Commvault Systems, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the Commvault Q3 Fiscal Year 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star then 0. I would now like to hand the conference over to your speaker today, Mike Melnyk, Director of Investor Relations. Thank you. Please go ahead, sir.

Good morning, and thanks for dialing in today for our call to discuss our fiscal third quarter 2020 earnings results. Before we begin, I'd like to remind everyone that the statements made during this call, including the question and answer session at the end of the call, may include forward-looking statements, including statements regarding financial projections and future performance. All the statements that relate to our beliefs, plans, expectations, or intentions include are pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are based on our current expectations. Actual results may differ materially due to risk and uncertainties such as competitive factors, difficulties, and delays inherent with development, manufacturing, marketing, and sale of software products and related services and general economic conditions. For discussion of these and other risks and uncertainties affecting our business, Please see the risk factors contained in our annual report on Form 10-K and our most recent quarterly report on Form 10-Q and in our other SEC filings and in the cautionary statements contained in our press release and on our website. The company undertakes no responsibility to update the information in this conference call under any circumstance. In addition, the development and timing of any product release as well as features or functionality remain at our sole discretion. A press release related to today's announcement was issued over the wire services earlier this morning and has been furnished to the SEC as an 8K filing. The press release is also available on our investor relations website. On this conference call we will refer to non-GAAP financial measures. A reconciliation between the non-GAAP and GAAP measures can be found on our website. This conference call is being recorded and a replay is available for the webcast. An archive of today's webcast will be available on our website following the call. With me on the call this morning are Sanjay Mirchandani, President and Chief Executive Officer of Commvault, and Brian Carolyn, Chief Financial Officer of Commvault. Sanjay and Brian will each share opening remarks and commentary before we open the call for Q&A. Now, I'll turn the call over to Sanjay. Good morning, and thanks for joining us today.

I'm just a few days away from my first full year as CEO and couldn't be prouder of the entire Commvault team and all we've accomplished over the last 12 months. We've positioned the company for a return to growth and reaffirmed our place as a leader in the industry. I want to thank all our employees around the world for their ongoing dedication to this exciting journey, which in some ways is just beginning. I'm also pleased to report that we again delivered results above expectations, all while successfully launching our new SaaS offering, Metallic, integrating Hedvig, our first major acquisition, and refreshing our overall data management portfolio, including Commvault Activate, Complete and Hyperscale. Our ability to deliver these results is due to the innovation, execution and simplification priorities we established at the start of the fiscal year. We achieved many milestones, but there is more for us to do. As we continue our journey as a new Commvault, I'm confident about the trajectory and our return to growth in fiscal 2021. Brian will provide more context on our better-than-expected results and our outlook. But first, let's discuss our strategic priorities and the work underway. I'll start with innovation, the cornerstone of our company. For more than two decades, we have been relentless in our pursuit of innovation excellence. This quarter was no exception. As I've said from day one, our innovation is focused on helping customers with their journey to the cloud. Our customers manage more than 800 petabytes of workloads in the cloud using Commvault products, and that's based on approximately 60% of our customers' reporting. We're also committed to giving customers ease of use, value, and choice in how they want to consume our technology, be it on-premise or in the cloud. Metallic, our software as a service solution, exemplifies this customer-focused approach. and many initial trials. I look forward to sharing more with you in the quarters ahead. Our innovation doesn't stop there. Since closing the Hedvig acquisition on October 1st, we have been diligently integrating the technology, talent, and product. With Commvault's go-to-market muscle and growing specialized sales force, we have added customers, expanded our pipeline, and put several large proof-of-concepts in place. It's early days, but I'm pleased with the progress. I'm even more excited about the future because the data-related problems that customers encounter in the cloud require a whole new approach. We believe Commvault, with Hedvig, is the only company with the vision, experience, and products to bring data and storage management together for a unique and differentiated solution to customers' current and evolving needs. More to come on that. We continue to innovate the products that our customers have depended on for years. During the quarter, we reintroduced an easier-to-buy and consume version of Commvault Activate, a feature-rich product to help customers address the e-discovery and sensitive data governance needs. At Commvault Go, Scott Hunter, Director of Global Infrastructure Services for AstraZeneca, talked about how he successfully uses Commvault Activate for file services optimization and data governance, including GDPR. Momentum continues to build for this product. We also introduced innovations to Commvault Complete, including cloud-to-cloud data backup and migration, automated disaster recovery validation, intelligent elastic storage planning, and powerful workload data protection. These new capabilities simplify recovery readiness and enable customers to take on today's toughest data challenges. And finally, Momentum continues to build for our Commvault hyperscale solutions. which are consistently contributing to our revenues, delivering more than 10% year-over-year growth in the third quarter. And six of our top 10 customers are now running Commvault Hyperscale, proof that this technology is enterprise-grade and scales in even the largest environments. As a technology company, innovation is always critical, but innovation alone will not deliver the results. We also need to execute flawlessly. Last quarter, our execution focused helped us deliver better than expected results. We added approximately 200 more subscription and utility customers during the quarter. We expect to deliver more predictable and recurring growth as more customers embrace our subscription model and invest beyond our traditional offerings to pursue new value-driven use cases. And we're selling across all market segments, including seven-figure deals to large enterprise customers, and small and medium enterprise segments where deals under $500,000 were up approximately 30% sequentially. Many of these deals were partner-led, which we believe is the result of our improved execution of the channel. In Q3, these included the Benetton Group SBA, City of Edmonton and, closer to home, the Monmouth County Sheriff Office. Let's take a moment to talk about two of these deals. First, we beat the incumbent vendor and other competitors to provide guarantee BBVA, the second largest bank in Turkey, with Commvault Complete. This will support all the critical operational elements for the tightly regulated financial services provider. It was one of the largest wins in the EMEA region. Second, in the U.S., we deepened our relationship with long-time customer Corvo. As a $13-plus billion innovative tech company, Corvo's chipsets are found in most electronics, including cars and aircraft. They selected Commvault hyperscale software with HPE servers as an economical repository to locally archive QA data sets off of frontline storage using Commvault, which Galen Korvos, Chief Information Security Officer and Head of IT Infrastructure, recently said, quote, We're excited to build on our longstanding success together through the expansion of Commvault hyperscale technology which allows us to easily scale out protection to new data volumes while reducing complexity and cost." We're winning across various customer segments globally because our robust technology solves multiple problems for customers and our innovation and execution initiatives differentiate us in the marketplace and lay the foundation for growth. Another key element of this foundation is our people. I believe great opportunities attract great people. and I'm pleased to say that we are attracting world-class talent. This quarter, we strengthened our global presence and expertise with two veteran sales leaders. Marco Panizzi joined us as our vice president for MIA, formerly an enterprise sales leader at Dell Technologies. Marco brings more than 30 years of experience in the enterprise data industry and will drive our growth objectives across Europe, Middle East and Africa. Formerly Vice President APJ for the Software Defined Data Center Business at VMware, joined as our Vice President for APJ. Leveraging his extensive sales and business development experience, Callum will be responsible for driving growth across APJ. And, Thad Keating joins us as VP Go-To-Market Strategy. He brings more than 20 years of experience leading strategy operations, corporate development, and sales. These industry veterans join David Boyle, our America sales leader, and round out Our world-class sales leadership team led by Chief Revenue Officer Ricardo de Blasio. In addition, as we shared last quarter, we continue to invest in expanding our sales force, with Q3 being one of our strongest field recruiting quarters. And finally, we made substantial progress with our third priority, simplification. Internally, we aligned our tools and processes to help us manage and drive better predictability and linearity in the business. That's evident in our recent results. and our new simplified user experience with Metallic, Activate and Command Center contributed to a strong net promoter score and the addition of new customers. With that, I'll turn it over to Brian to cover our financial results and guidance for the upcoming quarter.