Shares in Commvault Systems Inc. were down slightly in regular trading today after the data protection provider reported lower-than-expected results in its fiscal third-quarter earnings.
For the quarter that ended Dec. 31, Commvault reported non-generally accepted accounting principles earnings of 62 cents per share, down from 67 cents per share in the same quarter of last year. Revenue came in at $195.1 million, down from $202.38 million. Analysts had been expecting earnings per share of 65 cents on revenue of $197.74 million.
The revenue figure of $195.1 million was lower than expected due to currency fluctuations, with Commvault noting that revenue growth would have been 1% on a consistent currency basis versus a decrease of 4%. Total recurring revenue in the quarter was $167.1 million, up 2% year-over-year but would have been up 7% on a constant currency basis.
Annualized recurring revenue as of Dec. 31 was $640.7 million, up 14% year-over-year. Software and product revenue was down 9% in the quarter to $89.6 million driven by a 14% decrease in large deals (deals over $100,000). Software and product revenue was down 20% in the Americas but up 6% internationally.
Services revenue in the quarter was up 2% to $105.5 million, driven by an uptake in the company’s Metallic product. Operating cash flow was up 13% to $30.2 million.
Commvault also made several adjustments throughout the quarter to deal with the worsening macroeconomic outlook, resulting in additional charges. The company incurred $9.2 million in restructuring charges related to headcount reductions. Commvualt has also entered into an agreement to sell its corporate headquarters in Tinton Falls, New Jersey for $40 million, with the deal expected to close in the second quarter of this year.
“We remain confident that customers will continue to recognize Commvault’s products and services as a critical component to keep their data safe and simplify their journey to the cloud,” Sanjay Mirchandani, president and chief executive officer of Commvault, said in a statement. “As we navigate through current macro conditions, we are committed to our philosophy of responsible growth.”
In an investor call, Chief Financial Officer Gary Merrill said that Commvault expected fiscal fourth-quarter revenue to be approximately $197 million.
The misses on earnings and revenue would usually see shares in a company drop significantly and that’s initially what happened to Commvault, with its shares falling to $59.84 shortly after the opening of regular trading. However, as the day progressed, the company’s shares recovered, closing at $62.23, down 0.72%.
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