Shares of Commvault Systems Inc. (NASDAQ:CVLT) slid 8.70% in premarket trading Tuesday after the data management software company posted second-quarter 2025 earnings below expectations, despite delivering stronger-than-expected revenue and hitting a key growth milestone.
For the quarter ended September 30, the company reported adjusted earnings of $0.91 per share, falling short of analyst estimates of $0.94. Revenue came in at $276 million, ahead of the $273.34 million consensus forecast, representing 18% year-over-year growth.
One of the quarter’s highlights was the company surpassing $1 billion in annualized recurring revenue (ARR), reaching $1.04 billion — two quarters ahead of its original March 2026 target. Subscription revenue climbed 29% YoY to $173 million, while SaaS revenue surged 61% to $80 million.
“Commvault delivered a strong quarter fueled by solid ARR and SaaS growth that accelerated a key milestone for the company — achieving $1 billion in total ARR — two quarters earlier than projected,” said Sanjay Mirchandani, President and CEO. “As enterprises globally rely on Commvault to be resilient, our cloud-first, AI-enabled cyber resilience platform is more relevant than ever.”
Looking ahead to the third quarter, Commvault projects revenue in the range of $298 million to $300 million, aligning with Wall Street expectations of $298.3 million. The company also generated solid cash flow in Q2, with operating cash flow of $77 million and free cash flow of $74 million.
Despite the strong revenue performance and ARR milestone, the earnings shortfall weighed on sentiment, dragging the stock lower after the results.