Commvault Systems, Inc. (NASDAQ:CVLT) Q1 2024 Earnings Call Transcript

Sanjay Mirchandani: Well, we — Jim, hopefully, you’ve seen our new marketing campaigns, and we’re a lot more bold, up for direct. It’s been having some great impact on the funnel and the pipeline. We’re getting — and it’s bringing a lot of hits to our freemium sort of SKUs on Metallic, it’s working the way we want it to. And there’s a lot more visibility around what we do. So overall, in our new approach with marketing, we’re very pleased and the impact is starting to have. There’s a lot of excitement there. On Office 365 specifically, I think you’re referring to Microsoft’s recent announcement on some archival capabilities, of which we’re part. It’s more of a platform kind of announcement. It legitimizes the need for Office 365 backup, which for the longest time, customers were made to believe they didn’t need it.

And what they really need is a life cycle of data management on one of the most used apps in most enterprises. So we have — we believe we have the best approach to that, the best solution there. Competitive pressure has always been there. and it’s not a pricing. It’s also important for customers to understand where their office data is written to, so you could get a service that looks like ours, but the data is written to some cloud, you don’t know or to some data centers, you don’t know. Ours is end-to-end, all the Office 365 is end-to-end on Azure and everything that comes with that. So we — it’s a value proposition. We think we’ve got a great value proposition. It dovetails wonderfully with our software capabilities, which is important for customers.

It’s not an island to itself. And we have competitive SKUs.

Operator: Our next question comes from Eric Martinuzzi from Lake Street Capital Markets.

Eric Martinuzzi : Yes. Sanjay, just curious on the outlook geographically. As we look at Q1, the America is roughly flat, international up about 1%. Are we looking for any change in that based on the full year guide? Is that — would we still see for roughly similar growth rates for the 2 different geographic segments?

Gary Merrill: Eric, it’s Gary. I can jump in and handle the question on geographic. Yes. So the performance overall for fiscal Q1 was roughly the same. The Americas, as you stated, was roughly flat year-over-year. International was up 1% year-over-year. Within international, relatively though, we’re seeing stronger results throughout Europe relative to Asia Pacific. As I think about trends geographically into the second half, I would expect a little more growth out of the Americas. As a lot of the renewal opportunity we have, right? We have a much higher renewal opportunity in our subscription software business, which gives us some of that transparency into the opportunity in the second half, but much of that is concentrated in the Americas hub region.

Eric Martinuzzi : Okay. And then you talked about continued investment in sales into Q2. Can you give us some specifics there as far as the number of reps that we currently have and how many more we plan to add in Q2?

Gary Merrill: Yes. So Eric, if I think about some of the work that we’re doing within go-to-market, it’s really driven around that discrete focus that we’re trying to provide in our business and trying to build and enhance new routes to market. So much of what we’re doing is reallocation of resources through the business to provide that discrete focus tied to 3 key areas. One is driving net new land and expand business. And second is continuing to secure our renewal motion. And the third is building out that velocity motion solely dedicated on SaaS. So if we think about where any incremental, I’ll say, net new investments are primarily coming from, it’s primarily coming from the third, as we build out that inside sales motion to drive that velocity piece of the market dedicated to SaaS. So all of that is reflected within the guidance. Much of that happened during fiscal Q1. And there’s just some final pieces that will move towards into fiscal Q2.