Commvault stock rocketed higher Tuesday, after the data backup and recovery company reported fiscal second quarter earnings and sales that exceeded expectations. The firm also raised its outlook for the full year.
Commvault said that it earned an adjusted 83 cents per share on sales of $233.3 million for the September-ended quarter. Analysts polled by FactSet projected the Tinton Falls, N.J.-based company would post adjusted earnings of 76 cents per share on sales of $220.8 million. For the same period a year earlier, Commvault posted adjusted earnings of 70 cents per share on sales of $201 million.
"Our strong execution and increasing demand for our innovative Commvault Cloud platform has not only resulted in our fourth consecutive quarter of double-digit revenue growth, but it has given us the confidence to once again raise our outlook for the full fiscal year," Chief Executive Sanjay Mirchandani said in a news release.
On the stock market today, Commvault stock rallied more than 24% to 170.99. Shares hit an all-time high while also retaking a 157.13 flat base buy point from an Oct. 8 breakout.
Commvault's Outlook For March 2025 Fiscal Year
With Tuesday's gain, Commvault stock has gained 114% this year and 166% in the past 12 months. Commvault stock has been helped by the strong growth of its subscription-focused products. The company's Commvault Cloud software is pitched as a data resilience solution that backs up data and prepares corporate customers to react quickly to data breaches and other outages.
Subscription revenue grew 37% to $134 million in the September quarter. The strength of the company's subscription offerings contributed to stronger-than-expected sales guidance from Commvault.
For the current quarter, Commvault guided for sales of $245 million at the midpoint of its range. That was ahead of the $234.6 million in sales for the December-ending quarter that analysts previously projected, according to FactSet.
Further, company said it expects full-year revenue of $954.5 million, at the midpoint of its range. That's up from the $920 million midpoint the company gave investors in late July.
"We've seen a (software-as-a-service) acceleration in the first half of the year, and that really just carries through to the second half," Commvault Chief Financial Officer Jen DiRico told IBD.
Commvault's fiscal year ends with March.
Focus On Data Resilience
Meanwhile, Commvault last month paid a reported $47 million to acquire Clumio, a provider of data protection services focus on the Amazon Web Services cloud platform. The firm earlier this year also acquired the startup Appranix, which is focused on relaunching applications during the recovery process.
That's not the only dealmaking in the sector. Salesforce in September acquired Own, a data protection and data management company, for $1.9 billion.
Such deals are "underscoring the importance of the sector," Mirchandani told IBD.
The massive global IT outage caused by a faulty CrowdStrike software update has also continued to increased awareness for data protection and resilience, he said in an interview Tuesday.
"If nothing else it brought a level of awareness to protection, resilience," Mirchandani told IBD. "I've had many conversations with customers since then that had nothing do with CrowdStrike, but CrowdStrike comes up."
Commvault Stock: Technical Ratings
Coming into the report, Commvault stock had an IBD Composite Rating of 93 out of a best possible 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.
Further, Commvault's IBD Relative Strength Rating was 94 out of 99. The RS Rating means that Commvault has outperformed 94% of all stocks in IBD's database over the past year.
