Shares in Commvault Systems Inc. fell slightly in regular trading today after the data protection provider reported lower-than-expected fiscal third-quarter earnings.

For the quarter that ended Dec. 31, Commvault reported earnings before costs such as stock compensation of 62 cents per share, down from 67 cents per share in the same quarter of last year. Revenue declined about 4%, to $195.1 million. Analysts had been expecting earnings per share of 65 cents on revenue of $197.74 million.

Revenue was lower than expected because of currency fluctuations, with Commvault noting that revenue would have grown 1% on a constant-currency basis. Total recurring revenue in the quarter rose 2%, to $167.1 million, but would have risen 7% on a constant currency basis.

Annualized recurring revenue as of Dec. 31 was $640.7 million, up 14% year-over-year. Software and product revenue fell 9% in the quarter, to $89.6 million, driven by a 14% decline in large deals, those valued at more than $100,000. Software and product revenue dropped 20% in the Americas but rose 6% internationally.

Services revenue in the quarter edged up 2%, to $105.5 million, driven by an uptake in the company’s Metallic cloud storage service. Operating cash flow rose 13%, to $30.2 million.

Commvault also made several adjustments throughout the quarter to deal with the worsening macroeconomic outlook, resulting in additional charges. The company incurred $9.2 million in restructuring charges related to headcount reductions. It has also entered into an agreement to sell its corporate headquarters in Tinton Falls, New Jersey, for $40 million, with the deal expected to close in the second quarter of this year.

“We remain confident that customers will continue to recognize Commvault’s products and services as a critical component to keep their data safe and simplify their journey to the cloud,” Sanjay Mirchandani, president and chief executive officer of Commvault, said in a statement. “As we navigate through current macro conditions, we are committed to our philosophy of responsible growth.”

In an investor call, Chief Financial Officer Gary Merrill said that Commvault expected fiscal fourth-quarter revenue to be about $197 million.

The misses on earnings and revenue would usually see shares in a company drop significantly and that’s initially what happened to Commvault, with its shares falling to $59.84 shortly after the opening of regular trading. However, as the day progressed, the company’s shares recovered, closing at $62.23, down less than a point.

Image: Commvault