Commvault Systems Inc., a New Jersey-headquartered company specializing in data management and cyber resilience solutions, disclosed its fiscal third-quarter earnings for the period ending December 31, 2025, on Tuesday. The company recorded total revenue of $314 million for the quarter, marking a 19% increase compared to the same quarter a year earlier.
The firm’s strategy appears anchored in its subscription offerings, which contributed significantly to the revenue expansion. Total annual recurring revenue (ARR) rose to $1.085 billion, up 22% year over year. Subscription ARR, representing recurring subscription income, reached $941 million, a 28% increase from the prior year.
During the quarter, subscription revenue totaled $206 million, reflecting a 30% year-over-year improvement. Within this figure, revenue from term-based licenses was $119 million, up 22%, whereas software-as-a-service (SaaS) revenue amounted to $87 million, which surged by 44% compared to the previous year, illustrating marked growth in cloud-based service adoption.
Chief Executive Officer Sanjay Mirchandani emphasized the company’s focus on artificial intelligence-driven advancements, stating that "Customers and partners are turning to Commvault because they require an AI-enabled platform that addresses rapidly evolving identity and emerging threats." This underscores the company's positioning towards integrating AI capabilities into its cybersecurity and data management services.
Moreover, Commvault announced on Monday an expanded partnership with Google Cloud, a subsidiary of Alphabet Inc. This collaboration aims to enhance the companies' combined offerings in data protection and cyber resilience, signaling a strategic move to strengthen their positions in a competitive sector focused on safeguarding critical information assets.
Turning to forward guidance, Commvault projected revenues for the fourth quarter to fall between $305 million and $308 million, with subscription revenue anticipated in a range of $203 million to $207 million. The company also expects a non-GAAP earnings before interest and taxes (EBIT) margin of approximately 19% in the same period.
Financial cash flow metrics revealed that operating cash flow was $4 million in Q3, with free cash flow at $2 million. These amounts were notably influenced by the timing of working capital items, which can affect short-term cash flows independent of underlying business performance.
Despite these operational achievements, Commvault’s stock performance has faced headwinds in the market. The shares dipped to a closing price of $89.13 in regular trading on Tuesday, down over 31% for the trading day. In after-hours trading, the shares edged slightly higher by 0.15%, reaching $89.26.
The stock has experienced a significant decline over the past year, falling approximately 43.7%, and currently trades about 4% above its 52-week low of $84.44, which contrasts sharply with its 52-week high of $200.68. This positioning near the lower end of its trading range for the year signals ongoing challenges for the company’s equity performance and implies constrained upward momentum.
Technical analysis shows Commvault’s Relative Strength Index (RSI) at 24.24, indicating the stock is in an oversold territory. Benzinga’s Edge Stock Rankings suggest a short-term upward movement for the stock, with medium- and long-term trends demonstrating consolidation phases, suggesting that investors may be reassessing the stock’s potential following recent volatility.
Market capitalization for Commvault stands at approximately $3.93 billion, reflecting the firm’s sizeable presence within the data management and cybersecurity landscape, yet also indicating market skepticism given recent stock price declines.
Key Points:
- Commvault reported a total revenue of $314 million in Q3 2025, growing 19% year over year.
- Subscription revenue, a key growth driver, increased 30% year over year to $206 million.
- The company expanded its partnership with Google Cloud to enhance data protection and cyber resilience offerings.
- Q4 guidance projects revenue between $305 million and $308 million with a 19% non-GAAP EBIT margin forecast.
Risks and Uncertainties:
- Despite solid operational growth, Commvault’s stock price has declined significantly, falling 43.7% over the past year and trading near its 52-week low.
- The limited positive movement in after-hours trading suggests cautious investor sentiment.
- Operating and free cash flows remain modest and are subject to fluctuations due to working capital timing, potentially affecting financial flexibility.
- Technical indicators show the stock in oversold territory, raising questions about stability and potential volatility ahead.
Disclosure: This analysis is based on Commvault Systems’ publicly released financial information and company statements as of its Q3 2025 earnings announcement. Investors should consider this alongside broader market conditions and company fundamentals.