightly Gary. single trend business. The fully in half the but paces, our drive now the similar at some still as less bi-perpetual, dedicated to are and verticals

to is of range million $XX million the $XX still So fair.

the in the would would $XX $XX the million expect? that mean given half, mass front But Okay. you million would be

end at the range. high Yes, the it be range. Yes, will high end be of it the of Yes. will

right. the And think, revenue, was looks it in like then quarter. outperformance up I All XX% international

-- remainder mean? Just that year? to we Or the curious to that of reversion to of for just a that expect are know expecting is the the kind if you outperform

I'll Eric, Yes. take again. that. Gary It's

our very both with So of pleased regions.

and in total XX%. about X%, was said, up business Our up, business our Americas international you as was

both So growth is growth, of acceleration revenue to which that X% returning we're year-over-year, total of which pleased with. about businesses

international EMEA strong to The bit Americas. deal was some is relative acceleration seeing business really some subscription with on really now growth. Americas adoption. little a The and smaller We're are mature good the strong driving in is as of first option. well more the sizes business now the driving that Our some international subscription

So of Americas can of term get some international. the less mega the the prevalent about and on on is length the we've lumpiness topics you some talked deals

markets. velocity strong to able drive a international in business we're the So really

of the Jason Your next from line from Ader William comes question Blair.

revenue. customer first to ask wanted outlook support Just the for you on

customer As term, You're is that in more the to you 'XX decline start mix expect support from slightly should continue into declines that. you as than -- subside? do that expect But the continue we 'XX, move 'XX to guess, lower that see to be down to year I to X% of we forward year-over-year do and subside? this comes in something, fiscal going

I'll Yes. Jason, well. take as this Gary. it's question

support. will we've pace the it started it's prior percentage is growth natural revenue QX flatline that where customer some significantly our customer support get that year, than of as of it related the alleviate in to we the enter to customer quite becomes if fiscal into be the And the will fiscal total support that year by that that the a even then years, this of licenses somewhere key that that impact. the other And higher moderate. declines the will piece year, the of derived driver then year look be from be cross contracts. big support seen impact motion meaning to to will get is fiscal into you've majority fiscal and the as And on less crossover you or had impact term customer expect year, And to to would should next that does, be we've being XX-ish of we'll the So year, year. of you start we year-over-year of that, software after the driven already to next a including revenue headwinds start revenue had on decline software And what one fiscal term-related year, revenue That start total growth. now the A probably amount we're time. see actual, smallest some term. to in roughly. as next to This at XX%

Got you.

perpetual into it, the you million talked this only any towards -- high headwind will off more without down will modestly? pinning sort that about of Or actually license So of license line. end you Do specific will of a be it do sort be of the of revenue 'XX forward $XX perpetual do sharp significant million 'XX sort to trail the think in you that $XX move like range only, sort year you as we on and call guidance, of have think let's you more falloff? continue to

Modest.

modest. the will up the it revenue high be support somewhere, on will of as million. more we we're that into to of likely million customer we towards as If $XX range. be million, be the end think get that They $XX end impact total Then I year does. say, this but probably it, year, at roughly to similar end to $XX call in lower the range, that next

on So not variability over you're million. talking significant a that's obviously number revenue $XXX is

you. Got Got you.

Sanjay, then you. I And Great. got for one Okay.

Can of call is as-a-service your it, you towards customers Just because guys market about competition, let's mid-market just the but are mid-market dynamics, and backup and strategy just you services. adapted through SMB more and less talk procuring actually does more SMB how it software and on like shifting seem purchasing about that have how offerings? backup

Sure.

calls go motion, So of number invested -- of Jason, ISRs a smaller that segment, in mentioned that That's we've we've velocity loosely allows velocity us a plus the we couple channel motion which this, that prior translates in particular to for I the to after one. think to a customers.

customers, community you that. In work mentioned, growing to addition, like as with also a through been MSP and we've working many

being customers right The that. we motion marketplaces able promote third the SaaS sort into see through develop software and is hyperscalers marketplaces, their or of that sort as to tap of

be like how in purchase. to accessible some just enabling the our of we're So are to more customers our can examples they those technology way

and see Okay. floor. I'll And the then one quick follow-up,

sense that from business, give how customers of a Metallic coming mid-market of of Sanjay, the SMB sort business us enterprise? On is versus you can much

fairly like And SMB I'm grow and in the mid-market. because gives necessarily. that quite de-risks by it business, I lower to it to SMB. following consistent, business about X/X us historically that. haven't areas a think pleased the the mid-market X/X side if It's be the much enterprise the with it roughly we our is not seems but X/X of our also trend been has enterprise, and It design chance

You Tom line KeyBanc from the Markets. from next of Capital question comes Blakey

to company-specific? a could? would the could a seems just of has for longer, being in talk gave maybe in bit deceleration then public if color of spend few if any or if received that a Or answer an you been there that Sanjay, there's Just maybe question, pause, helpful.And hybrid of the to hybrid its it's of that terms general. be uptick in security cloud kind new cloud spend secondly, up and in questioner, NRR, in last cloud would NRR split security just premature for go industry capacity between helpful. kind the of complex kind quarters, impacting journey prior a to you a just a clarify if of as -- not things I bit be view of couple. the if kind give And could that growth could Metallic, the and you that wanted back you is, on you to be the is services, greater a but call

Okay.

those. me Let process

customers is was -- little So as all, hyper a of the indicator. first of a There the fault. journey, the us bit, thinking think -- trailing there my count

hybrid or and them we're that through utilization. as easy entire customers is hyper commitments up those across on open about about of data, customers, stack workloads that's customers cases There's It's it's it's data cloud the cloud the whether is referring capabilities. their infrastructure, journeys and whether a in And workloads stack difficult it's we're public data cloud it So the use intelligence lot to move it's a that it of to kind lot services. that that move or be those made run the helping was move use those whether harder doing of entirely what of things mission-critical their across a we're flight. through management because helping harder the have public cloud, gets And capabilities and cloud and of incentive applying of services cloud that whether I security, into lot the to.And outcomes. what sort data hybrid moving

cloud that and lot really sure what not mission-critical It's kind spend to public of the customers into And we're from capability, platform utilization to it's it's that other help going.And a in any requires the that's are trying whether or it CIO. a moving listing it with. getting or complex they choices. for workloads cloud. journey increasing I much decreasing value it's a -- making was and of anticipated cloud the the is so was thought right that's requires of from -- customers the our where a I lot a So

question? why -- So Did I cover I that's pause to your want there.

yes. Yes,

before follow-up there that be maybe indicator Just demand for get that to Does perspective some from pent-up that regard? the there Commvault might a trailing NRR. we a in imply

to as And that. we're hope journey pervasive the we're in that to to the as the have so models to more cloud software would anticipating is of -- lot answer life move Tom, -- week, and to I These talk because The what be made about next going them about a of that customers security in the when of make short The is Do see more cyber the have -- see be choices our them important trying we and hard all to journey, customers. capabilities ahead between are make decisions AI. and recovery to becomes are we tough to having for steps SaaS. customer them helping they problems the sort resilience, of are where data? using where decisions these where on with are to what X X

I So hope so. would

just And is number. the strong a on then XXX

and capacity Just any that, securities type mix new there services and growth impacting that of helpful. the be would if of possibly on commentary

Relative of XXX% retention. dollar one. take to I'll that net Gary. it's Tom, the

or As motion, roughly the and of capacity seats from cross-sell drove But about meaning hybrid for about the more drivers Absolutely, driven more it an expansion security cross-sell, of upsell what bit similar the seeing the VMs which comes comes upsell of a from or of from on you of it that X/X and upsell, think that X/X upsell that cross-sell, a is security that. X/X all and/or licenses our benefits of versus cloud about little or offerings, whether we're databases, dynamics, about from or whether be contributing part they're be cross-sell. factors. there

call will over closing no I time. have at further the questions remarks. We Melnyk this now turn for Michael to

Thank joining you today. the for call

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