Commvault Systems, Inc.

Gentlemen, thank you for standing by, and welcome to the ConVault Q4 FY 2021 Earnings Conference Call. At this time, all participant lines are in a listen-only mode. After the speaker's 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 0. I would now like to hand the conference over to your speaker today, Mr. Michael Melnick, Director of Investor Relations. Thank you. Please go ahead, sir.

Good morning, and thanks for dialing in this morning to discuss our fourth quarter and fiscal year 2021 earnings results. Before we begin, I'd like to remind everyone that the statements made during this call, including in 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 regarding the future 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 other SEC filings and the cautionary statement 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. Our press release related to today's announcement was issued over the wire service earlier this morning and has also 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 Merchandani, 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 we'll turn the call over to Sanjay. Sanjay? Thank you, Mike.

Good morning, everyone, and thanks for joining us today. I'm pleased to report that Commvault finished Q4 and full year fiscal year 21 on a high note with record quarterly sales and earnings results. We accomplished this in a year where the pandemic focused customers to adopt solutions that will remain a core part of their IT strategy as they accelerate their migration to the cloud. By nearly all accounts, we've performed well. Our portfolio and roadmap are aligned with our customers' highest priorities. Our vision is resonating in the marketplace, and our team is focused on our continued execution. This was evident in our Q4 results. We had software revenue growth of 35%, and total revenue growth of 16% year-over-year. We accelerated our recurring revenue transition as Q4 subscription revenue represented 59% of software revenue, and recurring revenue represented 76% of total revenue. We increased our total annual recurring revenue, ARR, by 15% year-over-year. We saw continued adoption of our cloud offerings, and Metallic doubled ARR quarter-and-quarter again. Our results were led by our largest regions, with the Americas posting record software revenue. And our better-than-expected growth drove strong operating leverage with a non-GAAP EBIT margin of 20.3% and record non-GAAP EPS of 59 cents. We outpaced the industry growth rate, gained market share, and solidified our place as a market leader, all while weathering the unprecedented macro environment. We could not have accomplished this without our loyal customers and partners and the hard work and dedication of our employees worldwide. I'd like to extend my appreciation to each of them. I've never been prouder of our achievements or more excited about the opportunities in front of us. Now let's discuss why. As we discussed at our investor event in January, we believe the markets are at a tipping point. No longer are data protection and data management nice to have. They're organizational imperatives. Faced with multi-generational data sprawl, CIOs and IT professionals are grappling with massive data fragmentation, new security threats, unknown failure points, and economic inefficiencies, which are only magnified by exponential data growth. This creates what we call the business integrity gap. Said simply, it is a gap between a company's need to transform and their ability to actually do it. We saw this coming. and build a robust and future-proof platform to help our customers close the business integrity gap, accelerate their cloud journeys, and deliver on the digital transformation strategy. In fact, we estimate that we've now helped customers move over two exabytes of data to the cloud, and we expect this acceleration to continue. We're also seeing existing Commvault customers rapidly modernize their data environments by expanding with our newer solutions, including our metallic SaaS offerings. longtime customer Chart Industries, a leading independent global manufacturer of cryogenic equipment, recently added Metallic to support their growing Office 365 and Salesforce.com workloads. Nathaniel Howardstein, Chart's global infrastructure manager, said, quote, Commvault and Metallic together are a trusted partner, and their bulletproof solutions mean that we will have the scale, flexibility, and reliability that are critical to our business, end quote. Not only do customers see the value of our intelligent data services, But the industry has taken notice. CRN recently named us as one of top 20 coolest cloud storage companies. Make no mistake, Commvault is built for the cloud and hybrid cloud environments. As you know, innovation has always been a hallmark of Commvault. Over the past two years, we've built our core offering, pricing, and licensing to better align with customer priorities. Our intelligent data services platform is built for today and for tomorrow. And we conveniently provide these services as software on premises, in the cloud, as a managed service through our partners, or as software as a service. We believe that this creates incredible opportunities for us by meeting customers where they are and taking them to where they want to go. We're seeing a gradual shift to multi-product deployments. And as customers embrace what they're calling the power of and, which is Essentially, the ability to easily and simultaneously leverage our on-premise solutions like Hyperscale X or Disaster Recovery with a cloud-native solution like Metallic. Hyperscale X embodies all things Commvault, giving customers the ultimate in choice and flexibility. It can be deployed in a matter of hours and seamlessly integrates with Metallic cloud storage to provide future-proofed air-gap ransomware protection and other cloud extensions. In Q4, Hyperscale X saw increased momentum and new customer wins. Additionally, our standalone Commvault distributed storage offering, formerly known as Hedvig, is also gaining traction in software-defined storage and modern container-based environments. Sue S. Payne, a worldwide leader in driving environmental sustainability, recently chose Hyperscale X to protect the company and their customers As Daniel Pastrana of SOSA noted, quote, I can't overstate the absolute criticality of data protection and management in our industry. When we assessed our options, Commvault came out on top to use scale, simplicity, flexibility, security, and resiliency. We're protecting our customers and our company with Commvault's Hyperscale X and are thrilled with our choice, end quote. And last but certainly not least, Metallic, the gold standard in data management as a service, is now available in 24 countries, and customers have noticed. We doubled the number of new Metallic logos, more than half of which were net new to Commvault. Partner-sourced bookings for Metallic also doubled them a quarter. Enterprise customers now make up over one-third of Metallic's base. And Metallic ARR more than doubled and was a significant component of our total company sequential ARR growth. By all accounts, fiscal year 21 was a tremendous inaugural year for Metallic. Our pace of innovation in Metallic across SAP and hybrid multi-cloud is helping our customers accelerate their cloud transformation. Metallic emerged as a key driver of our land and expand motion. RECs that sell Metallic also sell more Commvault Core. And customers that buy Metallic spend more and have a higher retention rate on average. Looking forward, we plan to accelerate development cycles and add capabilities to this exciting platform. What makes us unique is the power of AMP. the ability to leverage on-premise and SaaS with a single user interface. Changing gears. Throughout this past year, we've seen significant progress in our go-to-market execution. Our regions are hitting their stride and finding success across industry verticals with customers of all sizes. Our record quarter was fueled by large-deal momentum and significant productivity increases. And we also posted strong growth in our velocity business across all three regions. Complementing our sales force is a world-class customer success team that's critical to our retention and expansion efforts. By any measure, the first year of our renewal cycle was a success. We finished the quarter and the full year with a net dollar retention firmly over 110%. Across our install base, we're increasingly selling a suite of intelligent data services that ultimately should drive higher lifetime value. Compulse had a good year. We will continue to work diligently to deliver similar results in fiscal year 22 and beyond. Now I'd like to turn it over to Brian to discuss the numbers.