Q2 FY2027
Filed Oct 27, 2026Subscription revenue was $269 million, up 21% year over year; subscription ARR reached $1,104 million, up 20% year over year; operating cash flow was $75 million and free cash flow was $71 million.
Subscription revenue, SaaS revenue and subscription ARR each posted double-digit year-over-year growth, while GAAP and non-GAAP operating profitability improved and the company generated substantial operating cash flow. Full-year fiscal 2027 guidance was updated, including subscription ARR, non-GAAP EBIT margin and free cash flow.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q2 fiscal 2027 total revenues (In thousands)GAAP | $312.4M | – | 13% |
| Q2 fiscal 2027 total subscription revenue (In thousands)GAAP | $268.5M | – | 21% |
| Q2 fiscal 2027 term-based license revenue (In thousands)GAAP | $105.0M | – | 13% |
| Q2 fiscal 2027 term-based support revenue (In thousands)GAAP | $57.31M | – | 15% |
| Q2 fiscal 2027 software-as-a-service revenue (In thousands)GAAP | $106.2M | – | 33% |
| Q2 fiscal 2027 perpetual license revenue (In thousands)GAAP | $7.21M | – | (40)% |
| Q2 fiscal 2027 perpetual support revenue (In thousands)GAAP | $23.48M | – | (23)% |
| Q2 fiscal 2027 other services revenue (In thousands)GAAP | $13.19M | – | 18% |
| Q2 fiscal 2027 subscription ARR (In thousands)other | $1.10B | – | 20% |
| Q2 fiscal 2027 SaaS ARR (In thousands)other | $454.4M | – | – |
| Q2 fiscal 2027 constant currency subscription ARR (In thousands)other | $1.11B | – | – |
| Q2 fiscal 2027 constant currency subscription net new ARR (In thousands)other | $51.05M | – | – |
| Q2 fiscal 2027 subscription net dollar retention rateother | 113% | – | – |
| Q2 fiscal 2027 total cost of revenues (In thousands)GAAP | $58.87M | – | – |
| Q2 fiscal 2027 gross margin (In thousands)GAAP | $253.5M | – | – |
| Q2 fiscal 2027 sales and marketing expense (In thousands)GAAP | $135.5M | – | – |
| Q2 fiscal 2027 research and development expense (In thousands)GAAP | $42.29M | – | – |
| Q2 fiscal 2027 general and administrative expense (In thousands)GAAP | $42.21M | – | – |
| Q2 fiscal 2027 restructuring expense (In thousands)GAAP | $324K | – | – |
| Q2 fiscal 2027 total operating expenses (In thousands)GAAP | $223.1M | – | – |
| Q2 fiscal 2027 income from operations (In thousands)GAAP | $30.38M | – | – |
| Q2 fiscal 2027 operating marginGAAP | 9.7% | – | – |
| Q2 fiscal 2027 non-GAAP income from operations (In thousands)non-GAAP | $68.35M | – | – |
| Q2 fiscal 2027 non-GAAP EBIT marginnon-GAAP | 21.9% | – | – |
| Q2 fiscal 2027 income before income taxes (In thousands)GAAP | $38.75M | – | – |
| Q2 fiscal 2027 income tax expense (In thousands)GAAP | $9.64M | – | – |
| Q2 fiscal 2027 net income (In thousands)GAAP | $29.11M | – | – |
| Q2 fiscal 2027 diluted earnings per shareGAAP | $ 0.69 | – | – |
| Q2 fiscal 2027 non-GAAP net income (In thousands)non-GAAP | $58.31M | – | – |
| Q2 fiscal 2027 non-GAAP diluted earnings per sharenon-GAAP | $ 1.38 | – | – |
| Q2 fiscal 2027 net cash provided by operating activities (In thousands)GAAP | $74.80M | – | – |
| Q2 fiscal 2027 free cash flow (In thousands)non-GAAP | $70.87M | – | – |
| Six months ended September 30, 2026 total revenues (In thousands)GAAP | $626.5M | – | – |
| Six months ended September 30, 2026 total subscription revenue (In thousands)GAAP | $535.5M | – | – |
| Six months ended September 30, 2026 income from operations (In thousands)GAAP | $56.10M | – | – |
| Six months ended September 30, 2026 net income (In thousands)GAAP | $50.25M | – | – |
| Six months ended September 30, 2026 diluted earnings per shareGAAP | $ 1.19 | – | – |
| Six months ended September 30, 2026 non-GAAP income from operations (In thousands)non-GAAP | $139.8M | – | – |
| Six months ended September 30, 2026 non-GAAP diluted earnings per sharenon-GAAP | $ 2.80 | – | – |
| Six months ended September 30, 2026 net cash provided by operating activities (In thousands)GAAP | $126.5M | – | – |
| Six months ended September 30, 2026 free cash flow (In thousands)non-GAAP | $122.0M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| AmericasAmericas includes the United States, Canada, and Latin America. | $194.1M | – | 15% |
| InternationalInternational primarily includes Europe, the Middle East, Africa, Australia, India, and Southeast Asia. | $118.3M | – | 9% |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Third quarter and full year fiscal 2027 outlook
- RevenueThird quarter fiscal 2027 subscription revenue is expected to be between $293 million and $297 million; full fiscal year 2027 subscription revenue is expected to be between $1,127 million and $1,133 million.
- NoteThird quarter fiscal 2027 non-GAAP EBIT margin is expected to be between 20.5% and 21.0%.
- NoteFull fiscal year 2027 subscription ARR is expected to be between $1,205 million and $1,215 million.
- NoteFull fiscal year 2027 non-GAAP EBIT margin is expected to be between 21.0% and 21.5%.
- NoteFull fiscal year 2027 free cash flow is expected to be between $255 million and $265 million.
- NoteFull fiscal year 2027 diluted shares outstanding are expected to be approximately 42 million.
Capital returns
- During the three months ended September 30, 2026, repurchase of common stock was $ 107,741 (In thousands).
- During the six months ended September 30, 2026, repurchase of common stock was $ 117,872 (In thousands).
- During the six months ended September 30, 2026, the company repurchased approximately 906,000 shares of common stock for $119 million.
What drove it
- Subscription revenue was $269 million, up 21% year over year, including SaaS revenue of $106 million, up 33% year over year.
- Subscription ARR grew to $1,104 million, up 20% year over year, and constant currency subscription net new ARR was $51 million.
- Commvault introduced Commvault Active Directory Pre Recover, an Identity Resilience innovation designed to reduce clean recovery of Active Directory from hours to minutes.
- Commvault expanded its FedRAMP High Authorized Cyber Resilience Services to managed services providers.
- Commvault integrated Threat Scan with Google Threat Intelligence to help organizations identify clean recovery points faster and accelerate recovery following cyberattacks.
Concerns
- Perpetual license revenue was down (40)% year over year and perpetual support revenue was down (23)% year over year.
- International revenue growth was 9%, compared with Americas revenue growth of 15%.
- Noncash stock-based compensation expense was $ 35,680 (In thousands) in the three months ended September 30, 2026 and is described by the company as a significant recurring expense.
- The outlook metrics contemplate current macroeconomic conditions.
What to watch
- Third quarter fiscal 2027 subscription revenue guidance of between $293 million and $297 million.
- Third quarter fiscal 2027 non-GAAP EBIT margin guidance of between 20.5% and 21.0%.
- Full fiscal year 2027 subscription ARR guidance of between $1,205 million and $1,215 million.
- Full fiscal year 2027 free cash flow guidance of between $255 million and $265 million.
- Subscription net dollar retention rate of 113%.
Balance sheet and cash flow
- Cash and cash equivalents totaled $897 million as of September 30, 2026.
- Cash and cash equivalents were $ 897,250 (In thousands) as of September 30, 2026, compared with $ 899,987 (In thousands) as of March 31, 2026.
- Convertible notes, net were $ 882,989 (In thousands) as of September 30, 2026, compared with $ 880,863 (In thousands) as of March 31, 2026.
- Total assets were $ 1,875,062 (In thousands) as of September 30, 2026.
- Total stockholders’ equity was $ 12,534 (In thousands) as of September 30, 2026.
- Purchase of property and equipment was $ 3,932 (In thousands) during the three months ended September 30, 2026.
- Purchase of property and equipment was $ 4,501 (In thousands) during the six months ended September 30, 2026.
Analysis
Commvault reported $ 312,389 (In thousands) of second-quarter fiscal 2027 revenue, with total subscription revenue of $ 268,512 (In thousands) versus $ 222,351 (In thousands) in the prior-year quarter. SaaS revenue was $ 106,203 (In thousands), up 33%, while term-based license revenue was $ 105,002 (In thousands), up 13%, and term-based support revenue was $ 57,307 (In thousands), up 15%. The recurring-revenue indicators were also strong: subscription ARR was $ 1,103,909 (In thousands), SaaS ARR was $ 454,406 (In thousands), and subscription net dollar retention rate was 113%.
Revenue mix continued to move toward subscription offerings. Total subscription revenue rose 21%, while perpetual license revenue declined (40)% to $ 7,205 (In thousands) and perpetual support revenue declined (23)% to $ 23,482 (In thousands). Americas revenue was $ 194,103 (In thousands), up 15%, while International revenue was $ 118,286 (In thousands), up 9%. On a constant-currency basis, total subscription revenue growth was 21% and total revenue growth was 13%.
Profitability improved in the quarter. GAAP income from operations was $ 30,377 (In thousands), with a 9.7% operating margin, compared with $ 12,491 (In thousands) in the prior-year quarter. Non-GAAP income from operations was $ 68,348 (In thousands), with a 21.9% non-GAAP EBIT margin, compared with $ 51,406 (In thousands) in the prior-year quarter. GAAP net income was $ 29,111 (In thousands), or $ 0.69 per diluted share, and non-GAAP net income was $ 58,311 (In thousands), or $ 1.38 per diluted share. The non-GAAP reconciliation excludes recurring stock-based compensation among other items, with noncash stock-based compensation expense of $ 35,680 (In thousands) for the quarter.
Cash generation remained substantial, although below the prior-year quarter on the reported measure. Net cash provided by operating activities was $ 74,798 (In thousands) and non-GAAP free cash flow was $ 70,866 (In thousands), versus $ 76,769 (In thousands) and $ 73,582 (In thousands), respectively, a year earlier. The company repurchased approximately 906,000 shares for $119 million during the six months ended September 30, 2026. Cash and cash equivalents were $ 897,250 (In thousands), while convertible notes, net were $ 882,989 (In thousands), both as of September 30, 2026.
For the third quarter, Commvault guided subscription revenue to between $293 million and $297 million and non-GAAP EBIT margin to between 20.5% and 21.0%. For full fiscal year 2027, the updated outlook calls for subscription revenue of between $1,127 million and $1,133 million, subscription ARR of between $1,205 million and $1,215 million, non-GAAP EBIT margin of between 21.0% and 21.5%, and free cash flow of between $255 million and $265 million. The company also expects approximately 42 million diluted shares outstanding for the full year.
Management, verbatim
With AI accelerating both innovation and risk in the enterprise, resilience continues to be a business imperative. Enterprises globally are increasingly turning to Commvault to stay resilient as they navigate more data, more identities, and greater complexity. We believe our strong Q2 results reflect that momentum, driving durable growth and shareholder value.
Sanjay Mirchandani, President and CEO
Not in the filing
stated, not guessed- Previous-release outlook was not provided, so comparison of actual results with prior guidance is unavailable.
- GAAP revenue guidance was not provided.
- GAAP operating income, GAAP operating margin, GAAP net income, GAAP EPS and GAAP cash-flow guidance were not provided.
- Third-quarter fiscal 2027 guidance for subscription ARR, free cash flow and diluted shares outstanding was not provided.
- Full-year fiscal 2027 gross margin, operating expenses and tax-rate guidance were not provided.
- A Q2 fiscal 2027 GAAP gross-margin percentage was not provided.
- A Q2 fiscal 2027 prior-quarter GAAP income from operations, net income, EPS, operating cash flow and free cash flow were not provided on the corresponding financial-statement rows.
- Dividend information was not provided.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.