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Commvault Metallic SaaS Tech Drives Q1 Sales, ARR Growth

‘We also have inside sales and sales reps pitching Metallic to customers. Our customer renewal specialists also talk with customers about Metallic. Metallic is becoming very much entrenched in our partner community. Over 90-plus-plus percent of Metallic sales go through the channel. Metallic is almost exclusively a channel product,’ says Commvault CFO Brian Carolan.

Data protection software developer Commvault Systems Tuesday said its Metallic SaaS-based offering is starting to drive significant growth, particularly in the all-important annual recurring revenue part of the business, even as the company exits the data protection hardware business.

Brian Carolan, Commvault’s chief financial officer, talking to CRN after the company unveiled its first fiscal quarter 2022 financial results, said that while total revenue for the Tinton Falls, N.J.-based company rose about 6 percent over first fiscal quarter 2021 revenue, annual recurring revenue for the latest quarter was up 6 percent year-over-year.

“The big drivers were subscription revenue and Metallic SaaS,” Carolan said. “Metallic will be a driver for years to come. We’re not releasing Metallic numbers yet, but we track them internally. We may be ready to release them by the end of the year.”

[Related: Commvault Targets ‘Growing’ Partner Base With Metallic For MSPs, Consumption Pricing Incentives]

Commvault signed 300 new Metallic customers in the first fiscal quarter 2022, Carolan said. About half of Metallic customers are running another Commvault solution, and about half of new Metallic opportunities are coming directly from channel partners, he said.

“We also have inside sales and sales reps pitching Metallic to customers,” he said. “Our customer renewal specialists also talk with customers about Metallic. Metallic is becoming very much entrenched in our partner community. Over 90-plus-plus percent of Metallic sales go through the channel. Metallic is almost exclusively a channel product.”

On the other hand, Commvault’s legacy perpetual licensing business is not growing, Carolan said.

“We are helping customers switch to subscriptions or Metallic,” he said. “Once we lay out the benefits, we expect them to switch. It becomes a win-win.”

The first fiscal quarter 2022 also saw Commvault exit the hardware business, Carolan said.

“We were reselling hardware appliances with our software, and had pass-through revenue there,” he said. “But we’re out of that now. We let distribution handle the hardware part.”

For Commvault, it was a good solid quarter in terms of customer mix, Carolan said. Large customer business, as in contracts worth $100,000 or more, rose 34 percent year-over-year, which he said shows the company is not dependent on a handful of “megadeals.” Commvault also saw sub-$100,000 deals grow 23 percent over last year, he said.

For its first fiscal quarter 2022, which ended June 30, Commvault reported total revenue of $183.42 million, up about 6 percent over the $173.00 million the company reported for its first fiscal quarter 2021. That included software and products revenue of $82.16 million, up 7.3 percent over last year, and services revenue of $101.26 million, up 5.0 percent.

Commvault reported GAAP net income of $13.90 million, or 30 cents per share, up significantly from the $2.28 million or 5 cents per share the company reported for last year. On a non-GAAP basis, Commvault reported net income of $30.03 million, or 62 cents per share, up from last year’s $23.95 million, or 51 cents per share.

Looking forward, Carolan said during the company’s financial analyst conference call that Commvault believes the current street consensus of approximately $83 million of software revenue for the second fiscal quarter is reasonable, implying year-over-year software growth of 14 percent. Commvault also believes that the current street consensus for total revenue of approximately $184.5 million is reasonable, he said.

Commvault reported early in the trading day Tuesday. By close of trade, the company’s shares were down 9.35 percent to $74.95 per share, but share prices rose over 1 percent in after-hours trading.

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