CommVault Systems (D6I) Q2 2027 Earnings Report

The call was strongly positive. Highlights significantly outweighed the limited challenges, with broad-based growth in subscription ARR, SaaS, customers, multiproduct adoption, identity, cloud offerings, margins and free cash flow. Management also raised full-year guidance and described strong go-to-market execution. The main negatives were the planned decline in legacy revenue, modest variability in net dollar retention and SaaS timing, near-term margin guidance below the Q2 level, and the fact that AI monetization remains in its early stages.

For fiscal Q3, Commvault expects subscription revenue of $293 million to $297 million, representing approximately 15% year-over-year growth at the midpoint, resulting in approximately $339 million of total revenue and EBIT margins in the range of 20.5% to 21.0%, including costs associated with their annual shift user conference. For the full fiscal year 2027, subscription ARR is expected in the range from $1.205 billion to $1.215 billion, representing growth of approximately 19.2% at the midpoint, with approximately $195 million in net new subscription ARR; SaaS ARR is expected to exceed $500 million by the end of the fiscal year, subscription revenue is expected in a range of $1.127 billion to $1.133 billion, representing approximately 16% year-over-year growth at the midpoint, total revenue is expected at $1.30 billion to $1.31 billion, non-GAAP EBIT margins are projected to be in the range of 21.0% to 21.5%, free cash flow is expected at $255 million to $265 million, and diluted share count is projected at approximately 42 million shares; SaaS net new ARR contribution is expected at 60% at least for the year, and the raised guidance assumes a little bit over $100 million in net new ARR in the second half.