Shares in Commvault Systems Inc. dropped more than 30% in regular trading today after the data protection provided a revenue outlook below expectations alongside otherwise strong fiscal 2026 third quarter earnings.

For the quarter that ended on Dec. 31, Commvault reported adjusted earnings per share of $1.17, up from 94 cents in the same quarter of the previous fiscal year, on revenue of $314 million, up 19% year-over-year. Both figures were solidly ahead of the profit of 98 cents per share and revenue of $299.05 million expected by analysts.

Commvault saw subscription revenue in the quarter of $206 million, up 30% year-over-year, inclusive of term-based license revenue of $119 million, up 22% year-over-year and software-as-a-service revenue of $87 million, up 44% year-over-year.

The company’s annual recurring revenue as of the end of December sat at $1.085 billion, up 22% year-over-year and subscription annual recurring revenue was up 28% to $941 million.

Business highlights in the quarter included Commvault launching Conversational AI and Data Rooms in October, two offerings designed to transform how enterprises manage, protect and activate their data in the age of artificial intelligence. Commvault said at the time that the products underscored its mission to unify cyber resilience and responsible AI for the hybrid cloud era.

November saw Commvault launch the Commvault Cloud Unity platform, an artificial intelligence-enabled version of the Commvault Cloud platform that unifies data security, cyber recovery and identity resilience across cloud, on-premises and hybrid environments. The platform’s offers a unified data security layer that includes AI-driven discovery, classification and access governance tools that are enhanced with technology from Commvault’s acquisition of Satori Cyber Ltd. that was completed in August.

In December, Commvault announced a partnership and technology integration with privileged access management firm Delinea Inc. that connects the Commvault Cloud platform with Delinea’s Secret Server to help joint customers strengthen credential security, support compliance initiatives and streamline data recovery.

“Commvault delivered another quarter of healthy growth and profitability driven by record customer engagement and adoption,” Sanjay Mirchandani, president and chief executive officer of Commvault, said in the company’s earnings release. “Customers and partners are turning to Commvault because they require an AI-enabled platform that addresses rapidly evolving identity and emerging threats, supports compliance, and brings resilience to hybrid and multi-cloud environments.”

For its fiscal 2026 fourth quarter, Commvault forecasts revenue of between $305 million and $308 million, below the $314 million expected by analysts.

The outlook was, by no means, a huge miss, but with Commvault already trading at a high valuation, and amid a sea of other tech companies that are surpassing growth expectations, it was enough to trigger a big selloff of Commvault stock.

Commvault shares closed regular trading down 31%, to $89.13, its lowest close since January 2024.

Photo: Commvault