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Jan. 26, 2022, 2:15 p.m. EST

10-Q: COMMVAULT SYSTEMS INC

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(EDGAR Online via COMTEX) -- Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations You should read the following discussion and analysis along with our consolidated financial statements and the related notes included elsewhere in this quarterly report on Form 10-Q. The statements in this discussion regarding our expectations of our future performance, liquidity and capital resources, and other non-historical statements are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described under "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended March 31, 2021. Our actual results may differ materially from those contained in or implied by any forward-looking statements. Overview

Commvault Systems, Inc. is a global data protection and information management software company offering customers enterprise level, intelligent data management solutions built from the ground up on a single platform and unified code base. Commvault was incorporated in Delaware in 1996.

At Commvault, we believe in solving hard problems for our customers. To do this, we provide capabilities which enable our customers to accelerate their digital transformation in today's ever evolving workforce using tools that are light touch and utilize artificial intelligence and machine learning to drive automation. Our product portfolio empowers our customers to reduce complexity, reign in data fragmentation, and accelerate their cloud journey. All software functionality shares the same back-end technologies to deliver the benefits of a holistic approach to protecting, managing, and accessing data. Our software addresses many aspects of storage and data management in the enterprise, while providing scalability and control of data and information. We believe our technology provides the broadest set of capabilities in the industry, which allows customers to reduce storage costs and administrative overhead. We also provide our customers with a broad range of professional services.

Sources of Revenues

with Arrow were terminated, and if we were unable to take back the management of our reseller channel or find another North American distributor to replace Arrow, then such events would have a material adverse effect on our future business.

Foreign Currency Exchange Rates' Impact on Results of Operations Sales outside the United States were 49% of our total revenue for the nine months ended December 31, 2021 and 48% of our total revenue for the nine months ended December 31, 2020. The income statements of our non-U.S. operations are translated into U.S. dollars at the average exchange rates for each applicable month in a period. To the extent the U.S. dollar weakens against foreign currencies, the translation of these foreign currency denominated transactions generally results in increased revenue, operating expenses and income from operations for our non-U.S. operations. Similarly, our revenue, operating expenses and net income will generally decrease for our non-U.S. operations if the U.S. dollar strengthens against foreign currencies.

Critical Accounting Policies

Results of Operations

Our software and products revenue in EMEA and APJ is subject to changes in foreign exchange rates as more fully discussed above in the "Foreign Currency Exchange Rates' Impact on Results of Operations" section.

Cost of Revenues and Gross Margin ($ in millions)

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Operating Expenses ($ in millions)

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Income Tax Expense

Nine months ended December 31, 2021 compared to nine months ended December 31, 2020

Our software and products revenue in EMEA and APJ is subject to changes in foreign exchange rates as more fully discussed above in the "Foreign Currency Exchange Rates' Impact on Results of Operations" section.

Cost of Revenues and Gross Margin ($ in millions)

[[Image Removed: cvlt-20211231_g19.jpg]][[Image Removed: cvlt-20211231_g20.jpg]][[Image Removed: cvlt-20211231_g21.jpg]]

Operating Expenses ($ in millions)

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-Depreciation and amortization expense decreased $5.4 million, from $12.4 million in the nine months ended December 31, 2020 to $7.1 million in the nine months ended December 31, 2021, driven by the elimination of amortization of intangible assets related to Hedvig due to their impairment in the second quarter of fiscal 2021.

Income Tax Expense

Liquidity and Capital Resources

Jan 26, 2022

COMTEX_401237001/2041/2022-01-26T14:14:43

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