Commvault Systems Inc. (NASDAQ: CVLT) shares dropped 8.7% in premarket trading on Tuesday after the data management software company reported second-quarter results that missed profit estimates, even as revenue came in higher than expected.
For the quarter ended September 30, 2025, Commvault posted adjusted earnings of $0.91 per share, below the consensus estimate of $0.94 per share. However, revenue rose 18% year-on-year to $276 million, surpassing expectations of $273.34 million.
A major highlight was the company crossing $1.04 billion in annualized recurring revenue (ARR) — a key milestone achieved two quarters ahead of its March 2026 target. Subscription revenue surged 29% year-on-year to $173 million, while SaaS revenue jumped 61% to $80 million.
“Commvault delivered a strong quarter fueled by solid ARR and SaaS growth that accelerated a key milestone — achieving $1 billion in total ARR two quarters earlier than projected,” said Sanjay Mirchandani, President and CEO. “Our cloud-first, AI-enabled cyber resilience platform is more relevant than ever as enterprises globally rely on Commvault to be resilient.”
For the upcoming quarter, the company expects revenue between $298 million and $300 million, aligning with analyst forecasts. It also reported robust cash flow generation — operating cash flow stood at $77 million, and free cash flow at $74 million.
Despite the upbeat revenue and milestone achievements, investor sentiment turned negative due to the earnings miss, triggering a sharp decline in the stock.
