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What changed in COMMVAULT SYSTEMS INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of COMMVAULT SYSTEMS INC's 2024 and 2025 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 2025 report.

+284 added−270 removedSource: 10-K (2025-05-05) vs 10-K (2024-05-13)

Top changes in COMMVAULT SYSTEMS INC's 2025 10-K

284 paragraphs added · 270 removed · 221 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

56 edited+10 added−6 removed18 unchanged
Biggest changeDesigned for automated disaster and cyber recovery use cases, Autonomous Recovery can deliver backup, replication, and disaster recovery for all workloads, on-premises, in the cloud, across multiple clouds, and in hybrid environments. It provides trusted recovery of data and applications, VMs, and containers, along with verifiable recoverability of replicas, cost-optimized cloud data mobility and resilience.
Biggest changeAutonomous Recovery aims to reduce recovery time, downtime, and costs by bringing automation and validation to Operational Recovery. Designed for automated disaster and cyber recovery use cases, Autonomous Recovery can deliver backup, replication, and disaster recovery for all workloads, on-premises, in the cloud, across multiple clouds, and in hybrid environments.
We also provide a selection of self-paced online content for our products in our On-Demand Learning Library. • Remote Managed Services. Commvault Remote Managed Services provide results-oriented data protection and cyber resilience to customers worldwide. Commvault experts provide secure, reliable, and cost-effective remote monitoring and management of our customers' data protection environment.
We also provide a selection of self-paced online content for our products in our On-Demand Learning Library. • Cyber Resilience Managed Services. We provide results-oriented data protection and cyber resilience services to customers worldwide. Commvault experts provide secure, reliable, and cost-effective remote monitoring and management of our customers' data protection environment.
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 cyber resilience 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 cyber resilience solutions to businesses and government agencies of all sizes. We sell through our global direct sales force and partner channels.
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.
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. 6 Additionally, we have a non-exclusive distribution agreement with Arrow Enterprise Computing Solutions, Inc. ("Arrow"), a subsidiary of Arrow Electronics, Inc.
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. The scope and interpretation of these laws could change, and the associated burdens and our compliance costs could increase in the future.
Failure to safeguard data adequately or to destroy data securely could subject us to regulatory investigations or enforcement actions under applicable data privacy and security, unfair practices or consumer protection laws. The scope and interpretation of these laws could change, and the associated burdens and our compliance costs could increase in the future.
Professional & Customer Support Services Commvault offers a wide range of professional and customer support services to complement its product portfolio. We offer multiple levels of service that can be tailored to our customers’ needs. Our services consist of: • Real-Time Support.
Professional & Customer Support Services Commvault offers a wide range of professional and customer support services to complement its product portfolio. We offer multiple levels of service that can be tailored to our customers’ needs. Our services consist of: • Global Real-Time Support.
Traditional isolated on-premises cleanrooms can be expensive to build and maintain, and incident response plans often go untested, increasing an 4 organization’s risk and recovery time objectives.
Traditional isolated on-premises cleanrooms can be expensive to build and maintain, and incident response plans often go untested, increasing an organization’s risk and recovery time objectives.
With HyperScale X, customers can leverage the entire Commvault portfolio, giving them access to all the features, functions, and industry-leading integration with applications, databases, public cloud environments, hypervisors, operating systems, NAS systems, and primary storage arrays, wherever the data resides. It is available as a fully integrated appliance or as a reference architecture depending on an organization’s requirements.
With HyperScale X, customers can leverage the Commvault portfolio, giving them access to the features, functions, and industry-leading integration with applications, databases, public cloud environments, hypervisors, operating systems, NAS systems, and primary storage arrays, wherever the data resides. It is available as a fully integrated appliance or as a reference architecture depending on an organization’s requirements.
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. Marketplace .
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. Cloud Hyperscalers .
We believe these partnerships enhance our position in the market and serve as an accelerator to sales. Distributors, Value-Added Reseller, Systems Integrator, Corporate Reseller and Original Equipment Manufacturer Relationships. These partners either bundle our solutions together with their own products or resell our solutions independently.
We believe these partnerships enhance our position in the market and serve as an accelerator to sales. Distributor, Value-Added Reseller, Systems Integrator, Corporate Reseller and Original Equipment Manufacturer Relationships. These partners either bundle our solutions together with their own products or resell our solutions independently.
We do this by offering unified visibility and management across the entire hybrid enterprise so our customers can secure and recover data from any location to any location. Our Commvault Cloud offerings are organized in the following packages – Operational Recovery, Autonomous Recovery and Cyber Recovery.
We do this by offering unified visibility and management across the entire hybrid enterprise so our customers can protect and recover data from any location to any location. Our Commvault Cloud offerings are organized in the following packages – Operational Recovery, Autonomous Recovery and Cyber Recovery.
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. 9
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 Annual Report on Form 10-K or in any other report, statement or document we file with the SEC. 10
We have established the following types of strategic relationships: Alliance and Technology Partners . We maintain strategic sales, marketing and technology relationships with industry leaders to ensure that our products are integrated with, supported by and add value to our partners’ portfolios.
We have established the following types of strategic relationships: Alliance and Technology Partners . We maintain strategic sales, marketing and technology relationships with industry leaders so that our products are integrated with, supported by and add value to our partners’ portfolios.
Mirchandani served from September 2016 to January 2019 as the Chief Executive Officer of Puppet, Inc. (“Puppet”), an Oregon-based IT automation company. Mr. Mirchandani joined Puppet in May 2016 as President and Chief Operating Officer. Mr. Mirchandani brings a wealth of international business experience through his diverse well-rounded career in technology.
Prior to joining Commvault, Mr. Mirchandani served from September 2016 to January 2019 as the Chief Executive Officer of Puppet, Inc. (“Puppet”), an Oregon-based IT automation company. Mr. Mirchandani joined Puppet in May 2016 as President and Chief Operating Officer. Mr. Mirchandani brings a wealth of international business experience through his diverse well-rounded career in technology.
We 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 an environment that fosters career growth, investing in the development, creativity and aspirational needs of all employees.
We continue to be committed to securing the best talent with a concerted effort to expound on and build a broad pipeline of candidates. We are committed to providing an environment that fosters career growth, investing in the development, creativity and aspirational needs of all employees.
Our ESP provides additional industry technical experts who provide strategic guidance and advice to ensure our enterprise customers achieve their cyber resiliency objectives. The entire Customer Success program is centered around driving customer adoption, customer satisfaction and quick time to value. 5 • Technology Consulting Services.
Our ESP offerings provide additional industry technical experts who provide strategic guidance and advice so our enterprise customers achieve their cyber resiliency objectives. 5 The entire Customer Success program is centered around driving customer adoption, customer satisfaction and quick time to value. • Technology Consulting Services.
It is an integrated, air-gapped cloud storage target that enables IT organizations to efficiently adopt cloud storage for Operational Recovery, HyperScale X or SaaS to ease digital transformation, save costs, reduce risk and scale. This minimizes IT complexities and allows customers to easily store, isolate, and secure data while providing the foundation for predictable costs and reduced overhead.
It is an integrated, air-gapped cloud storage target that enables IT organizations to efficiently adopt cloud storage for Operational Recovery, HyperScale X or SaaS to ease digital transformation, reduce risks and scale. This minimizes IT complexities and allows customers to easily store, isolate, and protect data while providing the foundation for predictable costs and reduced overhead.
Our marketing efforts include sales campaigns, webinars, active participation at trade shows, technical conferences and seminars; advertising; content development and distribution; public relations; social media; industry analyst relations; publication of technical and educational articles in industry journals; sales training; and preparation of competitive analyses.
Our marketing efforts include sales campaigns, webinars, active participation at trade shows, virtualized cyberattack simulation training sessions, technical conferences and seminars; advertising; content development and distribution; public relations; social media; industry analyst relations; publication of technical and educational articles in industry journals; sales training; and preparation of competitive analyses.
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.
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 definitive proxy statements and any amendments to those reports or statements filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act.
This enables organizations to minimize the impact of attacks and aims towards a fast recovery after a cyber incident. In addition, Commvault provides customers with a variety of industry-leading offerings, including Cleanroom Recovery, HyperScale X, Air Gap Protect and Compliance. Commvault Cloud’s Cleanroom Recovery is a resilience offering.
This enables organizations to minimize the impact of attacks and aims towards a fast recovery after a cyber incident. In addition, Commvault provides customers with a variety of unique offerings, including Cleanroom Recovery, HyperScale X, Air Gap Protect, Compliance, Cloud Rewind, and Clumio Backtrack. Commvault Cloud’s Cleanroom Recovery is a cyber resilience offering.
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 36% of our total revenue in fiscal 2024 and 37% in fiscal 2023. 6 Service Provider Partners.
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 approximately 35% of our total revenues in fiscal 2025 and 36% in fiscal 2024. Service Provider Partners.
Commvault delivers a portfolio of products and services to effectively secure, quickly capture intelligence, and rapidly recover from ransomware attacks or any other threats. Our solutions create an intuitive cyber resilience experience across customer-managed enterprise software and SaaS-delivered cloud native solutions that mitigate data sprawl, facilitate cloud adoption, and help customers modernize and transform their enterprise IT environment.
Commvault delivers a portfolio of products and services to effectively protect, quickly capture intelligence, and rapidly recover from cyber incidents. Our solutions create an intuitive cyber resilience experience across customer-managed enterprise software and SaaS-delivered cloud-native solutions that mitigate data sprawl, facilitate cloud adoption, and help customers modernize and transform their enterprise IT environment.
We have forged numerous relationships with software, hardware, cloud and cybersecurity partners to enhance our combined capabilities and to create the optimal combination of data and information management applications. We believe this approach enhances our ability to expand our product offerings and customer base and to enter new markets.
We have forged numerous relationships with software, hardware, cloud and cybersecurity partners to enhance our combined capabilities, help our customers advance business-critical security, resilience, and cloud initiatives, and create the optimal combination of data and information management applications. We believe this approach enhances our ability to expand our product offerings and customer base and to enter new markets.
Our comprehensive solutions address the critical aspects of modern cyber resiliency, from data security to data recovery, data governance and compliance in a flexible and scalable platform. Products Commvault helps customers protect their data and be cyber resilient in a hybrid multi-cloud environment.
Our comprehensive solutions address the critical aspects of modern cyber resiliency, from data protection to data recovery, data governance and compliance in a flexible and scalable platform. Commvault was incorporated in Delaware in 1996. Products Commvault helps customers protect their data and be cyber resilient in hybrid, multi-cloud, and cloud-native environments.
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 publicly traded companies. Mr.
Merrill served as our CFO from June 2022 to July 2024 and 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.
During fiscal year 2024, we began selling our solutions via marketplace offerings which enable customers to purchase our solutions through online platforms, such as Microsoft, AWS or Google. The marketplace allows us to publish an offer which an end user can then purchase directly, or through the assistance of a partner.
We sell our solutions via marketplace offerings which enable customers to purchase our solutions through online platforms, such as AWS, Google, Microsoft, or Oracle. The marketplace allows us to publish an offer which an end user can then purchase directly, or with the assistance of a partner. Cybersecurity and AI Partnerships.
Operational Recovery includes Commvault’s leading backup and recovery capabilities which can be utilized across hybrid enterprise workloads. It includes features like Zero Trust Architecture and immutable storage to ensure critical data is protected and recoverable. This solution can be delivered as customer-managed software, as SaaS, or a mix of the two to meet the requirements of hybrid enterprises worldwide.
Operational Recovery includes Commvault’s leading backup and recovery capabilities which can be utilized across hybrid enterprise workloads. This solution can be delivered as customer-managed software, as SaaS, or a mix of the two to meet the requirements of hybrid enterprises worldwide.
Our technical consultants ensure that customers’ data protection environment is designed for optimal results, configured quickly, and is easy to maintain. We offer architecture design; implementation; automation and orchestration; data migration; and health assessment services.
Our technical consultants guide customers so their data protection environments are designed for optimal results, configured quickly, and easy to maintain. We offer architecture design; implementation; automation and orchestration; data migration; and health assessment services.
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 ("CFO") since July 2022. 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. Jennifer DiRico has served as our Chief Financial Officer (“CFO”) since August 2024. Prior to joining Commvault, Ms.
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.
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 data privacy and security.
Research and Development Our research and development organization is responsible for the design, development, testing and certification of our cyber resilience platform and solutions. Our engineering efforts support product development across all major operating systems, databases, applications, hyperscalers and network storage devices.
Our customers and strategic partners provide references and recommendations that we often feature in external marketing activities. 7 Research and Development Our research and development organization is responsible for the design, development, testing and certification of our cyber resilience platform and solutions. Our engineering efforts support product development across all major operating systems, databases, applications, hyperscalers and network storage devices.
Organizations can automatically failover applications to the secondary site in the event of a data incident and continue running without interruption. Cyber Recovery offers the most comprehensive set of Commvault Cloud capabilities.
It provides trusted recovery of data and applications, VMs, and containers, along with verifiable recoverability of replicas, cost-optimized cloud data mobility and resilience. Organizations can automatically failover applications to a secondary site in the event of a data incident and continue running without interruption. Cyber Recovery offers the most comprehensive set of Commvault Cloud capabilities.
Information about our Executive Officers The following table presents information with respect to our executive officers as of May 9, 2024: Name Age Position Sanjay Mirchandani 59 President and Chief Executive Officer Gary Merrill 49 Chief Financial Officer Sanjay Mirchandani has served as our President and Chief Executive Officer ("CEO") since February 2019. Prior to joining Commvault, Mr.
Information about our Executive Officers The following table presents information with respect to our executive officers as of May 2, 2025: Name Age Position Sanjay Mirchandani 60 President and Chief Executive Officer Jennifer DiRico 40 Chief Financial Officer Gary Merrill 50 Chief Commercial Officer Sanjay Mirchandani has served as our President and Chief Executive Officer ("CEO") since February 2019.
Item 1. Business Company Overview Incorporated in Delaware in 1996, Commvault Systems, Inc. provides its customers with a scalable platform that enhances customers' cyber resiliency by protecting their data in a world of increasing threats. We provide these products and services for their data across many types of environments, including on-premises, hybrid and multi-cloud.
Item 1. Business Company Overview Commvault Systems, Inc. aims to provide its customers cyber resiliency by protecting and recovering their data and cloud-native applications in a world of increasing cyber threats and attacks, including ransomware. We provide products and services across many types of environments, including on-premises, hybrid and multi-cloud.
With Commvault Cloud, customers have access to business-critical capabilities such as layered defenses to detect and minimize the impact of bad actors; automation to verify clean recovery points; and cloud-native capabilities to dedupe, scale, and as necessary, recover business. We believe in solving hard problems for our customers by enabling them to protect their data in a difficult world.
With Commvault Cloud, customers have access to business-critical capabilities such as layered defenses to detect and minimize the impact of bad actors; automation to verify clean recovery points; and cloud-native capabilities to dedupe, scale, and as necessary, recover data and cloud applications to remain in a state of continuous business.
We offer various enhanced Customer Success options, including Enterprise Success Program ("ESP") offerings, to our software and SaaS customers. Our Customer Success offerings provide resources focused on proactively helping our customers achieve their goals and are aligned to their business initiatives.
Our Customer Success offerings provide resources focused on proactively helping our customers achieve their goals and are aligned to their business initiatives.
Commvault's Compliance is an add-on product that facilitates efficient compliance and aids in ensuring relevant legal data remains unaltered. It provides built-in reporting, auditing, and logging to help ensure data is not modified or deleted for legal and compliance purposes. It reduces the time and costs spent between IT and legal departments to expedite discovery and review.
Commvault's Compliance capabilities, which can be procured as an add-on product, facilitates efficient compliance and protects relevant legal data from alteration. It provides built-in reporting, auditing, and logging so data is not modified or deleted for legal and compliance purposes. It is designed to reduce the time and costs spent between IT and legal departments to expedite discovery and review.
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.
In addition, our strategic partners augment our marketing and sales campaigns through seminars, trade shows, joint public relations and advertising campaigns.
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 Avepoint, Cohesity, Dell-EMC, Druva, IBM, Rubrik, Veeam, and Veritas.
The ability of major system vendors to bundle solutions is also a significant competitive factor in our industry. 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 Cohesity, Druva, Rubrik, and Veeam.
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 cyber resilience, data protection, security, transformation, insights, and compliance and governance, including our SaaS and HyperScale X solutions, are core to our competitive advantage.
Our product’s unique capabilities are covered by a robust portfolio of patents worldwide. Areas such as cyber resilience, data protection, transformation, insights, and compliance and governance, including our SaaS and HyperScale X solutions, are core to our competitive advantage. More than 1,500 patents have been issued to Commvault globally as a result of our strategic patenting.
It is designed to meet the needs of any size business protecting workloads across all locations, including hybrid environments such as on-premises and multiple cloud providers; physical servers; virtual machines (“VMs”); applications and databases; endpoint devices; and cloud applications.
It is designed to meet the needs of any size business protecting workloads across all locations, including hybrid and multi-cloud environments; physical servers; virtual machines (“VMs”); applications and databases; endpoint devices; and cloud applications. Operational Recovery provides backup, verifiable recovery, and cost-optimized cloud workload mobility, helping to ensure data availability and granular recovery, even across multiple clouds.
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. 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.
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.
Our Commvault Cloud platform powered by Metallic AI aims to deliver the highest security, most intelligence, and fastest recovery across on-premises, hybrid and multi-cloud environments. Our solutions’ unique features drive the performance, scale, TCO benefits and interoperability of our offerings. Such features include encryption, indexing and immutable recovery.
Our Commvault Cloud platform aims to deliver best-in-class cyber resilience with the fastest recovery across on-premises, hybrid and multi-cloud environments. Our solutions’ unique features drive the performance, scale, TCO benefits and interoperability of our offerings. Such features include encryption, indexing and immutable recovery. Additional options enable content search and auditing features to support data discovery and compliance.
We not only drive the ability to be a best-in-class cyber resilience 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.
The broad range of perspectives in our workforce not only drives our ability to hire the best, most qualified talent and to be a best-in-class cyber resilience organization, but also uphold our value in the marketplace by leading as an employer of choice.
Our Cleanroom Recovery solution empowers organizations to be ready to recover by providing a clean, isolated, and on-demand recovery location in the cloud, as well as the ability to regularly and proactively test their response plans and recover quickly.
Our Cleanroom Recovery solution empowers organizations to be ready to recover by providing a clean, isolated, and on-demand recovery location in the cloud, as well as the ability to regularly and proactively test their incident response plans and recover quickly. 4 Commvault HyperScale X is an intuitive, easy-to-deploy and scale-out, integrated data protection solution to support enterprises' transformations from legacy scale-up infrastructures to the hybrid cloud, container and virtualized environments.
Competition The data protection and cyber resilience 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.
Security operations teams can leverage these integrations to help better understand risks and threats, defend against them, and recover with confidence. Competition The data protection and cyber resilience 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.
Additional options enable content search and auditing features to support data discovery and compliance. 7 Our success and ability to compete depend on our continued development and protection of our solutions. We rely primarily on a combination of trade secret, patent, copyright and trademark laws, as well as contractual provisions, to establish and protect our intellectual property rights.
Our success and ability to compete depend on our continued development and protection of our solutions. We rely primarily on a combination of trade secrets, patents, and copyrights, as well as contractual provisions, to establish and protect our intellectual property rights. We patent our technical infrastructure and key usability and design concepts.
People Commvault aims to unlock potential in data, customers and our employees. 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 people 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 is product, process or team. As of March 31, 2025, we had approximately 3,300 employees worldwide, of which 37% were in the United States and 63% were located internationally.
As of March 31, 2024, we had 2,882 employees worldwide, of which approximately 40% were in the United States and 60% were located internationally. 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.
We remain committed to providing people with opportunities and resources that enable them to work successfully and creatively, while also investing in their professional and personal development.
More than 1,400 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 over 150 worldwide trademark registrations and pending registration applications. Refer to our “Risk Factors” below.
We also have established proprietary trademark rights in markets across the globe, and Commvault owns over 200 worldwide trademark registrations and pending registration applications. Refer to our “Risk Factors” below. Government Regulations The global legal environment of technology businesses is evolving rapidly and is often unclear.
Our offerings are delivered via self-managed software, software-as-a-service ("SaaS"), integrated appliances, or managed by partners. Customers use our Commvault Cloud platform to protect themselves from threats like ransomware and recover their data efficiently.
Our offerings are delivered via self-managed software, software-as-a-service ("SaaS"), integrated appliances, or managed by partners.
Merrill began his career with Arthur Anderson LLP in its audit practice. Mr. Merrill obtained his bachelor’s degree in accounting from Elizabethtown College. Available Information Our website is located at: www.commvault.com. 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.
Merrill held accounting management positions with several publicly traded companies. 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. 9 Available Information Our website is located at: www.commvault.com.
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 to the hybrid cloud, container and virtualized environments. Its flexible architecture allows customers to get up, run quickly and scale while delivering comprehensive data protection for all workloads, including containers, VMs and databases, from a single, extensible platform.
Its flexible architecture allows customers to get up and running quickly and scale while delivering comprehensive data protection for a vast array of workloads, including containers, VMs and databases, from a single, extensible platform.
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. Innovative use of web-based diagnostic tools provides problem analysis and resolution.
We offer global customer support from physical locations around the world, which allows us to provide 24/7 support. Our customers have access to support staff available by phone for first responses and to manage resolutions, and to an online support database for help with troubleshooting and operational questions.
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.
We have designed our support infrastructure to scale with the increasing globalization of our customers. 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. • Broad Expertise. Our support engineers have extensive knowledge of complex applications, servers and networks.
Throughout fiscal 2024, our employees participated in over 1,200 training programs, totaling more than 190,000 hours. Diversity, Equity and Inclusion At Commvault, we believe that diversity is a business imperative at the heart of our human capital management strategy.
Throughout fiscal 2025, our employees, partners and customers participated in over 1,400 training programs, totaling more than 260,000 hours. 8 Community and Belonging At Commvault, we believe that a culture of community and belonging and a workforce encompassing a broad range of talents and perspectives is a business requirement that helps us compete in the marketplace.
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Operational Recovery provides backup, verifiable recovery, and cost-optimized cloud workload mobility, helping to ensure data availability and granular recovery, even across multiple clouds all managed with Commvault’s Command Center. Autonomous Recovery aims to reduce recovery time, downtime, and costs by bringing automation and validation to Operational Recovery.
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Commvault Cloud Rewind integrates automated cloud-native application recovery and rebuild capabilities to help customers quickly restore an organization’s entire cloud application and data environment. By combining data recovery with cloud-native application and infrastructure rebuild automation, Cloud Rewind can help customers get back to business within minutes after a cloud services outage or ransomware attack.
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Our comprehensive customer support includes “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.
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Commvault’s Clumio Backtrack uses automation to rapidly revert objects and datasets stored in Amazon Simple Storage Service (Amazon S3) to a specific point and time.
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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 scale with the increasing globalization of our customers. • Customer Success Options .
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Being able to revert to a specific point and time can be very useful across a variety of recovery use cases, including bringing back data before it was accidentally deleted; before an application started sending incorrect or corrupt data; or before a cybercriminal encrypted the objects and demanded a ransom.
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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. Women in Technology (WiT) 2. Multi-Culture 3. PRISM (LGBTQ+ & Allies) 4. VALOR (Veterans & Allies) 5.
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Additionally, we leverage Arlie, our artificial intelligence ("AI")-powered assistant within the Commvault Cloud platform, to enhance support with real-time, actionable insights. This advanced AI capability is designed for faster resolutions and an even more responsive support experience. Our cloud-based support system creates a virtual global support center to address customer needs.
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CapAbilities (Disability inclusion) We also have two Employee Affinity Groups: Family Support Network and Environmental Group - VAST (Vaulters Advocating Sustainable Technology). Foundational to these engagement initiatives is our Courageous 8 Conversations program designed to foster difficult conversations in an open, safe and respectful manner.
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We proactively take ownership of the customer’s problem and provide bug fixes and updates as part of our commitment to enhancing performance and functionality. • Customer Success Options. We offer various Customer Success options for our software and SaaS customers, including Enterprise Success Program ("ESP") offerings.
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This program has become the hub for all diversity, equity and inclusion issues and 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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Commvault has continued to expand integrations with leading cybersecurity and AI partners. These integrations can play a key role in helping joint customers advance cyber resilience – from identifying potential threats or anomalies, to understanding where sensitive data exists, to accelerating clean recoveries. These bi-directional integrations also empower customers to use their preferred security, data protection, and cyber recovery solutions.
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Commerce Department’s Export Administration Regulations and economic and trade sanctions regulations maintained by the Office of Foreign Assets Control, as well as anti-bribery and anti-corruption laws and regulations, including the Foreign Corrupt Practices Act and the U.K. Bribery Act. Refer to our “Risk Factors” below. People Commvault aims to unlock potential in data, customers and our people.
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DiRico served as Senior Vice President & General Manager, International at Toast, Inc. (“Toast”). Ms. DiRico, who was integral to Toast’s initial public offering in 2021, served in a series of leadership positions within Toast since May 2016, including Senior Vice President & Head of Finance, and Chief of Staff. Prior to that, Ms.
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DiRico served in finance leadership positions with Nuance Communications from 2014 to 2016. She obtained her Masters of Business Administration from Simmons College and Bachelor of Business Administration from the University of Miami. Gary Merrill has served as our Chief Commercial Officer ("CCO") since August 2024. Prior to his current role, Mr.
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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.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn addition, as a technology provider, our customers expect us to demonstrate compliance with current data privacy laws and further make contractual commitments and implement processes to enable the customer to comply with their own obligations under data privacy laws, and our actual or perceived inability to do so may adversely impact sales of our products and services, particularly to customers in highly regulated industries.
Biggest changeIn addition, as a technology provider, our customers expect us to demonstrate compliance with current data privacy laws and further make contractual commitments and implement processes to enable the customer to comply with their own obligations under data privacy laws, and our actual or perceived inability to do so may adversely impact sales of our products and services, particularly to customers in highly regulated industries. 21 Our actual or perceived failure to comply with laws, regulations, contractual commitments, or other actual or asserted obligations, including certain industry standards, regarding personal information, or other confidential information of individuals could lead to costly legal action, brand and reputational damage, significant liability, inability to process data, and decreased demand for our services, which could adversely affect our business.
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.
Risks Related to Our Business and Industry 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.
From time to time, we may become involved in various other legal proceedings relating to matters incidental to the ordinary course of our business, including intellectual property, commercial, product liability, employment, class action, whistleblower and other litigation and claims, and governmental and other regulatory investigations and proceedings.
From time to time, we may become involved in various legal proceedings relating to matters incidental to the ordinary course of our business, including intellectual property, commercial, product liability, employment, class action, whistleblower and other litigation and claims, and governmental and other regulatory investigations and proceedings.
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.
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 13 potential customers about the uses and benefits of our solutions; and the timing of the expiration of our customers’ current agreements for similar solutions.
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, 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 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, including economic downturns and financial instability of banking institutions; and • other events or factors, including those resulting from war, incidents of terrorism or responses to such events.
If we do not have sufficient rights to use the data on which these models rely, we may incur liability through the violation of such laws, third-party privacy or other 19 rights or contracts to which we are a party. Changes in laws, rules, directives and regulations may adversely affect the ability of our business to develop and use AI.
If we do not have sufficient rights to use the data on which these models rely, we may incur liability through the violation of such laws, third-party privacy or other rights or contracts to which we are a party. Changes in laws, rules, directives and regulations may adversely affect the ability of our business to develop and use AI.
We may also market our own products as containing AI features. Some of our customers, especially those in highly regulated industries, may be reluctant or unwilling to adopt such AI features which could reduce or delay customer adoption. Any of these factors could adversely affect our business, reputation, or financial results or subject us to legal liability.
We market our own products as containing AI features. Some of our customers, especially those in highly regulated industries, may be reluctant or unwilling to adopt such AI features which could reduce or delay customer adoption. Any of these factors could adversely affect our business, reputation, or financial results or subject us to legal liability.
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.
The principal competitive factors in our industry include product functionality and integration, platform coverage, ability to invest and 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.
An unfavorable change in the exchange rate of foreign currencies against the U.S. dollar would result in lower revenues when translated into U.S. dollars, although operating expenditures would be lower as well. In recent fiscal years, we have selectively hedged our exposure to changes in foreign currency exchange rates on the balance sheet.
An unfavorable change in the exchange rate of foreign currencies against the 17 U.S. dollar would result in lower revenues when translated into U.S. dollars, although operating expenditures would be lower as well. In recent fiscal years, we have selectively hedged our exposure to changes in foreign currency exchange rates on the balance sheet.
In addition, any failure to successfully implement new information systems and technologies, or improvements or upgrades to existing information systems and technologies in a timely manner could adversely impact our business, internal controls, results of operations, and financial condition. We may not be successful in our initiatives that utilize AI, which could adversely affect our business, reputation, or financial results.
In addition, any failure to successfully implement new information systems and technologies, or improvements or upgrades to existing information systems and technologies in a timely manner could adversely impact our business, internal controls, results of operations, reputation, and financial condition. 19 We may not be successful in our initiatives that utilize AI, which could adversely affect our business, reputation, or financial results.
In addition, we expect that a portion of our sales growth will depend upon our ability to identify and attract new resellers. Our competitors also use reseller arrangements and may be more successful in attracting reseller partners and could enter into exclusive relationships with resellers that make it difficult to expand our reseller network.
In addition, we expect that a portion of our sales growth will depend upon our ability to identify and attract new resellers. Our competitors also use reseller arrangements and may be more successful in attracting resellers and could enter into exclusive relationships with resellers that make it difficult to expand our reseller network.
Any material decrease in the volume of sales generated by OEMs could have a material adverse effect on our revenues and results of operations in future periods. We also sell our solutions via marketplace offerings which enable customers to purchase our solutions through online platforms, typically hosted by a cloud provider.
Any material decrease in the volume of sales generated by OEMs could have a material adverse effect on our revenues and results of operations in the future. We also sell our solutions via marketplace offerings which enable customers to purchase our solutions through online platforms, typically hosted by a cloud provider.
In addition, customers in the past have brought to our attention “bugs” in our software created by the customers’ unique operating environments, which are often characterized by a wide variety of both standard and non-standard configurations that make pre-release testing very difficult and time consuming.
In addition, customers in the past have brought to our 14 attention “bugs” in our software created by the customers’ unique operating environments, which are often characterized by a wide variety of both standard and non-standard configurations that make pre-release testing very difficult and time consuming.
We seek to detect and investigate all cybersecurity incidents and to prevent their recurrence, but attempts to gain unauthorized access to our IT systems or other attacks may be successful, and in some cases, we might be unaware of an incident or its magnitude and effects.
We seek to detect and investigate all cybersecurity breaches or incidents and to prevent their recurrence, but attempts to gain unauthorized access to our IT systems or other attacks may be successful, and in some cases, we might be unaware of an incident or its magnitude and effects.
Potential or existing customers, particularly larger enterprise customers, generally commit significant resources to an evaluation of available solutions and require us to expend substantial time, effort and money educating them as to the value of our solutions. Sales often require an extensive education and marketing effort.
Potential or existing customers, particularly government customers and larger enterprise customers, generally commit significant resources to an evaluation of available solutions and require us to expend substantial time, effort and money educating them as to the value of our solutions. Sales often require an extensive education and marketing effort.
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. Our revenues 12 related to SaaS offerings have increased in recent years.
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. Our revenues related to SaaS offerings have increased in recent years.
In the future, we may enter into additional foreign currency-based hedging contracts to 17 reduce our exposure to significant fluctuations in currency exchange rates on the balance sheet, although there can be no assurances that we will do so.
In the future, we may enter into additional foreign currency-based hedging contracts to reduce our exposure to significant fluctuations in currency exchange rates on the balance sheet, although there can be no assurances that we will do so.
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 software license and SaaS arrangements. The arrangements are typically one to three years in duration.
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 software license and SaaS arrangements. Those arrangements are typically one to three years in duration.
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.
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 and cyber resilience 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.
Demand for data protection and cyber resilience 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) demand for and adoption of new backup devices and networking technologies, and ability to respond to and recover from data breaches in a secure environment.
Demand for data protection and cyber resilience 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) demand for and adoption of new backup devices and networking technologies, and ability to respond to and recover from cyber incidents in a secure environment.
For further discussion on our revolving credit facility, see Note 16 of the notes to the consolidated financial statements. 16 Risks Related to our International Operations If we are unable to effectively manage certain risks and challenges related to our India operations, our business could be harmed. Our India operations are a key factor to our success.
For further discussion on our revolving credit facility, see Note 17 of the notes to the consolidated financial statements. Risks Related to our International Operations If we are unable to effectively manage certain risks and challenges related to our India operations, our business could be harmed. Our India operations are a key factor to our success.
Factors that could affect our revenues and operating results include the following: 21 • the unpredictability of the timing and magnitude of orders for our solutions, particularly transactions greater than $100,000, as a majority of our quarterly revenues were earned and recorded near the end of each quarter; • failure to develop substantial sales pipeline for our products; • failure to attract new customers and expand sales to our existing customers, including by effectively marketing and pricing our products; • 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.
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, as a majority of our quarterly revenues have been earned and recorded near the end of each quarter; • failure to develop substantial sales pipeline for our products; • failure to attract new customers and expand sales to our existing customers, including by effectively marketing and pricing our products; • 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; 23 • 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.
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.
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 and cyber resilience solutions that compete with ours.
See Note 5 of the notes to the consolidated financial statements for additional information on our assets held for sale. 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.
See Note 6 of the notes to the consolidated financial statements for additional information on our assets held for sale. 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.
Borrowing against our revolving credit facility could adversely affect our operations and financial results. We have a $100 million revolving credit facility. As of March 31, 2024, there were no borrowings under the credit facility.
Borrowing against our revolving credit facility could adversely affect our operations and financial results. We have a $100 million revolving credit facility. As of March 31, 2025, there were no borrowings under the credit facility.
Most of our support and maintenance agreements are for a one-year term and thereafter, we pursue renewal thereof. Historically, such renewals have represented a significant portion of our total revenue.
Most of our support and maintenance agreements are for a one-year term and thereafter, we pursue renewal thereof. Historically, such renewals have represented a significant portion of our total revenues.
If we fail to manage our resellers successfully, there may be conflicts between resellers or they could fail to perform as we anticipate, including required compliance with the terms and obligations of our agreement, either of which could reduce our sales or impact our reputation in the market.
If we fail to manage our resellers successfully, there may 11 be conflicts between resellers or they could fail to perform as we anticipate, including required compliance with the terms and conditions of our agreement, either of which could reduce our sales or impact our reputation in the market.
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 solutions by managing our resellers and leveraging their own industry experience.
Further, 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 solutions by managing our resellers and leveraging their own industry experience.
Risks Related to Tax and Accounting Our effective tax rate is difficult to project, and changes in such tax rate or adverse results of tax examinations could adversely affect our operating results. We are a U.S.-based multinational company subject to tax in multiple U.S. and foreign tax jurisdictions.
Our effective tax rate is difficult to project, and changes in such tax rate or adverse results of tax examinations could adversely affect our operating results. We are a U.S.-based multinational company subject to tax in multiple U.S. and foreign tax jurisdictions.
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 plan in fiscal 2024, which we cannot guarantee will achieve its intended results.
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 completed a restructuring plan in fiscal 2025, which we cannot guarantee will achieve its intended results.
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.
We 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 cyber resilience products. We expect that competition will increase as a result of future industry consolidation.
As 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.
As 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 in the past resulted in and may continue to result in volatility in credit, equity, debt and foreign currency markets.
These resellers may give a higher priority to other software or SaaS applications, including those of our competitors, or may not continue to carry data protection solutions.
These resellers may give a higher priority to other software or SaaS applications, including those of our competitors, or may not continue to carry data protection and cyber resilience solutions.
GDPR"), impose strict requirements for processing the personal data of individuals. Violations of these obligations carry significant potential consequences. For example, under the E.U. GDPR, government regulators may impose temporary or definitive bans on processing, as well as fines of up to €20 million or 4% of the annual global revenue, whichever is greater.
Violations of these obligations carry significant potential consequences. For example, under the E.U. GDPR, government regulators may impose temporary or definitive bans on processing, as well as fines of up to €20 million or 4% of the annual global revenue, whichever is greater.
In fiscal 2024, we initiated a restructuring plan to enhance customer satisfaction, optimize operational efficiency, and align our customer experience functions with our strategic goals. We cannot guarantee the restructuring plan will achieve its intended results.
In fiscal 2024, we initiated a restructuring plan to enhance customer satisfaction, optimize operational efficiency, and align our customer experience functions with our strategic goals. This plan was completed in fiscal 2025. We cannot guarantee the restructuring plan will achieve its intended results.
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 22 action litigation.
The market prices of companies in the data protection and cyber resiliency market 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.
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. Risks Related to our Common Stock Goodwill represents a portion of our assets and any impairment of these assets could negatively impact our results of operations.
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. 22 Goodwill represents a portion of our assets and any impairment of these assets could negatively impact our results of operations.
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.
Expansion of our international operations has and is expected to require a significant amount of attention from our management and substantial financial resources and might require us to add qualified management in these markets.
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. 15 Acquisitions involve a number of risks, including diversion of management’s attention, ability to finance the acquisition on attractive terms, failure to retain key personnel or valuable customers, legal liabilities, the need to amortize acquired intangible assets, and intellectual property ownership and infringement risks, any of which could have a material adverse effect on our business, results of operations, financial condition and cash flows.
Acquisitions involve a number of risks, including diversion of management’s attention, ability to finance the acquisition on attractive terms, failure to retain key personnel or valuable customers, legal liabilities, the need to amortize acquired intangible assets, and intellectual property ownership and infringement risks, any of which could have a material adverse effect on our business, results of operations, financial condition and cash flows.
We believe that our significant presence in India provides certain important advantages for our business, such as direct access to a large pool of skilled professionals and assistance in growing our business internationally. However, it also creates certain risks that we must effectively manage. As of March 31, 2024, we had 1,037 employees located in India.
We believe that our significant presence in India provides certain important advantages for our business, such as direct access to a large pool of skilled professionals and assistance in growing our business internationally. However, it also creates certain risks that we must effectively manage. As of March 31, 2025, approximately 39% of our employees were located in India.
Risks Related to Legal Matters We have been, and may in the future become, involved in litigation that may have a material adverse effect on our business.
Risks Related to Financial, Accounting, Regulatory, Tax, and Other Legal Matters We have been, and may in the future become, involved in litigation that may have a material adverse effect on our business.
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.
Most of our new customers previously adopted cyber resilience 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.
We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. In January 2023, we entered into an exclusive agreement to sell our owned corporate headquarters and reclassified the assets as held for sale.
We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. In January 2023, we reclassified our owned corporate headquarters as assets held for sale.
The cyber resiliency 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 cyber resiliency 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. We must continually innovate to maintain our market position.
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 wars in Israel and Ukraine, the COVID-19 pandemic and the governmental regulations put in place as a result of the virus, 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.
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, particularly related to the ongoing Russia-Ukraine conflict and the regional conflict in the Middle East; • 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; • imposition of, or unexpected adverse changes in, foreign laws or regulatory requirements, 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.
At March 31, 2024, our goodwill was approximately $127.8 million, which represented approximately 14% of our total assets. We test goodwill for impairment at least annually at the reporting unit level, or more often if an event occurs or circumstances change that would more likely than not reduce the fair value of its carrying amount.
At March 31, 2025, our goodwill had a carrying value of approximately $185.3 million, which represented approximately 17% of our total assets. We test goodwill for impairment at least annually at the reporting unit level, or more often if an event occurs or circumstances change that would more likely than not reduce the fair value of its carrying amount.
Due to the potential for extended period of collection, we may be exposed to more significant credit risk. 11 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.
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.
We generated approximately 48% and 47% of our revenues from outside the United States in fiscal 2024 and fiscal 2023, respectively. International revenue increased 9% in fiscal 2024 compared to fiscal 2023.
We generated approximately 46% and 48% of our revenues from outside the United States in fiscal 2025 and fiscal 2024, respectively. International revenue increased 15% in fiscal 2025 compared to fiscal 2024.
Although we believe we currently have adequate internal control over financial reporting, we are required to assess our internal control over financial reporting on an annual basis, and any future adverse results from such assessment could result in a loss of investor confidence in our financial reports and have an adverse effect on our stock price.
Securities litigation could have a substantial cost and divert resources and the attention of management from our business. 24 Although we believe we currently have adequate internal control over financial reporting, we are required to assess our internal control over financial reporting on an annual basis, and any future adverse results from such assessment could result in a loss of investor confidence in our financial reports and have an adverse effect on our stock price.
If 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.
If there is a reduction in demand for these services caused by a lack of customer acceptance, technological challenges, weakening economic or political conditions, including as a result of tariffs or the imposition of new tariffs, trade wars, barriers or restrictions, or threats of such actions, 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.
Risks associated with this restructuring plan also include additional unexpected costs, adverse effects on employee morale and the failure to meet operation 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.
Risks associated with this restructuring plan also include additional unexpected costs, adverse effects on employee morale and the failure to meet operation 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. 15 A portion of our revenue is generated by sales to government entities, which are subject to a number of challenges and risks.
Our research and development expenses were $132.3 million, or 16% of our total revenues in fiscal 2024, $141.8 million, or 18% of our total revenues in fiscal 2023 and $153.6 million, or 20% of our total revenues in fiscal 2022.
Our research and development expenses were $146.3 million, or 15%, of our total revenues in fiscal 2025, $132.3 million, or 16%, of our total revenues in fiscal 2024 and $141.8 million, or 18%, of our total revenues in fiscal 2023.
In the normal course of business, we are subject to examination by taxing authorities throughout the world. The final determination of tax audits and any related litigation could be materially different from our historical tax provisions and accruals.
In the normal course of business, we are subject to examination by taxing authorities throughout the world. The final determination of tax audits and any related litigation could be materially different from our historical tax provisions and accruals. For further discussion on income taxes, see Note 12 of the notes to the consolidated financial statements.
It is also costly and time-consuming to change data management systems.
It is also costly and time-consuming to change cyber resilience systems.
Turnover at the senior management level may create instability within the Company, which could impede the Company’s day-to-day operations. Such instability could impede our ability to fully implement our business plan and growth strategy, which would harm our business and prospects. We rely on our key personnel to execute our existing business operations and identify and pursue new growth opportunities.
Such instability could impede our ability to fully implement our business plan and growth strategy, which would harm our business and prospects. We rely on our key personnel to execute our existing business operations and identify and pursue new growth opportunities.
For further discussion on income taxes, see Note 11 of the notes to the consolidated financial statements. 20 Furthermore, our overall effective income tax rate and tax expenses may be affected by various factors in our business, including changes in our entity structure, geographic mix of income and expenses, tax laws, and variations in the estimated and actual level of annual profits before income tax.
Furthermore, our overall effective income tax rate and tax expenses may be affected by various factors in our business, including changes in our entity structure, geographic mix of income and expenses, tax laws, and variations in the estimated and actual level of annual profits before income tax.
Following the completion of acquisitions, we may have to rely on the seller to provide administrative and other support, including financial reporting and internal controls, and other transition services to the acquired business for a period of time. There can be no assurance that the seller will do so in a manner that is acceptable to us.
Following the completion of acquisitions, we may have to rely on the seller to provide administrative and other support, including financial reporting and internal controls, and other transition services to the acquired business for a period of time.
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.
In addition, a significant percentage of our revenue is from 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.
Volatile economic conditions, including those related to the wars in Israel and Ukraine and the global response to the conflicts, the COVID-19 pandemic and its variants, 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.
Volatile economic conditions, including those related to the ongoing Russia-Ukraine conflict, the conflicts in the Middle East and the global response to the conflicts, economic downturns, tariffs or the imposition of new tariffs, trade wars, barriers or restrictions, or threats of such actions, supply chain disruptions, or the financial instability of banking institutions could result in our customers and partners 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.
Incorrect or improper implementation or use of our data security solutions could result in customer dissatisfaction and harm our business, financial condition, and results of operations. 13 Our products are deployed by our customers and partners in a wide variety of IT infrastructures, including large-scale, complex technology environments, and we believe our future success will depend, at least in part, on our ability to support such deployments.
Our products are deployed by our customers and partners in a wide variety of IT infrastructures, including large-scale, complex technology environments, and we believe our future success will depend, at least in part, on our ability to support such deployments.
If we are unable to effectively manage any of the foregoing risks related to our India operations, our development efforts could be impaired, our growth could be slowed and our results of operations could be negatively impacted. Volatility in the global economy could adversely impact our continued growth, results of operations and our ability to forecast future business.
If we are unable to effectively manage any of the foregoing risks related to our India operations, our development efforts could be impaired, our growth could be slowed and our results of operations could be negatively impacted. We may experience fluctuations in foreign currency exchange rates that could adversely impact our results of operations.
New competitors entering our markets can have a negative impact on our competitive positioning. In addition, we expect to encounter new competitors as we enter new markets. Furthermore, many of our existing competitors are broadening their operating systems platform coverage.
New competitors entering our markets may have a negative impact on our competitive positioning. As we enter new markets, we expect to encounter new competitors. Many of our existing competitors are broadening their product breadth and scope.
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 SaaS offerings.
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 sell a backup appliance which integrates our solution with hardware.
Changes in senior management or key personnel could cause disruption in the Company and have a material effect on our business. We have had, and could have, changes in senior management which could be disruptive to management and operations of the Company and could have a material effect on our business, operating results and financial conditions.
We have had, and could have, changes in senior management which could be disruptive to management and operations of the Company and could have a material effect on our business, operating results and financial conditions. Turnover at the senior management level may create instability within the Company, which could impede the Company’s day-to-day operations.
Such events could disrupt our operations or those of our customers or third parties on which we rely, including through direct damage to assets and indirect impacts from supply chain disruption and market volatility.
Such events could disrupt our operations or those of our customers or third parties on which we rely, including through direct damage to assets and indirect impacts from supply chain disruption and market volatility. Our business may be adversely affected by the ongoing Russia-Ukraine conflict, the regional conflict in the Middle East or a public health crisis.
Bad actors regularly attempt to gain unauthorized access to our IT systems, and many such attempts are increasingly sophisticated. 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 nation-state and nation-state supported actors, include trying to covertly introduce malware or ransomware to our environments, impersonating authorized users, as well as other intrusions from nation-state actors and nation-state supported actors.
Sales through the marketplace have not been material to date; however, we anticipate an increase in revenue through this channel. Failure to effectively compete in the marketplace could have a material adverse effect on our revenues and results of operations in future periods.
Failure to effectively compete in the marketplace could have a material adverse effect on our revenues and results of operations in the future.
Our solutions operate primarily on the Windows, UNIX, Linux and Novell Netware operating systems; used in conjunction with Microsoft SQL; and on hardware devices of numerous manufacturers.
Our solutions operate primarily on the Windows, UNIX, Linux and Novell Netware operating systems; used in conjunction with Microsoft SQL; and on hardware devices of numerous manufacturers. Our reliance on such hardware components exposes us to potential supply chain disruption, which can delay product deliveries and adversely affect customer satisfaction.
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. 23 We currently, and may in the future, have assets held at financial institutions that may exceed the insurance coverage offered by the Federal Deposit Insurance Corporation (“FDIC”), the loss of which would have a severe negative affect on our operations and liquidity.
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. 25 Item 1B. Unresolved Staff Comments None.
If we fail to adapt and respond effectively to rapidly changing technology, evolving industry standards, changing regulations, or to changing customer needs, requirements, or preferences, our products may become less competitive.
Microsoft and other cloud platform providers may furthermore introduce functionality that competes with our products and services, as a result of an acquisition, or their own development. 20 If we fail to adapt and respond effectively to rapidly changing technology, evolving industry standards, changing regulations, or to changing customer needs, requirements, or preferences, our products may become less competitive.
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.
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. 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.
Arrow accounted for approximately 36% of our total revenues for fiscal 2024 and 37% of our total revenues in both fiscal 2023 and fiscal 2022.
Arrow accounted for approximately 35%, 36% and 37% of our total revenues for the years ended March 31, 2025, 2024 and 2023, respectively.
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.
If at the end of the initial term, customers elect to not renew, or they renew on terms that are less favorable to us, our business and financial performance might be adversely impacted. Volatility in the global economy could adversely impact our continued growth, results of operations and our ability to forecast future business.
Increased competition could harm our business by causing, among other things, price reductions of our products, reduced profitability and loss of market share.
Increased competition could harm our business by causing, among other things, price reductions of our products, reduced profitability and loss of market share. Additionally, attracting and retaining skilled professionals is a common challenge in the cyber resilience space, due to the intensely competitive nature of the industry.
Other states have enacted or proposed similar laws. These developments may increase legal risk and compliance costs for us and our customers. 14 Outside the United States, an increasing number of laws, regulations, and industry standards govern data privacy and security. For example, the European Union’s ("E.U.") General Data Protection Regulation ("E.U. GDPR"), and the United Kingdom’s ("U.K.") GDPR ("U.K.
Outside the United States, an increasing number of laws, regulations, and industry standards govern data privacy and security. For example, the European Union’s ("E.U.") General Data Protection Regulation ("E.U. GDPR") and the Digital Operational Resilience Act (“DORA”), and the United Kingdom’s ("U.K.") GDPR ("U.K. GDPR"), impose strict requirements for processing the personal data of individuals.
Any failure on our part to maintain and/or expand our network of resellers could impair our ability to grow revenues in the future. 10 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.
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.
Deterioration of economic conditions in the countries in which we do business could also cause slower or impaired collections on accounts receivable. 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 scope and interpretation of these laws could change and the associated burdens and our compliance costs could increase in the future. A portion of our revenue is generated by sales to government entities, which are subject to a number of challenges and risks.
The scope and interpretation of these laws could change and the associated burdens and our compliance costs could increase in the future. Changes in tax laws or tax rulings could materially affect our financial position, results of operations, and cash flows.
In the event of a failure or liquidity issues of or at any of the financial institutions where we maintain our deposits or other assets, we may incur a loss to the extent such loss exceeds the FDIC insurance limitation, which could have a material adverse effect upon our liquidity, financial condition and our results of operations.
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.
Removed
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.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe current CISO holds a Bachelor of Science in Information Technology, industry certifications such as CISSP, CISA, CISM, is affiliated with various CISO professional working groups, and has over twenty-five years of experience in information security, compliance, technology, and program management across financial, telecommunications, audit, healthcare, retail, and professional services organizations.
Biggest changeThe current CSO holds a Bachelor of Science and Master of Business Administration from the University of Maryland, industry certifications such as CISSP, PMP, CIPP/E, CIPP/US and CISA, is affiliated with various industry working groups focused on threat intelligence and privacy, and has over twenty years of experience in cybersecurity leading technical, operational, and strategic programs to protect critical data and infrastructure.
Management ensures cybersecurity risks are communicated through the establishment of the ERMC and the CSOT and regular, or as needed, reporting to the Audit Committee and the Board. The ERMC is responsible for the implementation, maintenance, and execution of our enterprise risk management program.
Management ensures cybersecurity risks are communicated through the establishment of the ERMC and regular, or as needed, reporting to the Audit Committee and the Board. The ERMC is responsible for the implementation, maintenance, and execution of our enterprise risk management program.
Item 1C. Cybersecurity Risk Management and Strategy Commvault has established a cybersecurity program for the benefit of the company, our customers, partners and stockholders. The cybersecurity program includes policies, processes and practices that are designed to assess, identify and manage material risks from cybersecurity threats and is integrated into our enterprise risk management program.
Item 1C. Cybersecurity Risk Management and Strategy Commvault has established a cybersecurity program for the benefit of the company, our customers, partners and stakeholders. The cybersecurity program includes policies, processes and practices that are designed to assess, identify and manage material risks from cybersecurity threats and is integrated into our enterprise risk management program.
The Board is kept apprised of cybersecurity updates through quarterly, or as needed, reporting from the Audit Committee Chair and annual, or as needed, reporting directly to the Board from the CISO.
The Board is kept apprised of cybersecurity updates through quarterly reporting from the Audit Committee Chair and annual, or as needed, reporting directly to the Board from the CSO.
We also assess third-party service provider cybersecurity controls through a risk assessment questionnaire and include security and privacy terms in contracts as appropriate. Commvault maintains a variety of third-party certifications and undergoes annual assessments for SOC 2 Type 2, ISO 27001, HIPAA, CJIS, and PCI DSS. In support of these certifications and assessments, our products also undergo security testing.
We also assess third-party service provider cybersecurity controls and include security and privacy terms in contracts as appropriate. Commvault maintains a variety of third-party certifications and undergoes annual assessments for SOC 2 Type 2, ISO 27001, HIPAA, CJIS, and PCI DSS. In support of these certifications and assessments, our products also undergo security testing.
The ERMC meets quarterly, or as needed, to assess, consider, and manage material risks including cybersecurity threats across the business. The CSOT is responsible for the significant operational decisions in the event of an active cybersecurity incident.
The ERMC meets quarterly, or as needed, to assess, consider, and manage material risks, including cybersecurity threats across the business. An Executive Security Council is responsible for the significant operational decisions in the event of an active cybersecurity incident.
We have established a Security Incident Response Plan ("SIRP") which outlines our processes for incident preparation, detection, analysis, containment, eradication, and post-incident analysis.
We adopt industry best practices and security technologies and have established a Security Incident Response Plan ("SIRP") which outlines our processes for incident preparation, detection, analysis, containment, eradication, and post-incident analysis.
We partner with third parties to enhance monitoring and response capabilities and facilitate readiness activities including tabletop exercises and penetration testing. All employees are required to undergo annual security awareness training on current and potential cybersecurity threats and report suspicious activity.
We partner with third party service providers to enhance our monitoring and response capabilities, facilitate readiness activities including tabletop exercises, and perform various methods of cybersecurity penetration testing. All employees are required to undergo annual security awareness training on current and potential cybersecurity threats and report suspicious activity.
The CSOT meets as needed, with the Audit Committee Chair as an optional attendee, to provide counsel and foster productive communication between Management and the Board.
The Executive Security Council meets monthly, or as needed, with the Audit Committee Chair as an optional attendee, to provide counsel and foster productive communication between Management and the Board.
Commvault’s Management, including the CEO, CFO, CLCO, CISO, Chief Information Officer (“CIO”), and Senior Vice President of Engineering, is responsible for our cybersecurity risk management strategy, operational decision-making, and incident preparedness and response.
Commvault’s Management, including the CEO, CFO, Chief Trust Officer, CSO, CIO, and Senior Vice President of Engineering, is responsible for our cybersecurity risk management strategy, operational decision- 26 making, and incident preparedness and response.
Led by the Chief Information Security Officer (“CISO”), Commvault’s cybersecurity program leverages the National Institute of Standards and Technology ("NIST") Cybersecurity Framework, with the primary objective of securing systems and data from cyber threats. We procure security technologies, consistently work to mature our cybersecurity program, and partner with security service providers.
Led by the Chief Security Officer (“CSO”), Commvault’s cybersecurity program leverages the National Institute of Standards and Technology ("NIST") Cybersecurity Framework, with the primary objective of securing systems and data from cyber threats. We partner with industry-leading cybersecurity experts for continuous monitoring, alerting, mitigation and responsiveness related to our cybersecurity program.
Annually, internal auditors complete a risk assessment of specific business operations like privacy and sanctions compliance or travel & expense policy compliance, identify areas of heightened risk, and conduct dedicated audit engagements at the direction of Management. The findings, observations, and recommendations from these engagements are shared with Management and the Audit Committee, as appropriate.
Annually, internal auditors complete a risk assessment of specific business operations, such as privacy and sanctions compliance and travel and expense policy compliance, identify areas of heightened risk, and conduct dedicated audit engagements.
“Risk Factors.” 24 Governance Commvault’s Board of Directors (the "Board") provides oversight of Commvault’s enterprise risk management strategy, which includes risks from cybersecurity threats.
“Risk Factors.” Governance Commvault’s Board of Directors (the "Board") provides oversight of Commvault’s enterprise risk management strategy, which includes risks from cybersecurity threats. The Audit Committee of the Board receives quarterly briefings on the cybersecurity program from the CSO and briefings on the Enterprise Risk Management Committee (“ERMC”) from the Chief Trust Officer.
Commvault has prioritized cyber resilience measures and leverages governance processes and procedures to mitigate potential business impacts if and when an adverse event occurs. Although no material impacts have been recorded to date, IT system failures, network disruptions, cybersecurity incidents, and data breaches could adversely impact our business, internal controls, results of operations, and financial condition.
Commvault has prioritized cyber resilience measures and leverages governance processes and procedures to mitigate potential business impacts if and when an adverse event occurs.
To date, Commvault is not aware of any cybersecurity incidents that have materially affected Commvault’s financial condition or business operations. Given the increasingly complex and sophisticated cyber threat landscape, we try to be vigilant to predict and prevent attacks.
To date, Commvault is not aware of any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect Commvault, including its business strategy, results of operations or financial condition.
Removed
The Audit Committee of the Board of Directors receives quarterly briefings on the cybersecurity program from the CISO and briefings on the Enterprise Risk Management Committee (“ERMC”) and Cybersecurity Oversight Team (“CSOT”) from the Chief Legal and Compliance Officer (“CLCO”).
Added
The findings, observations, and recommendations from these engagements are shared with Management, including the CEO, CFO, Chief Trust Officer, CSO, Chief Information Officer ("CIO"), and Senior Vice President of Engineering and the Audit Committee, as appropriate. Given the increasingly complex and sophisticated cyber threat landscape, we try to be vigilant to predict and prevent attacks.
Added
Although no material impacts have been recorded to date, IT system failures, network disruptions, cybersecurity incidents, and data breaches could adversely impact our business, internal controls, results of operations, and financial condition. For example, in February and April 2025, Microsoft notified the Company about unauthorized activity within our Azure environment by a suspected nation-state threat actor.
Added
As part of the ongoing investigation regarding this activity, the Company immediately activated its incident response plan, issued security advisories, and implemented several advanced security measures, including enhanced rotation of credentials and strengthened security monitoring, among other proactive measures.

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. In January 2023, we entered into an exclusive agreement to sell the property. The exclusivity expired in January 2024 and we are currently marketing the corporate headquarters for sale.
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 October 2024, we signed a purchase and sale agreement to sell the property. We believe the sale will be completed in the first quarter of fiscal 2026.
In addition, we have offices in the United States in Florida and Texas; and outside the United States in Australia, Belgium, Brazil, Canada, China, Denmark, France, Germany, India, Israel, Italy, Japan, Malaysia, Netherlands, Saudi Arabia, Singapore, South Africa, South Korea, Spain, Switzerland, Taiwan, United Arab Emirates, and United Kingdom.
In addition, we have offices in the United States in California and Florida; and outside the United States in Australia, Austria, Belgium, Brazil, Canada, China, Denmark, Egypt, France, Germany, India, Israel, Italy, Japan, Malaysia, Netherlands, Saudi Arabia, Singapore, South Africa, South Korea, Spain, Sweden, Switzerland, Taiwan, United Arab Emirates, and United Kingdom.
We believe the sale will be completed in calendar year 2024. Upon closing of the transaction, we intend to enter into a lease for a portion of the premises.
Upon closing of the transaction, we 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 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.
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 4.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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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. 3/31/2019 3/31/2020 3/31/2021 3/31/2022 3/31/2023 3/31/2024 Commvault 100.00 62.53 99.63 102.49 87.64 156.67 Nasdaq Composite Index 100.00 99.62 171.38 183.98 158.12 211.91 Nasdaq Computer Index 100.00 112.16 196.63 236.26 211.45 316.72 27 Issuer Purchases of Equity Securities During the three months ended March 31, 2024, we repurchased $50.4 million of common stock, or approximately 0.5 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. 3/31/2020 3/31/2021 3/31/2022 3/31/2023 3/31/2024 3/31/2025 Commvault 100.00 159.34 163.91 140.17 250.57 389.72 Nasdaq Composite Index 100.00 172.04 184.68 158.72 212.72 224.66 Nasdaq Computer Index 100.00 175.32 210.65 188.53 282.39 296.88 29 Item 6. [Reserved]
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 9, 2024, there were approximately 41 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 2, 2025, there were approximately 38 holders of our common stock.
This graph assumes the investment of $100,000 on March 31, 2019 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, 2019 was the closing sales price of $64.74 per share.
This graph assumes the investment of $100,000 on March 31, 2020 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, 2020 was the closing sales price of $40.48 per share.
As a result, $71.9 million remained available under the current authorization.
As a result, $91.5 million remained available under the current authorization.
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, 2024 132,303 $ 78.88 132,303 $ 111,875 February 1-29, 2024 210,163 93.78 210,163 92,166 March 1-31, 2024 204,571 98.85 204,571 71,944 * Three months ended March 31, 2024 547,037 $ 92.07 547,037 *On April 18, 2024, the Board of Directors approved an increase in our share repurchase program so that $250.0 million was available.
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, 2025 - January 31, 2025 62,963 $ 157.92 62,963 $ 111,349 February 1, 2025 - February 28, 2025 53,923 174.65 53,923 101,932 March 1, 2025 - March 31, 2025 65,250 160.32 65,250 91,471 * Three months ended March 31, 2025 182,136 $ 163.73 182,136 *On April 17, 2025, the Board of Directors approved an increase in our share repurchase program so that $250.0 million was available.
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. 26 Stock Performance Graph The graph set forth below compares the cumulative total stockholder return on our common stock between March 31, 2019 and March 31, 2024, with the cumulative total return of (i) The Nasdaq Composite Index and (ii) The Nasdaq Computer 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. 27 Issuer Purchases of Equity Securities During the three months ended March 31, 2025, we repurchased $29.8 million of common stock, or approximately 0.2 million shares, under our repurchase program.
Removed
The Board's authorization has no expiration date. Item 6. [Reserved]
Added
The Board's authorization has no expiration date. 28 Stock Performance Graph The graph set forth below compares the cumulative total stockholder return on our common stock between March 31, 2020 and March 31, 2025, with the cumulative total return of (i) The Nasdaq Composite Index and (ii) The Nasdaq Computer Index, over the same period.

Item 7. Management's Discussion & Analysis

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

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Biggest changeA summary of the cash used for the stock repurchase program consists of the following: Year Ended March 31, 2024 2023 2022 2021 2020 Cash used for repurchases (in thousands) $ 184,021 $ 150,921 $ 305,239 $ 95,259 $ 77,198 Shares repurchased (in thousands) 2,479 2,521 4,307 1,643 1,701 Average price per share $ 74.24 $ 59.90 $ 70.87 $ 57.97 $ 45.37 Our summarized cash flow information is as follows (in thousands): Year Ended March 31, 2024 2023 Net cash provided by operating activities $ 203,798 $ 170,288 Net cash used in investing activities (5,521) (5,286) Net cash used in financing activities (170,581) (135,579) Effects of exchange rate — changes in cash (2,720) (9,152) Net increase in cash and cash equivalents $ 24,976 $ 20,271 - Net cash provided by operating activities was impacted by: • Fiscal 2024: net income adjusted for the impact of non-cash charges and increases in deferred revenue, partially offset by increases in accounts receivable. 38 • 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. - Net cash used in investing activities was impacted by: • Fiscal 2024: $4.1 million of capital expenditures and $1.4 million for the purchase of equity securities. • Fiscal 2023: $3.2 million of capital expenditures and $2.1 million for the purchase of equity securities. - Net cash used in financing activities was impacted by: • Fiscal 2024: $184.0 million used to repurchase shares of our common stock under our repurchase program, partially offset by $13.4 million of proceeds from the exercise of stock options and the Employee Stock Purchase Plan. • Fiscal 2023: $150.9 million used to repurchase shares of our common stock under our repurchase program and $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.
Biggest changeThe Board's authorization has no expiration date. 39 A summary of the cash used for the stock repurchase program consists of the following: Year Ended March 31, 2025 2024 2023 2022 2021 Cash used for repurchases (in millions) $ 165.0 $ 184.0 $ 150.9 $ 305.2 $ 95.3 Shares repurchased (in millions) 1.2 2.5 2.5 4.3 1.6 Average price per share $ 135.77 $ 74.24 $ 59.90 $ 70.87 $ 57.97 Our summarized cash flow information is as follows (in millions): Year Ended March 31, 2025 2024 Net cash provided by operating activities $ 207.4 $ 203.8 Net cash used in investing activities (70.4) (5.5) Net cash used in financing activities (147.8) (170.6) Effects of exchange rate — changes in cash 0.2 (2.7) Net increase (decrease) in cash and cash equivalents $ (10.6) $ 25.0 - Net cash provided by operating activities was impacted by: • Fiscal 2025: net income adjusted for the impact of non-cash charges and an increase in deferred revenue, partially offset by an increase in accounts receivable. • Fiscal 2024: net income adjusted for the impact of non-cash charges and an increase in deferred revenue, partially offset by an increase in accounts receivable. - Net cash used in investing activities was impacted by: • Fiscal 2025: $65.3 million for the acquisitions of Appranix and Clumio, $3.8 million of capital expenditures and $1.3 million for the purchase of equity securities. • Fiscal 2024: $4.1 million of capital expenditures and $1.4 million for the purchase of equity securities. - Net cash used in financing activities was impacted by: • Fiscal 2025: $165.0 million used to repurchase shares of our common stock under our repurchase program, partially offset by $17.5 million of proceeds from the exercise of stock options and the Employee Stock Purchase Plan. • Fiscal 2024: $184.0 million used to repurchase shares of our common stock under our repurchase program, partially offset by $13.4 million of proceeds from the exercise of stock options and the Employee Stock Purchase Plan. 40 Working capital decreased $30.2 million from $110.2 million as of March 31, 2024 to $80.0 million as of March 31, 2025.
Our c ustomer support revenue includes support contracts tied to our software products. Customer support includes software updates on a when-and-if-available basis, telephone support, integrated web-based support, and other premium support offerings, for both term-based software license and perpetual software license arrangements. We sell our customer support contracts as a percentage of net software.
Our c ustomer support revenue includes support contracts tied to our software products. Customer support includes software updates on a when-and-if-available basis, telephone support, integrated web-based support, and other premium support offerings, for both term-based software license and perpetual software license arrangements. We sell our customer support contracts as a percentage of net software.
Customer support revenue is recognized ratably over the term of the customer support agreement, which is typically one year on our perpetual licenses. The term of our subscription arrangements is typically one to three years, but can range between one and five years.
Customer support revenue is recognized ratably over the term of the customer support agreement, which is typically one year on our perpetual licenses. The term of our subscription arrangements is typically one to three years, but can range between one and five years.
The Credit Facility also contains certain customary events of default 37 which would permit the lender to, among other things, declare all loans then outstanding to be immediately due and payable if such default is not cured within applicable grace periods.
The Credit Facility also contains certain customary events of default which would permit the lender to, among other things, declare all loans then outstanding to be immediately due and payable if such default is not cured within applicable grace periods.
The failure of our indirect distribution channels or our direct sales force to effectively sell our products and services could have a material adverse effect on our revenues and results of operations.
The failure of our indirect 30 distribution channels or our direct sales force to effectively sell our products and services could have a material adverse effect on our revenues and results of operations.
Our appliances are almost exclusively sold 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 revenues and costs associated with hardware are usually not included in our financial statements.
These appliances are almost exclusively sold 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 revenues and costs associated with hardware are usually not in our financial statements.
In assessing the need for a valuation allowance, we considered all available objective and verifiable evidence both positive and negative, including historical levels of pre-tax income (loss) both on a consolidated basis and tax reporting entity basis, legislative developments, expectations and risks associated with estimates of future pre-tax income, and prudent and feasible tax planning strategies.
In assessing the need for a valuation allowance, we consider all available objective and verifiable evidence both positive and negative, including historical levels of pre-tax income or loss, both on a consolidated basis and tax reporting entity basis, legislative developments, expectations and risks associated with estimates of future pre-tax income, and prudent and feasible tax planning strategies.
We analyze various factors including, but not limited to, the selling price of undelivered services when sold on a stand-alone basis, our pricing policies, the credit-worthiness of our customers, and contractual terms and conditions in helping us to make such judgments about revenue recognition.
We analyze various factors including, but not limited to, the selling price of undelivered services when sold on a stand-alone basis, our pricing policies, the creditworthiness of our customers, and contractual terms and conditions in helping us to make such judgments about revenue recognition.
We do not recognize software revenue related to the renewal of subscription software licenses earlier than the beginning of the new subscription period. 31 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.
We do not recognize software revenue related to the renewal of subscription software licenses earlier than the beginning of the new subscription period. We also offer software that integrates with appliances 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.
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, 2023 to March 31, 2022, please refer to our Annual Report on Form 10-K, filed with the SEC on May 5, 2023.
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, 2024 to March 31, 2023, please refer to our Annual Report on Form 10-K, filed with the SEC on May 13, 2024.
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 Subscription Term-based 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 Software-as-a-service (SaaS) 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 Perpetual License Perpetual software licenses Upon shipment or made available for download (point in time) Within 90 days of shipment Residual approach Customer Support 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 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 32 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.
Standalone selling prices for SaaS, customer support contracts, and other services are typically estimated based on observable transactions when these services are sold on a standalone basis. 33 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 Subscription Term-based 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 Software-as-a-service (SaaS) 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 Perpetual License Perpetual software licenses Upon shipment or made available for download (point in time) Within 90 days of shipment Residual approach Customer Support 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 Other professional services As work is performed (over time) Within 90 days of services being performed 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.
We are focused on these types of recurring revenue arrangements. 28 We expect our subscription arrangements will continue to generate revenues from the renewals of term-based licenses and SaaS offerings sold in prior years. Any of our pricing models (capacity, instance based, etc.) can be sold via a subscription arrangement, either through term-based licensing or hosted services.
We are focused on these types of recurring revenue arrangements. 32 We expect our subscription arrangements will continue to generate revenues from the renewals of term-based licenses and SaaS offerings sold in prior years. We offer of our pricing models (capacity, instance based, etc.) to be sold via a subscription arrangement, either through term-based licensing or hosted services.
We recognized net foreign currency transaction losses of $2.4 million and $1.2 million in fiscal 2024 and fiscal 2023, respectively, and insignificant losses in fiscal 2022. 30 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 recognized net foreign currency transaction losses of $1.5 million, $2.4 million and $1.2 million in fiscal 2025, fiscal 2024 and fiscal 2023, respectively. 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.
Sources of Revenues We generate revenues through subscription arrangements, perpetual software licenses, customer support contracts and other services. A significant portion of our total revenues comes from subscription arrangements, which include both sales of term-based licenses and SaaS offerings.
We recognize revenue net of sales tax. We generate revenues through subscription arrangements, perpetual software licenses, customer support contracts and other services. A significant portion of our total revenues comes from subscription arrangements, which include both sales of term-based licenses and SaaS offerings.
Also included in this category are other general corporate expenses, such as outside legal and accounting services, compliance costs and insurance; and • Depreciation and Amortization , consists of depreciation expense for computer equipment we use for information services and in our development and test labs, amortization of intangible assets, and in fiscal years 2023 and 2022, depreciation for our owned corporate headquarters.
Also included in this category are other general corporate expenses, such as outside legal and accounting services, compliance costs and insurance; and 31 • Depreciation and Amortization , consists of depreciation expense for fixed assets, computer equipment we use for information services and in our development and test labs, and amortization of intangible assets.
Our operating expenses are as follows: • Sales and Marketing , consists primarily of salaries, commissions, employee benefits, stock-based compensation and other direct and indirect business expenses, including travel and related expenses, sales promotion expenses, public relations expenses and costs for marketing materials and other marketing events (such as trade shows and advertising); • Research and Development , which is primarily the expense of developing new software applications and modifying existing software applications, consists principally of salaries, stock-based compensation and benefits for research and development personnel and related expenses; contract labor expense and consulting fees as well as other expenses associated with the design, certification and testing of our software applications; and legal costs associated with the patent registration of such software applications; • General and Administrative , consists primarily of salaries, stock-based compensation and benefits for our executive, accounting, human resources, legal, information systems and other administrative personnel.
Our operating expenses are as follows: • Sales and Marketing , consists primarily of salaries, commissions, employee benefits, stock-based compensation and other direct and indirect business expenses, including travel and related expenses, sales promotion expenses, public relations expenses and costs for marketing materials and other marketing events (such as trade shows and advertising); • Research and Development , consists primarily of salaries, stock-based compensation, benefits and related expenses for research and development personnel associated with the development of new, or the modification of existing, offerings and applications; further, costs related to certain contract labor and consulting fees and expenses associated with the design, certification and testing of our offerings are included; as well as legal costs associated with the patent registration of such offerings and applications; • General and Administrative , consists primarily of salaries, stock-based compensation and benefits for our executive, accounting, human resources, legal, information technology and other administrative personnel.
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.
Our operating expenses would not have been materially impacted for fiscal 2025. 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.
Our total revenues 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. 34 Cost of Revenues and Gross Margin ($ in millions) Year Ended March 31, 2024 2023 Cost of Revenues Gross Margin Cost of Revenues Gross Margin Subscription $ 58.4 86 % $ 44.5 87 % Perpetual license 2.2 96 % 2.4 97 % Customer support 60.8 80 % 58.3 81 % Other services 30.3 32 % 30.2 37 % Total $ 151.6 82 % $ 135.4 83 % – Total cost of revenues increased $16.2 million and represented 18% and 17% of our total revenues in fiscal 2024 and fiscal 2023, respectively. – Cost of subscription revenue increased $13.9 million, representing 14% of our total subscription revenue in fiscal 2024 compared to 13% in fiscal 2023.
Our total revenues in International is subject to changes in foreign exchange rates as further discussed above in the “Foreign Currency Exchange Rates’ Impact on Results of Operations” section. 36 Cost of Revenues and Gross Margin ($ in millions) Year Ended March 31, 2025 2024 Cost of Revenues Gross Margin Cost of Revenues Gross Margin Subscription $ 88.9 85 % $ 58.4 86 % Perpetual license 1.5 97 % 2.2 96 % Customer support 57.7 81 % 60.8 80 % Other services 31.0 28 % 30.3 32 % Total $ 179.0 82 % $ 151.6 82 % – Total cost of revenues increased $27.4 million and represented 18% of our total revenues in fiscal 2025 and fiscal 2024. – Cost of subscription revenue increased $30.5 million, representing 15% of our total subscription revenue in fiscal 2025 compared to 14% in fiscal 2024.
Software revenue in these arrangements is generally recognized when the software is delivered. In SaaS offerings, customers use hosted software over the contract period without taking possession of the software. Revenue related to SaaS is recognized ratably over the contract period. We sell both perpetual and term-based licenses of our software.
Software revenue in these arrangements is generally recognized when the software is delivered. In SaaS offerings, customers use hosted software over the contract period without taking possession of the software. Revenue related to SaaS is recognized ratably over the contract period.
We have concluded that our software licenses (both perpetual and subscription) are functional intellectual property that is distinct, as the user can benefit from the software on its own.
The software is delivered before related services are provided and is functional without professional services, updates and technical support. We have concluded that our software licenses (both perpetual and subscription) are functional intellectual property that is distinct, as the user can benefit from the software on its own.
Perpetual license revenue accounted for 7% of total revenues in fiscal 2024 compared to 10% in fiscal 2023. – Customer support revenue decreased $6.5 million, or 2% year over year, driven by a $32.4 million decrease in customer support revenue attached to perpetual license support renewals, partially offset by a $25.9 million increase in customer support allocated to term-based license arrangements. – Other services revenue decreased $2.9 million, or 6% year over year.
Perpetual license revenue accounted for 6% of total revenues in fiscal 2025 compared to 7% in fiscal 2024. – Customer support revenue was flat compared to the same period of the prior year, driven by a $25.7 million decrease in customer support revenue attached to perpetual license support renewals, offset by a $25.5 million increase in customer support related to term-based license arrangements. – Other services revenue decreased $2.0 million, or 4% year over year.
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 period-to-period. As such, there may be fluctuations in the dollars and percentage of subscription revenue generated through our direct distribution channels from time-to-time.
Subscription revenue generated through direct distribution channels accounted for approximately 10% of total subscription revenue in recent fiscal years. 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 period-to-period.
Results of Operations Amounts reported in millions are rounded based on the amounts in thousands. As a result, the sum of the components reported in millions may not equal the total amount reported in millions due to rounding.
As a result, the sum of the components reported in millions may not equal the total amount reported in millions due to rounding.
Revenues from other services can vary period over period based on the timing services are delivered and are typically recognized as the services are performed. 29 Description of Costs and Expenses Our cost of revenues is as follows: • Cost of Subscription 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 as well as third-party hosting fees related to our SaaS offerings; • Cost of Perpetual License Revenue , consists primarily of the cost of third-party royalties and other costs such as media, manuals, translation and distribution costs; • Cost of Customer Support Revenue , consists of salary and employee benefit costs in providing customer support services; and • Cost of Other Services Revenue , consists of salary and employee benefit costs in providing professional services.
Description of Costs and Expenses Our cost of revenues is as follows: • Cost of Subscription Revenue , consists primarily of the cost of third-party royalties and other costs such as media, manuals, translation and distribution costs, and third-party hosting fees related to our SaaS offerings; • Cost of Perpetual License Revenue , consists primarily of the cost of third-party royalties; • Cost of Customer Support Revenue , consists of salary and employee benefit costs in providing customer support services; and • Cost of Other Services Revenue , consists of salary and employee benefit costs in providing professional services.
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 solutions by managing our resellers 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 solutions by managing our resellers and leveraging their own industry experience. We generated approximately 35%, 36% and 37% of our total revenues through Arrow in fiscal 2025, fiscal 2024 and fiscal 2023, respectively.
On April 18, 2024, 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.
On April 17, 2025, the Board of Directors approved an increase in our share repurchase program so that $250.0 million was available.
Using the average foreign currency exchange rates from fiscal 2023, our total revenues would have been lower by $4.1 million, our cost of revenues would have been higher by $0.1 million, and our operating expenses would have been lower by $1.4 million from non-U.S. operations for fiscal 2024.
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. Using the average foreign currency exchange rates from fiscal 2024, our fiscal 2025 total revenues would have been higher by $4.2 million and our cost of revenues would have been higher by $1.0 million, respectively.
We believe that the growth of our subscription revenue, derived from both our indirect channel partners and direct sales force, are key attributes to our long-term growth strategy.
As such, there may be fluctuations in the dollars and percentage of subscription revenue generated through our direct distribution channels from time-to-time. We believe that the growth of our subscription revenue, derived from both our indirect channel partners and direct sales force, are key attributes to our long-term growth strategy.
Customer support and other services revenues declined 5% and 9%, respectively. ▪ The increase in International total revenues was primarily due to a 21% increase in subscription revenue, offset by an 8% decrease in perpetual license revenue. Customer support revenue increased 2% year over year. Other services revenue was flat year over year.
Customer support and other services revenues declined 2% and 3%, respectively. ▪ The increase in International total revenues was primarily due to a 33% increase in subscription revenue, partially offset by a 10% decrease in perpetual license revenue, driven by the shift from selling perpetual licenses to subscription arrangements. Customer support revenue increased 2% year over year.
We remain focused on selling subscription arrangements through both term-based software licenses and SaaS offerings. – Subscription revenue increased $81.4 million, or 23% year over year, driven primarily by an 87% increase in our SaaS revenue compared to the same period in the prior year.
We remain focused on selling subscription arrangements through both term-based software licenses and SaaS offerings. – Subscription revenue increased $160.5 million, or 37% year over year, driven primarily by a 74% increase in our SaaS revenue.
Overview Incorporated in Delaware in 1996, Commvault Systems, Inc. provides its customers with a scalable platform that enhances customers' cyber resiliency by protecting their data in a world of increasing threats. We provide these products and services for their data across many types of environments, including on-premises, hybrid and multi-cloud.
Overview Commvault Systems, Inc. aims to provide its customers cyber resiliency by protecting and recovering their data and cloud-native applications in a world of increasing cyber threats and attacks, including ransomware. We provide products and services across many types of environments, including on-premises, hybrid and multi-cloud.
Fiscal year ended March 31, 2024 compared to fiscal year ended March 31, 2023 Revenues (in millions) 33 – Total revenues increased $54.7 million, or 7% year over year, driven prim arily by an increase in subscription revenue, offset by decreases in perpetual license and customer support revenues.
Fiscal year ended March 31, 2025 compared to fiscal year ended March 31, 2024 Revenues ($ in millions) – Total revenues increased $156.4 million, or 19% year over year, driven primarily by an increase in subscription revenue, partially offset by decreases in perpetual license and other services revenues.
Our offerings are delivered via self-managed software, software-as-a-service ("SaaS"), integrated appliances, or managed by partners. Customers use our Commvault Cloud platform to protect themselves from threats like ransomware and recover their data efficiently. Industry Our industry continues to go through accelerating changes as the result of compounding data growth, increasing security threats, and the introduction of new technologies.
Our offerings are delivered via self-managed software, software-as-a-service ("SaaS"), integrated appliances, or managed by partners. Industry Our industry continues to go through accelerating changes as the result of compounding data growth, increasing security threats, and the introduction of new technologies. These changes are shifting the demands on the importance of resilience for the modern enterprise.
These changes are shifting the demands on the importance of resilience for the modern enterprise. Companies now require a comprehensive cyber resilience platform that simplifies and manages these forces holistically. Commvault Cloud is designed to secure and accelerate the recovery so that data can be restored from anywhere to anywhere, rapidly, reliably, and at scale.
Companies now require a comprehensive cyber resilience platform that simplifies and manages these forces holistically. Commvault Cloud is designed to secure and accelerate the recovery so that data can be restored from anywhere to anywhere, rapidly, reliably, and at scale. Sources of Revenues We generate revenues through subscription arrangements, perpetual software licenses, customer support contracts and other services.
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.
The income statements of our non-U.S. operations are translated into U.S. dollars at the average exchange rates for each applicable month in a period. To the extent the U.S. dollar weakens against foreign currencies, the translation of these foreign currency denominated transactions generally results in increased revenue, operating expenses and income from operations for our non-U.S. operations.
Investing in research and development remains a priority for Commvault and we anticipate continued responsible spending related to the development of our software applications and hosted services. – General and administrative expenses increased $9.8 million, or 9%, primarily driven by a $4.4 million increase in employee compensation and related expenses including a $1.3 million increase in stock-based compensation year over year.
Investing in research and development remains a priority for Commvault and we anticipate continued responsible spending related to the development of our software applications and hosted services. – General and administrative expenses increased $24.4 million, or 21%, driven by increases in accounting and legal expenses related to the acquisitions of Appranix and Clumio, and increases in employee compensation and related expenses, including a $3.2 million increase in stock-based compensation year over year. – Restructuring: Our restructuring plan, initiated in the fourth quarter of fiscal 2024 and completed in fiscal 2025, was intended to enhance customer satisfaction through the reorganization and redesign of our customer success functions.
Income Tax Expense (Benefit) Income tax benefit was $85.3 million in fiscal 2024 compared to expense of $20.4 million in fiscal 2023. The income tax benefit for the fiscal year ended March 31, 2024 relates primarily to the release of the previously recorded valuation allowance against certain deferred tax assets in the U.S. and foreign jurisdictions.
The income tax benefit for the fiscal year ended March 31, 2024 relates primarily to the release of the previously recorded valuation allowance against certain deferred tax assets in the U.S. and foreign jurisdictions. Liquidity and Capital Resources In recent fiscal years, our principal source of liquidity has been cash provided by operations.
The realignment of the customer success structure aims to optimize operational efficiency and improve continuity for our customers through the pre-sales and post-sales experience. Restructuring expenses were $4.5 million for the year ended March 31, 2024. These charges relate primarily to severance and related costs associated with headcount reductions as well as costs related to office termination and exit charges.
The realignment of the customer success structure aimed to optimize operational efficiency and improve continuity for our customers through the pre-sales and post-sales experience. Restructuring expenses were $10.0 million and $4.5 million for the years ended March 31, 2025 and 2024, respectively.
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.
Our other services revenue consists primarily of professional service offerings, including consultation, assessment and design, installation services, and customer education.
Our other services revenue consists primarily of professional service offerings, including consultation, assessment and design, installation services, and customer education. Revenues from other services can vary period over period based on the timing services are delivered and are typically recognized as the services are performed.
In SaaS offerings, customers use hosted software over the contract period without taking possession of the software. Revenue related to SaaS is recognized ratably over the contract period. We sell 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, OEMs and marketplaces.
We sell 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, OEMs and marketplaces. Subscription revenue generated through indirect distribution channels accounted for approximately 90% of total subscription revenue in recent fiscal years.
Goodwill We test goodwill for impairment at least annually, on January 1, by performing a qualitative assessment of whether the fair value of each reporting unit or asset exceeds its carrying amount. We have one reporting unit. Goodwill is tested at this reporting unit level.
We test goodwill for impairment at least annually, on January 1, or more frequently if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable. We have one reporting unit. Goodwill is tested at this reporting unit level.
The year over year increase is primarily the result of an increase in the cost of infrastructure related to growth in our SaaS offerings. – Cost of perpetual license revenue decreased $0.3 million and represented 4% of our total perpetual revenue in fiscal 2024 compared to 3% in fiscal 2023. – Cost of customer support revenue increased $2.5 million and represented 20% of our total customer support revenue in fiscal 2024 compared to 19% in fiscal 2023. – Cost of other services revenue increased $0.1 million, representing 68% of our total other services revenue in fiscal 2024 compared to 63% in fiscal 2023.
("Clumio") acquisition and an increase in the cost of infrastructure related to growth in our SaaS offerings. – Cost of perpetual license revenue decreased $0.7 million and represented 3% of our total perpetual revenue in fiscal 2025 compared to 4% in fiscal 2024. – Cost of customer support revenue decreased $3.1 million and represented 19% of our total customer support revenue in fiscal 2025 compared to 20% in fiscal 2024. – Cost of other services revenue increased $0.7 million, representing 72% of our total other services revenue in fiscal 2025 compared to 68% in fiscal 2024. 37 Operating Expenses ($ in millions) – Sales and marketing expenses increased $79.1 million, or 22%, due to increases in sales commissions and bonus associated with increased revenues relative to the prior year; increases in employee compensation tied to strategic go to market investments; and, an increase of $11.0 million in stock-based compensation.
Risks associated with our restructuring plans 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 $2.9 million, from $9.3 million in fiscal 2023 to $6.4 million in fiscal 2024, driven by the reclassification of our owned corporate headquarters as assets held for sale in the fourth quarter of fiscal 2023. – Impairment charges: During the fourth quarter of fiscal 2023, we entered into an exclusive agreement to sell our owned corporate headquarters in Tinton Falls, New Jersey.
These expenses included $4.6 million in fiscal 2025 and $1.5 million in fiscal 2024 of stock-based compensation related to modifications of existing awards granted to certain employees impacted by the plan. 38 Risks associated with our restructuring plan 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 increased $2.7 million, or 41%, driven by the acquisition of certain intangible assets in fiscal 2025. – Change in contingent consideration: During the year ended March 31, 2025, we recorded an expense of $2.1 million related to changes in the estimated fair value of our contingent consideration arrangement.
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. 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.
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.
We refer to our term-based software licenses as subscription arrangements. We do not customize our software and installation services are not required. The software is delivered before related services are provided and is functional without professional services, updates and technical support.
In SaaS offerings, customers use hosted software over the contract period without taking possession of the software. Revenue related to SaaS is recognized ratably over the contract period. 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.
Term-based license revenue increased 8% year over year, due to an increase in the number of larger term-based license transactions (deals greater than $0.1 million) period over period. Subscription revenue accounted for 51% of total revenues in fiscal 2024 compared to 44% in fiscal 2023. – Perpetual license revenue decreased $17.3 million, or 23% year over year.
Term-based license revenue increased 22%, primarily due to an increase in the number of larger term-based license transactions (deals greater than $0.1 million) period over period and an increase in the average selling price of these transactions.
This decrease is primarily a result of our preferred route to market which is led by the sale of term-based licenses. Perpetual licenses are generally only sold in certain verticals and geographies.
Subscription revenue accounted for 59% of total revenues in fiscal 2025 compared to 51% in fiscal 2024. 35 – Perpetual license revenue decreased $2.0 million, or 3% year over year. Our preferred route to market is led by the sale of term-based licenses. Perpetual licenses are generally only sold in certain verticals and geographies.
Foreign Currency Exchange Rates’ Impact on Results of Operations Sales outside the United States were 48% of our total revenue for fiscal 2024, 47% for fiscal 2023 and 48% for fiscal 2022. 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.
In fiscal year 2023, depreciation for our owned corporate headquarters was also included. Foreign Currency Exchange Rates’ Impact on Results of Operations Sales outside the United States were 46% of our total revenues for fiscal 2025, 48% for fiscal 2024 and 47% for fiscal 2023.
Working capital decreased $30.6 million from $140.8 million as of March 31, 2023 to $110.2 million as of March 31, 2024. The decrease in working capital is primarily due to increases in accrued liabilities and the current portion of deferred revenue, partially offset by increases in cash and cash equivalents and accounts receivable.
The decrease in working capital is primarily the result of a decrease in cash and cash equivalents driven by the acquisitions of Appranix and Clumio in fiscal 2025 and an increase in the current portion of deferred revenue, partially offset by an increase in accounts receivable.
Americas and International represented 59% and 41% of total revenues, respectively, for the fiscal year ended March 31, 2024.
Americas and International represented 61% and 39% of total revenues, respectively, for the fiscal year ended March 31, 2025. Total revenues increased 22% and 14% year over year in the Americas and International, respectively. ▪ The increase in the Americas total revenues was primarily due to increases of 40% and 12% in subscription and perpetual license revenues, respectively.
Liquidity and Capital Resources In recent fiscal years, our principal source of liquidity has been cash provided by operations. As of March 31, 2024, our cash and cash equivalents balance was $312.8 million, of which approximately $214.2 million was held outside of the United States by our foreign legal entities.
As of March 31, 2025, our cash and cash equivalents balance was $302.1 million, of which approximately $265.4 million was held outside of the United States by our foreign legal entities. These balances are dispersed across approximately 35 international locations around the world.
Changes in judgment on any of these factors could materially impact the timing and amount of revenue recognized in a given period. We recognize revenue net of sales tax. We generate revenues through subscription arrangements, perpetual software licenses, customer support contracts and other services.
As most of our transactions go through indirect distribution channels, we are also required to make judgments around principal versus agent considerations and judgments around which party is our customer in multi-party arrangements. Changes in judgment on any of these factors could materially impact the timing and amount of revenue recognized in a given period.
This requires us to assess and make judgments regarding a variety of factors which impact the fair value of the reporting unit or asset being tested, including business plans, anticipated future cash flows, economic projections and other market data.
This may involve making judgments about a variety of factors that impact fair value, including business plans, anticipated future cash flows, economic projections, and other market data. If the qualitative assessment indicates that it is more likely than not that the fair value is less than the carrying amount, a quantitative goodwill impairment test is performed.
As and for the fiscal year ended March 31, 2024, we believe that it is more likely than not that we will realize the benefits of our gross deferred tax assets and therefore we have released the previously recorded valuation allowance, resulting in an income tax benefit in the current period.
We believe, in the current period, it is more likely than not that we will have sufficient taxable income to realize our remaining deferred tax assets. Goodwill and Purchased Intangible Assets Goodwill represents the residual purchase price paid in a business combination after the fair value of all identified assets and liabilities have been recorded.
Off-Balance Sheet Arrangements As of March 31, 2024, 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. 39 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.
See Note 4 "Business Combinations", Note 9 "Commitments and Contingencies" and Note 16 "Leases" of the notes to the consolidated financial statements for further information regarding these commitments. 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.
In prior years, we believed that it was more likely than not that we would not realize the benefits of our gross deferred tax assets and therefore had recorded a valuation allowance to reduce the carrying value of those deferred tax assets, net of the impact of the reversals of taxable temporary differences, to zero.
At March 31, 2025 and 2024, we recorded a valuation allowance, which reflects uncertainties around our ability to generate sufficient income in certain jurisdictions to utilize our net deferred tax assets. At March 31, 2023, we had recorded a full valuation allowance as the realizability of the Company's gross deferred tax assets was not more likely than not.
Removed
Subscription revenue generated through indirect distribution channels accounted for approximately 90% of total subscription revenue in recent fiscal years. Subscription revenue generated through direct distribution channels accounted for approximately 10% of total subscription revenue in recent fiscal years.
Added
We have elected to first assess the qualitative factors to determine whether it is more likely than not that the fair value of our single reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the quantitative goodwill impairment test.
Removed
We generated 36% of our total revenues through Arrow in fiscal 2024, and 37% of our total revenues in both fiscal 2023 and fiscal 2022.
Added
If the fair value exceeds the carrying amount, no further analysis is required; otherwise, an impairment loss is recognized for the amount by which the carrying value of goodwill exceeds its fair value.
Removed
Standalone selling prices for SaaS, customer support contracts, and other services are typically estimated based on observable transactions when these services are sold on a standalone basis.
Added
No impairment of goodwill has been identified during the years presented. 34 We apply judgment in estimating the fair value of purchased intangible assets, which involves the use of significant judgment.
Removed
In the future, changes to our estimates regarding the realizability of our gross deferred tax assets could materially impact our results of operations. We conduct business globally and as a result, file income tax returns in the United States and in various state and foreign jurisdictions.
Added
The assumptions used in valuing intangible assets include, but are not limited to, future expected cash flows of the asset, discount rates to determine the present value of the future cash flows, attrition rates of customers, and expected technology life cycles.
Removed
In the normal course of business, we are subject to examination by taxing authorities throughout the world, including such major jurisdictions as the United States, Australia, Canada, Germany, Netherlands and United Kingdom.
Added
We also estimate the useful lives of the intangible assets based on the expected period over which we anticipate generating economic benefit from the asset. Additionally, we assess purchased intangible assets for impairment when events or changes in circumstances indicate the carrying amount is not recoverable and exceeds its fair value.
Removed
During the fourth quarter of fiscal 2024, we performed a qualitative impairment test for goodwill and concluded that the carrying amount of the reporting unit does not exceed the fair value. No goodwill impairment charges were recorded for the years ended March 31, 2024, 2023, and 2022.
Added
Determining the fair value of intangible assets requires management to make estimates based on all available information and, in some cases, assumptions regarding the timing and amount of future revenues and expenses associated with the asset.
Removed
Total revenues increased 6% and 8% in the Americas and International, respectively. ▪ Total revenues in the Americas was impacted by a 24% increase in subscription revenue, offset by a 45% decrease in perpetual license revenue, driven by the shift from selling perpetual licenses to subscription arrangements.
Added
Because there are inherent uncertainties involved in these factors, significant differences between these estimates and actual results could result in future impairment charges and could materially impact our future financial results. No impairment of purchased intangible assets has been identified during the years presented. Results of Operations Amounts reported in millions are rounded based on the amounts in thousands.
Removed
The increase in cost of other services revenue was driven by timing of the delivery of certain professional services. 35 Operating Expenses ($ in millions) – Sales and marketing expenses increased $14.2 million, or 4%, driven by increases in employee compensation and sales commissions associated with increased revenues relative to the same period in the prior year as well as increases in marketing spend related to Commvault's SHIFT event in New York City.
Added
Other services revenue declined 6% year over year due to a decrease in the delivery of professional services as compared to the same period of the prior year.
Removed
These increases were partially offset by a $6.5 million decrease in stock-based compensation. – Research and development expenses decreased $9.5 million, or 7%, driven by decreases in employee compensation and related expenses, including a $7.0 million decrease in stock-based compensation.
Added
The year over year increase is primarily the result of incremental hosting costs associated with the Clumio, Inc.
Removed
In addition, we recorded $2.4 million in foreign currency transaction losses compared to $1.2 million in foreign currency transaction losses recorded in the prior fiscal year. – Restructuring: Our restructuring plan, initiated in the fourth quarter of fiscal 2024, is intended to enhance customer satisfaction through the reorganization and redesign of our customer success functions.
Added
In addition, in fiscal 2025, there were increases year over year in certain marketing and go to market activities, which included a live sales kickoff event and participation in certain strategic conferences, including the RSA conference, which did not occur in fiscal 2024. – Research and development expenses increased $14.0 million, or 11%, driven by increases in employee compensation and related expenses resulting from additional headcount related to the Appranix, Inc.
Removed
These expenses included $1.5 million in fiscal 2024 of stock-based compensation related to modifications of existing awards granted to certain employees impacted by the plan. We anticipate the restructuring plan will be completed in the second half of fiscal 2025. 36 In the fourth quarter of fiscal 2022 we initiated a restructuring plan which was completed in fiscal 2023.
Added
("Appranix") and Clumio acquisitions completed in April 2024 and October 2024, respectively. Expenses related to stock-based compensation increased $2.4 million compared to the prior year.
Removed
It was aimed to increase efficiency in our sales, marketing and distribution functions as well as reduce costs across all functional areas. Restructuring expenses were $15.5 million for the year ended March 31, 2023. These restructuring charges relate primarily to severance and related costs associated with headcount reductions.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

4 edited+0 added−0 removed4 unchanged
Biggest changeWe recognized net foreign currency transaction losses of $2.4 million and $1.2 million in fiscal 2024 and fiscal 2023, respectively, and insignificant losses in fiscal 2022. 40
Biggest changeWe recognized net foreign currency transaction losses of $1.5 million, $2.4 million and $1.2 million in the years ended March 31, 2025, 2024 and 2023, respectively. 42
This sensitivity analysis disregards the possibilities that rates can move in opposite directions and that losses from one geographic area may be offset by gains from another geographic area.
This sensitivity analysis disregards the possibilities that 41 rates can move in opposite directions and that losses from one geographic area may be offset by gains from another geographic area.
Approximately 48% of our sales were outside the United States in fiscal 2024 and 47% in fiscal 2023. 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 46% of our sales were outside the United States in fiscal 2025 and 48% in fiscal 2024. 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.
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 $13.4 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 hypothetical 10% change in all foreign exchange rates would impact our reported operating profit by approximately $15.5 million annually.

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