Commvault Systems, Inc. (NASDAQ:CVLT) Q3 2023 Earnings Call Transcript

Sanjay Mirchandani: Hi Jason, it’s Sanjay. I’ll – we haven’t seen anything marked different from a competitive landscape from a year ago or even a couple of quarters ago. If anything, we’re winning some really good business against the ones you mentioned quite all the time. Actually, we were up against them all the time and we win. The — it’s hard to know — I have to take your word for it as to how they’re growing and how well they’re growing because I don’t have that information readily available as you may, okay? So it’s kind of hard for me to say what of it is real and what is — and I will say to you that if you look at the combined business, if you look at how our — notwithstanding the shortfall on the software side this quarter and you look at our new customer additions and you look at the SaaS growth that we’ve got with Metallic, and you look at the combined 40% to 50% of our customers have both, you’re seeing the momentum that we’ve got in the business.

I also think that we are in larger transformational deals, which take longer because the low-hanging fruit, like I said, has been done. Now the big mission-critical workloads that need to be ported to the cloud are just more complicated. They need more time. And we are continuing to win those. If you look at our renewal rate, there’s nothing there that sets us backwards. So I have to take your word for it that they’re growing at better than us. But as far as we’re concerned, we’re doing just right.

Jason Ader: Okay. And then the — I guess the follow-up question for me is just on execution and field coverage. You guys have been on a path to become more efficient for multiple years now. So I guess have you identified anything because it’s through this process of kind of macro weakening and some of the workforce changes that you’ve made, where you’ve said, okay, well, we just — we need to fix this or change this or I don’t know if it’s a coverage issue. But where are you on sort of thinking about execution and coverage and making sure you have all the right players on the field.

Gary Merrill: Thanks, Jason. It’s Gary. So for us, it comes down to driving the right segmentation and inspection, right? So making sure that in this macro environment, what we’re focused on is we can control the pipeline we have, and then we can control to make sure that as a broad go-to-market teams, that we are doing the inspection to make sure that we have the compelling event that we have the economic buyer and that we can work through the reverse time line with the customers. So in a tough macro environment for us, it’s actually going back to the basics, going back to the basics on deal inspection and controlling the pipeline that we have. The other key point that’s really important in this, especially in this environment, is also working really closely with the partner community, right?

90-plus percent of our transactions go through partners. And where we will double down in all environments, especially macro environment, is making sure we’re building those business plans with our partners globally.

Jason Ader: Very good. Thanks guys.

Operator: Thank you. Our next question coming from the line of Thomas Blakey with KeyBanc. Your line is open.