Commvault Systems, a prominent U.S.-based player in the data recovery and cybersecurity sector, continues to demonstrate robust growth and cement its status as a market leader, as evidenced by its most recent quarterly results. The company's success comes as the global demand for reliable data protection surges, with firms increasingly prioritizing secure, scalable cloud-based solutions.
For the fiscal second quarter ending September 30, 2025, Commvault reported total revenues of $276 million, an 18% increase year over year. The company notably surpassed the $1 billion mark in annualized recurring revenue (ARR)—reaching $1.043 billion—well ahead of its internal forecasts. This figure represents a 22% jump over the previous year and was achieved two quarters earlier than projected, marking a significant milestone for the organization. (Finance Yahoo; Commvault Press Release)
The chief driver of this growth has been Commvault’s focus on its software-as-a-service (SaaS) and subscription-based offerings. Subscription revenue reached $173 million for the quarter, a 29% increase compared to the prior year. Of this, term-based license revenue accounted for $93 million (up 10%), while SaaS revenue rose sharply to $80 million (a 61% year-over-year increase). The company’s total subscription ARR climbed to $894 million, marking 30% growth from a year ago. SaaS ARR stood at $335.7 million—a 56% annual rise. These gains have been fueled by the addition of roughly 100 new subscription customers, bringing Commvault's total customer base to more than 13,000, and a 17% uptick in software deals exceeding $100,000. (Blocks and Files)
Commvault remains highly competitive in the enterprise data protection space, supported by the ‘stickiness’ of its core products. Once integrated into business workflows, clients face substantial switching costs, such as the need to securely migrate large volumes of critical data, effectively fostering ongoing, long-term relationships. This loyalty has contributed to strong recurring revenue streams and a stable customer base that includes major global enterprises and technology firms.
The company’s product strategy centers around bundling services such as backup, recovery, and cybersecurity, improving customer retention and increasing average revenue per customer. This logical packaging approach, along with the asset-light business model, enables Commvault to scale efficiently without heavy capital investment—growth is mainly achieved by expanding sales and support teams rather than purchasing physical infrastructure. Recent launches, including Clumio for Apache Iceberg on AWS and the introduction of HyperScale Edge and HyperScale Flex, have further diversified Commvault’s portfolio, addressing a broader range of customer needs. The company's acquisition of Satori Cyber Ltd. has also enhanced its cyber-resilience capabilities, helping customers manage data and AI-related risks across complex hybrid and multi-cloud environments. (Commvault Press Release)
On the financial front, Commvault remains in a strong position. It is effectively debt-free (except for nominal capital leases), with a solid cash reserve sufficient to cover all current liabilities and fund expansion without external borrowing. The company reported robust cash generation, including an operating cash flow of $77 million and free cash flow of $74 million for the quarter. While the gross margin declined slightly to 80.1% from 82.3% in the previous quarter—largely due to expanded cloud hosting expenses—overall margins remain healthy. The non-GAAP EBIT margin was reported at 18.6%.
Despite some risks, such as a modest drop in average deal sizes and concerns about slower future customer acquisition, Commvault has maintained steady performance. Deferred revenue, recognized over multi-year contracts, provides substantial visibility into future income, and analysts remain optimistic about the company’s long-term potential. The operating leverage evident in the lower growth rate for sales, general, and administrative expenses compared to revenue further supports the company’s scalability and profit outlook.
On the stock market, shares of Commvault Systems Inc (ticker: CVLT) reflect investor confidence. As of the latest trade time—Friday, October 31, 14:35:00 PDT—the company’s shares traded at $139.22, up $1.49 (0.01%) from the previous close. During the session, shares ranged from a low of $136.60 to a high of $140.72, with an intraday volume of 991,817.
Looking ahead, the outlook for Commvault appears positive, bolstered by a recurring, scalable business model and continued efforts to improve profitability in line with mature software sector benchmarks. Although some near-term volatility and shareholder dilution due to stock-based compensation are factors to watch, the company’s strategic focus and strong financial foundation position it well for further growth in the rapidly expanding data protection and cyber resilience markets.