Shares of Commvault Systems Inc. rose more than 7% today after the data protection provider posted solid quarterly financial results that beat Wall Street’s expectations by a wide margin.

Tinton Falls, New Jersey-based Commvault provides software that helps organizations back up their records and protect them from risks such as hardware failures. Chief Executive Officer Sanjay Mirchandani (pictured) told SiliconANGLE recently that the provider’s products are “probably the most prevalent data protection technology in the public cloud.” Commvault also sells on-premises backup appliances and a software-defined storage platform.

The company today reported that sales had risen 7% in its first fiscal quarter, to $173 million. Zooming in on the part of the company’s sales that came from recurring contracts provides a clearer explanation why its stock jumped this morning: Recurring revenue rose 24% year-over-year to reach $141.1 million.

Commvault’s quarterly revenues beat the Zacks Consensus Estimate by more than 13%.

The company credited the better-than-expected sales to a spike in large deals. According to Commvault, the first quarter saw a 41% increase in contracts worth more than $100,000 and the average value of those contracts rose by 35%, to $403,000.

Mirchandani took up the CEO role at Commvault early last year after several quarters of stagnated growth to help turn the company around. Under the new leadership, the company acquired software-defined storage startup Hedvig Inc. for $225 million and more recently announced a reshuffle of its product portfolio at a customer event last week. It has beaten Wall Street revenue projections in three of the last four quarters.

Commvault has also recorded three earnings beats in the last year, including the quarter for which it shared results today. The company’s adjusted net income in the three-month period was $23.9 million, or $0.51 per diluted share. That’s about 168% higher than what the Zacks Consensus Estimate projected.

“Our first-quarter results are validation that our streamlined operations and reinvigorated go-to-market engine are starting to execute well,” Mirchandani said in a statement today. “Together with our new product portfolio and robust partner program, our customers are starting to embrace our intelligent data management vision.”

Mirchandani shared more details about Commvault’s data management strategy in appearance on SiliconANGLE Media’s theCUBE last week (below). He said that one pillar of the strategy is supporting both on-premise and cloud-based data protection use cases for enterprises that require both.

“We respect where customers are coming from,” Mirchandani said. “There’s a lot of stuff that runs their business that is still good that isn’t in the cloud …. as well as we’re leading in areas where they’re headed, in the public cloud.”

Commvault is also using its products’ artificial intelligence features as a differentiator, particularly in the context of the cloud deals that are fueling its recurring revenue growth. The company helps customers optimize their cloud infrastructure use “through deep degrees of AI and ML built-in,” Mirchandani said. “So it’s not just about moving bits, it’s about optimizing all of that and the entire lifecycle of that data.” 

Photo: SiliconANGLE