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What changed in COMMVAULT SYSTEMS INC's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of COMMVAULT SYSTEMS INC's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+277 added−235 removedSource: 10-K (2023-05-05) vs 10-K (2022-05-06)

Top changes in COMMVAULT SYSTEMS INC's 2023 10-K

277 paragraphs added · 235 removed · 190 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

54 edited+15 added−20 removed14 unchanged
Biggest changeWe are committed to providing a clear vision to career progression while investing in the development, creativity and aspirational needs of all employees. Safety and Well-being Commvault values its people. We are focused on driving business globally while honoring and caring for the health and safety of our employees, customers, and partners.
Biggest changeWe continue to be committed to securing the best talent with a concerted effort to expound on and build an inclusive and diverse pipeline of candidates. We are committed to providing a clear vision to career progression while investing in the development, creativity and aspirational needs of all employees. Employee Health, Safety and Wellness Commvault values its people.
Before joining Puppet, from October 2013 to April 2016, Mr. 9 Mirchandani served as Corporate Senior Vice President and General Manager of Asia Pacific and Japan at VMware, Inc. and, from June 2006 to October 2013, Mr. Mirchandani held various senior leadership positions at EMC Corporation, including Chief Information Officer and leader of the Global Centers of Excellence.
Before joining Puppet, from October 2013 to April 2016, Mr. Mirchandani served as Corporate Senior Vice President and General Manager of Asia Pacific and Japan at VMware, Inc. and, from June 2006 to October 2013, Mr. Mirchandani held various senior leadership positions at EMC Corporation, including Chief Information Officer and leader of the Global Centers of Excellence.
We support customers in a range of industries, including banking, insurance and financial services, government, healthcare, pharmaceuticals and medical services, technology, legal, manufacturing, utilities and energy. 6 Strategic Relationships An important element of Commvault’s strategy is to establish partnerships that support development, marketing, selling and implementation of our technology solutions.
We support customers in a range of industries, including banking, insurance and financial services, government, healthcare, pharmaceuticals and medical services, technology, legal, manufacturing, utilities and energy. Strategic Relationships An important element of Commvault’s strategy is to establish partnerships that support development, marketing, selling and implementation of our technology solutions.
We maintain strategic product and technology relationships with major industry leaders to ensure that our products are integrated with, supported by and add value to our partners’ portfolios. Collaboration with these market leaders allows us to provide applications that enable our customers to improve data and information management efficiency.
We maintain strategic product and technology relationships with industry leaders to ensure that our products are integrated with, supported by and add value to our partners’ portfolios. Collaboration with these market leaders allows us to provide applications that enable our customers to improve data and information management efficiency.
We also maintain relationships with a broad range of industry operating system, application and infrastructure vendors to verify and demonstrate the interoperability of our portfolio with their equipment and technologies. Distributors, Value-Added Reseller, Systems Integrator, Corporate Reseller and Original Equipment Manufacturer Relationships.
We also maintain relationships with a broad range of industry operating system, application and infrastructure vendors to verify and demonstrate the interoperability of our portfolio with their equipment and technologies. 6 Distributors, Value-Added Reseller, Systems Integrator, Corporate Reseller and Original Equipment Manufacturer Relationships.
Commerce Department’s Export Administration Regulations and economic and trade sanctions regulations maintained by OFAC, as well as anti-bribery and anti-corruption laws and regulations, including the FCPA and the U.K. Bribery Act. 8 People Commvault aims to unlock potential in data, customers and our employees.
Commerce Department’s Export Administration Regulations and economic and trade sanctions regulations maintained by OFAC, as well as anti-bribery and anti-corruption laws and regulations, including the FCPA and the U.K. Bribery Act. People Commvault aims to unlock potential in data, customers and our employees.
These partners team with our technical, engineering, marketing and sales force to enhance integration, tuning, operational management, implementation and vision for solutions that are designed to meet current and future data management needs.
These partners team with our technical, engineering, marketing and sales force to enhance integration, tuning, operational management, implementation and vision for solutions that are designed to meet current and future data protection needs.
On the investor relations section of this website, we post filings as soon as reasonably practicable after they are electronically filed with or furnished to the U.S.
On the Investor Relations section of the website, we post filings as soon as reasonably practicable after they are electronically filed with or furnished to the U.S.
Our engineering efforts support product development across all major operating systems, databases, applications and network storage devices. A substantial amount of our development effort goes into certification, integration and support of our solutions to ensure interoperability with our strategic partners’ solutions. We have also made substantial investments in the automation of our product test and quality assurance laboratories.
Our engineering efforts support product development across all major 7 operating systems, databases, applications, hyperscalers and network storage devices. A substantial amount of our development effort goes into certification, integration and support of our solutions to ensure interoperability with our strategic partners’ solutions. We have also made substantial investments in the automation of our product test and quality assurance laboratories.
In addition, our strategic partners augment our marketing and sales campaigns through seminars, trade shows, joint public relations and advertising campaigns. Our customers and strategic partners provide references and recommendations that we often feature in external marketing activities. Research and Development Our research and development organization is responsible for the design, development, testing and certification of our data management solutions.
In addition, our strategic partners augment our marketing and sales campaigns through seminars, trade shows, joint public relations and advertising campaigns. Our customers and strategic partners provide references and recommendations that we often feature in external marketing activities. Research and Development Our research and development organization is responsible for the design, development, testing and certification of our data protection solutions.
The scope and interpretation of these laws could change and the associated burdens and our compliance costs could increase in the future. We are also subject to U.S. and foreign laws and regulations that govern or restrict our business and activities in certain countries and with certain persons, including the U.S.
The scope and interpretation of these laws could change and the associated burdens and our compliance costs could increase in the future. We are also subject to global laws and regulations that govern or restrict our business and activities in certain countries and with certain persons, including the U.S.
As a result, these competitors can devote greater resources to the development, promotion, sale and support of their products than we can. Refer to our "Risk Factors" below. 7 Sales and Marketing We sell our data management solutions to businesses of all sizes, and government agencies. We sell through our global direct sales force and partner channels.
As a result, these competitors can devote greater resources to the development, promotion, sale and support of their products than we can. Refer to our "Risk Factors" below. Sales and Marketing We sell our data protection solutions to businesses of all sizes, and government agencies. We sell through our global direct sales force and partner channels.
We patent our technical infrastructure and key usability and design concepts. Our software’s unique capabilities are covered by a robust portfolio of over 1,000 patents worldwide. Areas such as data protection, security, transformation, insights, and compliance and governance, including our Metallic SaaS and HyperScale X solutions, are core to our competitive advantage.
We patent our technical infrastructure and key usability and design concepts. Our software’s unique capabilities are covered by a robust portfolio of patents worldwide. Areas such as data protection, security, transformation, insights, and compliance and governance, including our Metallic SaaS and HyperScale X solutions, are core to our competitive advantage.
Our corporate resellers bundle or sell our solutions together with their own products, and our value-added resellers resell our solutions independently. In order to broaden our market coverage, we work closely with our global original equipment manufacturer ("OEM") partners, investing significant time and resources to deliver unique, joint solutions incorporating Commvault solutions.
Our network of resellers bundle or sell our solutions together with their own products, and our value-added resellers resell our solutions independently. In order to broaden our market coverage, we work closely with our global original equipment manufacturer ("OEM") partners, investing significant time and resources to deliver unique, joint solutions incorporating Commvault solutions.
Technology, Intellectual Property and Proprietary Rights We believe our solutions are a major differentiator versus our competitors’ portfolios. Our solutions’ unique indexing, cataloging, data movement, media management and policy technologies are the source of the performance, scale, management, cost of ownership benefits and seamless interoperability inherent in all of our data management solutions.
Technology, Intellectual Property and Proprietary Rights We believe our solutions are a major differentiator versus our competitors’ portfolios. Our solutions’ unique indexing, cataloging, data movement, media management, AI/ML, and policy technologies are the source of the performance, scale, management, cost of ownership benefits and seamless interoperability inherent in all of our data protection solutions.
Securities and Exchange Commission ("SEC"), including: our Annual Reports on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K, our proxy statements related to our annual stockholders’ meetings and any amendment to those reports or statements filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended.
Securities and Exchange Commission ("SEC"), including: our Annual Reports on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K, our proxy statements related to our annual stockholders’ meetings and any amendment to those reports or statements filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act.
Previous to those positions, he served in various leadership roles for more than a decade across US and Europe, as Senior Vice President of Sales and Marketing at VMware and EMC Corporation. Available Information Our internet address is www.commvault.com.
Previous to those positions, he served in various leadership roles for more than a decade across US and Europe, as Senior Vice President of Sales and Marketing at VMware and EMC Corporation. Available Information Our website is located at: www.commvault.com.
Data Protection Commvault Backup and Recovery (“CBR”) is designed to meet the needs of any size business covering workloads across all locations: hybrid environments including on-premise and multiple cloud providers; physical servers; virtual machines; applications and databases; endpoint devices; cloud applications and more.
Data Recovery Commvault Backup and Recovery ("CBR") is designed to meet the needs of any size business protecting workloads across all locations: hybrid environments including on-premise and multiple cloud providers; physical servers; virtual machines; applications and databases; endpoint devices; cloud applications and more.
All such filings are available on the Investors Relations portion of our web site free of charge. The contents of our web site are not incorporated by reference into this Form 10-K or in any other report, statement or document we file with the SEC. 10
All such filings are available on the Investor Relations portion of our website free of charge. The contents of our website are not incorporated by reference into this Form 10-K or in any other report, statement or document we file with the SEC. 10
Our primary competitors in the data and information management software applications market, each of which has one or more products that compete with a part of or our entire product suite, are Dell-EMC, IBM, Veritas, Veeam, Rubrik, Cohesity, Druva, Avepoint and Datto.
Our primary competitors in the data protection software applications market, each of which has one or more products that compete with a part of or our entire product suite, include Dell-EMC, IBM, Veritas, Veeam, Rubrik, Cohesity, Druva, and Avepoint.
It is available in two form factors giving customers the flexibility to choose an implementation based on specific needs and preferences: • Commvault HyperScale X Appliance: A fully integrated appliance that streamlines operations and infrastructure and is ideally suited for smaller deployments with capacity requirements less than 150 terabytes that want the simplicity of an all-in-one integrated appliance from a single vendor. • Commvault HyperScale X Architecture: Our pre-validated designs for popular server platforms provides greater flexibility and allows customer to leverage existing vendor relationships and is ideally suited for larger environments that require greater scale.
It is available in two form factors giving customers the flexibility to choose an implementation based on specific needs and preferences: • Commvault HyperScale X Appliance: A fully integrated data protection appliance that streamlines operations and infrastructure and is ideally suited for smaller deployments that want the simplicity of an all-in-one integrated appliance from a single vendor. • Commvault HyperScale X Reference Architecture: Our pre-validated designs for popular server platforms provides greater flexibility and allows customers to leverage existing vendor relationships and is ideally suited for larger environments that require greater scale.
Prior to that, Mr. Mirchandani held various positions at Microsoft Corporation and Arthur Andersen LLP. Mr. Mirchandani has a Master of Business Administration degree from the University of Pittsburgh and a bachelor’s degree in mathematics from Drew University. Brian Carolan has served as our Chief Financial Officer since October 2012. Prior to his current role, Mr.
Prior to that, Mr. Mirchandani held various positions at Microsoft Corporation and Arthur Andersen LLP. Mr. Mirchandani has a Master of Business Administration degree from the University of Pittsburgh and a bachelor’s degree in mathematics from Drew University. Gary Merrill has served as our Chief Financial Officer since July 2022. Prior to his current role, Mr.
The principal competitive factors in our industry include product functionality, performance, integration, platform coverage, scalability, price, global sales infrastructure, technical support, branding and reputation. The ability of major system vendors to bundle solutions is also a significant competitive factor in our industry.
Competition The data protection and replication market is intensely competitive and highly fragmented. The principal competitive factors in our industry include product functionality, performance, integration, platform coverage, scalability, price, global sales infrastructure, technical support, branding and reputation. The ability of major system vendors to bundle solutions is also a significant competitive factor in our industry.
Information about our Executive Officers The following table presents information with respect to our executive officers as of May 3, 2022: Name Age Position Sanjay Mirchandani 57 President and Chief Executive Officer Brian Carolan 51 Chief Financial Officer Riccardo Di Blasio 50 Chief Revenue Officer Sanjay Mirchandani , has served as our President and Chief Executive Officer since February 2019.
Information about our Executive Officers The following table presents information with respect to our executive officers as of May 3, 2023: Name Age Position Sanjay Mirchandani 58 President and Chief Executive Officer Gary Merrill 48 Chief Financial Officer Riccardo Di Blasio 51 Chief Revenue Officer Sanjay Mirchandani has served as our President and Chief Executive Officer since February 2019.
Our alliance managers work directly with global OEM partners to design, deliver and support field activities that make it easier for customers to locate, learn about, and purchase these differentiated solutions. Additionally, we have a non-exclusive distribution agreement covering our North American commercial markets and our U.S. Federal Government markets with Arrow Enterprise Computing Solutions, Inc.
Our alliance managers work directly with global OEM partners to design, deliver and support field activities that make it easier for customers to locate, learn about, and purchase these differentiated solutions. Additionally, we have a non-exclusive distribution agreement with Arrow Enterprise Computing Solutions, Inc. ("Arrow"), a subsidiary of Arrow Electronics, Inc.
Metallic Cloud Storage Service Metallic Cloud Storage Service ("MCSS") is the “easy button” to adopt secure and scalable cloud storage in minutes, right from the Commvault Command Center — delivering against an organization's hybrid cloud strategy, without the need for additional cloud expertise.
Metallic Recovery Reserve Metallic Recovery Reserve ("MRR") is the “easy button” to adopt secure and scalable cloud storage in minutes — delivering against an organization's hybrid cloud strategy, without the need for additional cloud expertise.
We have implemented an Employee Resource Group (“ERG”) operating model and have established four ERGs for cross-cultural learning, mentoring and relationship building across employees: 1. CV WIT (Women in Technology), 2. Multi-Culture, 3. LGBTQ+ & Allies, and 4. VALOR (Veterans) In addition to our continued employee engagement initiatives, we launched a Courageous Conversations platform.
We have implemented an Employee Resource Group (“ERG”) operating model and have established five ERGs for cross-cultural learning, mentoring and relationship building across employees: 1. CV WIT (Women in Technology) 2. Multi-Culture 3. PRISM (LGBTQ+ & Allies) 4. VALOR (Veterans & Military) 5.
Its flexible architecture allows customers to get up and run quickly and scale. HyperScale X technology accelerates hybrid cloud adoption with an integrated solution that delivers comprehensive data management for all workloads, including containers, VMs and databases, from a single, extensible platform.
HyperScale X technology accelerates hybrid cloud adoption with an integrated solution that delivers comprehensive data protection for all workloads, including containers, VMs and databases, from a single, extensible platform.
These topics include data privacy and security, pricing, advertising, taxation, content regulation and intellectual property ownership and infringement. We are subject to several local, state, federal and foreign laws and regulations regarding privacy and data protection.
Government Regulations The global legal environment of technology businesses is evolving rapidly and is often unclear. These topics include data privacy and security, pricing, advertising, taxation, economic sanctions, content regulation and intellectual property ownership and infringement. We are subject to several local, state, federal and foreign laws and regulations regarding privacy and data protection.
Di Blasio led DXC Technology as Global Head of Sales for VMware Cloud Platform Services. Prior to that role, he was Chief Executive Officer at Globetouch, Inc., leading the company growth in the IoT and connected cars industry from January 2017 until April 2018.
Prior to that role, he was Chief Executive Officer at Globetouch, Inc., leading the company growth in the IoT and connected cars industry from January 2017 until April 2018.
Customers Our current customer base spans thousands of organizations across a variety of sizes, including large global enterprise companies, and small or mid-sized businesses and government agencies.
Commvault experts provide secure, reliable, and cost-effective remote monitoring and management of our customers' data protection environment. Customers Our current customer base spans thousands of organizations across a variety of sizes, including large global enterprise companies, and small or mid-sized businesses and government agencies.
As companies of all sizes and markets rapidly adopt cloud infrastructures for cost efficiencies, speed and agility, we remain committed to these strategic relationships to address this growing trend. Customers looking to move IT operations to the cloud depend on service providers to migrate, manage and protect their data and cloud infrastructures.
Our solutions are the data protection platform for many service providers, which provide cloud-based solutions to customers worldwide. As companies of all sizes and markets rapidly adopt cloud infrastructures for cost efficiencies, speed and agility, we remain committed to these strategic relationships to address this growing trend.
We call the seamless integration of our products the ‘Power of AND’, which creates an intuitive data management experience across customer-managed enterprise software AND SaaS-delivered cloud native solutions that mitigates data sprawl, facilitates cloud adoption, and meets customers wherever they are on their journey to modernize and transform their enterprise IT environment.
Our solutions create an intuitive data protection experience across customer-managed enterprise software and SaaS-delivered cloud native solutions that mitigate data sprawl, facilitate cloud adoption, and meet customers wherever they are on their journey to modernize and transform their enterprise IT environment.
("Arrow"), a subsidiary of Arrow Electronics, Inc. Arrow's primary role is to enable a more efficient and effective distribution channel for our products and services by managing our reseller partners and leveraging their own industry experience.
Arrow's primary role is to enable a more efficient and effective distribution channel for our products and services by managing our reseller partners and leveraging their own industry experience. Sales generated through our distribution agreement with Arrow accounted for 37% of our total revenue in both fiscal 2023 and fiscal 2022. Service Provider Partners.
Commvault Disaster Recovery (“CDR”) provides an easy-to-use replication and disaster recovery solution from a single extensible platform, all managed through the Command Center. Commvault’s standalone disaster recovery solution is both easy to implement and cost-effective. It provides orchestration and automated compliance reporting, flexible replication, cost-optimized cloud data mobility, and verifiable recoverability via copy data management.
Commvault Disaster Recovery (“CDR”) provides an easy-to-use replication and disaster recovery solution from a single extensible platform, all managed through the Command Center. Commvault’s standalone disaster recovery solution is both easy to implement and cost-effective. It provides recovery orchestration and recovery validation for enterprise workloads across on-premise and leading clouds.
To accomplish that, our employees are empowered to drive innovation and help our customers—by inspiring one another and working to make what’s already great, even greater—whether that’s product, process or team.
To accomplish that, our employees are empowered to drive innovation and help our customers—by inspiring one another and working to make what’s already great, even greater—whether that’s product, process or team. As of March 31, 2023, we had 2,779 employees worldwide, of which approximately 44% were in the United States and 56% were located internationally.
C ustomers have 24/7 access to support with our support staff available by phone for first responses and to manage resolutions, and our customers have access to an online support database for help with troubleshooting and operational questions. Innovative use of web-based diagnostic tools provides problem analysis and resolution.
We offer multiple levels of service that can be tailored to our customers’ needs. Our services consist of: • Real-Time Support. C ustomers have 24/7 access to support with our support staff available by phone for first responses and to manage resolutions. Our customers also have access to an online support database for help with troubleshooting and operational questions.
Inclusion and Diversity At Commvault, we believe that diversity is a business imperative at the heart of our human capital management strategy. In partnership with our leadership team, we not only drive the ability to be a best-in-class data management organization but also uphold our value in the marketplace by leading as an employer of choice.
We not only drive the ability to be a best-in-class data protection organization but also uphold our value in the marketplace by leading as an employer of choice. We continue to elevate our employee engagement and belonging efforts – which is the foundation of our approach.
We proactively take ownership of the customer’s problem, regardless of whether the issue is directly related to our products or to those of another vendor. We have also developed and maintain a knowledge library of storage systems and software products to further enable our support organization to quickly and effectively resolve customer problems. • Global Operations.
We have also developed and maintain a knowledge library of storage systems and software products to further enable our support organization to quickly and effectively resolve customer problems. • Global Operations. We offer our global customer support from physical locations around the world, which allows us to provide 24/7 support.
CBR provides backup, verifiable recovery and cost-optimized cloud workload mobility, helping to ensure data availability, even across multiple clouds.
CBR provides backup, verifiable recovery and cost-optimized cloud workload mobility, helping to ensure data availability and granular recovery, even across multiple clouds. Our simplified backup and recovery solution allows customers to protect all workloads – cloud, virtual machines ("VMs"), containers, applications, databases and endpoints – from the Command Center.
All of Commvault's products are managed seamlessly through a single pane of glass called the Commvault Command Center, which is our user interface for managing data protection and disaster recovery by providing configuration values and streamlined procedures for data protection and recovery tasks.
These offerings are organized into four categories - (1) Data Recovery, (2) Data Compliance & Governance, (3) Data Storage and (4) Data Security. Commvault's platform is managed through a single pane of glass called the Commvault Command Center. The Command Center provides configuration values and streamlined procedures for data protection and recovery tasks.
It is an integrated cloud storage target that enables IT organizations to efficiently adopt cloud storage for Commvault Backup & Recovery or HyperScale X – to ease digital transformation, save costs, reduce risk and scale. Metallic Software-as-a-Service Metallic Software-as-a-Service (“Metallic”) delivers data protection technology with simplicity and agility, getting companies up and running to protect critical business data within minutes.
It is an integrated, air-gapped cloud storage target that enables IT organizations to efficiently adopt cloud storage for CBR, HyperScale X or Metallic – to ease digital transformation, save costs, reduce risk and scale. Data Security Leveraging patented deception technology, Metallic ThreatWise combines sophisticated early warning and early action with comprehensive data protection.
Our solution design is also an important element in our comprehensive customer support, including “root cause” problem analysis, intelligent alerting and troubleshooting assistance. Our solutions are directly linked to our online support database allowing customers to analyze problems without engaging our technical support personnel. • Broad Expertise. Our support engineers have extensive knowledge of complex applications, servers and networks.
Innovative use of web-based diagnostic tools provides problem analysis and resolution. Our solution design is also an important 5 element in our comprehensive customer support, including “summary of findings” problem analysis, intelligent alerting and troubleshooting assistance. • Broad Expertise. Our support engineers have extensive knowledge of complex applications, servers and networks. We proactively take ownership of the customer’s problem.
We partner with a broad ecosystem of managed service providers and cloud partners to effectively deliver data management-as-a-service solutions based on Commvault solutions across geographies, vertical markets and offerings. Competition The data storage management market is intensely competitive, highly fragmented and characterized by either legacy technology or rapidly changing technology and evolving standards.
Customers looking to move IT operations to the cloud depend on service providers to migrate, manage and protect their data and cloud infrastructures. We partner with a broad ecosystem of managed service providers and cloud partners to effectively deliver data protection-as-a-service solutions based on Commvault solutions across geographies, vertical markets and offerings.
These solutions can operate independent of Commvault Complete Data Protection or as part of a combined solution to maximize data management capabilities for any business. This means that customers can gain insights to data that isn’t managed by Commvault to drive analytics and other tasks.
Data Compliance & Governance Commvault's Data Insights portfolio is an integrated family of solutions for actionable insights, combining Commvault Data Governance, Commvault File Storage Optimization, and Commvault eDiscovery and Compliance. These solutions can operate independent of Commvault Complete Data Protection or as part of a combined solution to maximize data protection capabilities for any business.
We also have established proprietary trademark rights in markets across the globe, and Commvault owns hundreds of U.S. and foreign trademark registrations and pending registration applications. Refer to our “Risk Factors” below. Government Regulations The legal environment of technology businesses, both in the United States and internationally, is evolving rapidly and is often unclear.
More than 1,350 patents have been issued to Commvault globally as a result of our strategic patenting. We also have established proprietary trademark rights in markets across the globe, and Commvault owns hundreds of worldwide trademark registrations and pending registration applications. Refer to our “Risk Factors” below.
Our products address many aspects of data management, from data protection and security, to data governance, transformation and insights, while providing scalability. We believe our technology and professional services provide the broadest set of capabilities in the industry, which enables customers to efficiently and cost-effectively scale their data on premise or in the cloud.
We believe our technology and service offerings provide the broadest set of capabilities in the industry, which enables customers to efficiently and cost-effectively scale their data wherever it resides. Products Commvault helps customers protect their data in a hybrid multi-cloud environment.
Powered by Commvault’s intelligent data management platform, Metallic delivers enterprise-grade data protection on a cloud-delivered platform, with advanced built-in security controls. Application program interfaces manage functions including billing, metrics, and identity management.
Powered by 4 Commvault’s intelligent data protection platform, Metallic delivers enterprise-grade data protection as a service on a cloud platform, with advanced built-in security controls. Current Metallic offerings include data protection for Office 365, virtual machines and Kubernetes, databases, files, Dynamics 365, Salesforce and endpoints.
We offer global customer support options from physical locations in Tinton Falls, New Jersey; Reading, United Kingdom; Sydney, Australia; and Bangalore, India which are complemented by numerous regional support centers. Our cloud-based support system creates a virtual global support center combining these locations to allow for the fastest possible resolution times for customer incidents.
Our cloud-based support system creates a virtual global support center combining these locations to allow for the fastest possible resolution times for customer incidents. We have designed our support infrastructure to be able to scale with the increasing globalization of our customers. • Customer Success Options .
Carolan served as our Vice President, Finance and Chief Accounting Officer from July 2006 until September 2012. He also held the position of Controller from February 2001 until June 2006. Prior to joining Commvault, Mr. Carolan was with Ernst & Young LLP in its Technology, Communications and Entertainment audit practice from 1993 until January 2001. Mr.
Merrill served as our Chief of Business Operations from April 2021 until June 2022. He also held the position of Vice President of Operations from April 2019 through March 2021 and from December 2012 to March 2019, served as Chief Accounting Officer. Prior to joining Commvault, Mr. Merrill held accounting management positions with several 9 publicly traded companies. Mr.
Carolan obtained his bachelor’s degree in accounting from Villanova University, his master’s degree in business administration from New York University and is a certified public accountant in the State of New Jersey. Riccardo Di Blasio has served as our Chief Revenue Officer since May 2019. Prior to joining Commvault, Mr.
Merrill began his career with Arthur Anderson LLP in its audit practice. Mr. Merrill obtained his bachelor’s degree in accounting from Elizabethtown College. Riccardo Di Blasio has served as our Chief Revenue Officer since May 2019. Prior to joining Commvault, Mr. Di Blasio led DXC Technology as Global Head of Sales for VMware Cloud Platform Services.
Data Backup Hyperscale X Commvault HyperScale X is an intuitive and easy-to-deploy, scale-out solution that is fully integrated with Commvault’s intelligent data management platform to help enterprises transition from legacy scale-up infrastructures. It provides scalability, security and resiliency to accelerate an organization’s digital transformation journey as they move to hybrid cloud, container and virtualized environments.
It provides security and resiliency to accelerate an organization’s digital transformation journey as they move to hybrid cloud, container and virtualized environments. Its flexible architecture allows customers to get up, run quickly and scale.
Our product portfolio includes intuitive tools and powerful machine learning technology that drives automation, reduces complexity, reigns in data fragmentation, and accelerates a customer’s cloud journey. Our product functionality share the same back-end technologies to deliver the benefits of a holistic approach to protecting, managing, and securing data.
Our platform drives automation, reduces complexity, reigns in data fragmentation, and helps accelerate a customer’s cloud journey with a holistic approach to protecting, managing, and securing data. Our comprehensive solutions address the critical aspects of modern data protection, from data security to data recovery, data governance and compliance, in a flexible and scalable platform.
Courageous Conversations was designed as a forum where difficult conversations can be broached in an open, safe and respectful manner. This platform has become the hub for all I&D related conversations, where employees and senior leaders share courageous life experiences related to bias and social injustice.
This program has become the hub for all diversity, equity and inclusion ("DEI") related conversations, where employees and senior leaders share courageous life experiences related to bias and social injustice. Since its inception, we have hosted p owerful sessions, each virtually, reaching our workforce around the globe.
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Item 1. Business Company Overview Incorporated in Delaware in 1996, Commvault Systems, Inc. is a global data management company offering customers enterprise level, intelligent data services via a single platform and unified code base. We believe in solving hard problems for our customers by enabling our customers to accelerate their digital transformation in today's ever-evolving workforce.
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Item 1. Business Company Overview Incorporated in Delaware in 1996, Commvault Systems, Inc. provides its customers with a data protection platform that helps them secure, defend and recover their most precious asset, their data. We provide these products and services for their data across the following environments: on-premises, hybrid, or multi-cloud.
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Products Commvault provides a portfolio of intelligent data management solutions that help organizations securely manage their data without increasing costs or complexity.
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Our data protection offerings are delivered via self-managed software, software-as-a-service (SaaS), integrated appliances, or managed by partners. Customers use our technology to protect themselves from threats like ransomware and recover their data efficiently. We believe in solving hard problems for our customers by enabling them to accelerate their digital transformation and protect their data in a difficult world.
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These offerings are organized into three categories - (1) Data Protection, (2) Data Insights and (3) Data Storage.
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Commvault delivers a portfolio of products and services to effectively secure, defend and recover data from ransomware attacks or any other threats.
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Our simplified backup and recovery solution allows customers to manage all workloads – cloud, virtual machines ("VMs"), containers, applications, databases and endpoints – from the Command Center while flexible copy data management allows users to multi-purpose backed-up data for DevOps, replication and more, across an entire infrastructure.
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It provides trusted recovery of data and applications, virtual machines, and containers, along with verifiable recoverability of replicas, cost-optimized cloud data mobility, security and resilient ransomware protection. Metallic Data Protection as-a-service (“Metallic”) delivers data protection technology with the simplicity and agility of SaaS, getting companies up and running to protect critical business data within minutes.
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It provides trusted recovery of data and applications, virtual machines, and containers, along with verifiable recoverability of replicas, cost-optimized cloud data mobility, security and resilient ransomware protection, and flexible copy data management to leverage protected data for DevOps, testing, and analytics. 4 Data Insights Commvault's Data Insights portfolio is an integrated family of solutions for actionable insights, combining Commvault Data Governance, Commvault File Storage Optimization, and Commvault eDiscovery and Compliance.
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This means that customers can gain insights to data that isn’t protected by Commvault to drive analytics and other tasks. Data Storage Hyperscale X Commvault HyperScale X is an intuitive, easy-to-deploy and scale-out, integrated data protection solution to help enterprises transition from legacy scale-up infrastructures.
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Commvault Distributed Storage Commvault Distributed Storage provides software-defined storage built on HyperScale architecture that uses modern distributed system techniques to meet our customers primary, secondary and cloud data needs. With the capability to be deployed on any operating system, hypervisor, container or cloud, this unique platform also has the versatility to deploy in hyperscale or hyperconverged mode.
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It enables businesses of every size to neutralize attacks before they cause harm; detecting and diverting zero-day attacks that evade conventional detection technology and circumvent security controls. Professional & Customer Support Services Commvault offers a wide range of professional and customer support services to complement its product portfolio.
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Commvault Distributed Storage stores, protects and replicates data across any number of private and public cloud data centers and is integrated into our Hyperscale X technology. The advanced software stack of Commvault Distributed Storage simplifies all aspects of storage with a full set of enterprise data capabilities that can be provisioned at the application level and automated.
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We offer various enhanced Customer Success options including the Enterprise Success Program ("ESP") and Metallic Customer Success. Our ESP provides industry experts who provide strategic guidance and technical advice, alongside Success Account Managers, who are all focused on proactively helping our enterprise customers to achieve their goals and are aligned to their business initiatives.
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Current Metallic offerings include data protection for Office 365, virtual machines and Kubernetes, databases, files, Dynamics 365, Salesforce and endpoints. 5 Professional Services Commvault offers a wide range of professional services to complement its product portfolio. We offer multiple levels of customer service that can be tailored to our customers’ needs. Our customer support services consist of: • Real-Time Support.
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The entire program is centered around driving customer adoption, customer satisfaction and quick time to value. • Technology Consulting Services. Our technical consultants ensure that your data protection environment is designed for optimal results, configured quickly, and is easy to maintain. We offer architecture design; implementation; personalization; data migration; and health assessment services.
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We have designed our support infrastructure to be able to scale with the increasing globalization of our customers. • Enhanced Support Options . We offer several enhanced customer support services such as Enterprise Support.
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In addition, we offer customers staff-augmentation options via resident support engineers to assist with rapid expert deployment and operation of the Commvault suite. • Ransomware Recovery Services. Commvault Readiness Solutions provide the resources and expertise to quickly accelerate returning to normal business operations through the proper design, implementation, administration, and support of our customers' data protection environment. • Education Services.
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Our Enterprise Support service is for customers with critical support needs and builds on our 24/7 real-time support deliverables and includes various levels of enhanced services to ensure dedicated support and customized reporting. Enterprise Support adds a specialized team of technical support engineers, an assigned support account manager and innovative tools to achieve our customers’ mission. • Technology Consulting Services.
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We offer training content for learners at all levels, with basic, intermediate, and expert certifications available. We also provide a selection of self-paced online content for our products in our On-Demand Learning Library. • Remote Managed Services. The Commvault Remote Managed Services offering complements our software and SaaS platforms, providing results-oriented data protection to customers worldwide.
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Our technology consultants ensure customers' environments are designed for optimal results and deliver over the long term by installing, configuring, personalizing and validating those environments. We also offer architecture design; implementation; personalization; data migration; and health assessment services. In addition, we offer customers staff-augmentation options to assist with rapid expert deployment of the Commvault suite. • Business Consulting Services.
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We remain committed to providing employees with opportunities and resources that enable them to work successfully and creatively, while also investing in their professional and personal development.
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Our business consultants provide insights that align to how specific businesses gather, retain and employ data. We offer disaster recovery readiness and policy implementation; private cloud services design; data classification and archive policy implementation; and operational efficiency assessment services. • Education Services. We provide global on- and off-site training, and self-paced online alternatives for our products. • Remote Managed Services.
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Throughout fiscal 2023, our employees participated in over 900 training programs, totaling more than 15,000 hours. 8 Diversity, Equity and Inclusion At Commvault, we believe that diversity is a business imperative at the heart of our human capital management strategy.
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Commvault Remote Managed Services provides remote monitoring and management of the Commvault's solutions deployed on a customer's environment. Our engineers configure, maintain and optimize a customer's Commvault software environment remotely via a secure connection.
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CapAbilities (Disability inclusion & Allies) This year, we expanded our culture of belonging through two additional Employee Affinity Groups ("EAG"), Family Support Network and VAST - Vaulters Advocating Sustainable Technology. Foundational to these engagement initiatives is our Courageous Conversations program designed to foster difficult conversations in an open, safe and respectful manner.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisks Related to our International Operations Volatility in the global economy could adversely impact our continued growth, results of operations and our ability to forecast future business. As a global company, we have become increasingly subject to the risks arising from adverse changes in domestic and global economic and political conditions.
Biggest changeAs a global company, we have become increasingly subject to the risks arising from adverse changes in domestic and global economic and political conditions. Uncertainty in the macroeconomic environment and associated global economic conditions have resulted in volatility in credit, equity, debt and foreign currency markets.
Factors that could affect our revenues and operating results include the following: • the unpredictability of the timing and magnitude of orders for our solutions, particularly transactions greater than $100,000 in recent fiscal years, a majority of our quarterly revenues were earned and recorded near the end of each quarter; • the possibility that our customers may cancel, defer or limit purchases as a result of reduced information technology budgets; • the possibility that our customers may defer purchases of our solutions in anticipation of new solutions or updates from us or our competitors; • the ability of our OEMs and resellers to meet their sales objectives; • market acceptance of our new solutions and enhancements; • our ability to control expenses; • changes in our pricing, packaging and distribution terms or those of our competitors; and 19 • the demands on our management, sales force and customer services infrastructure as a result of the introduction of new solutions or updates.
Factors that could affect our revenues and operating results include the following: • the unpredictability of the timing and magnitude of orders for our solutions, particularly transactions greater than $100,000 in recent fiscal years, a majority of our quarterly revenues were earned and recorded near the end of each quarter; • the possibility that our customers may cancel, defer or limit purchases as a result of reduced information technology budgets; • the possibility that our customers may defer purchases of our solutions in anticipation of new solutions or updates from us or our competitors; • the ability of our OEMs and resellers to meet their sales objectives; • market acceptance of our new solutions and enhancements; • our ability to control expenses; • changes in our pricing, packaging and distribution terms or those of our competitors; and • the demands on our management, sales force and customer services infrastructure as a result of the introduction of new solutions or updates.
Our sales cycle for all of our products and services is subject to significant risks and delays over which we have little or no control, including: • our customers’ budgetary constraints; • the timing of our customers’ budget cycles and approval processes; • our customers’ willingness to replace their current software solutions; • our need to educate potential customers about the uses and benefits of our solutions; and • the timing of the expiration of our customers’ current agreements for similar solutions.
Our sales cycle for all of our products and services is subject to significant risks and delays over which we have little or no control, including: • our customers’ budgetary constraints; • the timing of our customers’ budget cycles and approval processes; • our customers’ willingness to replace their current solutions; • our need to educate potential customers about the uses and benefits of our solutions; and • the timing of the expiration of our customers’ current agreements for similar solutions.
We also expect increased competition from OEMs, including those we partner with, and from systems and network management companies, especially those that have historically focused on the mainframe computer market and have been making acquisitions and broadening their efforts to include data management and products. We expect that competition will increase as a result of future industry consolidation.
We also expect increased competition from OEMs, including those we partner with, and from systems and network management companies, especially those that have historically focused on the mainframe computer market and have been making acquisitions and broadening their efforts to include data protection products. We expect that competition will increase as a result of future industry consolidation.
Any failure on our part to maintain and/or expand our network of resellers could impair our ability to grow revenues in the future. Some of our resellers may, either independently or jointly with our competitors, develop and market solutions that compete with our offerings. If this were to occur, these resellers might discontinue marketing and distributing our solutions.
Any failure on our part to maintain and/or expand our network of resellers could impair our ability to grow revenues in the future. 11 Some of our resellers may, either independently or jointly with our competitors, develop and market solutions that compete with our offerings. If this were to occur, these resellers might discontinue marketing and distributing our solutions.
The loss of key employees could result in significant disruptions to our business, and the 15 integration and training of replacement personnel could be costly, time consuming, cause additional disruptions to our business and be unsuccessful. Borrowing against our revolving credit facility could adversely affect our operations and financial results. We have a $100 million revolving credit facility.
The loss of key employees could result in significant disruptions to our business, and the integration and training of replacement personnel could be costly, time consuming, cause additional disruptions to our business and be unsuccessful. Borrowing against our revolving credit facility could adversely affect our operations and financial results. We have a $100 million revolving credit facility.
Failure to safeguard data adequately or to destroy data securely could subject us to regulatory investigations or enforcement actions under applicable data security, unfair practices or consumer protection laws which could have an adverse effect on our business, financial condition or operating results.
Failure to 16 safeguard data adequately or to destroy data securely could subject us to regulatory investigations or enforcement actions under applicable data security, unfair practices or consumer protection laws which could have an adverse effect on our business, financial condition or operating results.
Demand for data management solutions is linked to growth in the amount of data generated and stored, demand for data retention and management (whether as a result of regulatory requirements or otherwise) and demand for and adoption of new backup devices and networking technologies.
Demand for data protection solutions is linked to growth in the amount of data generated and stored, demand for data retention and management (whether as a result of regulatory requirements or otherwise) and demand for and adoption of new backup devices and networking technologies.
The scope and interpretation of these laws could change and the associated burdens and our compliance costs could increase in the future. Change in senior management or key personnel could cause disruption in the Company and have a material effect on our business.
The scope and interpretation of these laws could change and the associated burdens and our compliance costs could increase in the future. Changes in senior management or key personnel could cause disruption in the Company and have a material effect on our business.
They have no minimum sales requirements and can terminate our relationship at any time. These OEMs also could choose to develop their own data management solutions. Our OEM partners compete with one another. If one of our OEM partners views our arrangement with another OEM as competing, it may decide to stop doing business with us.
They have no minimum sales requirements and can terminate our relationship at any time. These OEMs also could choose to develop their own data protection solutions. Our OEM partners compete with one another. If one of our OEM partners views our arrangement with another OEM as competing, it may decide to stop doing business with us.
The global spread of COVID-19 has created significant uncertainty, and economic disruption. We have undertaken measures to protect our employees, partners, and clients, including allowing our employees to work remotely; however, there can be no assurance that these measures will be sufficient or that we can implement them without adversely affecting our business operations.
The global spread of COVID-19 has created significant uncertainty, and economic disruption. We have undertaken measures to protect our employees, partners, and customers, including allowing our employees to work remotely; however, there can be no assurance that these measures will be sufficient or that we can implement them without adversely affecting our business operations.
The market price of our common stock could be subject to significant fluctuations in response to: • variations in our quarterly or annual operating results; • changes in financial estimates, treatment of our tax assets or liabilities or investment recommendations by securities analysts following our business or our competitors; • the public’s response to our press releases, rumors, our other public announcements and our filings with the SEC; • changes in accounting standards, policies, guidance or interpretations or principles; • sales of common stock by our directors, officers and significant stockholders; • announcements of technological innovations or enhanced or new products by us or our competitors; • our failure to achieve operating results consistent with securities analysts’ projections; • the operating and stock price performance of other companies that investors may deem comparable to us; • broad market and industry factors; and • other events or factors, including those resulting from war, incidents of terrorism or responses to such events.
The market price of our common stock could be subject to significant fluctuations in response to: • variations in our quarterly or annual operating results; • changes in financial estimates, treatment of our tax assets or liabilities or investment recommendations by securities analysts following our business or our competitors; • the public’s response to our press releases, rumors, our other public announcements and our filings with the SEC; 21 • changes in accounting standards, policies, guidance or interpretations or principles; • sales of common stock by our directors, officers and significant stockholders; • announcements of technological innovations or enhanced or new products by us or our competitors; • our failure to achieve operating results consistent with securities analysts’ projections; • the operating and stock price performance of other companies that investors may deem comparable to us; • broad market and industry factors, including financial instability of banking institutions; and • other events or factors, including those resulting from war, incidents of terrorism or responses to such events.
The principal competitive factors in our industry include product functionality and integration, platform coverage, ability to scale, price, worldwide sales infrastructure, global technical support, name recognition and reputation. If we are unable to address these factors, our competitive position could weaken and we could experience a decline in revenues that could adversely affect our business.
The principal competitive factors in our industry include product functionality and integration, platform coverage, ability to scale, price, worldwide sales infrastructure, global technical support, brand recognition and reputation. If we are unable to address these factors, our competitive position could weaken and we could experience a decline in revenues that could adversely affect our business.
Most of our new customers have installed data and information management systems, which gives an incumbent competitor an advantage in retaining a customer because it already understands the network infrastructure, user demands and information technology needs of the customer, and also because some customers are reluctant to invest the time and money necessary to change vendors.
Most of our new customers have installed data management systems, which gives an incumbent competitor an advantage in retaining a customer because the incumbent already understands the network infrastructure, user demands and information technology needs of the customer, and because some customers are reluctant to invest the time and money necessary to change vendors.
Any economic failure or other material disruption caused by war or natural disasters, including fires, floods, hurricanes, earthquakes, and tornadoes; power loss or shortages; environmental disasters; telecommunications or business information systems failures or similar events could also adversely affect our ability to conduct business.
Any economic failure or other material disruption caused by war, climate change or natural disasters, including fires, floods, hurricanes, earthquakes, and tornadoes; power loss or shortages; environmental disasters; telecommunications or business information systems failures or similar events could also adversely affect our ability to conduct business.
Any additional future acquisitions may also result in the incurrence of indebtedness or the issuance of additional equity securities. We could also experience financial or other setbacks if transactions encounter unanticipated problems, including problems related to execution, integration or underperformance relative to prior expectations.
Any additional future acquisitions may also result in the incurrence of indebtedness or the issuance of additional equity securities. We could also experience financial or other setbacks if transactions encounter unanticipated problems, including problems related to governmental approval, execution, integration or underperformance relative to prior expectations.
However, our agreements with resellers are generally not exclusive, are generally renewable annually, typically do not contain minimum sales requirements and in many cases may be terminated by either party without cause. Many of our resellers carry data management solutions that compete with ours.
However, our agreements with resellers are generally not exclusive, are generally renewable annually, typically do not contain minimum sales requirements and in many cases may be terminated by either party without cause. Many of our resellers carry data protection solutions that compete with ours.
The market prices of data management solutions companies have been extremely volatile. Stock prices of many of those companies have often fluctuated in a manner unrelated or disproportionate to their operating performance. In the past, following periods of market volatility, stockholders have often instituted securities class action litigation.
The market prices of data protection solutions companies have been extremely volatile. Stock prices of many of those companies have often fluctuated in a manner unrelated or disproportionate to their operating performance. In the past, following periods of market volatility, stockholders have often instituted securities class action litigation.
Our future financial performance will depend in large part on continued growth in the number of organizations adopting data management solutions for their environments. The market for data management solutions may not continue to grow at historic rates, or at all.
Our future financial performance will depend in large part on continued growth in the number of organizations adopting data protection solutions for their environments. The market for data protection solutions may not continue to grow at historic rates, or at all.
Because our solutions are concentrated within the data management market, if the demand for backup and data management solutions devices declines, our sales, profitability and financial condition would be materially adversely affected. Furthermore, the data management solutions market is dynamic and evolving.
Because our solutions are concentrated within the data protection market, if the demand for backup and data protection solutions devices declines, our sales, profitability and financial condition would be materially adversely affected. Furthermore, the data protection solutions market is dynamic and evolving.
Volatile economic conditions, including those related to the COVID-19 pandemic and its variants, or the war in Ukraine and the global response, could result in our customers and resellers facing liquidity concerns leading to them not being able to satisfy their payment obligations to us, which would have a material adverse effect on our financial condition, operating results and cash flows.
Volatile economic conditions, including those related to the COVID-19 pandemic and its variants, the war in Ukraine and the global response, or the financial instability of banking institutions could result in our customers and resellers facing liquidity concerns leading to them not being able to satisfy their payment obligations to us, which would have a material adverse effect on our financial condition, operating results and cash flows.
The emergence of a public health threat could pose the risk that our employees, partners, and clients may be prevented from conducting business activities at full capacity for an indefinite period, due to the spread of the disease or suggested or mandated by governmental authorities.
The emergence of a public health threat could pose the risk that our employees, partners, and customers may be prevented from conducting business activities at full capacity for an indefinite period, due to 15 the spread of the disease or suggested or mandated by governmental authorities.
We depend on growth in the data management solutions market, and lack of growth or contraction in this market could have a material adverse effect on our sales and financial condition.
We depend on growth in the data protection solutions market, and lack of growth or contraction in this market could have a material adverse effect on our sales and financial condition.
It is also costly and time-consuming to change data and information management systems.
It is also costly and time-consuming to change data management systems.
Moreover, these conditions can affect the rate of information technology spending and may adversely affect our clients’ willingness to purchase our solutions, delay prospective clients’ purchasing decisions, reduce the value or duration of their contracts, cause our clients to request concessions including extended payment terms or better pricing, or affect attrition rates, all of which could adversely affect our future sales and operating results.
Moreover, these conditions can affect the rate of information technology spending and may adversely affect our customers’ willingness to purchase our solutions, delay prospective customers’ purchasing decisions, reduce the value or duration of their contracts, cause our customers to request concessions including extended payment terms or better pricing, or affect attrition rates, all of which could adversely affect our future sales and operating results.
These resellers may give a higher priority to other software applications, including those of our competitors, or may not continue to carry data management solutions.
These resellers may give a higher priority to other software applications, including those of our competitors, or may not continue to carry data protection solutions.
Our industry is intensely competitive, and many of our competitors have greater financial, technical and sales and marketing resources and larger installed customer bases, which could enable them to compete more effectively than we do.
Risks Related to Our Business Our industry is intensely competitive, and many of our competitors have greater financial, technical and sales and marketing resources and larger installed customer bases, which could enable them to compete more effectively than we do.
If at the end of the initial term, customers elect to not renew, or they renew terms that are less favorable to us, our business and financial performance might be adversely impacted. 12 In periods of volatile economic conditions, our exposure to credit risk and payment delinquencies on our accounts receivable significantly increases.
If at the end of the initial term, customers elect to not renew, or they renew terms that are less favorable to us, our business and financial performance might be adversely impacted. In periods of volatile economic conditions, our exposure to credit risk and payment delinquencies on our accounts receivable significantly increases. Our outstanding accounts receivables are generally not secured.
The data and information management software market is intensely competitive, highly fragmented and characterized by rapidly changing technology and evolving standards, changing customer requirements and frequent new product introductions. Competitors vary in size and in the scope and breadth of the products and services offered.
The data protection and replication market is intensely competitive, highly fragmented and characterized by rapidly changing technology and evolving standards, changing customer requirements and frequent new product introductions. Competitors vary in size and in the scope and breadth of the products and services offered.
In addition to facing risks similar to the risks faced by our domestic operations, our international operations are also subject to risks related to the differing legal, political, social and regulatory requirements and economic conditions of many countries, including: • adverse effects in economic conditions in the countries in which we operate related specifically to the COVID-19 pandemic and the governmental regulations put in place as a result of the virus, and the war in Ukraine; • difficulties in staffing and managing our international operations; 16 • foreign countries may impose additional withholding taxes or otherwise tax our foreign income, impose tariffs or adopt other restrictions on foreign trade or investment, including currency exchange controls; • difficulties in coordinating the activities of our geographically dispersed and culturally diverse operations; • general economic conditions in the countries in which we operate, including seasonal reductions in business activity in the summer months in Europe and in other periods in other countries, could have an adverse effect on our earnings from operations in those countries; • imposition of, or unexpected adverse changes in, foreign laws or regulatory requirements may occur, including those pertaining to sanctions, export restrictions, privacy and data protection, trade and employment restrictions and intellectual property protections; • longer payment cycles for sales in foreign countries and difficulties in collecting accounts receivable; • competition from local suppliers; • greater risk of a failure of our employees and partners to comply with both U.S. and foreign laws, including antitrust regulations, the U.S.
Expansion of our international operations will require a significant amount of attention from our management and substantial financial resources and might require us to add qualified management in these markets. 18 In addition to facing risks similar to the risks faced by our domestic operations, our international operations are also subject to risks related to the differing legal, political, social and regulatory requirements and economic conditions of many countries, including: • adverse effects in economic conditions in the countries in which we operate related specifically to the COVID-19 pandemic and the governmental regulations put in place as a result of the virus, the war in Ukraine, and the financial instability of banking institutions; • difficulties in staffing and managing our international operations; • foreign countries may impose additional withholding taxes or otherwise tax our foreign income, impose tariffs or adopt other restrictions on foreign trade or investment, including currency exchange controls; • difficulties in coordinating the activities of our geographically dispersed and culturally diverse operations; • general economic conditions in the countries in which we operate, including seasonal reductions in business activity in the summer months in Europe and in other periods in other countries, could have an adverse effect on our earnings from operations in those countries; • imposition of, or unexpected adverse changes in, foreign laws or regulatory requirements may occur, including those pertaining to sanctions, export restrictions, privacy and data protection, trade and employment restrictions and intellectual property protections; • longer payment cycles for sales in foreign countries and difficulties in collecting accounts receivable; • competition from local suppliers; • greater risk of a failure of our employees and partners to comply with both U.S. and foreign laws, including antitrust regulations, the U.S.
These events may cause us or our customers to temporarily suspend operations and could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could affect demand for our solutions, our ability to collect against existing trade receivables and our operating results. 20 Item 1B. Unresolved Staff Comments None.
These events may cause us or our customers to temporarily suspend operations and could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could affect demand for our solutions, our ability to collect against existing trade receivables and our operating results.
Developing software is expensive, and the investment in product development may involve a long payback cycle. Our research and development expenses were $153.6 million, or 20% of our total revenues in fiscal 2022, $133.4 million, or 18% of our total revenues in fiscal 2021 and $110.0 million, or 16% of our total revenues in fiscal 2020.
Developing software is expensive, and the investment in product development may involve a long payback cycle. Our research and development expenses were $141.8 million, or 18% of our total revenues in fiscal 2023, $153.6 million, or 20% of our total revenues in fiscal 2022 and $133.4 million, or 18% of our total revenues in fiscal 2021.
If our customers do not renew their annual maintenance and support agreements or transition to other products or services, either at all, or on terms that are less favorable to us, our business and financial performance might be adversely impacted. Additionally, a significant amount of our revenues are from term-based, or subscription license arrangements.
If our customers do not renew their annual maintenance and support agreements either at all, or on terms that are less favorable to us, our business and financial performance might be adversely impacted. Additionally, a significant amount of our revenues are from term-based, or subscription license arrangements. The arrangements are typically one to three years in duration.
If Arrow was to discontinue or reduce the sales of our solutions or if our agreement with Arrow was 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 it could have a material adverse effect on our future revenues.
If Arrow were to discontinue or reduce the sales of our solutions or if our agreement with Arrow was terminated, and if we were unable to take back the management of our reseller channel or find another distributor to replace Arrow, there could be a material adverse effect on our future business.
In addition, these resellers would have an advantage over us when marketing their competing products and related services because of their existing customer relationships. The occurrence of any of these events could have a material adverse effect on our revenues and results of operations. In addition, we have a distribution agreement covering our North American commercial markets and our U.S.
In addition, these resellers would have an advantage over us when marketing their competing products and related services because of their existing customer relationships. The occurrence of any of these events could have a material adverse effect on our revenues and results of operations.
We develop solutions that interoperate with certain products, operating systems and hardware developed by others, and if the developers of those operating systems and hardware do not cooperate with us or we are unable to devote the necessary resources so that our solutions interoperate with those systems, our development efforts may be delayed or foreclosed and our business and results of operations may be adversely affected.
Due to the potential for extended period of collection, we may be exposed to more significant credit risk. 12 We develop solutions that interoperate with certain products, operating systems and hardware developed by others, and if the developers of those operating systems and hardware do not cooperate with us or we are unable to devote the necessary resources so that our solutions interoperate with those systems, our development efforts may be delayed or foreclosed and our business and results of operations may be adversely affected.
In addition, we have transitioned a more significant percentage of our revenue to subscription, or term based, arrangements. In these arrangements, our customers may pay for solutions over a period of several years. Due to the potential for extended period of collection, we may be exposed to more significant credit risk.
In addition, we have transitioned a more significant percentage of our revenue to subscription, or term based, arrangements. In these arrangements, our customers may pay for solutions over a period of several years.
Government demand for our solutions may be more volatile as they are affected by public sector budgetary cycles, funding authorizations, and the potential for funding reductions or delays, making the time to close such transactions more difficult to predict. We are subject to several local, state, federal and foreign laws and regulations regarding privacy and data protection.
Government demand for our solutions may be more volatile as they are affected by stringent regulations, public sector budgetary cycles, funding authorizations, and the potential for funding reductions or delays, making the time to close such transactions more difficult to predict.
Our outstanding accounts receivables are generally not secured. Our standard terms and conditions permit payment within a specified number of days following the receipt of our solution.
Our standard terms and conditions permit payment within a specified number of days following the receipt of our solution.
If such disruptions result in cancellations of customer orders or contribute to a general decrease in economic activity or corporate spending on IT, or impair our ability to meet our customer demands, our operating results and financial condition could be materially adversely affected.
If such disruptions result in cancellations of customer orders or contribute to a general decrease in economic activity or corporate spending on IT, or impair our ability to meet our customer demands, our operating results and financial condition could be materially adversely affected. There is also an increasing concern over the risks of climate change and related environmental sustainability matters.
However, these provisions could apply even if an acquisition of control of the Company may be considered beneficial by some shareholders and could delay or prevent an acquisition of control that our Board of Directors determines is not in the best interests of our Company and our shareholders.
However, these provisions could apply even if an acquisition of control of the Company may be considered beneficial by some shareholders and could delay or prevent an acquisition of control that our Board of Directors determines is not in the best interests of our Company and our shareholders. 22 General Risks Our business could be materially and adversely affected as a result of natural disasters, terrorism or other catastrophic events.
These factors make it difficult for our customers, our vendors and us to accurately forecast and plan future business activities. These factors could cause customers to slow or defer spending on our solutions, which would delay and lengthen sales cycles and negatively affect our results of operations.
These factors could cause customers to slow or defer spending on our solutions, which would delay and lengthen sales cycles and negatively affect our results of operations.
Increased competition could harm our business by causing, among other things, price reductions of our products, reduced profitability and loss of market share. 11 We rely on indirect sales channels, such as value-added resellers, systems integrators, corporate resellers, distributors, and OEMs, for the distribution of our solutions, and the failure of these channels to effectively sell our solutions could have a material adverse effect on our revenues and results of operations.
We rely on indirect sales channels, such as value-added resellers, systems integrators, corporate resellers, distributors, and OEMs, for the distribution of our solutions, and the failure of these channels to effectively sell our solutions could have a material adverse effect on our revenues and results of operations.
If we fail to accurately predict our requirements, we may be unable to fulfill those orders or we may be required to record charges for excess inventory.
If we fail to accurately predict our requirements, we may be unable to fulfill those orders or we may be required to record charges for excess inventory. Any of the foregoing could adversely affect our business, financial condition or results of operations.
You should also refer to the other information set forth in this Annual Report, including our financial statements and the related notes. Risks Related to Our Business We have engaged, and may continue to engage, in strategic acquisitions or transactions, which could have a material adverse effect on our business, results of operations, financial condition and cash flows.
We have engaged, and may continue to engage, in strategic acquisitions or transactions, which could have a material adverse effect on our business, results of operations, financial condition and cash flows.
Any failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm our operating results or cause us to fail to timely meet our regulatory reporting obligations. We may experience a decline in revenues or volatility in our quarterly operating results, which may adversely affect the market price of our common stock.
Any failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm our operating results or cause us to fail to timely meet our regulatory reporting obligations.
Selling to government entities can be highly competitive, expensive and time consuming, often requiring significant upfront time and expense without any assurance that we will successfully sell our solutions.
This customer base experiences budgetary constraints or shifts in spending priorities regularly which may adversely affect sales of our solutions to government entities. Selling to government entities can be highly competitive, expensive and time consuming, often requiring significant upfront time and expense without any assurance that we will successfully sell our solutions.
The occurrence of any of the foregoing factors may have a material adverse effect on our business and results of operations. We may experience fluctuations in foreign currency exchange rates that could adversely impact our results of operations. Our international sales are generally denominated in foreign currencies, and this revenue could be materially affected by currency fluctuations.
Deterioration of economic conditions in the countries in which we do business could also cause slower or impaired collections on accounts receivable. We may experience fluctuations in foreign currency exchange rates that could adversely impact our results of operations. Our international sales are generally denominated in foreign currencies, and this revenue could be materially affected by currency fluctuations.
Federal Government market with Arrow. Pursuant to this distribution agreement, Arrow’s primary role is to enable a more efficient and effective distribution channel for our products and services by managing our resellers and leveraging their industry experience. Arrow accounted for approximately 37% of our total revenues for fiscal 2022 and 36% of our total revenues for fiscal 2021.
In addition, we have a non-exclusive distribution agreement with Arrow pursuant to which Arrow’s primary role is to enable a more efficient and effective distribution channel for our products and services by managing our resellers and leveraging their industry experience.
Uncertainty in the macroeconomic environment and associated global economic conditions have resulted in volatility in credit, equity, debt and foreign currency markets. These global economic conditions can result in slower economic activity, decreased consumer confidence, reduced corporate profits and capital spending, inflation, adverse business conditions and liquidity concerns. There has also been increased volatility in foreign exchange markets.
These global economic conditions can result in slower economic activity, decreased consumer confidence, reduced corporate profits and capital spending, inflation, adverse business conditions and liquidity concerns. There has also been increased volatility in foreign exchange markets. These factors make it difficult for our customers, our vendors and us to accurately forecast and plan future business activities.
As a result of past discovered errors, we experienced delays and lost revenues while we corrected those solutions.
Despite extensive testing by us and customers, we have discovered errors in our solutions in the past and will do so in the future. As a result of past discovered errors, we experienced delays and lost revenues while we corrected those solutions.
IT system failures, network disruptions and breaches of data security could also result in the unintentional disclosure of customer or our information as well as damage our reputation.
IT system failures, network disruptions and breaches of data security could also result in the unintentional disclosure of customer or our information as well as damage our reputation. There can be no assurance that a system failure, network disruption or data security breach will not have a material adverse effect on our financial condition and operating results.
Risks Related to Information Technology and Security We may be subject to IT system failures, network disruptions and breaches in data security.
The occurrence of any of the foregoing factors may have a material adverse effect on our business and results of operations. Risks Related to Information Technology and Security We may be subject to IT system failures, network disruptions and breaches in data security.
Securities litigation could have a substantial cost and divert resources and the attention of management from our business. General Risks Our business could be materially and adversely affected as a result of natural disasters, terrorism or other catastrophic events.
Securities litigation could have a substantial cost and divert resources and the attention of management from our business.
A change in these principles or interpretations could have a significant effect on our reported financial results, and may even affect the reporting of transactions completed before the announcement or effectiveness of a change. 18 Risks Related to our Common Stock Certain provisions of our certificate of formation and our amended and restated bylaws or Delaware law could prevent or delay a potential acquisition of control of our Company, which could decrease the trading price of our common stock.
Certain provisions of our certificate of formation and our amended and restated bylaws or Delaware law could prevent or delay a potential acquisition of control of our Company, which could decrease the trading price of our common stock.
We may not accomplish these development efforts quickly or cost-effectively, and it is not clear what the relative growth rates of these operating systems and hardware will be. We sell a backup appliance which integrates our solution with hardware.
We may not accomplish these development efforts quickly or cost-effectively, and it is not clear what the relative growth rates of these operating systems and hardware will be. We encounter long sales and implementation cycles, particularly for our larger customers, which could have an adverse effect on the size, timing and predictability of our revenues.
As a result, our failure to maintain high quality support and professional services would have a material adverse effect on our sales of software applications and results of operations. A portion of our revenue is generated by sales to government entities, which are subject to a number of challenges and risks.
As a result, our failure to maintain high quality support and professional services would have a material adverse effect on our sales of software applications and results of operations. We implemented a restructuring program in fiscal 2022, which we cannot guarantee will achieve its intended result.
We have significant sales and services operations outside the United States and derive a substantial portion of our revenues from these operations. We also plan to continue to expand our international operations. We generated approximately 48% of our revenues from outside the United States in both fiscal 2022 and fiscal 2021.
Our international sales and operations are subject to factors that could have an adverse effect on our results of operations. We have significant sales and services operations outside the United States and derive a substantial portion of our revenues from these operations.
If this market fails to grow or grows more slowly than we currently anticipate, our sales and profitability could be adversely affected. Our complex solutions may contain undetected errors, which could adversely affect not only their performance but also our reputation and the acceptance of our solutions in the market.
Our complex solutions may contain undetected errors, which could adversely affect not only their performance but also our reputation and the acceptance of our solutions in the market. Our complex solutions may contain undetected errors or failures, especially when they are made generally available or new versions are released.
Sales to U.S. and foreign federal, state, and local governmental agencies account for a portion of our revenue, and we may in the future increase sales to government entities. This customer base experiences budgetary constraints or shifts in spending priorities regularly which may adversely affect sales of our solutions to government entities.
A portion of our revenue is generated by sales to government entities, which are subject to a number of challenges and risks. Sales to global federal, state, and local governmental agencies account for a portion of our revenue, and we may in the future increase sales to government entities.
The perception that the COVID-19 pandemic has made companies’ IT systems more vulnerable has increased the already significant volume of such attempts. These attempts, which might be related to industrial, corporate or other espionage, criminal hackers or state-sponsored intrusions, include trying to covertly introduce malware or ransomware to our environments and impersonating authorized users.
These attempts, which might be related to industrial, corporate or other espionage, criminal hackers or state-sponsored intrusions, include trying to covertly introduce malware or ransomware to our environments and impersonating authorized users. 19 Third-party service providers that we may rely on to back up and process our confidential information may also be subject to similar threats.
In the event of a security breach, these laws may subject us to incident response, notice and remediation costs.
In addition, any security breach that results in the release of, or unauthorized access to, personal information, or other confidential information of individuals could subject us to incident response, notice and remediation costs.
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The arrangements are typically one to three years in duration.
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You should also refer to the other information set forth in this Annual Report, including our financial statements and the related notes.
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Any of the foregoing could adversely affect our business, financial condition or results of operations. 13 We encounter long sales and implementation cycles, particularly for our larger customers, which could have an adverse effect on the size, timing and predictability of our revenues.
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Increased competition could harm our business by causing, among other things, price reductions of our products, reduced profitability and loss of market share.
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Our complex solutions may contain undetected errors or failures, especially when they are made generally available or new versions are released. Despite extensive testing by us and customers, we have discovered errors in our solutions in the past and will do so in the future.
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Arrow accounted for approximately 37% of our total revenues for both fiscal 2023 and fiscal 2022 and 36% of our total revenues in fiscal 2021.
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Deterioration of economic conditions in the countries in which we do business could also cause slower or impaired collections on accounts receivable. Our international sales and operations are subject to factors that could have an adverse effect on our results of operations.
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If this market fails to grow or grows more slowly than we currently anticipate, our sales and profitability could be adversely affected. Our as-a-service offerings require costly and continual infrastructure investments and if these investments do not yield the expected return, our business and financial performance might be adversely impacted.
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International revenue increased 8% in fiscal 2022 compared to fiscal 2021. Expansion of our international operations will require a significant amount of attention from our management and substantial financial resources and might require us to add qualified management in these markets.
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In order to deliver our as-a-service offerings via a cloud-based deployment, we have made and will continue to make capital investments and incur substantial costs to implement and maintain this alternative business model.
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There can be no assurance that a system failure, network disruption or data security breach will not have a material adverse effect on our financial condition and operating results. 17 Bad actors regularly attempt to gain unauthorized access to our IT systems, and many such attempts are increasingly sophisticated.
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In addition, as we look to deliver new or different cloud-based services, we are making significant technology investments to deliver new capabilities and advance our software to deliver cloud-native customer experiences. We expect that over time the percentage of our revenue attributable to our as-a-service offerings will continue to 13 increase.
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Third-party service providers that we may rely on to back up and process our confidential information may also be subject to similar threats.
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If these offerings do not garner widespread market adoption, or there is a reduction in demand for these services caused by a lack of customer acceptance, technological challenges, weakening economic or political conditions, security or privacy concerns, inability to properly manage such services, competing technologies and products, decreases in corporate spending or otherwise, our financial results and competitive position could suffer.
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If these investments do not yield the expected return, or we are unable to decrease the cost of delivering our cloud services, our gross margins, overall financial results, business model and competitive position could suffer. We rely on third-party hosting providers to deliver our as-a-service offerings.
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Therefore, any disruption or interference with our use of these services could adversely affect our business. Our use of third-party hosting facilities requires us to rely on the functionality and availability of the third parties’ services, as well as their data security, which despite our due diligence, may be or become inadequate.
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Our continued growth depends in part on the ability of our existing and potential customers to use and access our cloud services or our website to download our software within an acceptable amount of time. Third-party service providers operate platforms that we access, and we are vulnerable to their service interruptions.
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We may experience interruptions, delays, and outages in service and availability due to problems with our third-party service providers’ infrastructure. This infrastructure’s lack of availability could be due to many potential causes, including technical failures, power shortages, natural disasters, fraud, terrorism, or security attacks that we cannot predict or prevent.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Our principal administrative, sales, marketing, customer support and research and development facility is located at our owned corporate headquarters in Tinton Falls, New Jersey.
Biggest changeItem 2. Properties Our principal administrative, sales, marketing, customer support and research and development facility is located at our owned corporate headquarters in Tinton Falls, New Jersey. In January 2023 we entered into an agreement to sell the property.
In addition, we have offices in the United States in California and Texas; and outside the United States in Australia, Austria, Belgium, Brazil, Canada, China, Denmark, France, Germany, Hong Kong, India, Israel, Italy, Japan, Netherlands, Poland, Russia, Saudi Arabia, Singapore, South Africa, South Korea, Spain, Sweden, Switzerland, Taiwan, United Arab Emirates, and United Kingdom.
In addition, we have offices in the United States in California, Florida and Texas; and outside the United States in Australia, Austria, Belgium, Canada, China, Denmark, France, Germany, Hong Kong, India, Israel, Italy, Netherlands, Poland, Saudi Arabia, Singapore, South Africa, Spain, Sweden, Switzerland, United Arab Emirates, and United Kingdom.
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The agreement includes a due diligence period for the buyer, is contingent on receiving approvals from certain government agencies, and includes other customary closing conditions. We believe the sale will likely close in the first half of fiscal 2024. Upon closing of the transaction, Commvault will enter into a lease for a portion of the premises.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings From time to time, we may become involved in legal proceedings arising in the ordinary course of business. We do not believe that we are currently party to any pending legal action that could reasonably be expected to have a material adverse effect on our business or operating results.
Biggest changeItem 3. Legal Proceedings From time to time, we are subject to claims in legal proceedings arising in the normal course of business. We do not believe that we are currently party to any pending legal action that could reasonably be expected to have a material adverse effect on our business or operating results.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe performance graph shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of Commvault under the Securities Act or the Exchange Act. 3/31/2017 3/31/2018 3/31/2019 3/31/2020 3/31/2021 3/31/2022 Commvault 100.0 112.6 127.4 79.7 127.0 130.6 Nasdaq Composite Index 100.0 119.5 130.7 130.3 224.1 240.5 Nasdaq Computer Index 100.0 126.0 140.5 157.6 276.4 332.1 23 Issuer Purchases of Equity Securities During the three months ended March 31, 2022, we repurchased $39.8 million of common stock, or approximately 0.6 million shares, under our repurchase program.
Biggest changeInformation used in the graph was obtained from Nasdaq, a source we believe to be reliable, but we are not responsible for any errors or omissions in such information. 3/31/2018 3/31/2019 3/31/2020 3/31/2021 3/31/2022 3/31/2023 Commvault 100.00 113.18 70.77 112.76 116.00 99.20 Nasdaq Composite Index 100.00 109.43 109.01 187.54 201.33 173.03 Nasdaq Computer Index 100.00 111.52 125.07 219.28 263.47 235.80 26 Issuer Purchases of Equity Securities During the three months ended March 31, 2023, we repurchased $60.8 million of common stock, or approximately 1.0 million shares, under our repurchase program.
Our future decisions concerning the payment of dividends on our common stock will depend upon our results of operations, financial condition and capital expenditure plans, as well as any other factors that the Board of Directors, in its sole discretion, may consider relevant. 22 Stock Performance Graph The graph set forth below compares the cumulative total stockholder return on our common stock between March 31, 2017 and March 31, 2022, with the cumulative total return of (i) The Nasdaq Computer Index and (ii) The Nasdaq Composite Index, over the same period.
Our future decisions concerning the payment of dividends on our common stock will depend upon our results of operations, financial condition and capital expenditure plans, as well as any other factors that the Board of Directors, in its sole discretion, may consider relevant. 25 Stock Performance Graph The graph set forth below compares the cumulative total stockholder return on our common stock between March 31, 2018 and March 31, 2023, with the cumulative total return of (i) The Nasdaq Computer Index and (ii) The Nasdaq Composite Index, over the same period.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market for our Common Stock Our common stock is listed and traded on The Nasdaq Global Market under the symbol “CVLT”. Stockholders As of May 3, 2022, there were approximately 45 holders of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market for our Common Stock Our common stock is listed and traded on The Nasdaq Stock Market under the symbol “CVLT”. Stockholders As of May 3, 2023, there were approximately 43 holders of our common stock.
This graph assumes the investment of $100,000 on March 31, 2017 in our common stock, The Nasdaq Composite Index and The Nasdaq Computer Index, and assumes the reinvestment of dividends, if any. The graph assumes the initial value of our common stock on March 31, 2017 was the closing sales price of $50.80 per share.
This graph assumes the investment of $100,000 on March 31, 2018 in our common stock, The Nasdaq Composite Index and The Nasdaq Computer Index, and assumes the reinvestment of dividends, if any. The graph assumes the initial value of our common stock on March 31, 2018 was the closing sales price of $57.20 per share.
Period Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced programs Approximate dollar value of shares that may yet be purchased under the program January 1-31, 2022 277,900 $ 68.15 277,900 * February 1-28, 2022 144,900 65.16 144,900 * March 1-31, 2022 178,000 64.29 178,000 * Three months ended March 31, 2022 600,800 $ 66.29 600,800 *During the fourth quarter of fiscal 2022 we completed a share repurchase program that was commenced in January 2021.
A summary of our repurchases of common stock is as follows: Period Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced programs Approximate dollar value of shares that may yet be purchased under the program (in thousands) January 1-31, 2023 284,000 $ 60.37 284,000 $142,725 February 1-28, 2023 513,000 62.77 513,000 110,526 March 1-31, 2023 203,500 56.25 203,500 99,079 * Three months ended March 31, 2023 1,000,500 $ 60.76 1,000,500 *On April 20, 2023, the Board of Directors approved an increase in our share repurchase program so that $250.0 million was available.
On April 21, 2022 the Board of Directors approved a new share repurchase program of $250.0 million. The Board's authorization has no expiration date. Item 6. [Reserved]
The Board's authorization has no expiration date. Item 6. [Reserved]
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Information used in the graph was obtained from Nasdaq, a source we believe to be reliable, but we are not responsible for any errors or omissions in such information.
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As a result, $99.1 million remained available under the current authorization.
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During the year ended March 31, 2022, we repurchased $305.2 million of common stock, or approximately 4.3 million shares, under our repurchase program.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following chart summarizes the cash used to repurchase shares of our common stock: 33 A summary of the cash used for the stock repurchase program consists of the following: Year Ended March 31, 2022 2021 2020 2019 2018 Cash used for repurchases (in thousands) $ 305,239 $ 95,259 $ 77,198 $ 132,697 $ 112,218 Shares repurchased (in thousands) 4,307 1,643 1,701 2,115 2,098 Average price per share $ 70.87 $ 57.97 $ 45.37 $ 62.74 $ 53.49 Our summarized annual cash flow information is as follows (in thousands): Year Ended March 31, 2022 2021 2020 Net cash provided by operating activities $ 177,180 $ 123,955 $ 88,464 Net cash provided by (used in) investing activities (24,444) 35,469 (74,005) Net cash used in financing activities (276,088) (74,738) (39,403) Effects of exchange rate — changes in cash (6,378) 16,469 (6,966) Net increase (decrease) in cash and cash equivalents $ (129,730) $ 101,155 $ (31,910) - Net cash provided by operating activities was impacted by: • Fiscal 2022: net income adjusted for the impact of non-cash charges, increases in deferred revenue and accrued expenses, partially offset by increases in accounts receivable and deferred commissions. • Fiscal 2021: net loss adjusted for the impact of non-cash charges, including the impairment of intangible assets, and increases in deferred revenue and accrued expenses, partially offset by increases in accounts receivable and deferred commissions. • Fiscal 2020: net loss adjusted for the impact of non-cash charges and decreases in accounts receivable. - Net cash provided by or used in investing activities was impacted by: • Fiscal 2022: $16.9 million used for the acquisition of TrapX, $3.9 million of capital expenditures and $4.1 million for the purchase of equity securities partially offset by proceeds of $0.5 million related to the sale of an equity investment. • Fiscal 2021: $43.6 million of proceeds of short-term investments of U.S.
Biggest changeWhile we are not obligated to, our current practice is to repurchase shares using at least 75% of free cash flow (operating cash flow less capital expenditures). 36 A summary of the cash used for the stock repurchase program consists of the following: Year Ended March 31, 2023 2022 2021 2020 2019 Cash used for repurchases (in thousands) $ 150,921 $ 305,239 $ 95,259 $ 77,198 $ 132,697 Shares repurchased (in thousands) 2,521 4,307 1,643 1,701 2,115 Average price per share $ 59.90 $ 70.87 $ 57.97 $ 45.37 $ 62.74 Our summarized cash flow information is as follows (in thousands): Year Ended March 31, 2023 2022 Net cash provided by operating activities $ 170,288 $ 177,180 Net cash used in investing activities (5,286) (24,444) Net cash used in financing activities (135,579) (276,088) Effects of exchange rate — changes in cash (9,152) (6,378) Net increase (decrease) in cash and cash equivalents $ 20,271 $ (129,730) - Net cash provided by operating activities was impacted by: • Fiscal 2023: net loss adjusted for the impact of non-cash charges, including the impairment of our owned corporate headquarters, and increases in deferred revenue partially offset by decreases in accrued expenses. • Fiscal 2022: net income adjusted for the impact of non-cash charges and increases in deferred revenue and accrued expenses, partially offset by increases in accounts receivable and deferred commissions. - Net cash used in investing activities was impacted by: • Fiscal 2023: $3.2 million of capital expenditures and $2.1 million for the purchase of equity securities. • Fiscal 2022: $16.9 million used for the acquisition of TrapX, $3.9 million of capital expenditures and $4.1 million for the purchase of equity securities partially offset by proceeds of $0.5 million related to the sale of an equity investment. 37 - Net cash used in financing activities was impacted by: • Fiscal 2023: $150.9 million used to repurchase shares of our common stock under our repurchase program, $0.1 million of debt issuance costs paid partially offset by $15.4 million of proceeds from the exercise of stock options and the Employee Stock Purchase Plan. • Fiscal 2022: $305.2 million used to repurchase shares of our common stock under our repurchase program, $0.6 million of debt issuance costs paid partially offset by $29.7 million of proceeds from the exercise of stock options and the Employee Stock Purchase Plan.
We are continuing to pursue an aggressive product development program in both data and information management solutions. Our data management solutions include not only traditional backup, but also new innovations in de-duplication, data movement, virtualization, snap-based backups and enterprise reporting. Our information management innovations are primarily in the areas of archiving, eDiscovery, records management, governance, operational reporting and compliance.
We are continuing to pursue an aggressive product development program in both data and information management solutions. Our data protection solutions include not only traditional backup, but also new innovations in de-duplication, data movement, virtualization, snap-based backups and enterprise reporting. Our information management innovations are primarily in the areas of archiving, eDiscovery, records management, governance, operational reporting and compliance.
Services include customer support (software updates and technical support), consulting, assessment and design services, installation services, customer education and Commvault software-as-a-service, which is branded as Metallic. We sell both perpetual and term-based licenses of our software. We refer to our term-based software licenses as subscription arrangements. We do not customize our software and installation services are not required.
Services include customer support (software updates and technical support), consulting, assessment and design services, installation services, customer education and as-a-service, which is branded as Metallic. We sell both perpetual and term-based licenses of our software. We refer to our term-based software licenses as subscription arrangements. We do not customize our software and installation services are not required.
Summary Disclosures about Contractual Obligations and Commercial Commitments Our material capital commitments consist of obligations under facilities and operating leases. Some of these leases have free or escalating rent payment provisions. Refer to Notes 2 and 15 of the notes to the consolidated financial statements for further discussion on operating leases.
Summary Disclosures about Contractual Obligations and Commercial Commitments Our material capital commitments consist of obligations under facilities and operating leases. Some of these leases have free or escalating rent payment provisions. Refer to the notes to the consolidated financial statements for further discussion on operating leases.
Deals initiated by our direct sales force are sometimes transacted through indirect channels based on end-user customer requirements, which are not always in our control and can cause this overall percentage split to vary from fiscal year to fiscal year.
Deals initiated by our direct sales force are sometimes transacted through indirect channels based on end-user customer requirements and vice versa, which are not always in our control and can cause this overall percentage split to vary from fiscal year to fiscal year.
Off-Balance Sheet Arrangements As of March 31, 2022, we did not have off-balance sheet financing arrangements, including any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities.
Off-Balance Sheet Arrangements As of March 31, 2023, we did not have off-balance sheet financing arrangements, including any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities.
We sell our software applications and products to end-user customers both directly through our sales force and indirectly through our global network of value-added reseller partners, systems integrators, corporate resellers and original equipment manufacturers. Our software and products revenue was 46% of our total revenues for fiscal 2022, 45% in fiscal 2021 and 41% in fiscal 2020.
We sell our software applications to end-user customers both directly through our sales force and indirectly through our global network of value-added reseller partners, systems integrators, corporate resellers and original equipment manufacturers. Our software and products revenue was 45% of our total revenues for fiscal 2023, 46% in fiscal 2022 and 45% in fiscal 2021.
These charges include $1.7 million in fiscal 2022 and $2.7 million in fiscal 2021 of stock-based compensation related to modifications of existing awards granted to certain employees included in the restructuring. We cannot guarantee the restructuring program will achieve its intended result.
These charges include $2.6 million in fiscal 2023 and $1.7 million in fiscal 2022 of stock-based compensation related to modifications of existing awards granted to certain employees included in the restructuring. We cannot guarantee the restructuring program will achieve its intended result.
Because of this characteristic of our business, if our customers choose not to renew their maintenance and support agreements with us on beneficial terms, or at all, our business, operating results and financial condition could be harmed. The gross margin of our services revenue was 76% for fiscal 2022, 79% for fiscal 2021 and 78% for fiscal 2020.
Because of this characteristic of our business, if our customers choose not to renew their maintenance and support agreements with us on beneficial terms, or at all, our business, operating results and financial condition could be harmed. The gross margin of our services revenue was 72% for fiscal 2023, 76% for fiscal 2022 and 79% for fiscal 2021.
We believe that our existing cash, cash equivalents and our cash from operations will be sufficient to meet our anticipated cash needs for working capital, capital expenditures and potential stock repurchases for at least the next 12 months. We may seek additional funding through public or private financings or other arrangements during this period.
We believe that our existing cash, cash equivalents and our cash from operations will be sufficient to meet our anticipated cash needs for working capital, income taxes, capital expenditures and potential stock repurchases for at least the next twelve months. We may seek additional funding through public or private financings or other arrangements during this period.
Changes in judgment on any of these factors could materially impact the timing and amount of revenue recognized in a given period. We derive revenue from two primary sources: software and products, and services. Software and products revenue includes our software and integrated appliances that combine our software with hardware.
Changes in judgment on any of these factors could materially impact the timing and amount of revenue recognized in a given period. We record revenue net of sales tax. We derive revenue from two primary sources: software and products, and services. Software and products revenue includes our software and integrated appliances that combine our software with hardware.
Royalty expense, included in cost of software and products revenues, was $11.2 million in fiscal 2022 and $16.3 million in fiscal 2021. We offer a 90-day limited product warranty for our software. To date, costs relating to this product warranty have not been material.
Royalty expense, included in cost of software and products revenues, was $9.3 million in fiscal 2023 and $11.2 million in fiscal 2022. We offer a 90-day limited product warranty for our software. To date, costs relating to this product warranty have not been material.
Our services revenue was 54% of our total revenues for fiscal 2022, 55% in fiscal 2021 and 59% in fiscal 2020. Our services revenue is made up of fees from the delivery of customer support and other professional services, which are typically sold in connection with the sale of our software applications.
Our services revenue was 55% of our total revenues for fiscal 2023, 54% in fiscal 2022 and 55% in fiscal 2021. Our services revenue is made up of fees from the delivery of customer support, SaaS, and other professional services, which are typically sold in connection with the sale of our software applications.
Foreign Currency Exchange Rates’ Impact on Results of Operations Sales outside the United States were approximately 48% of our total revenue for both fiscal 2022 and fiscal 2021 and 49% for fiscal 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.
Foreign Currency Exchange Rates’ Impact on Results of Operations Sales outside the United States were 47% of our total revenue for fiscal 2023 and 48% for both fiscal 2022 and fiscal 2021. 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.
Standalone selling prices of services are typically estimated based on observable transactions when these services are sold on a standalone basis. 28 Our typical performance obligations include the following: Performance Obligation When Performance Obligation is Typically Satisfied When Payment is Typically Due How Standalone Selling Price is Typically Estimated Software and Products Revenue Software Licenses Upon shipment or made available for download (point in time) Within 90 days of shipment except for certain subscription licenses which are paid for over time Residual approach Customer Support Revenue Software Updates Ratably over the course of the support contract (over time) At the beginning of the contract period Observable in renewal transactions Customer Support Ratably over the course of the support contract (over time) At the beginning of the contract period Observable in renewal transactions Other Services Revenue Other Professional Services (except for education services) As work is performed (over time) Within 90 days of services being performed Observable in transactions without multiple performance obligations Education Services When the class is taught (point in time) Within 90 days of services being performed Observable in transactions without multiple performance obligations Software-as-a-service (Metallic) Ratably over the course of the contract (over time) Annual or monthly payments Observable in transactions without multiple performance obligations Accounting for Income Taxes Under ASC 740, deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts.
Our typical performance obligations include the following: Performance Obligation When Performance Obligation is Typically Satisfied When Payment is Typically Due How Standalone Selling Price is Typically Estimated Software and Products Revenue Software Licenses Upon shipment or made available for download (point in time) Within 90 days of shipment except for certain subscription licenses which are paid for over time Residual approach Customer Support Revenue Software Updates Ratably over the course of the support contract (over time) At the beginning of the contract period Observable in renewal transactions Customer Support Ratably over the course of the support contract (over time) At the beginning of the contract period Observable in renewal transactions Other Services Revenue Other Professional Services (except for education services) As work is performed (over time) Within 90 days of services being performed Observable in transactions without multiple performance obligations Education Services When the class is taught (point in time) Within 90 days of services being performed Observable in transactions without multiple performance obligations As-a-service (Metallic) Ratably over the course of the contract (over time) Annually or at the beginning of the contract period Observable in transactions without multiple performance obligations 31 Accounting for Income Taxes Under ASC 740, deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts.
The increase in gross margin percentage of software and products is a result of reduced sales of hardware associated with our appliance as well as reduced software royalties associated with sales of HyperScale appliances and software.
The increase in gross margin percentage of software and products is a result of reduced sales of hardware associated with our ap pliance as well as reduced software royalties associated with sales of HyperScale appliances and software.
Indemnifications Certain of our software licensing agreements contain certain provisions that indemnify our customers from any claim, suit or proceeding arising from alleged or actual intellectual property infringement. These provisions continue in perpetuity along with our software licensing agreements.
Indemnifications Certain of our software licensing agreements contain certain provisions that indemnify our customers from any claim, suit or proceeding arising from alleged or actual intellectual property infringement. These provisions continue in perpetuity along with our software licensing and as-a-service agreements.
Larger deal transactions (transactions greater than $0.1 million of software and product revenue) represented approximately 72% of our software and products revenue in fiscal 2022, 69% in fiscal 2021 and 65% in fiscal 2020. 25 Software and products revenue generated through indirect distribution channels accounted for approximately 90% of total software and products revenue in recent fiscal years.
Larger deal transactions (transactions greater than $0.1 million of software and product revenue) represented approximately 73% of our software and products revenue in fiscal 2023, 72% in fiscal 2022 and 69% in fiscal 2021. Software and products revenue generated through indirect distribution channels accounted for approximately 90% of total software and products revenue in recent fiscal years.
On December 13, 2021, we entered into a five-year $100 million senior secured revolving credit facility (the “Credit Facility”) with J.P. Morgan. The Credit Facility is available for share repurchases, general corporate purposes, and letters of credit. The Credit Facility contains financial maintenance covenants including a leverage ratio and interest coverage ratio.
On December 13, 2021, we entered into a five-year $100 million senior secured revolving credit facility (the “Credit Facility”) with JPMorgan Chase Bank, N.A.. The Credit Facility is available for share repurchases, general corporate purposes, and letters of credit. The Credit Facility contains financial maintenance covenants including a leverage ratio and interest coverage ratio.
In addition, we are exposed to risks of foreign currency fluctuation primarily from cash balances, accounts receivables and intercompany accounts denominated in foreign currencies and are subject to the resulting transaction gains and losses, which are recorded as a component of general and administrative expenses. Net foreign currency transaction losses in fiscal 2022 were not significant.
In addition, we are exposed to risks of foreign currency fluctuation primarily from cash balances, accounts receivables and intercompany accounts denominated in foreign currencies and are subject to the resulting transaction gains and losses, which are recorded as a component of general and administrative expenses.
Overall, our services revenue has lower gross margins than our software and products revenue. The gross margin of our software and products revenue was 96% for fiscal 2022, 92% for fiscal 2021 and 90% for fiscal 2020.
Overall, our services revenue has lower gross margins than our software and products revenue. The gross margin of our software and products revenue was 96% for both fiscal 2023 and fiscal 2022, and 92% for fiscal 2021.
If Arrow was to discontinue or reduce the sales of our products or if our agreement with Arrow was 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 it could have a material adverse effect on our future business.
If Arrow were to discontinue or reduce the sales of our products or if our agreement with Arrow was terminated, and if we were unable to take back the management of our reseller channel or find another distributor to replace Arrow, there could be a material adverse effect on our future business.
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.
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.
In addition, our total software and products revenue in any particular period is, to a certain extent, dependent upon our ability to generate revenues from large customer software and products deals, which we refer to as larger deal transactions.
Revenue in these utility arrangements is recognized as the software is used. Our total software and products revenue in any particular period is, to a certain extent, dependent upon our ability to generate revenues from large customer software and products deals, which we refer to as larger deal transactions.
As a result, our hardware revenues and cost of sales have been decreasing. 26 Description of Costs and Expenses Our cost of revenues is as follows: • Cost of Software and Products Revenue , consists primarily of the cost of third-party royalties and other costs such as media, manuals, translation and distribution costs, and hardware associated with our appliances; and • Cost of Services Revenue , consists primarily of salary and employee benefit costs in providing customer support and other professional services as well as third-party hosting fees.
Description of Costs and Expenses Our cost of revenues is as follows: • Cost of Software and Products Revenue , consists primarily of the cost of third-party royalties and other costs such as media, manuals, translation and distribution costs, and hardware associated with our appliances; and • Cost of Services Revenue , consists of salary and employee benefit costs in providing customer support and other professional services as well as third-party hosting fees related to our as-a-service offerings.
We recognized net foreign currency transaction losses of $1.9 million in fiscal 2021 and gains of $0.4 million in fiscal 2020. 27 Critical Accounting Policies In presenting our consolidated financial statements in conformity with U.S. generally accepted accounting principles, we are required to make estimates and judgments that affect the amounts reported therein.
We recognized net foreign currency transaction losses of $1.2 million in fiscal 2023, insignificant losses in fiscal 2022 and losses of $1.9 million in fiscal 2021. Critical Accounting Policies In presenting our consolidated financial statements in conformity with U.S. generally accepted accounting principles ("GAAP"), we are required to make estimates and judgments that affect the amounts reported therein.
We have never incurred a liability relating to one of these indemnification provisions in the past and we believe that the likelihood of any future payout relating to these provisions is remote.
We have never incurred a liability relating to one of these indemnification provisions in the past and we believe that the likelihood of any future payout relating to these provisions is remote. Therefore, we have not recorded a liability during any period related to these indemnification provisions.
We generated approximately 37% of our total revenues through Arrow in fiscal 2022, approximately 36% of our total revenues in fiscal 2021 and approximately 37% of our total revenues in fiscal 2020.
We generated 37% of our total revenues through Arrow in both fiscal 2023 and fiscal 2022, and 36% of our total revenues in fiscal 2021.
Our other professional services include consulting, assessment and design services, installation services and customer education. Customer education services include courses taught by our instructors or third-party contractors. Revenue related to other professional services and customer education services is typically recognized as the services are performed.
Our other professional services include consulting, assessment and design services, installation services and customer education. Customer education services include courses taught by our instructors or third-party contractors. Revenue related to other professional services and customer education services is typically recognized as the services are performed. Most of our contracts with customers contain multiple performance obligations.
These balances are dispersed across many international locations around the world. We believe that such dispersion meets the current and anticipated future liquidity needs of our foreign legal entities. If we need to repatriate funds from outside of the United States, such repatriation would likely be subject to restrictions by local laws and/or tax consequences including foreign withholding taxes.
We believe that such dispersion meets the current and anticipated future liquidity needs of our foreign legal entities. In the event we need to repatriate funds from outside of the United States, such repatriation would likely be subject to restrictions by local laws and/or tax consequences including foreign withholding taxes.
Our revenue recognition policies require us to make significant judgments and estimates. In applying our revenue recognition policy, we must determine which portions of our revenue are recognized currently (generally software and products revenue) and which portions must be deferred and recognized in future periods (generally services revenue).
In applying our revenue recognition policy, we must determine which portions of our revenue are recognized currently (generally software and products revenue) and which portions must be deferred and recognized in future periods (generally services revenue).
("Arrow"), a subsidiary of Arrow Electronics, Inc. Pursuant to this distribution agreement, Arrow's primary role is to enable a more efficient and effective distribution channel for our products and services by managing our reseller partners and leveraging their own industry experience.
We have a non-exclusive distribution agreement with Arrow pursuant to which Arrow's primary role is to enable a more efficient and effective distribution channel for our products and services by managing our reseller partners and leveraging their own industry experience.
We remain focused on both the data and information management trends in the marketplace and, in fact, a material portion of our existing research and development expenses are utilized toward the development of such new technologies discussed above.
We remain focused on both the data and information management trends in the marketplace and, in fact, a material portion of our existing research and development expenses are utilized toward the development of such new technologies. Given the nature of the industry in which we operate, our software applications are subject to obsolescence.
With the launch of HyperScale X in the second half of fiscal 2021, we typically sell software to a third party that sells an integrated appliance to end user customers.
With the launch of HyperScale X in the second half of fiscal 2021, we now typically sell software to a third party that sells an integrated appliance to end user customers. As a result, our hardware revenues and cost of sales have been decreasing.
During the fiscal year ended March 31, 2022, approximately 69% of software license revenue was sold under a subscription model. Software license revenue sold under a subscription model was 59% and 41% in the fiscal years ended March 31, 2021 and 2020, respectively. We also sell to some customers, primarily managed service providers, via utility, or pay-as-you-go models.
Software license revenue sold under a subscription model was 69% and 59% in the fiscal years ended March 31, 2022 and 2021, respectively. We also sell to some customers, primarily managed service providers, via utility, or pay-as-you-go models. In these arrangements, there is no minimum commitment and actual usage is regularly measured and billed.
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. 30 Cost of Revenues and Gross Margin ($ in millions) - Total cost of revenues increased $4.5 million and represented 15% of our total revenues in both fiscal 2022 and fiscal 2021. - Cost of software and products revenue decreased $13.2 million and represented 4% of software and products revenue in fiscal 2022 compared to 8% in fiscal 2021.
Our software and products revenue in International is subject to changes in foreign exchange rates as further discussed above in the “Foreign Currency Exchange Rates’ Impact on Results of Operations” section. 33 Cost of Revenues and Gross Margin ($ in millions) - Total cost of revenues increased $21.5 million and represented 17% and 15% of our total revenues in fiscal 2023 and fiscal 2022, respectively. - Cost of software and products revenue increased $0.6 million and represented 4% of software and products revenue in both fiscal 2023 and fiscal 2022. - Cost of services revenue increased $20.9 million and represented 28% of our services revenue in fiscal 2023 compared to 24% in fiscal 2022.
Risks associated with this restructuring program also include additional unexpected costs, adverse effects on employee morale and the failure to meet operational and growth targets due to the loss of key employees, any of which may impair our ability to achieve anticipated results of operations or otherwise harm our business. - Depreciation and amortization expense: decreased $5.0 million, from $14.6 million in fiscal 2021 to $9.7 million in fiscal 2022, driven by the elimination of amortization of intangible assets related to Hedvig due to 32 their impairment in the second quarter of fiscal 2021.
Risks associated with this restructuring program also include additional unexpected costs, adverse effects on employee morale and the failure to meet operational and growth targets due to the loss of key employees, any of which may impair our ability to achieve anticipated results of operations or otherwise harm our business. 35 - Depreciation and amortization expense decreased $0.4 million, from $9.7 million in fiscal 2022 to $9.3 million in fiscal 2023, driven by the reclassification of our owned corporate headquarters as assets held for sale. - Impairment charges: During the fourth quarter of fiscal 2023, we entered into an agreement to sell our owned corporate headquarters in Tinton Falls, New Jersey.
As of March 31, 2022, there were no borrowings under the Credit Facility and we were in compliance with all covenants. During the year ended March 31, 2022, we repurchased $305.2 million of common stock, or approximately 4.3 million shares, under our share repurchase program. This program commenced in January of 2021 and was completed on March 31, 2022.
As of March 31, 2023, there were no borrowings under the Credit Facility and we were in compliance with all covenants. During the year ended March 31, 2023, we repurchased $150.9 million of common stock, or approximately 2.5 million shares.
Restructuring expenses were $6.2 million and $23.5 million for the years ended March 31, 2022 and 2021, respectively. These restructuring charges relate primarily to severance and related costs associated with headcount reductions.
The plan also included a reorganization to combine our EMEA and APJ field organizations into our International region. Restructuring expenses were $15.5 million and $6.2 million for the years ended March 31, 2023 and 2022, respectively. These restructuring charges relate primarily to severance and related costs associated with headcount reductions.
During fiscal 2022, we continued to focus on subscription and other recurring revenue arrangements and began generating revenue from the renewals of subscription licenses sold in prior years. Any of our licensing models (capacity, instance based, etc.) can be sold via a subscription arrangement.
We continue to focus on subscription and other recurring revenue arrangements and continue to generate revenue from the renewals of subscription licenses sold in prior years. Any of our pricing models (capacity, instance based, etc.) can be sold via a subscription arrangement. In these arrangements, the customer has the right to use the software over a designated period of time.
Using the average foreign currency exchange rates from fiscal 2021, our software and products revenue would have been lower by $0.1 million, our services revenue would have been lower by $2.5 million, our cost of sales would have been lower by $0.3 million and our operating expenses would have been lower by $1.6 million from non-U.S. operations for fiscal 2022.
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. 29 Using the average foreign currency exchange rates from fiscal 2022, our software and products revenue would have been higher by $15.1 million, our services revenue would have been higher by $19.7 million, our cost of sales would have been higher by $4.2 million and our operating expenses would have been higher by $18.6 million from non-U.S. operations for fiscal 2023.
The failure of our indirect distribution channels or our direct sales force to effectively sell our software applications could have a material adverse effect on our revenues and results of operations. We have a non-exclusive distribution agreement covering our North American commercial markets and our U.S. Federal Government market with Arrow Enterprise Computing Solutions, Inc.
The failure of our indirect distribution channels or our direct sales force to effectively sell our software applications could have a material adverse effect on our revenues and results of operations.
Customer support agreements provide technical support and unspecified software updates on a when-and-if-available basis for an annual fee based on licenses purchased and the level of service subscribed. Other professional services include consulting, assessment and design services, implementation and post-deployment services and training, all of which to date have predominantly been sold in connection with the sale of software applications.
Other professional services include consulting, assessment and design services, implementation and post-deployment services and training, all of which to date have predominantly been sold in connection with the sale of software applications. 28 Most of our customer support agreements related to perpetual licenses are for a one-year term.
The geographic regions that are tracked are the Americas (United States, Canada, Latin America), EMEA (Europe, Middle East, Africa) and APJ (Australia, Japan, Southeast Asia, China). Americas, EMEA and APJ represented 59%, 30% and 11% of total software and products revenue, respectively, for the fiscal year ended March 31, 2022.
We track software and products revenue on a geographic basis. Our International region encompasses Europe, Middle East, Africa, Australia, India, Japan, Southeast Asia, and China. Our Americas region includes the United States, Canada, and Latin America. Americas and International represented 60% and 40% of total software and products revenue, respectively, for the fiscal year ended March 31, 2023.
Liquidity and Capital Resources As of March 31, 2022, our cash balance was $267.5 million. In recent fiscal years, our principal source of liquidity has been cash provided by operations. The amount of cash and cash equivalents held outside of the United States by our foreign legal entities was approximately $184.0 million.
The amount of cash and cash equivalents held outside of the United States by our foreign legal entities was approximately $183.3 million. In recent fiscal years, our principal source of liquidity has been cash provided by operations. These balances are dispersed across approximately 35 international locations around the world.
In these arrangements the customer has the right to use the software over a designated period of time. The capacity of the license is fixed and the customer has made an unconditional commitment to pay. Software revenue in these arrangements is generally recognized when the software is delivered.
The capacity of the license is fixed and the customer has made an unconditional commitment to pay. Software revenue in these arrangements is generally recognized when the software is delivered. During the fiscal year ended March 31, 2023, approximately 79% of software license revenue was sold under a subscription model.
Sources of Revenues We derive a significant portion of our total revenues from sales of licenses of our software applications and related appliance products. We do not customize our software or products for a specific end-user customer.
In addition, we must address evolving industry standards, changing customer requirements and competitive software applications that may render our existing software applications obsolete. 27 Sources of Revenues We derive a significant portion of our total revenues from sales of licenses of our software applications. We do not customize our software for a specific end-user customer.
Interest Expense Interest expense increased $0.1 million as a result of entering into a revolving credit facility in fiscal 2022. Income Tax Expense Income tax expense was $9.8 million in fiscal 2022 compared to expense of $9.7 million in fiscal 2021. The income tax expense for the year ended March 31, 2022 relates primarily to current foreign taxes.
Income Tax Expense Income tax expense was $20.4 million in fiscal 2023 compared to expense of $9.8 million in fiscal 2022. The income tax expense for the year ended March 31, 2023 relates primarily to current U.S. and foreign taxes.
Therefore, we have not recorded a liability during any period related to these indemnification provisions. 35 Impact of Recently Issued Accounting Standards See Note 2 of the notes to the consolidated financial statements for a discussion of the impact of recently issued accounting standards.
Impact of Recently Issued Accounting Standards See Note 2 of the notes to the consolidated financial statements for a discussion of the impact of recently issued accounting standards. 38
The following is a description of our accounting policies that we believe require subjective and complex judgments, which could potentially have a material effect on our reported financial condition or results of operations. Revenue Recognition We account for revenue in accordance with ASC 606, Revenue from Contracts with Customers .
The following is a description of these critical accounting policies. Revenue Recognition We account for revenue in accordance with ASC 606, Revenue from Contracts with Customers . Our revenue recognition policies require us to make significant judgments and estimates.
Commvault software-as-a-service, which is branded as Metallic, allows customers to use hosted software over the contract period without taking possession of the software. Revenue related to Metallic is generally recognized ratably over the contract term as services revenue. Most of our contracts with customers contain multiple performance obligations.
The term of our subscription arrangements is typically three years but can range between one and five years. Commvault's SaaS offerings, which are branded as Metallic, allow customers to use hosted software over the contract period without taking possession of the software. Revenue related to Metallic is generally recognized ratably over the contract term as services revenue.
Commvault sells its customer support contracts as a percentage of net software purchases the support is related to. Customer support revenue is recognized ratably over the term of the customer support agreement, which is typically one year. The term of our subscription arrangements is typically three years.
Customer support includes software updates on a when-and-if-available basis, telephone support, integrated web-based support and bug fixes or patches. We sell our customer support contracts as a percentage of net software purchases the support is related to. Customer support revenue is recognized ratably over the term of the customer support agreement, which is typically one year on our perpetual licenses.
During the fourth quarter of 2022, we completed the annual impairment test for goodwill and determined that it had not been impaired as of the test date, January 1, 2022. 29 Results of Operations Fiscal year ended March 31, 2022 compared to fiscal year ended March 31, 2021 Revenues (in millions) - Total revenues increased $46.1 million, or 6% - Software and products revenue represented 46% of our total revenues in fiscal 2022 and 45% of our total revenues in fiscal 2021.
During the fourth quarter of fiscal 2023, we completed the annual impairment test for goodwill and determined that it had not been impaired as of the test date, January 1, 2023.
Given the nature of the industry in which we operate, our software applications are subject to obsolescence. We continually develop and introduce updates to our existing software applications in order to keep pace with evolving industry technologies. In addition, we must address evolving industry standards, changing customer requirements and competitive software applications that may render our existing software applications obsolete.
We continually develop and introduce updates to our existing software applications in order to keep pace with evolving industry technologies.
The increase in cost of services revenue related to an increase in the cost of infrastructure related to our software-as-a-service offerings, as well as an increase in employee compensation and related expenses compared to the prior year due to temporary pay cuts enacted in 2021. 31 Operating Expenses ($ in millions) - Sales and marketing expenses: increased $9.7 million, or 3%, primarily due to an increase in employee compensation and sales commissions associated with increased revenue. - Research and development expenses: increased $20.2 million, or 15%, as a result of an increase in employee compensation and related expenses attributable to the expansion of our engineering group. • Increase in employee compensation, including an increase in stock-based compensation of $9.0 million compared to prior year. • Investing in research and development has been a priority for Commvault, and we anticipate continued spending related to the development of our data management software applications. - General and administrative expenses: increased $10.8 million, or 12%, primarily due to the following: • Increase in employee compensation and related expenses compared to prior year.
Investing in research and development has been a priority for Commvault, and we anticipate continued spending related to the development of our data protection software applications. - General and administrative expenses increased $1.2 million, or 1%, primarily due to increases in employee compensation and related expenses compared to prior year, partially offset by a $0.9 million decrease in stock-based compensation. - Restructuring: Our restructuring plan, initiated in the fourth quarter of fiscal 2022, is aimed to increase efficiency in our sales, marketing and distribution functions as well as reduce costs across all functional areas.
This was the result of an increase in the number of transactions compared to the prior year partially offset by a decrease in average deal size. ▪ EMEA software and products revenue increased primarily as a result of a 13% increase in larger deal revenue driven by an increase in average deal size. ▪ APJ revenue from deals less than $0.1 million decreased 5% compared to the prior year partially offset by a 1% increase in larger deal transactions.
Using the average foreign currency exchange rates from the fiscal year ended March 31, 2022, our software and products revenue would have increased 4% compared to the fiscal year ended March 31, 2022. • The foreign currency impact was partially offset by an increase of $3.2 million, or 1%, in larger deal transactions (deals greater than $0.1 million in software and products revenue).
Metallic, our software-as-a-service solution, allows customers to use hosted software over the contract period without taking possession of the software. Revenue related to Metallic is generally recognized ratably over the contract term as services revenue. Most of our customer support agreements related to perpetual licenses are for a one-year term.
Customer support agreements provide technical support and unspecified software updates on a when-and-if-available basis for an annual fee based on licenses purchased and the level of service subscribed. Metallic, our SaaS solution, allows customers to use hosted software over the contract period without taking possession of the software.
On April 21, 2022 the Board of Directors approved a new share repurchase program of $250.0 million. The Board's authorization has no expiration date. Our stock repurchase program has been funded by our existing cash and cash equivalent balances as well as cash flows provided by our operations.
On April 20, 2023, the Board of Directors approved an increase in our share repurchase program so that $250.0 million was available. The Board's authorization has no expiration date.
We believe our technology and professional services provide the broadest set of capabilities in the industry, which enables customers to efficiently and cost-effectively scale their data on premise or in the cloud. 24 Industry The industry in which we currently operate continues to go through accelerating changes as the result of compounding data growth and the introduction of new technologies.
Our data protection offerings are delivered via self-managed software, software-as-a-service (SaaS), integrated appliances, or managed by partners. Customers use our technology to protect themselves from threats like ransomware and recover their data. Industry The industry in which we currently operate continues to go through accelerating changes as the result of compounding data growth and the introduction of new technologies.
Working capital decreased $144.4 million from $234.4 million as of March 31, 2021 to $90.0 million as of March 31, 2022. The decrease in working capital is primarily due to cash used for share repurchases during the fiscal year.
Working capital increased $50.8 million from $90.0 million as of March 31, 2022 to $140.8 million as of March 31, 2023. The increase in working capital is primarily due to the reclassification of our owned corporate headquarters as assets held for sale.
Software and products revenue increased $29.6 million, or 9%, primarily due to the following: • Increase of $30.0 million, or 13%, in larger deal transactions (deals greater than $0.1 million in software and products revenue); • Increase of 19% in the number of larger deal transactions partially offset by a decrease of 4% in the average dollar amount of such transactions; • The average dollar amount of larger deal transactions was approximately $320 thousand in fiscal 2022 and approximately $335 thousand in fiscal 2021; • Larger deal transactions represented approximately 72% of our software and products revenue in fiscal 2022 and 69% of our software and products revenue in fiscal 2021; and • The increase in larger deal transaction revenue was partially offset by a decrease of $0.3 million in transactions less than $0.1 million. - Services revenue represented 54% of our total revenues in fiscal 2022 and 55% of our total revenues in fiscal 2021.
There were 750 larger deal revenue transactions in fiscal 2023 compared to 799 deals in fiscal 2022. • The increase in larger deal transaction revenue was partially offset by a decrease of $4.6 million in transactions less than $0.1 million. - Services revenue increased $16.4 million, or 4%, primarily due to: • An increase in other services revenue, driven primarily by the year over year increase in revenue from Metallic as-a-service arrangements, partially offset by a decrease in revenue from customer support agreements. • Using the average foreign currency exchange rates from the fiscal year ended March 31, 2022, our services revenue would have increased 9% compared to the fiscal year ended March 31, 2022.
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Our actual results may differ materially from those contained in or implied by any forward-looking statements. Overview Incorporated in Delaware in 1996, Commvault Systems, Inc. is a global data management company offering customers enterprise level, intelligent data services via a single platform and unified code base.
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Our actual results may differ materially from those contained in or implied by any forward-looking statements. For discussion comparing the period ended March 31, 2022 to March 31, 2021, please refer to our Annual Report on Form 10-K, filed with the SEC on May 6, 2022.
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We believe in solving hard problems for our customers by enabling our customers to accelerate their digital transformation in today's ever-evolving workforce. Our product portfolio includes intuitive tools and powerful machine learning technology that drives automation, reduces complexity, reigns in data fragmentation, and accelerates a customer’s cloud journey.
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Overview Incorporated in Delaware in 1996, Commvault Systems, Inc. provides its customers with a data protection platform that helps them secure, defend and recover their most precious asset, their data. We provide these products and services for their data across the following environments: on-premises, hybrid, or multi-cloud.
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Our product functionality share the same back-end technologies to deliver the benefits of a holistic approach to protecting, managing, and securing data. Our products address many aspects of data management from data protection and security, to data governance, transformation and insights, while providing scalability.
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Revenue related to Metallic is generally recognized ratably over the contract term as services revenue.
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While we feel confident in our ability to meet these changing industry demands with our Commvault suite and potential future releases, the development, release and timing of any features or functionality remain at our sole discretion and our solutions or other technologies may not be widely adopted.
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To the extent that there are material differences between these estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows may be affected.
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For each of our software applications, we provide full support for the current generally available release and one prior release. When we declare a product release obsolete, a customer notice is delivered twelve months prior to the effective date of obsolescence announcing continuation of full product support for the first six months.
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In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application, while in other cases, significant judgment is required in selecting among available alternative accounting standards that allow different accounting treatment for similar transactions. We consider these policies requiring significant management judgment to be critical accounting policies.
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We provide an additional six months of extended assistance support in which we only provide existing workarounds or fixes that do not require additional development activity. We do not have existing plans to make any of our software products permanently obsolete.
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We do not recognize software revenue related to the renewal of subscription software licenses earlier than the beginning of the new subscription period. 30 We also offer appliances that integrate our software with hardware and address a wide-range of business needs and use cases, ranging from support for remote or branch offices with limited IT staff up to large corporate data centers.
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In these arrangements actual usage is regularly measured and billed. Revenue in these utility arrangements is recognized as the software is used. In recent fiscal years, including the periods presented, we generated an average of 80% of our software and products revenue from our existing customer base and approximately 20% of our software and products revenue from new customers.
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We typically offer appliances via a software only model in which we sell software to a third party, which assembles an integrated appliance that is sold to end user customers. As a result, the revenue and costs associated with hardware are usually not included in our financial statements. Services revenue includes revenue from customer support, SaaS, and other professional services.
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We do not recognize software revenue related to the renewal of subscription software licenses earlier than the beginning of the new subscription period. Services revenue includes revenue from customer support and other professional services. Customer support includes software updates on a when-and-if-available basis, telephone support, integrated web-based support and bug fixes or patches.
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Standalone selling prices of services are typically estimated based on observable transactions when these services are sold on a standalone basis.
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Services revenue increased $16.5 million, primarily due to an increase in professional services and software-as-a-service revenue, partially offset by a decline in customer support revenue. We track software and products revenue on a geographic basis.
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Results of Operations Fiscal year ended March 31, 2023 compared to fiscal year ended March 31, 2022 Revenues (in millions) - Total revenues increased $15.0 million, or 2% as a result of the following: • An increase in services revenue driven by the year over year increase in revenue from Metallic as-a-service arrangements. • Software and products revenue represented 45% of our total revenues in fiscal 2023 and 46% of our total revenues in fiscal 2022. 32 • Services revenue represented 55% of our total revenues in fiscal 2023 and 54% of our total revenues in fiscal 2022. • Using the average foreign currency exchange rates from the fiscal year ended March 31, 2022, our total revenues would have increased 6% compared to the fiscal year ended March 31, 2022.
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The year over year increase of software and products revenue was 15% and 2% in the Americas and in EMEA, respectively, and declined 2% in APJ. ▪ The increase in Americas software and products revenue was primarily due to a 15% increase from larger deal transactions.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeWe recognized net foreign currency transaction losses of $1.9 million and gains of $0.4 million in fiscal 2021 and fiscal 2020, respectively. 36
Biggest changeWe recognized net foreign currency transaction losses of $1.2 million in fiscal 2023, insignificant losses in fiscal 2022, and losses of $1.9 million in fiscal 2021. 39
Historically, we have periodically reviewed and revised the pricing of our products available to our customers in foreign countries and we have not maintained excess cash balances in foreign accounts. We estimate that a 10% change in all foreign exchange rates would impact our reported operating profit by approximately $11.8 million annually.
Historically, we have periodically reviewed and revised the pricing of our products available to our customers in foreign countries and we have not maintained excess cash balances in foreign accounts. We estimate that a 10% change in all foreign exchange rates would impact our reported operating profit by approximately $11.0 million annually.
Approximately 48% of our sales were outside the United States in both fiscal 2022 and fiscal 2021. Our primary exposures are to fluctuations in exchange rates for the U.S. dollar versus the Euro, and to a lesser extent, the Australian dollar, British pound sterling, Canadian dollar, Chinese yuan, Indian rupee, Korean won and Singapore dollar.
Approximately 47% of our sales were outside the United States in fiscal 2023 and 48% in fiscal 2022. Our primary exposures are to fluctuations in exchange rates for the U.S. dollar versus the Euro, and to a lesser extent, the Australian dollar, British pound sterling, Canadian dollar, Chinese yuan, Indian rupee, Korean won and Singapore dollar.
Our foreign subsidiaries conduct their businesses in local currency and we generally do not maintain excess U.S. dollar cash balances in foreign accounts. Foreign currency transaction gains and losses are recorded in General and administrative expenses in the Consolidated Statements of Operation. Net foreign currency transaction activity in fiscal 2022 was not significant.
Our foreign subsidiaries conduct their businesses in local currency and we generally do not maintain excess U.S. dollar cash balances in foreign accounts. Foreign currency transaction gains and losses are recorded in general and administrative expenses in the consolidated statements of operations.

Other CVLT 10-K year-over-year comparisons