UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended: December 31, ~~2022~~2023

☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number: 1-33026

Commvault Systems, Inc.

(Exact name of registrant as specified in its charter)


Delaware						22-3447504
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

1 Commvault Way

Tinton Falls, New Jersey 07724

(Address of principal executive offices, including zip code)

(732) 870-4000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	CVLT	The Nasdaq Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, "accelerated filer", "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act. ~~(Check one):~~

Large accelerated filer

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section ~~13 (a)~~13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

As of January ~~27, 2023,~~29, 2024, there were ~~44,553,305~~43,661,621 shares of the registrant’s common stock, $0.01 par value, outstanding.

COMMVAULT SYSTEMS, INC.

FORM 10-Q

INDEX


		Page
Part I – FINANCIAL INFORMATION
Item 1.	Financial Statements
	Unaudited Consolidated Balance Sheets as of December 3 1 ~~, 2022~~ 31, 2023 and March 31, ~~2022~~2023	1
	Unaudited Consolidated Statements of Operations for the three and nine months ended December 31,, 2023 and 2022 ~~and 2021~~	2
	Unaudited Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended December 3 1 ~~, 2022~~ 31, 2023 and ~~2021~~2022	3
	Unaudited Consolidated Statements of Stockholders’ Equity for the three and nine months ended December 3 1 ~~, 2022~~ 31, 2023 and ~~2021~~2022	4
	Unaudited Consolidated Statements of Cash Flows for the nine months ended December 3 1 ~~, 2022~~ 31, 2023 and ~~2021~~2022	6
	Notes to Consolidated Financial Statements (unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1617
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	2628
Item 4.	Controls and Procedures	2730

Part II – OTHER INFORMATION
Item 1.	Legal Proceedings	2829
Item 1A.	Risk Factors	2829
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2830
Item 3.	Defaults Upon Senior Securities	2830
Item 4.	Mine Safety Disclosures	2830
Item 5.	Other Information	2830
Item 6.	Exhibits	2931

SIGNATURES		3032

Table of Contents

Commvault Systems, Inc.

Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)


			December 31, 2022		March 31, 2022
		December 31, 2023						December 31, 2023	March 31, 2023
ASSETS	ASSETS
Current assets:	Current assets:
Current assets:
Current assets:
Cash and cash equivalents
Cash and cash equivalents
Cash and cash equivalents	Cash and cash equivalents		$	273,469	$	267,507

Trade accounts receivable, net	Trade accounts receivable, net		215,464		194,238

Trade accounts receivable, net

Trade accounts receivable, net
Assets held for sale
Other current assets	Other current assets		17,747		22,336
Total current assets	Total current assets		506,680		484,081

Property and equipment, net
Property and equipment, net
Property and equipment, net	Property and equipment, net		100,901		106,513
Operating lease assets	Operating lease assets		11,211		14,921
Deferred commissions cost	Deferred commissions cost		57,584		52,974
Intangible asset, net	Intangible asset, net		2,604		3,542
Goodwill	Goodwill		127,780		127,780
Other assets	Other assets		23,182		26,269
Total assets	Total assets		$	829,942	$	816,080
LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:	Current liabilities:
Current liabilities:
Current liabilities:
Accounts payable
Accounts payable
Accounts payable	Accounts payable		$	459	$	432
Accrued liabilities	Accrued liabilities		104,078		121,837
Current portion of operating lease liabilities	Current portion of operating lease liabilities		4,031		4,778
Deferred revenue	Deferred revenue		282,614		267,017
Total current liabilities	Total current liabilities		391,182		394,064
Deferred revenue, less current portion	Deferred revenue, less current portion		166,084		150,180
Deferred tax liabilities, net	Deferred tax liabilities, net		728		808
Long-term operating lease liabilities	Long-term operating lease liabilities		8,150		11,270
Other liabilities	Other liabilities		3,782		3,929
Commitments and contingencies (Note 5)
Commitments and contingencies (Note 6)							Commitments and contingencies (Note 6)
Stockholders’ equity:	Stockholders’ equity:
Preferred stock, $0.01 par value: 50,000 shares authorized, no shares issued and outstanding	Preferred stock, $0.01 par value: 50,000 shares authorized, no shares issued and outstanding		—		—
Common stock, $0.01 par value: 250,000 shares authorized, 44,762 shares and 44,511 shares issued and outstanding at December 31, 2022 and March 31, 2022, respectively			446		443
Preferred stock, $0.01 par value: 50,000 shares authorized, no shares issued and outstanding
Preferred stock, $0.01 par value: 50,000 shares authorized, no shares issued and outstanding
Common stock, $0.01 par value: 250,000 shares authorized, 43,754 shares and 44,140 shares issued and outstanding at December 31, 2023 and March 31, 2023, respectively
Additional paid-in capital	Additional paid-in capital		1,242,697		1,165,948
Accumulated deficit	Accumulated deficit		(967,504)		(898,699)
Accumulated other comprehensive loss	Accumulated other comprehensive loss		(15,623)		(11,863)
Total stockholders’ equity	Total stockholders’ equity		260,016		255,829
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity		$	829,942	$	816,080

See accompanying unaudited notes to consolidated financial statements

Table of Contents

Commvault Systems, Inc.

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)


		Three Months Ended December 31,				Nine Months Ended December 31,				Three Months Ended December 31,		Nine Months Ended December 31,
		2022		2021		2022		2021		2023	2022		2023	2022
Revenues:	Revenues:
Software and products		$	89,589	$	98,575	$	264,850	$	255,998
Services		105,485		103,806		316,262		307,644
Subscription
Subscription
Subscription
Perpetual license
Customer support
Other services
Total revenues	Total revenues	195,074		202,381		581,112		563,642
Cost of revenues:	Cost of revenues:
Software and products		3,122		4,271		10,308		9,471
Services		31,416		25,692		90,289		72,341
Subscription
Subscription
Subscription
Perpetual license
Customer support
Other services
Total cost of revenues	Total cost of revenues	34,538		29,963		100,597		81,812
Gross margin	Gross margin	160,536		172,418		480,515		481,830
Operating expenses:	Operating expenses:
Sales and marketing	Sales and marketing	87,343		89,217		253,561		248,506
Sales and marketing
Sales and marketing
Research and development	Research and development	32,505		39,257		109,671		113,118
General and administrative	General and administrative	23,983		29,132		76,512		80,919
Restructuring	Restructuring	9,228		—		11,360		2,082

Depreciation and amortization	Depreciation and amortization	2,459		2,451		7,631		7,084
Total operating expenses	Total operating expenses	155,518		160,057		458,735		451,709
Income from operations	Income from operations	5,018		12,361		21,780		30,121
Interest income	Interest income	364		120		916		543
Interest expense	Interest expense	(105)		(19)		(315)		(19)
Other income (expense), net	Other income (expense), net	123		564		(112)		564
Income before income taxes	Income before income taxes	5,400		13,026		22,269		31,209
Income tax expense	Income tax expense	5,710		3,018		14,550		5,573
Net income (loss)	Net income (loss)	$	(310)	$	10,008	$	7,719	$	25,636
Net income (loss) per common share:	Net income (loss) per common share:
Basic	Basic	$	(0.01)	$	0.22	$	0.17	$	0.56
Basic
Basic
Diluted	Diluted	$	(0.01)	$	0.21	$	0.17	$	0.54
Weighted average common shares outstanding:	Weighted average common shares outstanding:
Basic	Basic	44,712		45,242		44,738		45,720
Basic
Basic
Diluted	Diluted	44,712		46,719		45,810		47,552

See accompanying unaudited notes to consolidated financial statements

Table of Contents

Commvault Systems, Inc.

Consolidated Statements of Comprehensive Income (Loss)

(In thousands)

(Unaudited)


		Three Months Ended December 31,				Nine Months Ended December 31,				Three Months Ended December 31,		Nine Months Ended December 31,
		2022		2021		2022		2021		2023	2022		2023	2022
Net income (loss)	Net income (loss)	$	(310)	$	10,008	$	7,719	$	25,636
Other comprehensive income (loss):	Other comprehensive income (loss):
Foreign currency translation adjustment	Foreign currency translation adjustment	(171)		36		(3,760)		(1,277)
Foreign currency translation adjustment
Foreign currency translation adjustment
Comprehensive income (loss)	Comprehensive income (loss)	$	(481)	$	10,044	$	3,959	$	24,359

See accompanying unaudited notes to consolidated financial statements

Table of Contents

Commvault Systems, Inc.

Consolidated Statements of Stockholders’ Equity

(In thousands)

(Unaudited)

Common Stock Additional
Paid – In
Capital Accumulated
Deficit Accumulated
Other
Comprehensive
Loss Total
Shares Amount
Balance as of September 30, 2022 44,597 $ 444 $ 1,220,667 $ (940,396) $ (15,452) $ 265,263
Stock-based compensation 24,645 24,645
Share issuances related to stock-based compensation 672 7 1,926 1,933
Repurchase of common stock (507) (5) (4,541) (26,798) (31,344)
Net loss (310) (310)
Other comprehensive loss (171) (171)
Balance as of December 31, 2022 44,762 $ 446 $ 1,242,697 $ (967,504) $ (15,623) $ 260,016


	Common Stock			Additional Paid – In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total
	Shares	Amount
Balance as of September 30, 2023	43,918	$	438	$	1,307,027	$	(1,108,738)	$	(17,204)	$	181,523
Stock-based compensation				24,602						24,602
Share issuances related to stock-based compensation	547	5		1,380						1,385
Repurchase of common stock	(711)	(7)		(6,541)		(44,984)				(51,532)
Net income						17,140				17,140
Other comprehensive income								1,485		1,485
Balance as of December 31, 2023	43,754	$	436	$	1,326,468	$	(1,136,582)	$	(15,719)	$	174,603

Common Stock Additional
Paid – In
Capital Accumulated
Deficit Accumulated
Other
Comprehensive
Loss Total
Shares Amount
Balance as of March 31, 2022 44,511 $ 443 $ 1,165,948 $ (898,699) $ (11,863) $ 255,829
Stock-based compensation 81,067 81,067
Share issuances related to stock-based compensation 1,771 18 9,274 9,292
Repurchase of common stock (1,520) (15) (13,592) (76,524) (90,131)
Net income 7,719 7,719
Other comprehensive loss (3,760) (3,760)
Balance as of December 31, 2022 44,762 $ 446 $ 1,242,697 $ (967,504) $ (15,623) $ 260,016



	Common Stock			Additional Paid – In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total
	Shares	Amount
Balance as of March 31, 2023	44,140	$	440	$	1,264,608	$	(1,062,900)	$	(16,050)	$	186,098
Stock-based compensation				71,941						71,941
Share issuances related to stock-based compensation	1,546	15		7,738						7,753
Repurchase of common stock	(1,932)	(19)		(17,819)		(116,468)				(134,306)
Net income						42,786				42,786
Other comprehensive income								331		331
Balance as of December 31, 2023	43,754	$	436	$	1,326,468	$	(1,136,582)	$	(15,719)	$	174,603

Table of Contents

Commvault Systems, Inc.

Consolidated Statements of Stockholders’ Equity

(In thousands)

(Unaudited)

Common Stock Additional
Paid – In
Capital Accumulated
Deficit Accumulated
Other
Comprehensive
Loss Total
Shares Amount
Balance as of September 30, 2021 45,374 $ 452 $ 1,119,738 $ (808,749) $ (11,663) $ 299,778
Stock-based compensation 28,533 28,533
Share issuances related to stock-based compensation 606 6 421 427
Repurchase of common stock (1,298) (13) (11,793) (73,516) (85,322)
Net income 10,008 10,008
Other comprehensive income 36 36
Balance as of December 31, 2021 44,682 $ 445 $ 1,136,899 $ (872,257) $ (11,627) $ 253,460


	Common Stock			Additional Paid – In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total
	Shares	Amount
Balance as of September 30, 2022	44,597	$	444	$	1,220,667	$	(940,396)	$	(15,452)	$	265,263
Stock-based compensation				24,645						24,645

Share issuances related to stock-based compensation	672	7		1,926						1,933
Repurchase of common stock	(507)	(5)		(4,541)		(26,798)				(31,344)
Net loss						(310)				(310)
Other comprehensive loss								(171)		(171)
Balance as of December 31, 2022	44,762	$	446	$	1,242,697	$	(967,504)	$	(15,623)	$	260,016


			Common Stock			Additional Paid – In Capital				Accumulated Deficit		Accumulated Other Comprehensive Loss		Total
			Shares	Amount
Balance as of March 31, 2021			46,482	$	463			$	1,069,695			$	(665,774)	$	(10,350)	$	394,034
			Common Stock
			Common Stock
			Common Stock															Additional Paid – In Capital	Accumulated Deficit	Accumulated Other Comprehensive Loss	Total
		Shares
Balance as of March 31, 2022
Balance as of March 31, 2022
Balance as of March 31, 2022
Stock-based compensation	Stock-based compensation					76,793								76,793

Share issuances related to stock-based compensation	Share issuances related to stock-based compensation		1,906	19		23,669								23,688
Repurchase of common stock	Repurchase of common stock		(3,706)	(37)		(33,258)				(232,119)				(265,414)
Net income	Net income									25,636				25,636
Other comprehensive loss	Other comprehensive loss											(1,277)		(1,277)
Balance as of December 31, 2021			44,682	$	445	$	1,136,899			$	(872,257)	$	(11,627)	$	253,460
Balance as of December 31, 2022

See accompanying unaudited notes to consolidated financial statements

Table of Contents

Commvault Systems, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


			Nine Months Ended December 31,
		Nine Months Ended December 31,							Nine Months Ended December 31,
			2022		2021		2023	2022
Cash flows from operating activities	Cash flows from operating activities
Net income	Net income		$	7,719	$	25,636
Net income
Net income
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
Depreciation and amortization
Depreciation and amortization	Depreciation and amortization		8,656		8,027
Noncash stock-based compensation	Noncash stock-based compensation		81,067		76,793
Noncash change in fair value of equity securities	Noncash change in fair value of equity securities		112		436

Amortization of deferred commissions cost	Amortization of deferred commissions cost		16,533		13,344

Amortization of deferred commissions cost

Amortization of deferred commissions cost

Changes in operating assets and liabilities:	Changes in operating assets and liabilities:

Changes in operating assets and liabilities:

Changes in operating assets and liabilities:
Trade accounts receivable
Trade accounts receivable
Trade accounts receivable	Trade accounts receivable		(17,779)		(25,546)
Operating lease assets and liabilities, net	Operating lease assets and liabilities, net		(61)		(809)
Other current assets and Other assets	Other current assets and Other assets		2,982		(2,172)
Deferred commissions cost	Deferred commissions cost		(22,663)		(21,852)
Accounts payable	Accounts payable		49		(120)
Accrued liabilities	Accrued liabilities		(17,103)		(3,293)
Deferred revenue	Deferred revenue		41,807		19,564
Other liabilities	Other liabilities		1,136		56
Net cash provided by operating activities	Net cash provided by operating activities		102,455		90,064
Cash flows from investing activities	Cash flows from investing activities

Purchase of property and equipment	Purchase of property and equipment		(2,186)		(3,328)

Purchase of property and equipment

Purchase of property and equipment
Purchase of equity securities	Purchase of equity securities		(1,961)		(3,527)
Other			—		500

Net cash used in investing activities
Net cash used in investing activities
Net cash used in investing activities	Net cash used in investing activities		(4,147)		(6,355)
Cash flows from financing activities	Cash flows from financing activities
Repurchase of common stock
Repurchase of common stock
Repurchase of common stock	Repurchase of common stock		(90,131)		(265,414)
Proceeds from stock-based compensation plans	Proceeds from stock-based compensation plans		9,292		23,688
Payment of debt issuance costs	Payment of debt issuance costs		(63)		(609)

Net cash used in financing activities
Net cash used in financing activities
Net cash used in financing activities	Net cash used in financing activities		(80,902)		(242,335)
Effects of exchange rate — changes in cash	Effects of exchange rate — changes in cash		(11,444)		(4,920)
Net increase (decrease) in cash and cash equivalents	Net increase (decrease) in cash and cash equivalents		5,962		(163,546)
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period		267,507		397,237
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period		$	273,469	$	233,691

See accompanying unaudited notes to consolidated financial statements

Table of Contents

Commvault Systems, ~~Inc~~Inc.

Notes to Consolidated Financial Statements - Unaudited

(In thousands, except per share data)

1. Basis of Presentation

Commvault Systems, Inc. and its subsidiaries ("Commvault," "we," "us," or "our") ~~is a provider of data protection and information management software applications and products. We develop, market and sell a suite of software applications and services, globally, that~~ provides ~~our customers with data protection solutions. We also provide our~~its customers with a ~~broad range of professional~~cyber resiliency platform that helps them secure, defend and ~~customer support~~recover their most precious asset, their data. We provide these products and services ~~including as-a-service, branded as Metallic.~~for their data across the following environments: on-premises, hybrid, and multi-cloud. Our cyber resiliency offerings are delivered via self-managed software, software-as-a-service ("SaaS"), integrated appliances, or managed by partners. Customers use our technology to protect themselves from threats like ransomware and recover their data efficiently.

The consolidated financial statements of Commvault as of December 31, ~~2022~~2023 and for the three and nine months ended December 31, ~~2022~~2023 and ~~2021~~2022 are unaudited, and in the opinion of management, include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the results for the interim periods. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements and should be read in conjunction with the financial statements and notes in our Annual Report on Form 10-K for fiscal ~~2022.~~2023. The results reported in these financial statements should not necessarily be taken as indicative of results that may be expected for the entire fiscal year.

The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make judgments and estimates that affect the amounts reported in our consolidated financial statements and the accompanying notes. We base our estimates and judgments on historical experience and on various other assumptions that we believe are reasonable under the circumstances. The amounts of assets and liabilities reported in our balance sheets and the amounts of revenues and expenses reported for each of our periods presented are affected by estimates and assumptions, which are used for, but not limited to, the accounting for revenue recognition, income taxes and related reserves, deferred commissions ~~purchased intangible assets~~ and goodwill. Actual results could differ from those estimates.

2. Summary of Significant Accounting Policies

Reclassification of Prior Year Balances

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications have no impact on the amount of total revenues or net income. Beginning in fiscal 2024, the software and services line items on the consolidated statements of operations, related to revenues and cost of revenues, will be presented in the following categories:

Subscription - The amounts on this line include the revenues and costs of recurring time-based arrangements, including the software portion of term-based licenses and SaaS offerings. The software component of term-based licenses is typically recognized when the software is delivered or made available for download. For SaaS offerings, revenue is generally recognized ratably over the contract term beginning on the date that the service is made available to the customer.

Perpetual license - The amounts on this line include the revenues and costs from the sale of perpetual software licenses. Perpetual software license revenue is typically recognized when the software is delivered or made available for download.

Customer support - The amounts on this line include customer support revenues and costs associated with 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 subscription software and perpetual software license arrangements. Customer support revenue is typically recognized ratably over the term of the customer support agreement.

Table of Contents

Commvault Systems, Inc.

Notes to Consolidated Financial Statements - Unaudited (continued)

(In thousands, except per share data)

Other services - The amounts included on this line consist primarily of revenues and costs related to professional service offerings, including consultation, assessment and design, installation services, and customer education. Revenues related to other professional services are typically recognized as the services are performed.

Recently Adopted and Recently Issued Accounting Standards

There were no recently adopted accounting standards that had a material effect on our condensed consolidated financial statements and accompanying ~~disclosures, and no~~disclosures. The table below outlines recently issued accounting standards ~~that are expected to have a material impact on our condensed consolidated financial statements and accompanying disclosures.~~not yet adopted.


Standard	Description	Effective Date	Effect on the Consolidated Financial Statements (or Other Significant Matters)
Accounting Standards Update ("ASU") No. 2023-07 (Topic 280): Segment Reporting	In November 2023, the Financial Accounting Standards Board ("FASB") issued a new standard to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements.	This standard will be effective for us beginning April 1, 2024, with early adoption permitted.	We are currently evaluating the impact of this standard in our consolidated financial statements, including accounting policies, processes, and systems.
ASU No. 2023-09 (Topic 740): Income Taxes	In December 2023, the FASB issued a new standard to improve income tax disclosures. The standard requires greater disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid.	This standard will be effective for us beginning April 1, 2025, with early adoption permitted.	We are currently evaluating the impact of this standard in our consolidated financial statements, including accounting policies, processes, and systems.

Table of Contents

Commvault Systems, Inc.

Notes to Consolidated Financial Statements - Unaudited (continued)

(In thousands, except per share data)

Concentration of Credit Risk

We grant credit to customers in a wide variety of industries worldwide and generally do not require collateral. ~~Credit~~Historically, credit losses relating to these customers have been minimal.

Sales through our distribution agreement with Arrow Enterprise Computing Solutions, Inc. (“Arrow”) totaled 35% and 38% of total revenues for ~~both~~ the three months ended December 31, 2023 and 2022, respectively, and ~~2021,~~36% and 37% ~~and 36%~~ for the nine months ended December 31, ~~2022~~2023 and ~~2021,~~2022, respectively. Arrow accounted for approximately ~~32%~~31% and ~~30%~~34% of total accounts receivable as of December 31, ~~2022~~2023 and March 31, ~~2022,~~2023, respectively.

~~Hitachi Vantara ("Hitachi"), one~~Fair Value of Financial Instruments

The carrying amounts of our ~~original equipment manufacturers, accounted for 11%~~cash, cash equivalents, accounts receivable and accounts payable approximate their fair values due to the short-term maturity of ~~total accounts receivable~~these instruments. Our cash equivalents balance consists primarily of U.S. Treasury Bills with maturities of one month or less.

The following table summarizes the composition of our financial assets measured at fair value at December 31, 2023:


	Level 1		Level 2	Level 3	Total
Cash equivalents	$	24,903	—	—	$	24,903

There were no financial assets measured at fair value on a recurring basis as of December 31, 2022.

~~Table of Contents~~

~~Commvault Systems, Inc~~

~~Notes to Consolidated Financial Statements - Unaudited (continued)~~

~~(In thousands, except per share data)~~

Equity Securities Accounted for at Net Asset Value

We held equity interests in private equity funds of ~~$5,995~~$7,154 as of December 31, ~~2022,~~2023, which are accounted for under the net asset value practical expedient as permitted under ASC 820, Fair Value Measurement. These investments are included in ~~Other~~other assets in the accompanying consolidated balance sheets. The net asset values of these investments are determined using quarterly capital statements from the funds, which are based on our contributions to the funds, allocation of profit and loss and changes in fair value of the underlying fund investments. Changes in fair value as reported on the capital statements are recorded through the consolidated statements of operations as non-operating income or expense. These private equity funds focus on making investments in key technology sectors, principally by investing in companies at expansion capital and growth equity stages. We had total unfunded commitments in private equity funds of ~~$4,334~~$3,010 as of December 31, ~~2022.~~

2023.

Deferred Commissions Cost

Sales commissions, bonuses, and related payroll taxes earned by our employees are considered incremental and recoverable costs of obtaining a contract with a customer. Our typical contracts include performance obligations related to term-based software licenses, SaaS offerings, perpetual software licenses, software updates, and customer ~~support and other services, including as-a-service offerings.~~support. In these contracts, incremental costs of obtaining a contract are allocated to the performance obligations based on the relative estimated standalone selling prices and then recognized on a systematic basis that is consistent with the transfer of the goods or services to which the asset relates. We do not pay commissions on annual renewals of ~~contracts for software updates and~~ customer support contracts for perpetual licenses. The costs allocated to software and products are expensed at the time of sale, when revenue for the functional software license or appliance is recognized. The costs allocated to software updates and customer support for perpetual licenses are amortized ratably over a period of approximately five years, the expected period of benefit of the asset capitalized. We currently estimate a period of five years is appropriate based on consideration of historical average customer life and the estimated useful life of the underlying software sold as part of the transaction. The commission paid on the renewal of ~~a term-based or~~ subscription ~~software license~~arrangements is not commensurate with the commission paid on the initial purchase. As a result, the cost of commissions allocated to SaaS offerings, software updates and customer support on the initial term-based software license transactions are amortized over a period of approximately five years, consistent with the accounting for these costs associated with perpetual licenses. The costs of commissions allocated to SaaS offerings, software updates and support for the renewal of term-based software licenses is limited to the contractual period of the arrangement, as we pay a commensurate renewal commission upon the next renewal of the subscription software license and related updates and support.

Table of Contents

Commvault Systems, Inc.

Notes to Consolidated Financial Statements - Unaudited (continued)

(In thousands, except per share data)

The incremental costs ~~related~~attributable to professional services are generally amortized over the period the related ~~professional~~ services are provided and revenue is recognized. Amortization expense related to these costs is included in sales and marketing expenses in the accompanying consolidated statements of operations.

3. Revenue

We derive revenues from ~~two primary sources:~~various sources, including subscriptions, perpetual software licenses, customer support contracts and other services.

Subscription

Subscription includes the revenues derived from time-based arrangements, including the software portion of term-based licenses and SaaS offerings. The software component of term-based licenses is typically recognized when the software is delivered or made available for download. The term of our subscription arrangements is typically one to three years, but can range between one and five years. For SaaS offerings, revenue is generally recognized ratably over the contract term beginning on the date that the service is made available to the customer.

Perpetual License

Perpetual license includes the revenues from the sale of perpetual software licenses. Perpetual software license revenue is typically recognized when the software is delivered or made available for download.

Customer Support

Customer support includes revenues associated with 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 subscription software and ~~products, and services. Software and products revenue includes~~perpetual software license arrangements. We sell our ~~software and integrated appliances that combine our software with hardware. Services include~~ customer support ~~(software updates~~contracts as a percentage of net software purchases. Customer support revenue is recognized ratably over the term of the customer support agreement, which is typically one year on our perpetual licenses and ~~technical support), consulting,~~over the term on our term-based licenses.

Other Services

Other services consist primarily of revenues related to professional service offerings, including consultation, assessment and design, ~~services,~~ installation services, and customer ~~education and as-a-service, which is branded~~education. Revenues related to other professional services are typically recognized as ~~Metallic.~~the services are performed.

~~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 licenses (both perpetual and term-based) and installation services are not required. ~~The software is~~Software licenses are delivered before related services are provided and isare functional without professional services, updates and technical support. We have concluded that our software licenses (both perpetual and ~~subscription)~~term-based) are functional intellectual property that is distinct, as the user can benefit from the software on its own. ~~Software revenue~~Revenues for both perpetual and ~~subscription~~term-based licenses isare typically recognized when the software is delivered and/or made available for download as this is the point the user of the software can direct the use of, and obtain substantially all of the remaining benefits from the functional intellectual property. We do not recognize ~~software~~subscription revenue related to the renewal of that subscription ~~software licenses~~ earlier than the beginning of the new subscription period.

We also ~~sell~~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

~~Table of Contents~~

~~Commvault Systems, Inc~~

~~Notes to Consolidated Financial Statements - Unaudited (continued)~~

~~(In thousands, except per share data)~~

data centers. ~~Revenue related to~~Our appliances ~~is recognized when control of the appliances passes to the customer; typically upon delivery. In the second half of fiscal 2021 we began transitioning to~~are almost exclusively sold via a software only model in which we ~~typically~~ sell software to a third party, which assembles an integrated appliance that is sold to end user customers. As a result, the ~~revenue~~revenues and costs associated with hardware ~~have declined from recent fiscal years.~~are usually not included in our financial statements.

Services revenue includes revenue from customer support and other professional services. Customer support includes software updates on a when-and-if-available basis, telephone support, integrated web-based support and bug fixes or patches. We sell our customer support contracts as a percentageTable of net software purchases the support is related to. Customer support revenue is recognized ratably over the term of the customer support agreement, which is typically one year on our perpetual licenses. The term of our subscription arrangements is typically three years but can range between Contents~~one~~ ~~and five years.~~

Commvault Systems, Inc.

Notes to Consolidated Financial Statements - Unaudited (continued)

(In thousands, except per share data)

Our other professional services include consulting, assessment and design services, installation services and customer education. Customer education services include courses taught by our instructors or third-party contractors. Revenue related to other professional services and customer education services is typically recognized as the services are performed.

Commvault as-a-service, which is branded as Metallic, allows customers to use hosted software over the contract period without taking possession of the software. Revenue related to Metallic is generally recognized ratably over the contract term as services revenue.

Most of our contracts with customers contain multiple performance obligations. For these contracts, we account for individual performance obligations separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. Standalone selling prices of software are typically estimated using the residual approach. Standalone selling prices of services are typically estimated based on observable transactions when these services are sold on a standalone basis.

Our typical performance obligations include the following:


Performance Obligation	When Performance Obligation is Typically Satisfied	When Payment is Typically Due	How Standalone Selling Price is Typically Estimated
~~Software and Products Revenue~~Subscription
~~Software Licenses~~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 ~~Revenue~~
Software ~~Updates~~updates	Ratably over the course of the support contract (over time)	At the beginning of the contract period	Observable in renewal transactions
Customer ~~Support~~support	Ratably over the course of the support contract (over time)	At the beginning of the contract period	Observable in renewal transactions
Other Services ~~Revenue~~
Other ~~Professional Services~~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~~services	When the class is taught (point in time)	Within 90 days of services being performed	Observable in transactions without multiple performance obligations
~~As-a-service (Metallic)~~

Judgments related to revenue recognition

Most of our contracts contain multiple performance obligations. For these contracts, we evaluate and account for individual performance obligations separately if they are determined to be distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. Standalone selling prices of software licenses (both perpetual and term-based) are typically estimated using the residual approach. 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. We recognize revenue net of sales tax.

Disaggregation of Revenues

We disaggregate revenues from contracts with customers into geographical regions. Our Americas region includes the United States, Canada, and Latin America. Our International region primarily includes Europe, Middle East, Africa, Australia, India, Southeast Asia, and China.


	Three Months Ended December 31,				Nine Months Ended December 31,
	2023		2022		2023		2022
Americas	$	125,052	$	108,107	$	367,476	$	346,907
International	91,756		86,967		248,479		234,205
Total revenues	$	216,808	$	195,074	$	615,955	$	581,112

~~Ratably over the course of the contract (over time)Annual or monthly paymentsObservable in transactions without multiple performance obligations~~

911

Table of Contents

Commvault Systems, ~~Inc~~Inc.

Notes to Consolidated Financial Statements - Unaudited (continued)

(In thousands, except per share data)

~~Disaggregation of Revenue~~Remaining Performance Obligations

~~We disaggregate revenue~~Remaining performance obligations represent expected future revenues from existing contracts ~~with customers into~~where performance obligations are unsatisfied or partially unsatisfied at the ~~nature~~end of the ~~products~~reporting period. As of December 31, 2023, our remaining performance obligations (inclusive of deferred revenues) were $581,346 of which approximately 64% is expected to be recognized as revenue over the next 12 months and the remainder recognized thereafter. The vast majority of these revenues consist of customer support, other services and ~~geographical regions. During the fourth quarter~~SaaS arrangements. Other services consists primarily of ~~fiscal 2022, we combined the management~~professional services revenue which is contingent upon a number of ~~our EMEA~~factors, including customers' needs and APJ field organizations into our International region (Europe, Middle East, Africa, Australia, India, Japan, Southeast Asia, China). Our Americas region includes the United States, Canada, and Latin America.

Three Months Ended December 31, 2022 Nine Months Ended December 31, 2022
Americas International Total Americas International Total
Software and Products Revenue $ 46,020 $ 43,569 $ 89,589 $ 158,863 $ 105,987 $ 264,850
Customer Support Revenue 45,709 31,956 77,665 139,713 97,265 236,978
Other Services Revenue 16,378 11,442 27,820 48,331 30,953 79,284
Total Revenue $ 108,107 $ 86,967 $ 195,074 $ 346,907 $ 234,205 $ 581,112
scheduling.

Three Months Ended December 31, 2021 Nine Months Ended December 31, 2021
Americas International Total Americas International Total
Software and Products Revenue $ 57,538 $ 41,037 $ 98,575 $ 153,510 $ 102,488 $ 255,998
Customer Support Revenue 50,163 35,844 86,007 153,244 109,185 262,429
Other Services Revenue 10,620 7,179 17,799 27,323 17,892 45,215
Total Revenue $ 118,321 $ 84,060 $ 202,381 $ 334,077 $ 229,565 $ 563,642

The amount of revenue recognized in the period that was included in the opening deferred revenue balance was $70,164 and $263,529 for the three and nine months ended December 31, 2023, respectively. The amount of revenue recognized from performance obligations satisfied in prior periods was not significant.

Information about Contract Balances

Amounts collected in advance of services being provided are accounted for as deferred revenue. Nearly all of our deferred revenue balance is related to ~~services revenue.~~customer support, SaaS arrangements, and other services.

In some arrangements we allow customers to pay for term-based software licenses and products over the term of the software license. Amounts recognized as revenue in excess of amounts billed are recorded as unbilled receivables. Unbilled receivables, which are anticipated to be invoiced in the next twelve months, are included in accounts receivable on the consolidated balance sheets. Long-term unbilled receivables are included in other assets. The opening and closing balances of our accounts receivable, unbilled receivables, and deferred revenues are as follows:

Accounts Receivable Unbilled Receivable
(current) Unbilled Receivable
(long-term)
Deferred Revenue
(current)
Deferred Revenue
(long-term)
Opening Balance as of March 31, 2022 $ 177,182 $ 17,056 $ 14,296 $ 267,017 $ 150,180
Increase (decrease), net 17,880 3,346 (3,531) 15,597 15,904
Ending Balance as of December 31, 2022 $ 195,062 $ 20,402 $ 10,765 $ 282,614 $ 166,084


	Accounts receivable		Unbilled receivable (current)		Unbilled receivable (long-term)		Deferred revenue (current)		Deferred revenue (long-term)
Opening balance as of March 31, 2023	$	188,736	$	21,705	$	9,867	$	307,562	$	174,393
Increase	8,829		4,440		5,026		17,938		9,858
Ending balance as of December 31, 2023	$	197,565	$	26,145	$	14,893	$	325,500	$	184,251

The ~~increases~~increase in accounts receivable (inclusive of unbilled receivables) ~~and deferred revenue are~~is a result of an increase in ~~Metallic~~revenues relative to the fourth quarter of the prior fiscal year. The increase in deferred revenue is primarily the result of an increase in SaaS contracts which are billed upfront but recognized ratably over the contract ~~period.~~period, partially offset by a decrease in professional service contracts.

~~The amount~~

4. Assets Held for Sale

During the fourth quarter of ~~revenue recognized~~fiscal 2023, we entered into an exclusive agreement to sell our owned corporate headquarters in Tinton Falls, New Jersey for $40,000 in cash consideration and determined the ~~period that was included in the March 31, 2022 balance of deferred revenue was $59,080~~assets and $224,543 for the three and nine months ended December 31, 2022, respectively. The majority of this revenue consists of customer support arrangements and Metallic. The amount of software and products revenue recognized in the three and nine months ended December 31, 2022land related to ~~performance obligations from prior periods was not significant.~~headquarters met the criteria for classification as assets held for sale in accordance with ASC 360, Impairment and Disposal of Long-Lived Assets ("ASC 360"). The property's estimated fair value, less estimated costs to sell, is $38,680. Upon closing of the transaction, we will enter into a lease for a portion of the premises.

1012

Table of Contents

Commvault Systems, ~~Inc~~Inc.

Notes to Consolidated Financial Statements - Unaudited (continued)

(In thousands, except per share data)

~~Remaining Performance Obligations~~Subsequent Event

As of January 31, 2024, the sale of our owned corporate headquarters has not yet been finalized and the exclusivity of the agreement has expired. The assets have now been classified as held for sale for more than one year. In ~~addition to~~accordance with ASC 360, assets not sold by the ~~amounts included in deferred revenue~~end of the one-year period may still qualify as held for sale, if certain conditions are met. We have determined that, as of ~~December~~January 31, ~~2022, $83,322~~2024, those conditions have been met.

The Board of revenue may be recognized from remaining performance obligations, of which $9,614 was related to software and products. We expect the majority of this software and products revenue to be recognized during the next twelve months. The majority of this software and products revenue is associated with renewals of subscription licenses which have not yet expired. The majorityDirectors reconfirmed their approval of the ~~services revenue is related~~sale at the January 2024 meeting and we believe the sale will be completed in calendar year 2024. All of the held for sale criteria are still met, and the assets are properly classified as such on the consolidated balance sheets.

Additionally, we have assessed whether there are any indicators of impairment and have concluded that the current carrying amount represents the estimated fair value, less estimated costs to ~~professional services~~sell, and ~~Metallic contracts that are committed but billed annually.~~

no additional remeasurement should be recorded.

4.5. Net Income (Loss) per Common Share

Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares during the period. Diluted net income (loss) per share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the incremental common shares issuable upon the vesting of restricted stock units, shares to be purchased under the Employee Stock Purchase Plan ("ESPP"), and the exercise of stock options. The dilutive effect of such potential common shares is reflected in diluted earnings per share by application of the treasury stock method.

The following table sets forth the reconciliation of basic and diluted net income (loss) per common share:


			Three Months Ended December 31,				Nine Months Ended December 31,
			2022		2021		2022		2021
		Three Months Ended December 31,										Three Months Ended December 31,			Nine Months Ended December 31,
		2023									2023		2022	2023		2022
Net income (loss)	Net income (loss)		$	(310)	$	10,008	$	7,719	$	25,636
Basic net income (loss) per common share:	Basic net income (loss) per common share:
Basic weighted average shares outstanding	Basic weighted average shares outstanding		44,712		45,242		44,738		45,720
Basic weighted average shares outstanding
Basic weighted average shares outstanding
Basic net income (loss) per common share	Basic net income (loss) per common share		$	(0.01)	$	0.22	$	0.17	$	0.56
Diluted net income (loss) per common share:	Diluted net income (loss) per common share:
Basic weighted average shares outstanding
Basic weighted average shares outstanding
Basic weighted average shares outstanding	Basic weighted average shares outstanding		44,712		45,242		44,738		45,720
Dilutive effect of stock options and restricted stock units	Dilutive effect of stock options and restricted stock units		—		1,477		1,072		1,832
Diluted weighted average shares outstanding	Diluted weighted average shares outstanding		44,712		46,719		45,810		47,552
Diluted net income (loss) per common share	Diluted net income (loss) per common share		$	(0.01)	$	0.21	$	0.17	$	0.54

The diluted ~~weighted-average~~weighted average shares outstanding exclude restricted stock units, performance restricted stock units, shares to be purchased under the ESPP and outstanding stock options totaling ~~3,921~~121 and ~~624~~3,921 for the three months ended December 31, ~~2022~~2023 and ~~2021,~~2022, respectively, and ~~674~~505 and ~~566~~674 for the nine months ended December 31, ~~2022~~2023 and ~~2021,~~2022, respectively, because the effect would have been anti-dilutive.

5.6. Commitments and Contingencies

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.

Table of Contents

Commvault Systems, Inc.

Notes to Consolidated Financial Statements - Unaudited (continued)

(In thousands, except per share data)

7. Capitalization

Our stock repurchase program has been funded by our existing cash and cash equivalent balances, as well as cash flows provided by our operations.

~~Table of Contents~~

~~Commvault Systems, Inc~~

~~Notes to Consolidated Financial Statements - Unaudited (continued)~~

~~(In thousands, except per share data)~~

On April ~~21, 2022,~~20, 2023, the Board of Directors (the "Board") approved ~~a new~~an increase of the existing share repurchase program ~~of $250,000.~~so that $250,000 was available. The Board's authorization has no expiration date. For the nine months ended December 31, ~~2022,~~2023, we repurchased ~~$90,131~~$133,655 of our common stock, or approximately ~~1,520~~1,932 shares. ~~As a result, $159,869 remains~~The remaining amount available under the current ~~authorization.~~authorization as of December 31, 2023 was $122,311.

7.8. Stock Plans

The following table presents the stock-based compensation expense included in cost of ~~services revenue,~~revenues, sales and marketing, research and development, general and administrative and restructuring expenses for the three and nine months ended December 31, ~~2022~~2023 and ~~2021.~~2022. Stock-based compensation is attributable to restricted stock units, performance-based awards and the ESPP.


		Three Months Ended December 31,				Nine Months Ended December 31,				Three Months Ended December 31,		Nine Months Ended December 31,
		2022		2021		2022		2021		2023	2022		2023	2022
Cost of services revenue		$	1,383	$	1,140	$	3,852	$	3,367
Cost of revenues
Sales and marketing	Sales and marketing	10,479		10,073		32,037		27,355
Research and development	Research and development	5,988		9,127		23,022		24,722
General and administrative	General and administrative	5,776		8,193		19,850		20,977
Restructuring	Restructuring	1,019		—		2,306		372
Stock-based compensation expense	Stock-based compensation expense	$	24,645	$	28,533	$	81,067	$	76,793

As of December 31, ~~2022,~~2023, there was ~~$155,273~~$149,391 of unrecognized stock-based compensation expense that is expected to be recognized over a ~~weighted-average~~weighted average period of ~~1.96~~1.91 years. We account for forfeitures as they occur. To the extent that awards are forfeited, stock-based compensation will be different from our current estimate.

Stock option activity was not significant for both the nine months ended December 31, 2023 and 2022. ~~In the nine months ended December 31, 2021, there were 398 options exercised with an intrinsic value of $12,631.~~

Restricted Stock Units

Restricted stock unit activity for the nine months ended December 31, ~~2022 is~~2023 was as follows:


Non-vested Restricted Stock Units	Non-vested Restricted Stock Units	Number of Awards	Weighted- Average Grant Date Fair Value		Non-vested Restricted Stock Units	Number of Awards	Weighted Average Grant Date Fair Value
Non-vested as of March 31, 2022		3,310	$	58.16
Non-vested as of March 31, 2023
Awarded	Awarded	1,785	63.87
Vested	Vested	(1,587)	55.70
Forfeited	Forfeited	(359)	60.69
Non-vested as of December 31, 2022		3,149	$	62.35
Non-vested as of December 31, 2023

The ~~weighted-average~~weighted average fair value of restricted stock units awarded was $71.48 and $69.83 per unit during the three and nine months ended December 31, 2023, respectively, and $66.50 and $63.87 per unit during the three and nine months ended December 31, 2022, ~~and $67.34 and $70.14 per unit during the three and nine months ended December 31, 2021.~~respectively. The ~~weighted-average~~weighted average fair value of awards includes the awards with a market condition described below.

1214

Table of Contents

Commvault Systems, ~~Inc~~Inc.

Notes to Consolidated Financial Statements - Unaudited (continued)

(In thousands, except per share data)

Performance Based Awards

In the nine months ended December 31, ~~2022,~~2023, we granted ~~126~~120 performance ~~restricted~~ stock units ("PSUs") to certain executives. Vesting of these awards is contingent upon i) us meeting certain non-GAAP performance goals (performance-based) in fiscal ~~2023~~2024 and ii) our customary service periods. The awards vest over three ~~years.~~years and have the potential to vest between 0% and 200% (240 shares) based on actual fiscal 2024 performance. The vesting quantity of these awards may vary based on actual fiscal ~~2023~~2024 performance. The related stock-based compensation expense is determined based on the value of the underlying shares on the date of grant and is recognized over the vesting term using the accelerated method. During the interim financial periods, management estimates the probable number of PSUs that would vest until the ultimate achievement of the performance goals is known. The awards are included in the restricted stock unit table.

Awards with a Market Condition

In the nine months ended December 31, ~~2022,~~2023, we granted ~~126~~120 market ~~performance stock units~~PSUs to certain executives. The vesting of these awards is contingent upon us meeting certain total shareholder return ("TSR") levels as compared to the Russell 3000 market index over the next three years. The awards vest in three annual tranches and have ~~a maximum~~the potential to vest atbetween 0% and 200% ~~(252~~(240 shares) based on TSR performance. The related stock-based compensation expense is determined based on the estimated fair value of the underlying shares on the date of grant and is recognized using the accelerated method over the vesting term. The estimated fair value was calculated using a Monte Carlo simulation model. The fair value of the awards granted during the nine months ended December 31, ~~2022~~2023 was ~~$76.48~~$87.90 per unit. The awards are included in the restricted stock unit table.

Employee Stock Purchase Plan

The ~~Employee Stock Purchase Plan (the “Purchase Plan”)~~ESPP is a shareholder approved plan under which substantially all employees may purchase our common stock through payroll deductions at a price equal to 85% of the lower of the fair market values of the stock as of the beginning or the end of six-month offering periods. An employee’s payroll deductions under the ~~Purchase Plan~~ESPP are limited to 10% of the employee’s salary and employees may not purchase more than $25 of stock during any calendar year. Employees purchased 96 shares in exchange for $5,164 of proceeds in the nine months ended December 31, 2023, and 107 shares in exchange for $5,418 of proceeds in the nine months ended December 31, ~~2022 and 85 shares in exchange for $5,160 of proceeds in the nine months ended December 31, 2021.~~2022. The ~~Purchase Plan~~ESPP is considered compensatory and the fair value of the discount and look back provision are estimated using the Black-Scholes formula and recognized over the six-month withholding period prior to purchase. The total expense associated with the ~~Purchase Plan~~ESPP for the nine months ended December 31, 2023 and 2022 was $2,391 and ~~2021 was~~ $2,847, ~~and $2,428,~~ respectively. As of December 31, ~~2022,~~2023, there was approximately ~~$460~~$364 of unrecognized cost related to the current ~~purchase~~offering period of our ~~Purchase Plan.~~ESPP.

8.9. Income Taxes

Income tax expense was $5,176 and $17,772 in the three and nine months ended December 31, 2023, respectively, compared to expense of $5,710 and $14,550 in the three and nine months ended December 31, 2022, ~~respectively, compared to expense of $3,018 and $5,573 in the three and nine months ended December 31, 2021,~~ respectively. The fiscal year-to-date increase in income tax expense ~~relative~~compared to the prior year relates primarily to current federal and state taxes driven by the ~~effects~~increase of ~~capitalization~~pre-tax income relative to the same period in the prior year. We believe that it is more likely than not that we will not realize the benefits of our gross deferred tax assets and ~~amortization of research and development expenses starting in fiscal year 2023 as required by the 2017 Tax Cuts and Jobs Act. Given we have recorded~~therefore continue to record a valuation allowance ~~against our~~to reduce the carrying value of these gross deferred tax assets, ~~there is no corresponding deferred tax benefit related~~net of the impact of the reversal of taxable temporary differences, to ~~the current tax expense associated with the capitalization~~zero as of ~~research and development expenses.~~December 31, 2023.

~~9. Restructuring~~

Our restructuring plan, initiated in the fourth quarter of fiscal 2022, is aimed to increase efficiency in our sales, marketing and distribution functions, as well as reduce costs across all functional areas. The plan also included a reorganization to combine our EMEA and APJ field organizations. These restructuring charges relate primarily to severance and related costs associated with headcount reductions and stock-based compensation related to modifications of existing unvested awards granted to certain employees impacted by the restructuring plan.

Table of Contents

Commvault Systems, ~~Inc~~Inc.

Notes to Consolidated Financial Statements - Unaudited (continued)

(In thousands, except per share data)

~~For the three and nine months ended December 31, 2022 and 2021, restructuring charges were comprised of the following:~~

Three Months Ended December 31, Nine Months Ended December 31,
2022 2021 2022 2021
Employee severance and related costs $ 8,209 $ — $ 9,054 $ 1,710
Stock-based compensation 1,019 — 2,306 372
Total restructuring charges $ 9,228 $ — $ 11,360 $ 2,082

~~Restructuring accruals~~

~~The activity in our restructuring accruals for the nine months ended December 31, 2022 is as follows:~~


	~~Total~~
~~Balance as of March 31, 2022~~	$	~~2,261~~
~~Employee severance and related costs~~	~~9,054~~
~~Payments~~	~~(4,956)~~
~~Balance as of December 31, 2022~~	$	~~6,359~~

10. Revolving Credit Facility

On December 13, 2021, we entered into a five-year $100,000 senior secured revolving credit facility (the “Credit Facility”) with JPMorgan Chase Bank, N.A. ~~("J.P. Morgan").~~ The Credit Facility is available for share repurchases, general corporate purposes, and letters of credit. The Credit Facility contains financial maintenance covenants, including a leverage ratio and interest coverage ratio. 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 Credit Facility also limits our ability to incur certain additional indebtedness, create or permit liens on assets, make acquisitions, make investments, loans or advances, sell or transfer assets, pay dividends or distributions, and engage in certain transactions with foreign affiliates. Outstanding borrowings under the Credit Facility accrue interest at an annual rate equal to the Secured Overnight Financing Rate plus 1.25% subject to increases based on our actual leverage. The unused balance on the Credit Facility is also subject to a 0.25% annual interest charge subject to increases based on our actual leverage. As of December 31, ~~2022,~~2023, there were no borrowings under the Credit Facility and we were in compliance with all covenants.

We have deferred the expense related to debt issuance costs, which are classified as other assets, and will amortize the costs into interest expense over the term of the Credit Facility. Unamortized amounts at December 31, ~~2022~~2023 were $457. The amortization of debt issuance costs and interest expense incurred for the three and nine months ended December 31, 2022 was $93 and $278, respectively. Unamortized amounts at December 31, 2021 were $572.$341. The amortization of debt issuance costs and interest expense incurred was ~~$19~~$92 and $93 for the three months ended December 31, 2023 and 2022, respectively, and $277 and $278 for the nine months ended December 31, ~~2021.~~

2023 and 2022, respectively.

~~Table of Contents~~

~~Commvault Systems, Inc~~

~~Notes to Consolidated Financial Statements - Unaudited (continued)~~

~~(In thousands, except per share data)~~

~~11. Subsequent Events~~

On January 19, 2023, our Board of Directors approved a plan to sell Commvault's owned corporate headquarters in Tinton Falls, New Jersey. Subsequently, we entered into an agreement to sell the property for $40,000. The agreement includes a due diligence period for the buyer, is contingent on receiving approvals from certain government agencies, and includes other customary closing conditions. We believe the sale will likely close in the first half of fiscal 2024. Upon closing of the transaction, Commvault will enter into a lease for a portion of the premises.

~~Management has concluded that during the fourth quarter of fiscal 2023, the headquarters has met the criteria to be classified as held for sale in accordance with ASC 360-10,~~ ~~Impairment and Disposal of Long-Lived Assets. We expect to record a non-cash impairment charge of approximately $50,000 in the fourth quarter of fiscal 2023. We will also incur expenses for professional fees and moving associated with the sale.~~

1516

Table of Contents

Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis along with our consolidated financial statements and the related notes included elsewhere in this ~~quarterly report~~Quarterly Report on Form 10-Q. The statements in this discussion regarding our expectations of our future performance, liquidity and capital resources, and other non-historical statements are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, changes in demand as well as the risks and uncertainties described under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended March 31, ~~2022.~~2023. Our actual results may differ materially from those contained in or implied by any forward-looking statements.

Overview

Incorporated in Delaware in 1996, Commvault Systems, Inc. isprovides its customers with a ~~global~~cyber resiliency platform that helps them secure, defend and recover their most precious asset, their data. We provide these products and services for their data ~~management company offering customers enterprise level, intelligent data services~~across the following environments: on-premises, hybrid and multi-cloud. Our cyber resiliency offerings are delivered via ~~a single platform and unified code base.~~

~~We believe in solving hard problems for our customers~~self-managed software, SaaS, integrated appliances, or managed by enabling our customers to accelerate their digital transformation in today's ever-evolving workforce. Our product portfolio includes tools and machine learning technology that drives automation, reduces complexity, reigns in data fragmentation, and accelerates a customer’s cloud journey. Our product functionality share the same back-end technologies to deliver the benefits of a holistic approach to protecting, managing, and securing data. Our products address many aspects of data management, from data protection and security, to data governance, transformation and insights, while providing scalability. We believepartners. Customers use our technology to protect themselves from threats like ransomware and ~~professional services provide the broadest set of capabilities in the industry, which enables customers to efficiently and cost-effectively scale~~recover their data ~~on premises or in the cloud.~~efficiently.

Sources of Revenues

We ~~derive a~~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 are focused on these types of our software applications. We do not customize our software for a specific end-user customer. We sell our software applications to end-user customers both directly through our sales force and indirectly through our global network of value-added reseller partners, systems integrators, corporate resellers and original equipment manufacturers. Our software and productsrecurring revenue ~~was 46% and 45% of our total revenues for the nine months ended December 31, 2022 and 2021, respectively.~~arrangements.

We ~~continue to focus on~~expect our subscription ~~and other recurring revenue~~ arrangements ~~and~~will continue to generate ~~revenue~~revenues from the renewals of ~~subscription~~term-based licenses and SaaS offerings sold in prior years. Any of our ~~licensing~~pricing models (capacity, instance based, etc.) can be sold via a subscription ~~arrangement.~~arrangement, either through term-based licensing or hosted services. In ~~these~~term-based license arrangements, the customer has the right to use the software over a designated period of time. The capacity of the license is fixed and the customer has made an unconditional commitment to pay. Software revenue in these arrangements is generally recognized when the software is delivered. ~~During~~In SaaS offerings, revenue is recognized ratably over the ~~nine months ended December 31, 2022 and 2021, approximately 78% and 65% of software license revenue was sold under a subscription model, respectively.~~ contract period.

We ~~also~~ sell to ~~some~~end-user customers ~~primarily managed service providers, via utility, or pay-as-you-go models. In these arrangements, there is no minimum commitment~~both directly through our sales force and ~~actual usage is regularly measured~~indirectly through our global network of value-added reseller partners, systems integrators, corporate resellers and ~~billed. Revenue in these utility arrangements is recognized as the software is used.~~

Our total software and products revenue in any particular period is, to a certain extent, dependent upon our ability to generate revenues from large customer software and products deals, which we refer to as larger deal transactions. Larger deal transactions (transactions greater than $0.1 million of software and products revenue) represented 73% and 71% of our total software and products revenue in the nine months ended December 31, 2022 and 2021, respectively.

~~Software and products~~original equipment manufacturers. Subscription revenue generated through indirect distribution channels accounted for approximately 90% of total ~~software and products~~subscription revenue in both the nine months ended December 31, ~~2022~~2023 and ~~2021. Software and products~~2022. Subscription revenue generated through direct distribution channels accounted for approximately 10% of total ~~software and products~~subscription revenue in both the nine months ended December 31, ~~2022~~2023 and ~~2021.~~2022. 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 ~~software and products~~subscription revenue generated through our direct distribution channels from time-to-time. We believe that the growth of our ~~software and products~~subscription revenue, derived from both our indirect channel partners and direct sales force, are key attributes to our long-term growth strategy. We intend to continue to invest in both our channel relationships and direct sales force in the future, but we continue to expect more revenue to be generated through indirect distribution channels over the long term. The

~~Table of Contents~~

failure of our indirect distribution channels or our direct sales force to effectively sell our ~~software applications~~products and services could have a material adverse effect on our revenues and results of operations.

We have a non-exclusive distribution agreement with Arrow ~~Enterprise Computing Solutions, Inc. ("Arrow"), a subsidiary of Arrow Electronics, Inc. Pursuant~~pursuant to ~~this distribution agreement,~~which Arrow's primary role is to enable a more efficient and effective distribution channel for our products and services by managing our reseller partners and leveraging their own industry experience. We generated ~~37%~~36% and ~~36%~~37% of our total revenues through Arrow for the nine months ended December 31, ~~2022~~2023 and ~~2021,~~2022, respectively. If Arrow were to discontinue or reduce the sales of our products or if our agreement with Arrow were terminated, and if we were unable to take back the management of our reseller channel or find another distributor to replace Arrow, there could be a material adverse effect on our future business.

~~We have an original equipment manufacturer agreement with Hitachi Vantara ("Hitachi") which allows them~~Our customer support revenue includes support contracts tied to ~~market, sell and support~~ our software ~~applications and services on a stand-alone basis and/or incorporate our software applications into their own hardware~~ products. ~~Hitachi has no obligation to recommend or offer our software applications exclusively, or at all, and they have no minimum sales requirements and can terminate our relationship at any time.~~

Our services revenue was 54% and 55% of our total revenues for the nine months ended December 31, 2022 and 2021, respectively. Our services revenue is made up of fees from the delivery of customer support and other professional services, which are typically sold in connection with the sale of our software applications. Customer support ~~agreements provide technical support and unspecified~~includes software updates on a when-and-if-available basis, telephone support, integrated web-based support, and

Table of Contents

other premium support offerings, for ~~an annual fee based on licenses purchased~~both term-based software license and ~~the level~~perpetual software license arrangements. We sell our customer support contracts as a percentage of ~~service subscribed. Metallic, our as-a-service solution, allows customers to use hosted software over the contract period without taking possession of the~~net software. ~~Revenue related to Metallic~~Customer support revenue is ~~also included in services revenue and is generally~~ recognized ratably over the ~~contract term. Other~~term of the customer support agreement.

Our other services revenue consists primarily of professional ~~services include consulting,~~service offerings, including consultation, assessment and design, ~~services, implementation and post-deployment~~installation services, and ~~training, all of which to date have predominantly been sold in connection with~~customer education. Revenues from other services can vary period over period based on the ~~sale of software applications.~~

timing services are delivered and are typically recognized as the services are performed.

Foreign Currency Exchange Rates’ Impact on Results of Operations

Sales outside the United States were 47% of our total ~~revenue~~revenues for both the nine months ended December 31, ~~2022~~2023 and ~~49% of our total revenue for the nine months ended December 31, 2021.~~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. To the extent the U.S. dollar weakens against foreign currencies, the translation of these foreign currency denominated transactions generally results in increased ~~revenue,~~revenues, operating expenses and income from operations for our non-U.S. operations. Similarly, our ~~revenue,~~revenues, 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 the three months ended December 31, ~~2021,~~2022, our ~~software and products revenue~~total revenues would have been ~~higher~~lower by ~~$4.4 million, our services revenue would have been higher by $5.3~~$2.4 million, our cost of ~~sales~~revenues would have been ~~higher~~lower by ~~$1.1~~$0.1 million and our operating expenses would have been ~~higher~~lower by ~~$5.4~~$0.9 million from non-U.S. operations for the three months ended December 31, ~~2022.~~2023. Using the average foreign currency exchange rates from the nine months ended December 31, ~~2021,~~2022, our ~~software and products revenue~~total revenues would have been lower by $3.8 million, our cost of revenues would have been higher by ~~$12.7 million, our services revenue would have been higher by $16.3 million, our cost of sales would have been higher by $3.5~~$0.1 million and our operating expenses would have been ~~higher~~lower by ~~$14.9~~$0.8 million from non-U.S. operations for the nine months ended December 31, ~~2022.~~2023.

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. We recognized net foreign currency transaction losses of approximately $1.6 million and $1.8 million for the three and nine months ended December 31, 2023, respectively. We recognized net foreign currency transaction losses of approximately $0.3 million and $0.1 million for the three and nine months ended December 31, 2022, respectively. ~~We recognized net foreign currency transaction losses of approximately $0.3 million and $0.5 million for the three and nine months ended December 31, 2021, respectively.~~

~~Table of Contents~~

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. Some of the estimates and assumptions we are required to make relate to matters that are inherently uncertain as they pertain to future events. We base these estimates on historical experience and on various other assumptions that we believe to be reasonable and appropriate. Actual results may differ significantly from these estimates. To the extent that there are material differences between these estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows ~~will~~may be affected.

In many cases, the accounting treatment of a particular transaction is specifically dictated by U.S. GAAP and does not require management’s judgment in its application, while in other cases, significant judgment is required in selecting among available alternative accounting standards that allow different accounting treatment for similar transactions. We consider these policies requiring significant management judgment to be critical accounting policies. These critical accounting policies are:

•Revenue Recognition

•Accounting for Income Taxes

•Goodwill

There have been no significant changes in our critical accounting policies during the nine months ended December 31, ~~2022~~2023 as compared to the critical accounting policies and estimates disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies” included in our Annual Report on Form 10-K for the year ended March 31, ~~2022.~~

~~Results of Operations~~

~~Three months ended December 31, 2022 compared to three months ended December 31, 2021~~

~~Revenues (in millions)~~

2023.

–~~Total revenues decreased $7.3 million, or 4% as a result of the following:~~

•A decrease in software and products revenue which was significantly impacted by the year over year strengthening of the US dollar, particularly the Euro and Pound. Using the average foreign currency exchange rates from the three months ended December 31, 2021, our total revenues would have increased 1% compared to the three months ended December 31, 2021.

•~~Software and products revenue represented 46% of our total revenue in the three months ended December 31, 2022 and 49% of our total revenue in the three months ended December 31, 2021.~~

•~~Services revenue represented 54% of our total revenue in the three months ended December 31, 2022 and 51% of our total revenue in the three months ended December 31, 2021.~~

–~~Software and products revenue decreased $9.0 million, or 9%, as a result of the following:~~

•A decrease of $10.4 million, or 14%, in larger deal revenue (deals greater than $0.1 million). Larger deal revenue represented 72% of our software and products revenue in the three months ended December 31, 2022 and 76% of our software and products revenue in the three months ended December 31, 2021.

Table of Contents

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.

Three months ended December 31, 2023 compared to three months ended December 31, 2022

Revenues ($ in millions)

•

–~~The average dollar amount~~Total revenues increased $21.7 million, or 11% year over year, driven primarily by an increase in subscription revenue, partially offset by a decrease in perpetual license revenue. We remain focused on selling subscription arrangements through both term-based software licenses and SaaS offerings.

–Subscription revenue increased $26.9 million, or 31% year over year, driven primarily by a 91% increase in our SaaS revenue. Term-based license revenue increased 16%, due to an increase in larger term-based license transactions (deals greater than $0.1 million) period over period. Subscription revenue accounted for 53% of ~~larger deal revenue transactions was approximately $312 thousand and $332 thousand~~total revenues for the three months ended December 31, ~~2022 and 2021, respectively, representing a 6% decrease. There were 206 larger deal revenue transactions~~2023 compared to 45% for the three months ended December 31, ~~2022, compared~~2022.

–Perpetual license revenue decreased $4.9 million, or 25% year over year. Our go to ~~225 deals~~market motion is led by subscription and perpetual licenses are generally only sold in certain verticals and geographies. Perpetual license revenue accounted for 7% of total revenues for the three months ended December 31, ~~2021.~~

•~~This decrease was partially offset by an increase of $1.4 million in transactions less than $0.1 million.~~

•~~Using the average foreign currency exchange rates from~~2023 compared to 10% for the three months ended December 31, ~~2021, our software and products revenue would have decreased 5% compared to the three months ended December 31, 2021.~~2022.

–~~Services~~Customer support revenue ~~increased $1.7~~decreased $0.9 million, or ~~2%, primarily due to the following:~~

•~~An increase in other services revenue, driven primarily by the~~1% year over year, ~~increase~~driven by a $7.2 million decrease in customer support revenue ~~from Metallic as-a-service arrangements,~~attached to perpetual license support renewals, partially offset by a ~~decrease~~$6.3 million increase in ~~revenue from customer~~ support ~~agreements.~~allocated to term-based license arrangements.

•–~~Using the average foreign currency exchange rates from the three months ended December 31, 2021, our~~Other services revenue ~~would have~~ increased 7%$0.6 million, or 6% year over year, primarily due to an increase in professional services delivered during the period compared to the ~~three months ended December 31, 2021.~~same period in the prior year.

We track ~~software and products revenue~~total revenues on a geographic basis. During the fourth quarter of fiscal 2022, we combined the management of our EMEA and APJ field organizations into our International region (Europe, Middle East, Africa, Australia, India, Japan, Southeast Asia, China). Our Americas region includes the United States, Canada, and Latin America. Our International region primarily includes Europe, Middle East, Africa, Australia, India, Southeast Asia and China. Americas and International represented ~~51%~~58% and ~~49%~~42% of total ~~software and products revenue,~~revenues, respectively, for the three months ended December 31, ~~2022. Software~~2023. Total revenues increased 16% and ~~products revenue decreased~~6% year over year ~~by 20%~~ in the Americas and ~~increased 6% in International.~~International, respectively.

Table of Contents

▪~~The~~Total revenues in the Americas was impacted by a 44% increase in subscription revenue, offset by a 47% decrease in ~~Americas software and products revenue was primarily due to a 27% decrease in larger deal transactions~~perpetual license revenue, driven by ~~a decrease~~the planned shift from selling perpetual licenses to selling subscription arrangements. Customer support revenue declined 4% and other services revenue increased 10% due to an increase in the ~~average dollar amount~~delivery of ~~larger deal transactions~~professional services for the region as ~~a result~~compared to the same period of ~~slower buying patterns and lower close rate execution. This decrease was partially offset by an increase of $1.7 million in transactions less than $0.1 million.~~the prior year.

▪The increase in International ~~software and products revenue~~total revenues was primarily due to ~~an 11%~~a 13% increase in ~~larger deal transactions~~subscription revenue, offset by a 12% decrease in perpetual license revenue. ~~Using the average foreign currency exchange rates from the three months ended December 31, 2021, our International software~~Customer support revenue increased 4% year over year and ~~products~~other services revenue ~~would have increased 17% compared to the three months ended December 31, 2021.~~was flat year over year.

Our ~~software and products revenue~~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.

1920

Table of Contents

Cost of Revenues and Gross Margin ($ in millions)


	Three Months Ended December 31,
	2023				2022
	Cost of Revenues		Gross Margin		Cost of Revenues		Gross Margin
Subscription	$	15.9	86	%	$	11.7	87	%
Perpetual license	0.8		95	%	0.6		97	%
Customer support	15.1		80	%	14.6		81	%
Other services	7.3		33	%	7.6		26	%
Total	$	39.1	82	%	$	34.5	82	%

–Total cost of revenues increased $4.5 million, and represented 18% ~~and 15%~~ of our total revenues for both the three months ended December 31, ~~2022~~2023 and ~~2021, respectively.~~2022.

–Cost of ~~software and products~~subscription revenue ~~decreased $1.2~~increased $4.2 million, ~~and represented 3%~~representing 14% of our total ~~software and products~~subscription revenue for the three months ended December 31, ~~2022~~2023 compared to 4%13% for the three months ended December 31, ~~2021.~~2022. The ~~decrease~~year over year increase is primarily the result of an increase in the cost of infrastructure related to ~~a decline~~growth in ~~hardware as part of~~ our ~~transition to a software model for appliances and the reduction in third party royalties associated with the current version of our Hyperscale software.~~SaaS offerings.

–Cost of ~~services~~perpetual license revenue increased ~~$5.7~~$0.2 million ~~representing 30%~~and represented 5% of our total perpetual revenue for the three months ended December 31, 2023 compared to 3% for the three months ended December 31, 2022.

–Cost of customer support revenue increased $0.5 million and represented 20% of our total customer support revenue for the three months ended December 31, 2023 compared to 19% for the three months ended December 31, 2022.

–Cost of other services revenue decreased $0.3 million, representing 67% of our total other services revenue for the three months ended December 31, ~~2022~~2023 compared to ~~25%~~74% for the three months ended December 31, ~~2021.~~2022. The ~~increase~~decrease in cost of other services revenue ~~primarily related to an increase in~~was driven by timing of the ~~cost~~delivery of ~~infrastructure related to Metallic as-a-service offering as they continue to scale.~~certain professional services.

2021

Table of Contents

Operating Expenses ($ in millions)

–Sales and marketing expenses increased $4.4 million, or 5%, primarily due to increases in employee compensation and related expenses as well as marketing spend related to Commvault's SHIFT event in New York City, partially offset by a $0.3 million decrease in stock-based compensation.

–Research and development expenses increased $1.9 million, or 6%, driven by increases in employee compensation and related expenses, partially offset by a $0.5 million decrease in stock-based compensation. 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 $5.1 million, or 21%, driven by $1.6 million in foreign currency transaction losses and increases in employee compensation and related expenses, including an increase of $1.3 million in stock-based compensation year over year.

–Depreciation and amortization expense decreased $1.0 million, driven by the reclassification of our owned corporate headquarters as assets held for sale in the fourth quarter of fiscal 2023.

Income Tax Expense

Income tax expense was $5.2 million in the three months ended December 31, 2023 compared to expense of $5.7 million in the three months ended December 31, 2022. The decrease in income tax expense compared to the prior year relates primarily to current federal and state taxes relative to the prior year quarter.

Table of Contents

Nine months ended December 31, 2023 compared to nine months ended December 31, 2022

Revenues ($ in millions)

–Total revenues increased $34.8 million, or 6% year over year, driven primarily by an increase in subscription revenue, offset by decreases in perpetual license and customer support revenues. We remain focused on selling subscription arrangements through both term-based software licenses and SaaS offerings.

–Subscription revenue increased $56.0 million, or 22% year over year, driven primarily by a 92% increase in our SaaS revenue compared to the same period in the prior year. Term-based license revenue increased 7% 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 and an increase in the average selling price of these transactions. Subscription revenue accounted for 50% of total revenues for the nine months ended December 31, 2023 compared to 44% for the nine months ended December 31, 2022.

–Perpetual license revenue decreased $14.9 million, or 26% year over year. Our go to market motion is led by subscription and perpetual licenses are generally only sold in certain verticals and geographies. Perpetual license revenue accounted for 7% of total revenues for the nine months ended December 31, 2023 compared to 10% for the nine months ended December 31, 2022.

–Customer support revenue decreased $6.2 million, or 3% year over year, driven by a $26.3 million decrease in customer support revenue attached to perpetual license support renewals, partially offset by a $20.1 million increase in support allocated to term-based license arrangements.

–Other services revenue was flat compared to the same period of the prior year. Changes in other services revenue can vary period over period primarily due to the timing professional services are delivered.

We track total revenues on a geographic basis. Our Americas region includes the United States, Canada, and Latin America. Our International region primarily includes Europe, Middle East, Africa, Australia, India, Southeast Asia and China. Americas and International represented 60% and 40% of total revenues, respectively, for the nine months ended December 31, 2023. Total revenues increased 6% in both the Americas and International.

▪Total revenues in the Americas was impacted by a 24% increase in subscription revenue, offset by a 44% decrease in perpetual license revenue, driven by the shift from selling perpetual licenses to subscription arrangements. Customer support and other services revenues declined 6% and 2%, respectively.

▪The increase in International total revenues was primarily due to a 19% increase in subscription revenue, offset by a 14% decrease in perpetual license revenue. Customer support revenue increased 2% year over year. Other services revenue increased 3% year over year due to an increase in the delivery of professional services for the region as compared to the same period of the prior year.

Table of Contents

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.

Table of Contents

Cost of Revenues and Gross Margin ($ in millions)


	Nine Months Ended December 31,
	2023				2022
	Cost of Revenues		Gross Margin		Cost of Revenues		Gross Margin
Subscription	$	42.9	86	%	$	31.6	88	%
Perpetual license	1.9		96	%	1.9		97	%
Customer support	44.9		81	%	45.1		81	%
Other services	22.7		32	%	22.1		34	%
Total	$	112.5	82	%	$	100.6	83	%

–Total cost of revenues increased $11.9 million, and represented 18% and 17% of our total revenues for the nine months ended December 31, 2023 and 2022, respectively.

–Cost of subscription revenue increased $11.4 million, representing 14% of our total subscription revenue for the nine months ended December 31, 2023 compared to 12% for the nine months ended December 31, 2022. 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 $0.1 million and represented 4% of our total perpetual revenue for the nine months ended December 31, 2023 compared to 3% for the nine months ended December 31, 2022.

–Cost of customer support revenue decreased $0.1 million and represented 19% of our total customer support revenue for both the nine months ended December 31, 2023 and 2022.

–Cost of other services revenue increased $0.7 million, representing 68% of our total other services revenue for the nine months ended December 31, 2023 compared to 66% for the nine months ended December 31, 2022. The increase in cost of other services revenue was driven by timing of the delivery of certain professional services.

Table of Contents

Operating Expenses ($ in millions)

–Sales and marketing expenses ~~decreased $1.8~~increased $7.0 million, or 2%3%, primarily due to ~~decreases in~~ employee compensation and sales commissions associated with ~~decreased revenue~~increased revenues relative to the same period in the prior ~~year.~~year as well as increases in marketing spend related to Commvault's SHIFT event in New York City. These increases were partially offset by a $2.2 million decrease in stock-based compensation.

–Research and development expenses decreased ~~$6.8~~$12.6 million, or ~~17%~~11%, ~~primarily due to~~driven by decreases in employee compensation and related expenses, including a ~~$3.1~~$6.8 million decrease in stock-based ~~compensation, and the completion of payments related to key employees of Hedvig, Inc., which ended in the fourth quarter of fiscal 2022.~~compensation. Investing in research and development ~~has been~~remains a priority for Commvault and we anticipate continued responsible spending related to the development of our ~~data~~software applications and ~~information management software applications.~~hosted services.

–General and administrative expenses ~~decreased $5.1~~increased $7.5 million, or ~~18%~~10%, ~~primarily due to the following:~~

•~~Decreases~~driven by $1.8 million in foreign currency transaction losses and increases in employee compensation and related expenses, including ~~a $2.4~~an increase of $0.9 million ~~decrease~~ in ~~stock compensation expense.~~

•~~A decrease in legal costs relative to the same period of the prior year.~~

–Restructuring: Our restructuring plan, initiated in the fourth quarter of fiscal 2022, is aimed to increase efficiency in our sales, marketing and distribution functions as well as reduce costs across all functional areas. The plan also included a reorganization to combine our EMEA and APJ field organizations. Restructuring expenses were $9.2 million for the three months ended December 31, 2022. There were no restructuring charges for the three months ended December 31, 2021. These restructuring charges relate primarily to severance and related costs associated with headcount reductions. These charges include $1.0 million of stock-based compensation related to modifications of existing awards granted to certain employees included in the restructuring for the three months ended December 31, 2022. We cannot guarantee the restructuring program will achieve its intended result. Risks associated with this restructuring program also include additional unexpected costs, adverse effects on employee morale and the failure to meet operational and growth targets due to the loss of key employees, any of which may impair our ability to achieve anticipated results of operations or otherwise harm our business.year over year.

–Depreciation and amortization expense ~~was $2.5~~decreased $3.0 million, or 39%, driven by the reclassification of our owned corporate headquarters as assets held for ~~both~~sale in the ~~three months ended December 31, 2022 and 2021.~~fourth quarter of fiscal 2023.

~~Table of Contents~~

Income Tax Expense

Income tax expense was ~~$5.7~~$17.8 million in the ~~three~~nine months ended December 31, ~~2022~~2023 compared to expense of ~~$3.0~~$14.6 million in the ~~three~~nine months ended December 31, ~~2021.~~2022. The increase in income tax expense ~~relative~~compared to the prior year relates primarily to current federal and state taxes driven by the ~~effects~~increase of capitalization and amortization of research and development expenses starting in fiscal year 2023 as required by the 2017 Tax Cuts and Jobs Act. Given we have recorded a valuation allowance against our deferred tax assets, there is no corresponding deferred tax benefit relatedpre-tax income relative to the ~~current tax expense associated with~~same period in the ~~capitalization of research and development expenses.~~

~~Nine months ended December 31, 2022 compared to nine months ended December 31, 2021~~

~~Revenues (in millions)~~

prior year.

–~~Total revenues increased $17.5 million, or 3% as a result of the following:~~

•~~An increase in software and products and Metallic as-a-service revenues.~~

•~~Software and products revenue represented 46% of our total revenue in the nine months ended December 31, 2022 and 45% of our total revenue in the nine months ended December 31, 2021.~~

•~~Services revenue represented 54% of our total revenue in the nine months ended December 31, 2022 and 55% of our total revenue in the nine months ended December 31, 2021.~~

•~~Using the average foreign currency exchange rates from the nine months ended December 31, 2021, our total revenues would have increased 8% compared to the nine months ended December 31, 2021.~~

–~~Software and products revenue increased $8.8 million, or 3%, as a result of the following:~~

•An increase of $12.1 million, or 7%, in larger deal revenue (deals greater than $0.1 million). Larger deal revenue represented 73% of our software and products revenue in the nine months ended December 31, 2022 and 71% of our software and products revenue in the nine months ended December 31, 2021.

•The average dollar amount of larger deal revenue transactions was approximately $344 thousand and $317 thousand for the nine months ended December 31, 2022 and 2021, respectively, representing a 9% increase. There were 563 larger deal revenue transactions for the nine months ended December 31, 2022, compared to 573 deals for the nine months ended December 31, 2021.

•~~This increase was partially offset by a decrease of $3.2 million in transactions less than $0.1 million.~~

•Using the average foreign currency exchange rates from the nine months ended December 31, 2021, our software and products revenue would have increased 8% compared to the nine months ended December 31, 2021.

–~~Services revenue increased $8.7 million, or 3%, primarily due to the following:~~

•An increase in other services revenue, driven primarily by the year over year increase in revenue from Metallic as-a-service offerings, partially offset by a decrease in revenue from customer support agreements.

•~~Using the average foreign currency exchange rates from the nine months ended December 31, 2021, our services revenue would have increased 8% compared to the nine months ended December 31, 2021.~~

2226

Table of Contents

Americas and International represented 60% and 40% of total software and products revenue, respectively, for the nine months ended December 31, 2022. Software and products revenue increased year over year by 3% in the Americas and by 3% in International.

▪The increase in Americas software and products revenue was primarily the result of a 6% increase in larger deal transactions revenue driven primarily by an increase in the average dollar amount of larger deal transactions.

▪The increase in International software and products revenue was primarily the result of a 7% increase in larger deal revenue driven by an increase in the average dollar value of larger deal transactions. Using the average foreign currency exchange rates from the nine months ended December 31, 2021, our International software and products revenue would have increased 15% compared to the nine months ended December 31, 2021.

Our software and products revenue in International is subject to changes in foreign exchange rates as more fully discussed above in the “Foreign Currency Exchange Rates’ Impact on Results of Operations” section.

~~Cost of Revenues and Gross Margin ($ in millions)~~

–~~Total cost of revenues increased $18.8 million, and represented 17% and 15% of our total revenues for the nine months ended December 31, 2022 and 2021, respectively.~~

–~~Cost of software and products revenue increased $0.8 million and represented 4% of our total software and products revenue for both the nine months ended December 31, 2022 and 2021.~~

–Cost of services revenue increased $18.0 million, representing 29% of our total services revenue for the nine months ended December 31, 2022 compared to 24% for the nine months ended December 31, 2021. The increase in cost of services revenue primarily related to an increase in the cost of infrastructure related to Metallic as-a-service offering as they continue to scale.

~~Table of Contents~~

~~Operating Expenses ($ in millions)~~

–Sales and marketing expenses increased $5.1 million, or 2%, primarily due to a $4.7 million increase in stock-based compensation and an increase in travel expenses versus the same period of the prior year.

–Research and development expenses decreased $3.4 million, or 3%, primarily due to a $1.7 million decrease in stock-based compensation and the completion of payments related to key employees of Hedvig, Inc., which ended in the fourth quarter of fiscal 2022. Investing in research and development has been a priority for Commvault, and we anticipate continued spending related to the development of our data and information management software applications.

–~~General and administrative expenses decreased $4.4 million, or 5%, primarily due to the following:~~

•~~A decrease in legal costs relative to the same period of the prior year.~~

•~~A $1.1 million decrease in stock-based compensation relative to the same time in the prior year.~~

•~~Partially offset by an increase in employee compensation and related expenses.~~

–Restructuring: Our restructuring plan, initiated in the fourth quarter of fiscal 2022, is aimed to increase efficiency in our sales, marketing and distribution functions as well as reduce costs across all functional areas. The plan also included a reorganization to combine our EMEA and APJ field organizations. Restructuring expenses were $11.4 million and $2.1 million for the nine months ended December 31, 2022 and 2021, respectively. These restructuring charges relate primarily to severance and related costs associated with headcount reductions. These charges include $2.3 million and $0.4 million of stock-based compensation related to modifications of existing awards granted to certain employees included in the restructuring for the nine months ended December 31, 2022 and 2021, respectively. We cannot guarantee the restructuring program will achieve its intended result. Risks associated with this restructuring program also include additional unexpected costs, adverse effects on employee morale and the failure to meet operational and growth targets due to the loss of key employees, any of which may impair our ability to achieve anticipated results of operations or otherwise harm our business.

–Depreciation and amortization expense increased $0.5 million, from $7.1 million in the nine months ended December 31, 2021 to $7.6 million in the nine months ended December 31, 2022, as a result of the acquisition of an intangible asset in the fourth quarter of fiscal year 2022.

~~Table of Contents~~

~~Income Tax Expense~~

Income tax expense was $14.6 million in the nine months ended December 31, 2022 compared to expense of $5.6 million in the nine months ended December 31, 2021. The increase in income tax expense relative to the prior year relates primarily to current federal and state taxes driven by the effects of capitalization and amortization of research and development expenses starting in fiscal year 2023 as required by the 2017 Tax Cuts and Jobs Act. Given we have recorded a valuation allowance against our deferred tax assets, there is no corresponding deferred tax benefit related to the current tax expense associated with the capitalization of research and development expenses.

Liquidity and Capital Resources

~~As of December 31, 2022, our cash balance was $273.5 million. The amount of cash and cash equivalents held outside of the United States by our foreign legal entities was $156.6 million.~~ In recent fiscal years, our principal source of liquidity has been cash provided by operations. As of December 31, 2023, our cash and cash equivalents balance was $284.3 million, of which approximately $196.7 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. 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.

On December 13, 2021, we entered into a five-year $100 million senior secured revolving credit facility (the “Credit Facility”) with ~~J.P. Morgan.~~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. 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 Credit Facility also limits our ability to incur certain additional indebtedness, create or permit liens on assets, make acquisitions, make investments, loans or advances, sell or transfer assets, pay dividends or distributions, and engage in certain transactions with foreign affiliates. Outstanding borrowings under the Credit Facility accrue interest at an annual rate equal to the Secured Overnight Financing Rate plus 1.25% subject to increases based on our actual leverage. The unused balance on the Credit Facility is also subject to a 0.25% annual interest charge subject to increases based on our actual leverage. As of December 31, ~~2022,~~2023, there were no borrowings under the Credit Facility and we were in compliance with all covenants.

On April ~~21, 2022,~~20, 2023, the Board of Directors approved ~~a new~~an increase of the existing share repurchase program ofso that $250.0 ~~million.~~million was available. The Board's authorization has no expiration date. For the nine months ended December 31, ~~2022,~~2023, we have repurchased ~~$90.1~~$133.7 million of our common stock. ~~As a result, $159.9 million remains~~The remaining amount available under the current ~~authorization.~~authorization as of December 31, 2023 was $122.3 million.

Our summarized cash flow information is as follows (in thousands):


		Nine Months Ended December 31,				Nine Months Ended December 31,
		2022		2021		2023	2022
Net cash provided by operating activities	Net cash provided by operating activities	$	102,455	$	90,064
Net cash used in investing activities	Net cash used in investing activities	(4,147)		(6,355)
Net cash used in financing activities	Net cash used in financing activities	(80,902)		(242,335)
Effects of exchange rate - changes in cash	Effects of exchange rate - changes in cash	(11,444)		(4,920)
Net increase (decrease) in cash and cash equivalents	Net increase (decrease) in cash and cash equivalents	$	5,962	$	(163,546)

2527

Table of Contents

–Net cash provided by operating activities was impacted by net income adjusted for the impact of non-cash charges ~~an increase~~and increases in deferred revenue, partially offset by increases in accounts receivable and deferred ~~commission costs and a decrease in accrued liabilities.~~commissions.

–Net cash used in investing activities was related to ~~$2.0~~$1.1 million for the purchase of equity securities and ~~$2.2~~$3.2 million of capital expenditures.

–Net cash used in financing activities was the result of ~~$90.1~~$133.7 million of repurchases of common shares, partially offset by ~~$9.2~~$7.8 million of proceeds from employee purchases of common shares under the ESPP and the exercise of stock options.

Working capital ~~increased $25.5~~decreased $7.1 million from ~~$90.0~~$140.8 million as of March 31, ~~2022~~2023 to ~~$115.5~~$133.7 million as of December 31, ~~2022.~~2023. The net ~~increase~~decrease in working capital was primarily driven by ~~cash provided~~increases in accrued liabilities and short-term deferred revenue, partially offset by ~~operating activities and was impacted by the fluctuations~~an increase in ~~exchange rates on foreign currency balances.~~accounts receivable.

We believe that our existing cash, cash equivalents and our cash from operations will be sufficient to meet our anticipated cash needs for working capital, income taxes, capital expenditures and potential stock repurchases for at least the next twelve months. We may seek additional funding through public or private financings or other arrangements during this period. Adequate funds may not be available when needed or may not be available on terms favorable to us, or at all. If additional funds are raised by issuing equity securities, dilution to existing stockholders will result. If we raise additional funds by obtaining loans from third parties, the terms of those financing arrangements may include negative covenants or other restrictions on our business that could impair our operational flexibility, and would also require us to fund additional interest expense. If funding is insufficient at any time in the future, we may be unable to develop or enhance our products or services, take advantage of business opportunities or respond to competitive pressures, any of which could have a material adverse effect on our business, financial condition and results of operations.

Off-Balance Sheet Arrangements

As of December 31, ~~2022,~~2023, we did not have off-balance sheet financing arrangements, including any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities.

Impact of Recently Issued Accounting Standards

See Note 2 of the ~~notes to the~~ unaudited consolidated financial statements for a discussion of the impact of recently issued accounting standards.

Item 3 - Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Risk

None.

2628

Table of Contents

Foreign Currency Risk

Economic Exposure

As a global company, we face exposure to adverse movements in foreign currency exchange rates. Our international sales are generally denominated in foreign currencies and ~~this revenue~~these revenues could be materially affected by currency fluctuations. Approximately 47% of our revenues were from outside the United States for the nine months ended December 31, ~~2022.~~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. Changes in currency exchange rates could adversely affect our reported revenues and require us to reduce our prices to remain competitive in foreign markets, which could also have a material adverse effect on our results of operations. 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.

Transaction Exposure

Our exposure to foreign currency transaction gains and losses is primarily the result of certain net receivables due from our foreign subsidiaries and customers being denominated in currencies other than the functional currency of the subsidiary. Our foreign subsidiaries conduct their businesses in local currency and we generally do not maintain excess U.S. dollar cash balances in foreign accounts.

Foreign currency transaction gains and losses are recorded in general and administrative expenses in the consolidated statements of operations. We recognized net foreign currency transaction losses of approximately $1.6 million and $1.8 million for the three and nine months ended December 31, 2023, respectively. We recognized net foreign currency transaction losses of approximately $0.3 million and $0.1 million for the three and nine months ended December 31, 2022, respectively. ~~We recognized net foreign currency transaction losses of approximately $0.3 million and $0.5 million for the three and nine months ended December 31, 2021, respectively.~~

PART II. OTHER INFORMATION

~~Item 4 - Controls and Procedures~~

~~Evaluation of Disclosure Controls and Procedures~~

Our management, with the participation of the Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as of December 31, 2022. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2022.

~~Changes in Internal Control over Financial Reporting~~

There was no change in our internal control over financial reporting that occurred during the third quarter of fiscal 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

~~Inherent Limitations on Internal Controls~~

Our management, including our Chief Executive Officer and Chief Financial Officer, do not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

~~Table of Contents~~

~~PART II. OTHER INFORMATION~~

Item 1. 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. Please refer to Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended March 31, ~~2022~~2023 for additional information.

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended March 31, ~~2022,~~2023, which are incorporated herein by reference, and could materially affect our business, financial condition or future results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results. If any of the risks actually occur, our business, financial conditions or results of operations could be negatively affected. In that case, the trading price of our stock could decline, and our stockholders may lose part or all of their investment. There have been no material changes from the risk factors set forth in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended March 31, 2023.

Table of Contents

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Purchases of Equity Securities by the Issuer

On April ~~21, 2022,~~20, 2023, the Board approved an increase of ~~Directors approved a new~~the existing share repurchase program ofso that $250.0 ~~million.~~million was available. The Board's authorization has no expiration date. During the three months ended December 31, ~~2022,~~2023, we repurchased ~~$31.3~~$51.3 million of common stock, or approximately ~~0.5~~0.7 million shares, under our share repurchase program. As ~~a result, $159.9 million remains~~of December 31, 2023, the remaining amount available under the current ~~authorization.~~authorization was $122.3 million. 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)
October 1-31, 2022 183,000 $ 57.16 183,000 $180,754
November 1-30, 2022 160,400 $ 65.07 160,400 $170,317
December 1-31, 2022 163,200 $ 64.02 163,200 $159,869
Three Months Ended December 31, 2022 506,600 $ 61.87 506,600


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)
October 1-31, 2023	163,248	$	67.07	163,248	$162,659
November 1-30, 2023	292,236	$	70.05	292,236	$142,190
December 1-31, 2023	255,669	$	77.75	255,669	$122,311
Three months ended December 31, 2023	711,153	$	72.13	711,153

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

~~None.~~On December 4, 2023, Sanjay Mirchandani, Chief Executive Officer, adopted a Rule 10b5-1 trading arrangement intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to approximately 86,000 shares of the Company’s common stock. The plan is in effect until December 31, 2024.

On December 4, 2023, Gary Merrill, Chief Financial Officer, adopted a Rule 10b5-1 trading arrangement intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to approximately 13,000 shares of the Company’s common stock. The plan is in effect until November 29, 2024.

During the three months ended December 31, 2023, no other directors or officers of the Company adopted or terminated any Rule 10b5-1 trading arrangement or “Non-Rule 10b5-1 trading arrangement” as each term is defined in Item 408 of Regulation S-K.

~~Table of Contents~~

Item 4 - Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of the Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended, as of December 31, 2023. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2023.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the third quarter of fiscal 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Table of Contents

Inherent Limitations on Internal Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, do not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Item 6. Exhibits


Exhibit No.			Description
10.1*			~~Purchase and Sale Agreement by and between Commvault and Ashling Development, LLC with an effective date of January 31, 2023~~
10.2*			~~Purchase and Sale Agreement by and between Commvault and Ashling Development, LLC with an effective date of January 31, 2023~~
31.1			Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2			Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**			Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**			Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS			XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH			XBRL Taxonomy Extension Schema Document
101.CAL			XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF			XBRL Taxonomy Extension Definition Linkbase Document
101.LAB			XBRL Taxonomy Extension Label Linkbase Document
101.PRE			XBRL Taxonomy Extension Presentation Linkbase Document
104			Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*Certain exhibits to this agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted exhibit will be furnished as a supplement to the Securities and Exchange Commission upon request.
** Furnished herewith

2931

Table of Contents

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Commvault Systems, Inc.

Dated:

January 31, ~~2023~~2024

By:

/s/ Sanjay Mirchandani

Sanjay Mirchandani

Director, President and Chief Executive Officer

(Principal Executive Officer)

Dated:

January 31, ~~2023~~2024

By:

/s/ Gary Merrill

Gary Merrill

Chief Financial Officer

(Principal Financial Officer)

3032


	Three Months Ended December 31, 2022						Nine Months Ended December 31, 2022
	Americas		International		Total		Americas		International		Total
Software and Products Revenue	$	46,020	$	43,569	$	89,589	$	158,863	$	105,987	$	264,850
Customer Support Revenue	45,709		31,956		77,665		139,713		97,265		236,978
Other Services Revenue	16,378		11,442		27,820		48,331		30,953		79,284
Total Revenue	$	108,107	$	86,967	$	195,074	$	346,907	$	234,205	$	581,112


	Three Months Ended December 31, 2021						Nine Months Ended December 31, 2021
	Americas		International		Total		Americas		International		Total
Software and Products Revenue	$	57,538	$	41,037	$	98,575	$	153,510	$	102,488	$	255,998
Customer Support Revenue	50,163		35,844		86,007		153,244		109,185		262,429
Other Services Revenue	10,620		7,179		17,799		27,323		17,892		45,215
Total Revenue	$	118,321	$	84,060	$	202,381	$	334,077	$	229,565	$	563,642