Business Overview / Sources of Revenue

CommVault Systems (CVLT) is a data protection and information management software company that provides solutions for backup, recovery, disaster recovery, and cyber resilience for enterprises worldwide. The company earns its revenue primarily through sales of software licenses, software-as-a-service (SaaS) via the Metallic brand, integrated appliances that combine software with hardware, and a suite of professional and managed services—including consulting, education, and support offerings[2][4]. Solutions are delivered across on-premises, hybrid, and multi-cloud environments. While a detailed percentage breakdown of revenue sources is not provided in the available search results, major revenue streams include self-managed software, SaaS, appliances, and a range of services[2][4]. Key industry customers span sectors such as banking, healthcare, government, and manufacturing[4].

Revenue Growth Potential and Recurrence

CommVault Systems (CVLT) has a large share of recurring revenue, with annualized recurring revenue (ARR) reaching $930 million—roughly 93% of its $996 million in total revenue for the most recent fiscal year, and ARR grew 21% year over year[1][2][4][5]. This highlights the company’s strong focus on subscriptions and high-margin, predictable revenue streams typical of SaaS businesses[5].

Looking ahead, analysts expect CVLT’s revenue to grow 11.1% over the next 12 months, which is above the sector average and represents an acceleration from the past three years[5]. This suggests solid long-term growth potential over the next 5+ years as recurring subscriptions drive consistent top-line expansion, underpinned by strong customer demand and new product adoption[5].

Economic Moat Factors

CommVault Systems (CVLT) possesses a narrow economic moat primarily built on intangible assets, including its reputable brand and patented technology in data management and backup solutions[1]. The company has established customer loyalty through its products' reliability and capability, which creates moderate switching costs[1].

CVLT's gross margin is exceptionally high at 82%, indicating strong pricing power and an asset-lite business model that surpasses many software peers[5]. This superior margin provides financial flexibility to invest in product development and sales expansion.

However, the moat isn't wide enough to fully insulate CVLT from competitive pressures in the rapidly evolving IT landscape[1]. While the company is successfully transitioning to a subscription-driven model (now 53% of total revenue)[3], which enhances revenue predictability, its revenue growth of 9% over three years has lagged behind sector peers[5], suggesting limited network effects and moderate competitive advantages.

Leadership

Commvault Systems is led by CEO Sanjay Mirchandani, who joined in February 2019 and has been at the helm for over 6 years[3][4][5]. He is not a founder, as the company was originally formed in 1988 as a development group in Bell Labs[5]. Mirchandani receives a total yearly compensation of $12.11M, with only 5.3% of that being salary[4]. Before joining Commvault, he served as CEO of Puppet and held senior leadership positions at Microsoft, EMC Corp., and VMware[3]. Under his leadership, Commvault has transitioned from a perpetual to subscription business model and accelerated revenue growth[3].

Financial Health

CommVault Systems (CVLT) maintains a highly healthy balance sheet, with zero debt and $302.1 million in cash and short-term investments, resulting in a 0% debt-to-equity ratio[5]. The company is debt-free and has been for the past five years[5]. CVLT generates free cash flow, with a robust cash position supporting operations; however, exact free cash flow margin figures are not detailed in the search results. Regarding shareholder dilution, recent information does not specify net repurchases or issuances, but there is no indication of dilutive actions in the latest financial summaries[5].

Last updated Jun 5, 2025