Commvault’s four-quarter revenue plateau around $313 million is poised to break, as the company forecasts renewed growth ahead.
The firm posted $312.4 million in revenue for its second fiscal 2027 quarter, a 13% year-over-year increase that topped its midpoint guidance of $310 million. GAAP net income reached $29.1 million, jumping 97.6%. It added 550 net new subscription customers, bringing the total subscriber base to 15,750, while subscription ARR hit $1.194 billion, a 20% year-on-year rise. Operating cash flow came in at $75 million, with free cash flow of $71 million.
President and CEO Sanjay Mirchandani commented: “Enterprises worldwide are leaning more on Commvault to maintain cyber resilience amid swelling data volumes, growing identity footprints and rising operational complexity. We see our solid Q2 results as proof of this market momentum, supporting sustainable growth and shareholder returns.”
Commvault’s top line had stayed steady across four consecutive quarters, a side effect of its strategic shift away from traditional perpetual licensing toward subscription and SaaS delivery models. Subscription revenue reached $268.5 million, up 20% year over year, and SaaS revenue stood at $106 million, climbing 33%. Subscription business now accounts for 85% of total revenue, matching the prior quarter, versus 84% and 82% in the two quarters before that.
Subscription gains stem from newly acquired accounts and cross-sell activity within existing customer environments. William Blair analyst Jason Ader noted: “Multi-product adoption keeps trending higher. Fifty-three percent of managed SaaS customers run two or more solutions, compared with roughly 45% one year ago and a four-point sequential gain. Leadership called out strong uptake among customers deploying three to eight products. Identity resilience and data security made up around 30% of net new ARR, and Active Directory ARR nearly doubled year over year. Cloud protection tools covering AWS Clumio, Azure DevOps and Google Workspace represent fresh cross-sell avenues.”
He also offered a note of caution: “Wider product adoption has not yet driven faster expansion across the installed customer base.” The 113% net dollar retention rate, down 1% both quarter over quarter and year over year, reflects this dynamic.
For Q3, Commvault projects subscription revenue of $295 million +/- $2 million, marking 15% annual growth. Its full-year subscription ARR target has been lifted from a $1.205 billion midpoint to $1.210 billion +/- $5 million, equivalent to 19% growth.
Total Q3 revenue guidance sits at $339 million, an 8% year-over-year increase, which will end the four-quarter plateau near $313 million. Full-year revenue is now expected to land at $1.305 billion +/- $5 million, up 10% year on year.
Ader added: “The second-half outlook is backed by a larger renewal pipeline and broadening cross-sell potential. SaaS will remain the primary driver of net new ARR and is on track to surpass $500 million by year-end.”
Footnote
Net dollar retention measures customer spending at the end of a fiscal quarter as a percentage of their spending at the start. It starts with the ARR or subscription revenue of a defined customer group at period opening, then adjusts for changes within that same group through the quarter:
-Add expansion from upsells, cross-sells, price adjustments and increased usage or seats
-Subtract churn (lost customers) and contraction (reduced spend from existing accounts)
Beijing Qianxing Jietong Technology Co., Ltd.
Sandy Yang/Global Strategy Director
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