Data protection provider Commvault Systems Inc. pleasantly surprised investors with its fiscal third-quarter earnings today, reporting beats in revenue and earnings.

For the quarter that ended Sept. 30, Commvault reported adjusted earnings per share of 70 cents, up from 10 cents in the same quarter of last year, on revenue of $201 million, up 7% year-over-year. Analysts had expected earnings per share of 64 cents on revenue of $195.2 million.

Commvault’s strong numbers were driven by customer growth, with subscription revenue up 25% year-over-year, to $97.8 million, subscription annual recurring revenue up 32%, to $530 million, and total annual recurring revenue up 18%, to $711 million. Software-as-service growth was highlighted in Commvault’s earnings presentation as a “meaningful driver of ARR growth,” with the company reporting SaaS annual recurring revenue of $131 million, up 77% year-over-year.

The number of subscription customers was the story of Commvault’s earnings report. The company now has more than 8,300 subscribing customers, now topping 50% of the company’s total company base and up from 6,700 subscription customers in the same quarter of last year. Those customers are sticking around as well, as Metallic, Commvault’s customer acquisition and expansion engine, saw a 130% net dollar retention rate.

Income from operations totaled $17.6 million on an operating margin of 20.9% and adjusted earnings before interest and taxes came in at $63 million. Operating cash flow in the quarter came in at $40.3 million and free cash flow at $40.1 million.

“Our Q2 total revenue growth accelerated, driven by our hyper-growth SaaS platform and we delivered robust operating margin leverage,” Sanjay Mirchandani, president and chief executive officer of Commvault, said in the company’s earnings release.

Mirchandani also said that the company has plans to unveil its new cyber resilience platform at Commvault SHIFT, the company’s “global cyber resilience event” scheduled for Nov. 9. The new product will combine its “leading data protection capabilities with comprehensive new security and AI-powered innovations that are critical for customers in an era of escalating cyberattacks.”

For its fiscal third quarter, the company expects revenue of $206 million to $210 million and subscription revenue of $106 million to $110 million. The revenue guidance, at the midpoint, was ahead of the $205.4 million expected by analysts.

For its full fiscal year 2024, Commvault expects revenue of $812 million to $822 million, annual recurring revenue growth of 14% year-over-year, and subscription revenue of $408 million to $418 million.

Mirchandani spoke to theCUBE, SiliconANGLE Media Inc.’s livestreaming studio, in May to discuss Commvault’s shift to subscription and software-as-a-service models:

Image: CommVault