Shares of Commvault Systems Inc. jumped more than 7% today after the company reported better-than-expected revenue and earnings for its fiscal third quarter.

Tinton Falls, New Jersey-based Commvault sells a popular suite of data protection tools. Enterprises can use the company’s software to create backups of their business information, as well as restore those backups if the original copy becomes unavailable. Commvault’s tools are capable of protecting data stored in public cloud instances, Salesforce deployments and other technology environments. 

The company also operates in a number of adjacent segments. It offers a cybersecurity tool, Security IQ, that can spot ransomware attacks and restore encrypted files to an earlier, unaffected version. For customers that wish to store their backup records on-premises, Commvault sells a line of data protection appliances called the HyperX series.

The company’s revenue climbed 11% year-over-year, to $216.8 million, in its fiscal third quarter ended Dec. 31. Analysts were expecting $208.06 million. Commvault’s annualized recurring revenue, in turn, reached $752 million, a 17% increase from the same time a year earlier.

“This was one of the strongest quarters in our history with double digit ARR and revenue growth, and robust free cash flow generation,” said Commvault Chief Executive Sanjay Mirchandani (pictured).

The company’s revenue growth was driven in significant part by its software-as-a-service data protection tools. The annualized recurring revenue of its SaaS business jumped 77% year-over-year in the third quarter, to $152 million. The business’ net dollar retention rate, a metric that tracks how existing customers increase their spending over time, reached 125%.

Commvault expanded its SaaS portfolio in the third quarter with the introduction of an offering called Commvault Cloud. It allows customers to manage their deployments of its SaaS services, as well as some of its other products, through a centralized interface. Built-in cybersecurity features can detect attempts by ransomware to temper with a company’s backups.

Commvault Cloud also ships with an artificial intelligence chatbot, Arlie, that runs on Microsoft Corp.’s Azure OpenAI service. The chatbot provides administrators with guidance on how to carry out common maintenance tasks. Additionally, Arlie can analyze the performance of an organization’s Commvault Cloud environment and generate improvement suggestions.

The revenue growth that the data protection provider achieved in the third quarter boosted its profitability. Commvault closed the three months ended Dec. 31 with adjusted earnings before interest and taxes of $46.7 million, or 78 cents per share. The consensus analyst estimate projected 73 cents per share.

Commvault’s guidance for the current quarter likewise exceeded expectations on the high end. The company estimates that it will end the three months through March 31 with sales of $210 million to $214 million, while analysts were projecting $210.18 million. Commvault’s SaaS applications and other subscription-based products are expected to account for more than half of that revenue. 

Photo: Commvault