Q1 2025 Commvault Systems Inc Earnings Call

Thank you for standing by. My name is Cath, and I will be your conference operator today. At this time, I would like to welcome everyone to the CommVault Q1 Fiscal Year 2025 Earnings Conference Call. All lines have been placed on mute to prevent any background noise.

Unknown Executive: I would like to welcome everyone to the CommVault Q1 Fiscal Year 2025 earnings conference call. All lines have been placed in need to prevent any background noise.

Operator: I would like to welcome everyone to the CommVault Q1 Fiscal Year 2025 Earnings Conference Call. All lines have been placed on mute to prevent any background noise.

Operator: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again. Thank you. I would now like to turn the call over to Mike Melnyk, Head of Investor Relations. Please go ahead.

Unknown Executive: After the speaker's remarks, there will be a question-and-answer session. If you would like to ask questions during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you.

After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again. Thank you.

Michael Melnyk: I would now like to turn the call over to Mike Melnyk, Head of Investor Relations. Please go ahead.

I would now like to turn the call over to Mike Melnyk, Head of Investor Relations. Please go ahead.

Unknown Executive: Good morning and welcome to our earnings conference call. Before we begin, I'd like to remind you that statements made on today's call will include forward-looking statements about CommVault's future expectations, plans, and prospects. All such forwardless statements are subject to risk, uncertainties, and assumptions.

Michael John Melnyk: Good morning, and welcome to our earnings conference call. Before we begin, I'd like to remind you that statements made on today's call will include forward-looking statements about CommVault's future expectations, plans, and processes. All such forward-looking statements are subject to risks, uncertainties, and assumptions. Please refer to the cautionary language in today's earnings release and CommVault's most recent periodic reports filed with the SEC for a discussion of the risks and uncertainties that could cause the company's actual results to be materially different from those contemplated in these forward-looking statements. CommVault does not assume any obligation to update these statements. Thank you again for joining us, and now I'll turn it over to our CEO, Sanjay Mirchandani, for his opening remarks.

Michael John Melnyk: Good morning, and welcome to our earnings conference call. Before we begin, I'd like to remind you that statements made on today's call will include forward-looking statements about CommVault's future expectations, plans, and prospects.

Unknown Executive: Please refer to the cautionary language in today's earnings release and CommVault's most recent periodic reports, clouds with the SEC for a discussion of the risk and uncertainty if it calls the company's actual results to materially different from those contemplated in these forwardless statements. Commvault does not assume any obligation to update these statements.

Michael John Melnyk: All such forward-looking statements are subject to risks, uncertainties, and assumptions.

Michael John Melnyk: Please refer to the cautionary language in today's earnings release and CommVault's most recent periodic reports filed with the SEC for a discussion of the risks and uncertainties that could cause the company's actual results to be materially different from those contemplated in these forward-looking statements.

Unknown Executive: During this call, CommVault's financial results are presented on a non-GAAP basis. A reconciliation between the non-GAF and GAF measures can be found on our website.

Commonwealth: CommVault does not assume any obligation to update these statements.

Speaker Change: During this call, CommVault's financial results are presented on a non-GAAP basis. A reconciliation between the non-GAAP and GAAP measures can be found on our website.

Sanjay Mirchandani: Thank you again for joining us, and then I'll turn it over to our CEO, Sanjay Mirchandani, for his opening remarks. Thank you for joining today's call. Q1 was an outstanding quarter and start to office school year. We saw great momentum across all our primary KPIs this quarter. Total revenue increased 13% to 225 million. Total ARR rose 17% to 803 million. Subscription ARR accelerated 27% to 636 million. SAS ARR jumped 66% to 188 million, and we did this profitably while investing in growth initiatives and hitting record Q1 free cash flow margins. A CommVault platform continues to accelerate our growth as more companies turn to us for industry-leading cyber resilience.

Sanjay Mirchandani: Thanks, Mike. Good morning, and thank you for joining today's call. Q1 was an outstanding quarter and start to our fiscal year. Total ARR rose 17% to 803 million. Subscription ARR accelerated 27% to 636 million, and SAS ARR jumped 66% to $188 million.

Speaker Change: Thank you again for joining us, and now I'll turn it over to our CEO , Sanjay Mirchandani, for his opening remarks. Sanjay?

Sanjay Mirchandani: Thanks, Mike. Good morning, and thank you for joining today's call. Q1 was an outstanding quarter and start to our fiscal year. We saw great momentum across all our primary KPIs this quarter.

Sanjay Mirchandani: Total revenue increased 13% to $225 million.

Sanjay Mirchandani: Total ARR rose 17% to 803 million.

Sanjay Mirchandani: Subscription ARR accelerated 27% to 636 million.

Sanjay Mirchandani: And we did this profitably while investing in growth initiatives and hitting record Q1 free cash flow margins. We're rapidly becoming an integral part of the security conversation. The need for resilience is paramount, whether that's recovering from a cyber attack, a natural disaster, or human error. We help our customers navigate these challenges in three critical areas. Let's discuss each one.

Sanjay Mirchandani: SAS ARR jumped 66% to $188 million, and we did this profitably while investing in growth initiatives and hitting record Q1-3 cash flow margins.

Sanjay Mirchandani: Our CommVault cloud platform continues to accelerate our growth as more companies turn to us for industry-leading cyber resilience.

Sanjay Mirchandani: We're rapidly becoming an integral part of the security conversation. In Q1, we had more conversations with CSOs and CIOs than ever before, which contributed to our rapid results and set the stage for continued momentum through the fiscal year. The need for resilience is paramount, whether that's recovering from a cyber attack, a natural disaster, human error, or, as we've recently seen, a massive global outage from a faulty patch. We help our customers navigate these challenges in three critical areas. Risk, readiness, and recovery.

Sanjay Mirchandani: We're rapidly becoming an integral part of the security conversation.

Sanjay Mirchandani: In Q1, we had more conversations with CISOs and CIOs than ever before, which contributed to our record results and set the stage for continued momentum through the fiscal year.

Sanjay Mirchandani: The need for resilience is paramount.

Sanjay Mirchandani: Whether that's recovering from a cyber attack, a natural disaster, human error, or a disaster.

Sanjay Mirchandani: or as we've recently seen, a massive global outage from a faulty patch.

Sanjay Mirchandani: We help our customers navigate these challenges in three critical areas.

Sanjay Mirchandani: Let's discuss each one. First, we help businesses reduce their risk. According to our recent cyber resilience readiness report, 83% of organizations have experienced a material security breach, with over 50% occurring in the past year alone. Capabilities like CommVault ThreatWise reduce risk by providing advanced threat detection. In Q1, sales of our ThreatWise offering doubled year over year. Additionally, while AI enhances cyber resilience, it could also create a bigger attack surface for organizations. Our AI enabled active insight technology is helping customers conduct real-time. We provide that to over 3,000 of our customers every day with our air gap protect offering.

Sanjay Mirchandani: Risk, Readiness, and Recovery.

Sanjay Mirchandani: First, we help businesses reduce their risk. According to our recent Cyber Resilience Readiness Report, 83% of organizations have experienced a material security breach, with over 50% occurring in the past year alone. Capabilities like CommVault ThreatWise reduce risk by providing advanced threat detection. In Q1, sales of our ThreatWise offering doubled year-over-year.

Sanjay Mirchandani: Let's discuss each one.

Sanjay Mirchandani: First, we help businesses reduce their risk. According to our recent Cyber Resilience Readiness Report, 83% of organizations have experienced a material security breach, with over 50% occurring in the past year alone.

Sanjay Mirchandani: Capabilities, like CommVault ThreatWise, reduce risk by providing advanced threat detection.

Sanjay Mirchandani: In Q1, sales of our ThreatWise offering doubled year over year. Additionally, while AI enhances cyber resilience, it can also create a bigger attack surface for organizations.

Sanjay Mirchandani: Additionally, while AI enhances cyber resilience, it can also create a bigger attack surface for organizations. Our AI-enabled Active Insights technology is helping customers conduct real-time threat analysis to assess their fiber resilience. We provide that to over 3,000 of our customers every day with our AirGap Protect offering. That said, research shows that bad actors are going to get in.

Sanjay Mirchandani: Our AI-enabled Active Insights technology is helping customers conduct real-time threat analysis to assess their fiber resilience.

Sanjay Mirchandani: Second, in addition to managing their risk,

Sanjay Mirchandani: Businesses need to be ready. That includes being ready for the type of global outage we saw a week ago, which includes having an immutable air gap copy of your data.

Sanjay Mirchandani: We provide that to over 3,000 of our customers every day with our AirGap Protect offering.

Sanjay Mirchandani: That said, reach the shores that bad actors are going to get in. So, how do businesses know that they can be ready when that happens? It comes down to regularly testing cyber recovery plans.

Sanjay Mirchandani: That's it. Research shows that bad actors are going to get in. So, how do businesses know that they can be ready when that happens?

Sanjay Mirchandani: So how do businesses know that they can be ready when that happens? It comes down to regularly testing cyber recovery. We've revolutionized how that's done. Our cleanroom recovery offering enables businesses to easily, frequently, and affordably test their cyber recovery plans in advance, in good times, across workloads, at scale, on demand. Nobody else's up

Sanjay Mirchandani: We revolutionize how that stuff. Our clean room recovery offering enables businesses to easily, frequently, and affordably test their cyber recovery plants in advance in good times across workloads at scale on demand. Nobody else does this. While this offering is new to the market, global pharmaceutical, healthcare, and transportation organizations have already invested in our clean room technology and are taking advantage of it.

Sanjay Mirchandani: It comes down to regularly testing cyber recovery plans.

Sanjay Mirchandani: We've revolutionized how that stops.

Sanjay Mirchandani: Our cleanroom recovery offering enables businesses to easily, frequently, and affordably test their cyber recovery plans in advance, in good times, across workloads, at scale, on demand.

Sanjay Mirchandani: While this offering is new to the market, global pharmaceutical, healthcare, and transportation organizations have already invested in our cleanroom technology and are taking advantage of it. And at the RFA conference, CommVault was named the winner of Trailblazing Cyber Resilience by Cyber Defense Magazine.

Sanjay Mirchandani: Nobody else does this.

Sanjay Mirchandani: While this offering is new to the market, global pharmaceutical, healthcare, and transportation organizations have already invested in our cleanroom technology and are taking advantage of it.

Sanjay Mirchandani: And, at the RSA Conference, CommVault was named the winner for Trailblazing Cyber Resilience by Cyber Defense Magazine. Third, when reached, businesses need to recover their data and rebuild their cloud applications fast. Traditionally, this has taken weeks or months. Not anymore. The Apprank's technology required the start of a quarter is allowing customers to reduce that time to days or hours. We'll have much more to say about this groundbreaking capability in the coming months as we integrate and enhance this offering within our CommVault platform. Our ability to help customers reduce their risk and enhance their readiness and quickly recover is critical to enabling their resilience.

Tom Waltz: And at the RFA conference, CommVault was named the winner for Trailblazing Cyber Resilience by Cyber Defense Magazine.

Sanjay Mirchandani: 1, 3, businesses need to recover their data and rebuild their cloud applications fast. Traditionally, this has taken weeks or months, but not anymore. The Appranix technology required at the start of the quarter is allowing customers to reduce that time to days or hours. We'll have much more to say about this groundbreaking capability in the coming months as we integrate and enhance this offering within our CommVault platform. Our ability to help customers reduce their risk, enhance their readiness, and quickly recover is critical to enabling their results.

Sanjay Mirchandani: Third, when breached, businesses need to recover their data and rebuild their cloud applications fast.

Sanjay Mirchandani: Traditionally, this has taken weeks or months, not anymore.

Sanjay Mirchandani: The Appranix technology required at the start of the quarter is allowing customers to reduce that time to days or hours.

Speaker Change: We'll have much more to say about this groundbreaking capability in the coming months as we integrate and enhance this offering within our Commvault platform.

Speaker Change: Our ability to help customers reduce their risk, enhance their readiness, and quickly recover is critical to enabling their resilience.

Sanjay Mirchandani: However, customers also turn to us to help securely accelerate the hybrid cloud modernization. I'm proud that as of today, we've enabled customers to move approximately five exabytes of data into the public cloud. That's nearly a tenfold increase over the past five years.

Sanjay Mirchandani: However, customers also turn to us to help securely accelerate the hybrid cloud modernization journeys. I'm proud that as of today, we've enabled customers to move approximately five exabytes of data in the public cloud; that's nearly a tenfold increase over the past five years. And we do this while enabling them to do it efficiently, while minimizing the total cost of ownership. For example, we recently helped Lendley's global real estate lender migrate its data center footprint onto the cloud while reducing complexity and gaining significant operational efficiencies. As a result, they achieved a 50% lower total cost of ownership for data management using CommVault Cloud.

Speaker Change: However, customers also turn to us.

Speaker Change: to help securely accelerate the hybrid cloud modernization journeys.

Speaker Change: I'm proud that as of today, we've enabled customers to move approximately five exabytes of data in the public cloud. That's nearly a tenfold increase over the past five years. And we do this while enabling them to do it efficiently, while minimizing the total cost of ownership.

Sanjay Mirchandani: And we do this while enabling them to do it efficiently, while minimizing the total cost of ownership. For example, we recently helped Lendlease, a global real estate lender, migrate its data center footprint onto the cloud while reducing complexity and gaining significant operational efficiency. As a result, they achieved a 50% lower total cost of ownership for data management using CommVault Cloud. Additionally... Enoch Group, a leading global energy provider, harnessed CommVault Cloud to modernize its on-premise and cloud infrastructure to drive improved operational efficiencies, reduce overhead, and enhance business continuity across its network. It now takes them 67% less time to restore their data while achieving an 88% cost-to-system recovery and a 40% reduction in operating expenses. But being a trusted, proven partner doesn't stop there.

Speaker Change: For example, we recently helped Lendlease, a global real estate lender, migrate its data center footprint onto the cloud while reducing complexity and gaining significant operational efficiencies.

Speaker Change: As a result, they achieved a 50% lower total cost of ownership for data management using CommVault Cloud.

Sanjay Mirchandani: Additionally, in our group, the leading global energy provider, Arnors CommVault Cloud, modernizes on-premise and cloud infrastructure to drive improved operational efficiencies, produce overhead, and enhance business continuity across its network. It now takes them 67% less time to restore their data while achieving an 88% cost of system recovery and a 40% reduction in operating expenses. And being a thrusted proven parker doesn't stop.

Speaker Change: Additionally,

Speaker Change: Enot Group, a leading global energy provider, harnessed CommVault Cloud to modernize its on-premise and cloud infrastructure.

Speaker Change: to drive improved operational efficiencies, produce overhead, and enhance business continuity across its network.

Speaker Change: It now takes them 67% less time to restore their data while achieving an 88% cost-to-system recovery and a 40% reduction in operating expenses.

Sanjay Mirchandani: out there. During the quarter, we also extended our cyber resiliency leadership for government organizations. Among our top competitors, we are the only company to achieve FedRAMP's High Authorization. With this, CommVault Cloud for Government can now securely handle Controlled Unclassified Information in cloud computing environments for government agencies and contractors. Additionally, CommVault Cloud is now on the AWS Marketplace for the U.S. Federal government.

Sanjay Mirchandani: During the quarter, we also extended our cyber resiliency leadership for government organizations. Among our top competitors, we are the only company to achieve FedRAMP high authorization. With this, CommVault Cloud for Government can now securely handle controlled, unclassified information in cloud computing environments for government agencies and contractors. Additionally, CommVault Cloud is now on the AWS marketplace for the U.S. federal government.

Speaker Change: And being a trusted, proven partner doesn't stop there.

Speaker Change: During the quarter, we also extended our cyber resiliency leadership for government organizations.

Speaker Change: Among our top competitors, we are the only company to achieve FedRAMP's high authorization. With this, CommVault Cloud for Government can now securely handle controlled, unclassified information in cloud computing environments for government agencies and contractors.

Speaker Change: Additionally, CommVault Cloud is now on the AWS Marketplace for the U.S. federal government.

Sanjay Mirchandani: Finally, during the quarter, we continue to strengthen our executive bench to drive our next wave of growth and evolution. A few weeks ago, we announced that Gary Merrill would become the company's first Chief Commercial Officer, leading our sales and part of the fees. Throughout this tenure at CommVault and ASA CFO, Gary has worked closely with our sales and part of the team globally. In his view, we believe he's ideally suited to lead the charge for CommVault. With this change, we're excited to announce that Jen Derrico will join us at CFO on August 12th. Jen spent close to a decade at Toast, where she was instrumental in its successful IPO.

Sanjay Mirchandani: Finally, during the quarter, we continue to strengthen our executive bench to drive our next wave of growth and evolution. A few weeks ago, we announced that Gary Merrill would become the company's first Chief Commercial Officer, leading our sales and partner teams. Throughout his tenure at CommVault and as our CFO, Gary has worked closely with our sales and partner teams globally. In his new role, we believe he's ideally suited to lead the charge for CommVault.

Speaker Change: Finally, during the quarter, we continue to strengthen our executive bench to drive our next wave of growth and evolution.

Speaker Change: A few weeks ago, we announced that Gary Merrill will become the company's first Chief Commercial Officer, leading our sales and partner teams.

Speaker Change: Throughout his tenure at CommVault and as our CFO , Gary has worked closely with our sales and partner teams globally.

Speaker Change: In his new role, we believe he is ideally suited to lead the charge for CommVault.

Sanjay Mirchandani: With this change, we're excited to announce that Jen DiRico will join us as CFO in August. Jen spent close to ten years at Toast, where she was instrumental in its successful IPO. As a member of the Toast senior leadership team, she contributed to the company's significant success and expansion, including growing its ARR to over $1 billion. We believe Jen's extensive financial and operational experience will enable us to accelerate growth here at CommVault as well.

Speaker Change: With this change, we're excited to announce that Jen DiRico will join us at CFO on August 12th.

Speaker Change: Jen spent close to a decade at Toast, where she was instrumental in its successful IPO.

Sanjay Mirchandani: As a member of the Toast senior leadership team, she contributed to the company's significant success and expansion, including growing this ARR to over $1 billion. We believe Jen's extensive financial and operational experience will enable us to accelerate growth here at CommVault as well. Jen will lead our earnings discussions after she officially joins the company in a couple of weeks.

Speaker Change: As a member of the Toll's senior leadership team, she contributed to the company's significant success and expansion, including growing its ARR to over $1 billion.

Speaker Change: We believe Jen's extensive financial and operational experience will enable us to accelerate growth here at CommVault as well.

Sanjay Mirchandani: General lead our earnings discussions after she officially joins the company in a couple of weeks. Today, Danielle Abrahamson, our Chief Accounting Officer, who I've worked with on Ernie's calls for 22 straight quarters, will lead this discussion as Gary tends to a personal family matter. With that, I will now turn the call over to Danielle to discuss our results.

Speaker Change: General lead, our earnings discussion process, she officially joins the company in a couple of weeks.

Sanjay Mirchandani: Today, Danielle Abrahamson, our Chief Accounting Officer, who I've worked with on earnings calls for 22 straight quarters, will lead this discussion as Gary tends to a personal family matter.

Speaker Change: Today, Danielle Abrahamson, our Chief Accounting Officer, who I've worked with on Ernie's calls for 22 straight quarters, will lead this discussion as Gary tends to a personal family matter.

Danielle Abrahamson: With that, I will now turn the call over to Danielle to discuss our results. Danielle.

Speaker Change: With that, I will now turn the call over to Danielle to discuss our results. Danielle?

Danielle Abrahamson: Thank you, Sanjay, and good morning, everyone. As Sanjay mentioned, we had a record start to the fiscal year, delivering our third consecutive quarter of double-digit total revenue growth with accelerating momentum across all our key metrics. I'll recap our Q1 results before providing our Q2 outlook and increased guidance for the full fiscal year 25. As a reminder, all growth rates are on a year-over-year basis, unless otherwise noted. For fiscal Q1, total revenue growth accelerated 13 percent to $225 million. Driven by a 28 percent increase in subscription revenue, which now exceeds 55 percent of total revenue. Subscription revenue growth was fueled by increased contributions from our staff's portfolio and continued double-digit growth in term software licenses, well ahead of the market growth rate.

Danielle Abrahamson: Thank you, Sanjay, and good morning everyone. As Sanjay mentioned, we had a record start to the fiscal year, delivering our third consecutive quarter of double-digit total revenue growth with accelerating momentum across all our key metrics. I'll recap our Q1 results before providing our Q2 outlook and increased guidance for the full fiscal year. As a reminder, all growth rates are on a year-over-year basis unless otherwise noted.

Danielle Abrahamson: Thank you Sanjay and good morning everyone. As Sanjay mentioned, we had a record start to the fiscal year, delivering our third consecutive quarter of double-digit total revenue growth with accelerating momentum across all our key metrics.

Speaker Change: I'll recap our Q1 results before providing our Q2 outlook and increased guidance for the full fiscal year 25. As a reminder, all growth rates are on a year-over-year basis unless otherwise noted.

Danielle Abrahamson: For fiscal Q1, total revenue growth accelerated 13% to $225 million, driven by a 28% increase in subscription revenue, which now exceeds 55% of total revenue. Subscription revenue growth was fueled by increased contributions from our SaaS portfolio and continued double-digit growth in term software licenses, well ahead of market growth. Our software revenue growth reflected a healthy balance between renewals and another strong quarter of land and expand fitness. Once again, we saw revenue from term software transactions over $100,000 increase by 13% as we closed an accelerated volume of larger deals. From a product perspective, our CommVault cloud platform is responding in the market as we have started to monetize our cyber resilience offering.

Speaker Change: For fiscal Q1, total revenue growth accelerated 13% to $225 million, driven by a 28% increase in subscription revenue, which now exceeds 55% of total revenue.

Speaker Change: Subscription revenue growth was fueled by increased contributions from our SAS portfolio and continued double-digit growth in term software licenses, well ahead of the market growth rate.

Danielle Abrahamson: Our software revenue growth reflected a healthy balance between renewals and another strong quarter of land and expand business. Once again, we saw revenue from term software transactions over $100,000 increased by 13 percent as we close an accelerated volume of larger deals. From a product perspective, our combo cloud platform is resonating in the market as we have started to monetize our cyber resilience off. From a geographic perspective, we were also pleased as both the Americas and international regions had impressive growth, with each achieving double-digit terms, software, and total revenue growth. We also have support revenue, which includes support for both our term-based and perpetual software licenses, with $76 million, down 1% sequentially and year over year.

Speaker Change: Our software revenue growth reflected a healthy balance between renewals and another strong quarter of land and expand fitness.

Speaker Change: Once again, we saw revenue from term software transactions over $100,000 increase by 13% as we close an accelerated volume of larger deals.

Speaker Change: From a product perspective, our CommVault cloud platform is resonating in the market as we have started to monetize our cyber resilience offerings.

Danielle Abrahamson: From a geographic perspective, we were also pleased as both the Americas and international regions had impressive growth, with each achieving double-digit terms, software, and total revenue growth. Q1 perpetual license revenue was $14 million, as perpetual licenses are sold in limited verticals and geographies. We believe we are approaching a steady state run rate of perpetual license sales. Q1 Customer Support Revenue, which includes support for both our term-based and perpetual software licensing, was $76 million, down 1% sequentially year over year.

Speaker Change: From a geographic perspective, we were also pleased as both the Americas and international regions had impressive growth with each achieving double-digit terms, software, and total revenue growth.

Speaker Change: Q1 perpetual license revenue was $14 million as perpetual licenses are sold in limited verticals and geographies.

Speaker Change: We believe we are approaching a steady state run rate of perpetual license sales.

Speaker Change: Q1 Customer Support Revenue, which includes support for both our term-based and perpetual software licenses.

Speaker Change: with $76 million, down 1% sequentially and year over year.

Danielle Abrahamson: In Q1, we reached a key inflection point where customer support revenue derived from term software and related arrangements crossed over 50% of total customer support revenue, compared to 44% in Q1 of the prior year.

Danielle Abrahamson: In Q1, we reached the key inflection point where customer support revenue derived from terms, software, and related arrangements crossed over 50% of total customer support revenue compared to 44% in Q1 of the prior year. Now, I'll discuss ARR.

Speaker Change: In Q1, we reached the key inflection point where customer support revenue derived from term, software, and related arrangements crossed over 50% of total customer support revenue, compared to 44% in Q1 of the prior year.

Danielle Abrahamson: Now I'll discuss AERR. Q1, total AERR growth accelerated 17% to $803 million. Subscription AERR, including term-based licenses and SaaS contracts, grew 27% year over year to $636 million, or 79% of total AERR. This includes $188 million of SaaS AERR, which jumped 66% from a year ago. SaaS continues to be the primary driver of our new AERR growth, contributing over 60% of our total AERR growth in the quarter. SaaS now represents 23% of total AERR, compared to just 17% a year ago. From a customer perspective, we added approximately 600 subscription customers during the quarter and ended the quarter with 9,900 subscription customers, representing over 65% of our install base.

Danielle Abrahamson: In Q1, total ARR growth accelerated 17% to $803 million. Subscription ARR, including term-based licenses and SAS contracts, grew 27% year over year to $636 million, or 79% of total ARR. This includes $188 million of SAS ARR, which jumped 66% from a year ago. SAS continues to be the primary driver of our new ARR growth, contributing over 60% of our total ARR growth in the quarter. SAS now represents 23% of total ARR compared to just 17% a year ago.

Speaker Change: Now, I'll discuss ARR.

Speaker Change: Q1, total ARR growth accelerated 17% to $803 million.

Speaker Change: Subscription ARR, including term-based licenses and SAS contracts, grew 27% year-over-year to $636 million, or 79% of total ARR.

Speaker Change: This includes $188 million of SAS ARR, which jumped 66% from a year ago. SAS continues to be the primary driver of our new ARR growth, contributing over 60% of our total ARR growth in the quarter.

Speaker Change: SAS now represents 23% of total ARR compared to just 17% a year ago.

Danielle Abrahamson: From a customer perspective, we added approximately 600 subscription customers during the quarter and ended the quarter with 9,900 subscription customers, representing over 65% of our install base. Existing customer expansion was strong, with Q1 DAS net dollar retention of 127%, benefiting both upsell and cross-sell activity. We saw accelerated growth in SAS ARR from hybrid cloud workloads and our newer workloads, such as Active Directory and Cleanroom.

Speaker Change: From a customer perspective, we added approximately 600 subscription customers during the quarter and ended the quarter with 9,900 subscription customers, representing over 65% of our install base.

Danielle Abrahamson: Existing customer expansion was strong, with Q1 SaaS net dollar retention of 127%, being benefited by both upsell and cross-sell activities. We saw accelerated growth in SaaS AERR from hybrid cloud workloads and our newer workloads, such as Active Directory and Cleanroom.

Speaker Change: Existing customer expansion was strong, with Q1 DAS net dollar retention of 127%, being benefited by both upsell and cross-sell activities.

Speaker Change: We saw accelerated growth in SaaS ARR from hybrid cloud workloads and our newer workloads, such as Active Directory and Cleanroom.

Danielle Abrahamson: Now I'll discuss expenses and profitability. This includes Q1 growth margins with 83%, roughly slightly year over year, benefiting from continued SaaS growth margin improvement and the growth in terms of software licenses. This includes Q1 operating expenses increased 15%, to $137 million, including costs associated with our appearance at the RSA Conference, a live in-person sales takeoff event, and higher commissions and bonuses on record revenue. We ended the quarter with approximately 3,000 employees, an increase of 4% sequentially, including strategic resource investments and on-boarding the employees brought over through the Apprannis acquisition. Non-GAP EBIT for Q1 was $48 million, and non-GAP EBIT margins were 21.5%, demonstrating our commitment to a responsible growth philosophy.

Danielle Abrahamson: Now, I'll discuss expenses and profitability. Fiscal Q1 growth margins were 83 percent, roughly flat, year over year, benefiting from continued fast growth margin improvement and growth in term software licenses. Fiscal Q1 operating expenses increased 15% to $137 million, including costs associated with our appearance at the RSA conference, a live in-person sales kickoff event, and higher commissions and bonuses on record revenue. We ended the quarter with approximately 3,000 employees, an increase of 4% sequentially, including strategic resource investments and onboarding the employees brought over through the Appranist Acquisition. Non-GAAP EBIT for Q1 was $48 million, and non-GAAP Moving to some key balance sheet and cash flow metrics, we ended the quarter with no debt and $288 million in cash.

Speaker Change: Now, I'll discuss expenses and profitability.

Speaker Change: Fiscal Q1 growth margins was 83 percent, roughly flat, year over year, benefiting from continued fast growth margin improvement and the growth in term software licenses.

Speaker Change: Fiscal Q1 operating expenses increased 15% to $137 million, including costs associated with our appearance at the RSA conference, a live in-person sales kickoff event, and higher commissions and bonuses on record revenue.

Speaker Change: We ended the quarter with approximately 3,000 employees, an increase of 4% sequentially, including strategic resource investments and onboarding the employees brought over through the Appranix acquisition.

Speaker Change: non-GAAP EBIT for Q1 was $48 million, and non-GAAP EBIT margins were 21.5%, demonstrating our commitment to a responsible growth philosophy.

Danielle Abrahamson: Recipe. Moving to some key balance sheet and cash flow metrics, we ended the quarter with no debt and $288 million in cash. Our Q1 freed cash flow through 16% year over year to $44 million. Reflecting continued growth in SaaS deferred revenue and the strength of our software subscription business, which typically includes upfront payment on multi-year contracts. In Q1, we were purchased $51 million of stock representing 117% of free cash flow. We now have $205 million remaining on our existing share of repurchase authorization.

Speaker Change: Moving to some key balance sheet and cash flow metrics, we ended the quarter with no debt and $288 million in cash.

Danielle Abrahamson: Our Q1 free cash flow grew 16% year-over-year to $44 million, reflecting continued growth in SAS Deferred Revenue and the strength of our software subscription business, which typically includes up-front payments on multi-year contracts. In Q1, we repurchased $51 million of stock, representing 117% of free cash flow. We now have $205 million remaining on our existing share of repurchase authority.

Speaker Change: Our Q1 free cash flow grew 16% year-over-year to $44 million, reflecting continued growth in SAS Deferred Revenue and the strength of our software subscription business, which typically includes up-front payment on multi-year contracts.

Speaker Change: In Q1, we repurchased $51 million of stock representing 117% of free cash flow. We now have $205 million remaining on our existing share of repurchase authorization.

Danielle Abrahamson: Now, I'll discuss our outlook for fiscal Q2 and our improved guidance for fiscal year 25. For fiscal Q2, we expect subscription revenue, which includes both the software portion of term-based licenses and SaaS, to be $120 to $124 million. This represents 25% year-over-year growth at the midpoint. As a result, we expect total revenues to be $218 to $222 million, with a growth of 9% at the midpoint. At these revenue levels, we expect Q2 consolidated growth margins to be in the range of 81 to 82%. We expect Q2 non-gas-evident margin to be in the range of 19 to 20%.

Danielle Abrahamson: Now, I'll discuss our outlook for fiscal Q2 and our improved guidance for fiscal year 25. For fiscal Q2, we expect subscription revenue, which includes both the software portion of term-based licenses and SAS, to be $120 to $124 million. This represents 25% year-over-year growth at the midpoint. As a result, we expect total revenues to be between $218 and $222 million, with a growth of 9% at the midpoint. At these revenue levels, we expect Q2 consolidated growth margins to be in the range of 81 to 82%. We expect Q2 non-gas event margins to be in the range of 19 to 20 percent. Our projected diluted share count for fiscal Q2 is approximately 45 million shares.

Speaker Change: Now, I'll discuss our outlook for Fiscal Q2 and our improved guidance for FY25.

Speaker Change: For Fiscal Q2, we expect subscription revenue, which includes both the software portion of term-based licenses and SAS, to be $120 to $124 million.

Speaker Change: This represents 25% year-over-year growth at the midpoint.

Speaker Change: As a result, we expect total revenues to be $218 to $222 million, with a growth of 9% at the midpoint. At these revenue levels, we expect Q2 consolidated growth margins to be in the range of 81 to 82%.

Speaker Change: We expect Q2 non-gas event margin to be in the range of 19 to 20 percent.

Danielle Abrahamson: Our projected diluted share count for fiscal Q2 is approximately 45 million shares. As you saw in this morning's press release, we have raised our outlook for the full fiscal year 25. We now expect fiscal year 25 total ARR growth of 15% year-over-year. We expect subscription ARR to increase in the range of 23% to 25% year-over-year. From a full year fiscal 25 revenue perspective, we now expect subscription revenue to be in the range of $522 to $527 million, growing 22% year-over-year at the midpoint, with strong contributions from both term-software licenses and SaaS. We now expect total revenue growth to accelerate and be in the range of $915 to $925 million, an increase of approximately 9.5% at the midpoint.

Speaker Change: Our projected diluted share count for fiscal Q2 is approximately 45 million shares.

Danielle Abrahamson: As you saw in this morning's press release, we have raised our outlook for the full fiscal year 25. We now expect fiscal year 25 total ARR growth of 15% year over year. We expect subscription ARR to increase in the range of 23% to 25% year over year. From a full year fiscal 25 revenue perspective, we now expect subscription revenue to be in the range of 522 to 527 million dollars, growing 22% year over year at the midpoint with strong contribution from both term software licenses and FAS.

Speaker Change: As you saw in this morning's press release, we have raised our outlook for the full fiscal year 25.

Speaker Change: We now expect FY 25 total ARR growth of 15% year-over-year. We expect subscription ARR to increase in the range of 23% to 25% year-over-year.

Speaker Change: From a full-year Fiscal 25 revenue perspective, we now expect subscription revenue to be in the range of $522 to $527 million.

Speaker Change: Growing 22% year-over-year at the midpoint, with strong contributions from both term software licenses and SAS.

Danielle Abrahamson: We now expect total revenue growth to accelerate and be in the range of $915 to $925 million, an increase of approximately 9.5% at the mid-term. Moving to our updated full-year fiscal 25 margin, EBIT, and cash flow outlook, we continue to expect growth margins to be in the range of 81.5 to 82.5 percent, inclusive of the accelerating contribution of our FAS FYSB. We also continue to expect non-GAAP EBIT margins to be in the range of 20-21%, inclusive of certain focus investments to continue our revenue momentum.

Speaker Change: We now expect total revenue growth to accelerate and be in the range of $915 to $925 million, an increase of approximately 9.5% at the midpoint.

Danielle Abrahamson: From a free cash flow perspective, we continue to expect full-year free cash flow of at least $200 million. And lastly, we expect to continue with our existing practice of repurchasing at least 75% of our annual free cash flow. As a reminder, for fiscal year 25, we lowered our non-GAAP tax rate from 27% down to 24%. We believe that a 24% rate more closely aligns with our effective tax rate expectations over the next few years.

Danielle Abrahamson: Moving to our updated full year fiscal 25 margin, EBIT, and cash flow outlook, we continue to expect growth margins to be in the range of 81.5 to 82.5%, inclusive of the accelerating contribution of our SaaS business. We also continue to expect non-GAAP EBIT margins to be in the range of 20 to 21%, inclusive of certain focused investments to continue our revenue momentum. From a free cash flow perspective, we continue to expect full-year free cash flow of at least $200 million. And lastly, we expect to continue with our existing practice of repurchasing at least 75% of our annual free cash flow.

Speaker Change: Moving to our updated full-year fiscal 25 margin, EBIT, and cash flow outlook, we continue to expect growth margins to be in the range of 81.5 to 82.5 percent, inclusive of the accelerating contribution of our SAS business.

Speaker Change: We also continue to expect non-GAAP EBIT margins to be in the range of 20 to 21 percent, inclusive of certain focused investments to continue our revenue momentum.

Speaker Change: From a free cash flow perspective, we continue to expect full-year free cash flow of at least $200 million. And lastly, we expect to continue with our existing practice of repurchasing at least 75% of our annual free cash flow.

Danielle Abrahamson: As a reminder, for fiscal year 25, we lowered our non-GAAP tax rate from 27% down to 24%. We believe that a 24% rate more closely aligns with our effective tax rate expectations over the next few years. Given our initial momentum to start fiscal year 25, our updated fiscal year 25 outlook, the current cyber market tailwinds, and our execution momentum in the field, we remain confident that we can deliver on our fiscal 26 ARR aspirations of total ARR of $1 billion. With subscription ARR, representing 90% of total ARR, including an accelerating tax contribution ranging from $310 to $330 million.

Speaker Change: As a reminder, for FY25, we lowered our non-GAAP tax rate from 27% down to 24%. We believe that a 24% rate more closely aligns with our effective tax rate expectations over the next few years.

Danielle Abrahamson: Given our initial momentum to start Fiscal Year 25, our updated Fiscal Year 25 outlook, the current cyber market tailwinds, and our execution momentum in the field, we remain confident that we can deliver on our Fiscal 26 ARR aspirations of total ARR of $1 billion, with subscription ARR representing 90% of total ARR, including an accelerating SAS contribution ranging from $310 to $330 million. For additional details and trends on all of our key metrics, please take time to review our earnings presentation, contained in the Investor Relations section of our website. Operator, you can now open the line for questions.

Speaker Change: Given our initial momentum to start fiscal year 25,

Speaker Change: Our updated fiscal year 25 outlook.

Speaker Change: the current cyber market tailwinds and our execution momentum in the field, we remain confident that we can deliver on our fiscal 26 ARR aspirations of total ARR of $1 billion.

Speaker Change: with subscription ARR representing 90% of total ARR, including an accelerating SAS contribution ranging from $310 to $330 million.

Unknown Executive: For additional details and trends on all of our key metrics, please take time to review our earnings presentation contained in the Investor Relations section of our website.

Speaker Change: For additional details and trends on all of our key metrics, please take time to review our earnings presentation contained in the Investor Relations section of our website. Operator, you can now open the line for questions.

Unknown Executive: Operator, you can now open the line for questions. Thank you.

Operator: Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again. If you are called upon to ask a question and are listening via the loudspeaker on your device, speak up your handset and ensure that your phone is not in mute when asking your question. Again, press star 1 to join the queue. Your first question comes from the line of Aaron Rakers with Wells Fargo. Your line is open.

Unknown Executive: We will not be in the question-and-answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand, enjoying the queue. If you would like to withdraw your question, simply press star one again. If you are called upon to ask a question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not in need when asking your question. Again, press star one to join the queue.

Speaker Change: Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue.

Speaker Change: If you would like to withdraw your question, simply press star 1 again. If you are called upon to ask a question and are listening via loudspeaker on your device,

Speaker Change: please pick up your handset and ensure that your phone is not in mute when asking your question. Again, press star one to join the queue. Your first question comes from the line of Aaron Rakers with Wells Fargo. Your line is open.

Aaron Rakers: Your first question comes from the line of Aaron Rakers with Wells Fargo. Your line is open.

Aaron Rakers: Yeah, thanks. Thanks for taking the question and congrats on the solid results here in the water. Maybe I'll just start by asking, you know, the current macro environment, maybe the deal activity flow, pipeline discussion, and then kind of tied to that.

Aaron Christopher Rakers: Yeah, thanks. Thanks for taking the question. Congratulations on the solid results this quarter.

Aaron Christopher Rakers: Yeah, thanks for taking the question and congrats on the solid results here in the quarter. Maybe I'll just start by asking...

Aaron Christopher Rakers: Maybe I'll just start by asking, you know, the current macro environment, maybe the deal activity flow pipeline, you know, discussion. And then, you know, kind of tied to that, Sanjay, I'd be interested in kind of what you're hearing from customers following the CrowdStrike downage, obviously the cyber resiliency strategy for CommVault. But, you know, curious about what your customer engagements have been like. I know, be it early, but since that outage a week or so ago.

Aaron Christopher Rakers: you know, the current macro environment, maybe the deal activity flow pipeline, you know, discussion, and then, you know, kind of tied to that, you know, Sanjay, I'd be interested in kind of what you're hearing from customers following the CrowdStrike downage, obviously the cyber resiliency strategy for CommVault's resonating, but, you know, curious of what your customer engagements have been like, I know, be it early, but since that outage a week or so ago.

Sanjay Mirchandani: Sandra, I'd be interested in kind of what you're hearing from customers following the CrowdStrike downtime. Obviously, the cyber resiliency strategy for convuls resonating, but curious of what your customer engagements have been like. I know, be it early, but since that outage a week or so ago. Good. Aaron, thanks. Thanks for the question. Good morning. You know, it's been a good quarter because, fundamentally, we're solving a hard problem for our customers with resilience in general, but cyber resilience in particular. And what we're seeing is, you know, the macroeconomic situation is, you know, we're kind of, we're drawing the straight line as it was.

Sanjay Mirchandani: Aaron, thanks. Thanks for the question. Good morning.

Speaker Change: Oh, good.

Sanjay Mirchandani: You know, it's been a good quarter because fundamentally, we're solving a hard problem for our customers with resilience in general, but cyber resilience in particular. And what we're seeing is, you know, the macroeconomic situation is, you know, we're kind of, we're drawing the straight line as it was. And, you know, from the previous quarters, our pipeline looks good.

Sanjay Mirchandani: Aaron, thanks. Thanks for the question. Good morning. You know it's been it's been a good quarter because fundamentally we're solving a hard problem for our customers.

Sanjay Mirchandani: with resilience in general, but cyber resilience in particular.

Sanjay Mirchandani: And what we're seeing is...

Speaker Change: You know, macroeconomic situation is, you know, we're kind of, we're drawing a straight line as it was and, you know, from the previous quarters.

Sanjay Mirchandani: And, you know, from the previous quarters, our pipeline looks good. We're having a lot of conversations with CISOs and CIOs at the same time around resilience. And what the CrowdStrike incident really brought to the fore wasn't so much of a direct line to us and what we do outside of our secure cloud capabilities, ag app protect, which had this been a malicious thing. Customers who have had an offside secure copy, it's bringing up the conversation repeatedly around resilience. And this was not a delicious situation. It was a trusted environment that went wrong. And you need to be resilient to recover from that, just as you would cyber.

Sanjay Mirchandani: We're having a lot of conversations with CISOs and CIOs at the same time around resilience. And what the CrowdStrike incident really brought to the floor wasn't so much of a direct line to us and what we do outside of our secure cloud capabilities, air gap for tech, which has been a malicious thing. Customers would have had an offsite secure copy. It's bringing up the conversation repeatedly around resilience. And, And this was not a malicious situation.

Speaker Change: Our pipeline looks good, we're having a lot of conversations with CISOs and CIOs at the same time around resilience.

Speaker Change: and what the...

Speaker Change: And what the CrowdStrike incident really brought to the floor wasn't so much of a direct line to us and what we do outside of our secure cloud capabilities, AgApp Protect, which had just been a malicious thing, customers would have had an off-site secure copy. It's bringing up the conversation.

Speaker Change: repeatedly around resilience.

Sanjay Mirchandani: It was a trusted environment that went wrong, and you need to be resilient to recover from that, just as you would with cyber. Had it been a cyber situation, we'd still be sort of scrambling, trying to figure out what happened, what our environment looks like, and what do we need to do to fix it? So the conversation around resilience is categorically responding and making a difference.

Speaker Change: And this was not a malicious situation. It was a trusted environment that went wrong, and you need to be resilient to recover from that, just as you would with cyber. Had it been a cyber situation...

Sanjay Mirchandani: Had it been a cyber situation, we'd still be sort of scrambling trying to figure out what happened, what our environment looks like, and what do we need to do to fix it. So the conversation around resilience is categorically resonating and making a difference. Yeah, very good. And then just as a quick follow-up, you know, you mentioned the 127 percent net dollar retention number, and you mentioned good upsell, you know, cross-sell opportunities.

Speaker Change: We'd still be sort of scrambling, trying to figure out what happened, what our environment looks like, what do we need to do to fix it. So the conversation around resilience is categorically resonating and making a difference.

Sanjay Mirchandani: Yeah, very good. And then just as a quick follow-up, I'm, you know, you mentioned the 127% net dollar retention number, and you mentioned good upsell, cross-sell opportunities. I'm curious about Metallic, you know, is there any kind of added commentary or quantification that you could give us in terms of what you're seeing from a cross-sell opportunity perspective as to how that business can continue to grow rapidly?

Speaker Change: And then just as a quick follow-up, you know, you mentioned the 127% net dollar retention number and you mentioned good upsell, you know, cross-sell opportunities. I'm curious with Metallic of, you know, is there any kind of added, you know, commentary or quantification that you could give us in terms of what you're seeing from a cross-sell opportunity perspective as that business continues to grow rapidly?

Sanjay Mirchandani: I'm curious with metallic, you know, is there any kind of added, you know, commentary or quantification that you can give us in terms of what you're seeing from a cross-sell opportunity perspective as that business can continue to grow rapidly. Let me, let me, let me give you a, let me give you a little bit of color, and then Danielle will fill in some numbers for you. What we're seeing is our new workloads, our hybrid workloads growing quite substantially. So, you know, outside of the Office 365 type workloads, we're, you know, we're seeing our secure storage, they're got to protect Active Directory and, you know, our Kubernetes container cloud-based workloads growing handsomely.

Sanjay Mirchandani: Let me give you a little bit of color, and then, Danielle, we'll fill in some numbers for you. What we're seeing is our new workloads, our hybrid workloads, growing quite substantially. So, you know, outside of the Office 365-type workloads, we're seeing our secure storage, AirGad Protect, Active Directory, and, you know, our Kubernetes container cloud-based workloads growing handsomely. That bodes well for us because that shows mission-critical cloud-native applications being backed up and secured in the cloud.

Speaker Change: Let me give you a little bit of color and then Danielle will fill in some numbers for you. What we're seeing is our new workloads, our hybrid workloads growing quite substantially.

Speaker Change: So, you know, outside of the Office 365 type workloads, you know, we're seeing our secure storage, AirGuard Protect, Active Directory, and, you know, our Kubernetes container cloud-based workloads growing handsomely.

Danielle Abrahamson: That's a, that's a, that's a, that's both well for us because that shows mission critical cloud-native applications being backed up and secured in the cloud. We've got over 3,000 customers using Air Gap Protect, which is substantial. Okay. And our, we've talked about threat wise, our threat deception capability, doubling year on year. We've seen Active Directory have a good, get off to a great start. So, we're seeing that, you know, there's a lot of, you know, third of our customers think to have more than one product out of the door. Okay. So there's good traction. I'll add some more color there if you want to.

Danielle Abrahamson: That's a, that's a, that bodes well for us because that shows mission-critical cloud-native applications being backed up and and secured in the cloud. We've got over 3,000 customers using AirGap Protect, which is substantial.

Sanjay Mirchandani: We've got over 3,000 customers using AirGap Protect, which is substantial, okay? And we talked about threat-deception capability doubling year-on-year. We've seen Active Directory get off to a great start, and we're seeing that a third of our customers tend to have more than one product out of the door. Okay, so there's good traction. I'll let Danielle add some more color there if you want.

Danielle Abrahamson: Okay.

Danielle Abrahamson: And we talked about threat-wise, our threat-deception capability doubling year-on-year. We've seen Active Directory get off to a great start. So we're seeing that a third of our customers tend to have more than one product out of the door.

Danielle Abrahamson: Yeah. Thanks, Aaron. Thanks for the question. Good morning.

Danielle Abrahamson: Yeah, yeah, thanks Aaron. Thanks for the question. Good morning.

Danielle Abrahamson: Okay, so there's good traction. I'll let Danielle add some more color there if you want. Yeah, yeah. Thanks, Aaron. Thanks for the question. Good morning.

Danielle Abrahamson: So when we launched our, our Convoc Cloud platform, right, our objective was really to create one unified platform that allowed our customers to easily navigate between their software and their staff offering. And so what that did is it allowed us a natural opportunity to monetize on that navigation. And we really saw, we've really seen the attraction in that in particular about a year ago. Right. We, we saw about called a quarter of our cross cell opportunities, right, coming from out of our expand revenue. That number is closer to a third today. So, we are really seeing the way that customers are buying, changing the way that Sunday spoke about in his opening remarks.

Danielle Abrahamson: So when we launched our CommVault cloud platform, our objective was really to create one unified platform that allowed our customers to easily navigate between their software and their SaaS offerings. And so what that did is it allowed us a natural opportunity to monetize on that navigation. And we really saw, we've really seen the traction on that, in particular, about a year ago, right? We saw about, call it a quarter of our cross-sell opportunities, right? Coming from out of our expanded revenue, that number is closer to a third today. So we are really seeing the way that customers are buying changing the way that Sanjay spoke about in his opening remarks.

Danielle Abrahamson: So when we launched our CommVault cloud platform,

Danielle Abrahamson: Right. Our objective was really to create one unified platform that allowed our customers to easily navigate between their software and their SaaS offering.

Speaker Change: And so what that did is it allowed us a natural opportunity to monetize.

Speaker Change: on that navigation. And we really saw, we've really seen the traction in that, in particular, about a year ago.

Speaker Change: We saw about, call it a quarter of our cross-sell opportunities coming out of our expand revenue. That number is closer to a third today. So we are really seeing the way that customers are buying changing the way that Sanjay spoke about in his opening remarks.

Aaron Christopher Rakers: Very good, thank you guys.

Unknown Executive: Yes. Very good. Thank you, guys. Thank you.

Speaker Change: Very good. Thank you, guys. Thank you.

Howard Ma: Your next question comes from the line of Howard Ma with good and high security. Your line is open.

Speaker Change: Your next question comes from the line of Howard Ma with Guggenheim Securities. Your line is open.

Howard Ma: Great. Thank you.

Howard Ma: Great. Thank you. Sanjay, hats off to you and the team for the strong performance. It looks like a clean print all around.

Howard Ma: And has Sanjay has off to you and the team for the strong performance. It looks like a clean print all around.

Howard Ma: Great, thank you. And Sanjay, hats off to you and the team for the strong performance. It looks like a clean print all around.

Sanjay Mirchandani: I want to ask you about investments in two areas that may be under-penetrated from Convolt. And those are the government vertical and the Asia Pacific region. So convolt cloud recently achieved a fed ramp high authorization. And, as you just mentioned, and you're prepared to march. And you also expanded your partnership with that with Kerosene, targeting at the US intelligence community. And then in Asia Pac, you recently hired a field CTO focus on security in that region.

Sanjay Mirchandani: I want to ask you about investments in two areas that may be underpenetrated for CommVault, and those are the government vertical and the Asia-Pacific region. So, CommVault Cloud recently achieved FedRAMP high authorization, as you just mentioned in your prepared remarks. You also expanded your partnership with Kerasoft, targeting the U.S. intelligence community, and then in AsiaPAC, you recently hired a field CTO focused on security in that region. My question to you is, how impactful are those investments, and should we expect them to bear fruit this year?

Howard Ma: I want to ask you about investments in two areas that may be underpenetrated for CommVault, and those are the government vertical and the Asia-Pacific region. So, CommVault Cloud recently achieved FedRAMP high authorization, as you just mentioned in your prepared remarks.

Speaker Change: You also expanded your partnership with Kerasops, targeting the U.S. intelligence community, and then in AsiaPac, you recently hired a field CTO focused on security in that region. My question to you is how impactful are those investments and should we expect them to bear fruit this year?

Sanjay Mirchandani: So my question to you is: how impactful are those investments, and should we expect them to bear fruit this year? Yeah, we're just to hear from you and thank you for your support. So government federal government governments around the world are a definite area focus. We went through the long journey of getting our technology fed ramp high certified. And you know, we're in a very rarefied space with that certification. Both of our competitors don't even come close on the level of certification that we have. In addition, we're making our technology far easier to obtain and access by being on marketplaces, like the AWS Federal Marketplace, government marketplace that we just announced.

Sanjay Mirchandani: Hey Howard, good to hear from you and thank you for your support. Most of our competitors don't even come close to the level of certification that we have. In addition, we're making our technology far easier to obtain and access by being on marketplaces like the AWS federal marketplace, a government marketplace that we just announced. So, you know, from a safety level and what federal government agencies are looking for, we have it. Access, we're getting there.

Speaker Change: Most of our competitors don't even come close on the level of certification that we have. In addition, we're making our technology far easier to obtain and access by being on marketplaces like the AWS Federal Marketplace, Government Marketplace that we just announced. So, you know, from a...

Sanjay Mirchandani: So, you know, from a safety level and, you know, that federal government agencies are looking for, we have it; access we're getting there, and we're also investing in specialized field resources, as you've observed with our field CTO community, that are deep, deep, deep, deeply rooted in security issues, cyber issues, and can take some of our capabilities from a compliance point of view, and standards point of view to governments around the world. So, it's an active area of investment for us, mostly on the product side, now a little bit on the go-to-market side.

Speaker Change: From a safety level and, you know, that federal government agencies are looking for, we have it.

Sanjay Mirchandani: And we're also investing in specialized field resources, as you've observed with our field CTO community, that are deep, deep, deep, deeply rooted in security issues, cyber issues, and can take some of our capabilities from a compliance point of view and standards point of view to governments around the world. So it's an active area of investment for us, mostly on the product side, now a little bit on the go-to-market side. Okay, so that's kind of how we're thinking about it.

Speaker Change: Access, we're getting there. And we're also investing in specialized field resources, as you've observed, with our field CTO community that are deep, deep, deep, deeply rooted in security issues, cyber issues, and can take some of our capabilities from a compliance point of view and standards point of view to governments around the world. So it's an active conversation.

Speaker Change: [inaudible]

Sanjay Mirchandani: So, that's going to help you think about it. If you've also on the channels, the kerosene sector, that's the go-to-market side that we're enabling and making sure we're close with.

Sanjay Mirchandani: If you look also at the channels, so Carisoft, et cetera, that's the go-to-market side that we're enabling and making sure we're close. In APAC, we are doing some modest growth there. You know, our focus has historically been Asia-Pacific, as it is ANZ, and Australia, New Zealand, Singapore, Southeast Asia, and a little bit in mainland China. That's been our focus area. We're continuing to go deeper. There's a lot of opportunity there, and we're investing there. But it's, again, part of our plan, and it's part of everything we've shared.

Sanjay Mirchandani: On APEC, we are doing some modest growth there. You know, our focus has historically been Asia-Pacific, as it is, A and Zan, and Australian New Zealand, Singapore, you know, Southeast Asia, and a little bit in mainland China. That's been our focus area. We're continuing to go deeper, but just because there's a lot of opportunities to that coming up and we're investing there. So, but it's, again, it's part of our plan, and it's part of everything we've shared, you know, as part of Fiscal Year 25.

Speaker Change: On APAC, we are doing some modest growth there. You know, our focus has historically been Asia-Pacific, as it is ANZ, and

Speaker Change: Australia, New Zealand, Singapore, you know, the Southeast Asia, and a little bit in mainland China. That's been our focus area. We're continuing to go deeper, but there's a lot of opportunity there coming up, and we're investing there. So, but it's, again, it's part of our plan, and it's part of everything we've shared.

Howard Ma: Well, thank you for that added color and I want to ask Danielle as well, I was trying to figure out the strength in subscription and SAS and specifically new term license, at least the way that we tried to back into it, and the question for you is that it makes me wonder, has your gross renewal rate been ticking up, and also, are you benefiting more from one-year subscription renewals this year? Thanks.

Howard Ma: Got it.

Danielle Abrahamson: Well, thank you for that added color, and I want to ask Daniel as well.

Speaker Change: You know, as part of Fiscal Year 25.

Danielle Abrahamson: So, I was trying to figure out the strengths and the description and the facts, and specifically new term license, at least that the way that we try to back into it. And the question for you is that it makes me wonder: has your growth renewal rate, has that been taking up? And also, are you benefiting more from one-year subscription renewals this year? Thanks. Yeah, thanks, Howard. Thanks for the question.

Speaker Change: Got it. Well, thank you for that added color. And I want to ask Danielle as well.

Danielle Abrahamson: So I was trying to figure out...

Danielle Abrahamson: The question for you is that it makes me wonder,

Danielle Abrahamson: Has your gross renewal rate, has that been picking up? And also, are you benefiting more from one year subscription renewals this year? Thanks.

Danielle Abrahamson: Good morning. So, the first thing I want to say, right, that this quarter, Q1, we saw a very balanced contribution from all the items on our subscription line. So, that's our software renewals, our software land expand opportunities, and our staff. When I think about term in particular, and I think I mentioned this in my prepared remarks, we actually saw a 13% growth rate on our large deals on our over $100,000 deals. And much of that was actually driven by volume. So, you mentioned our GRR rate. We are seeing our GRR rate, Springson. So, we are seeing good signs, but I really want to highlight the facts. The success of the quarter really came from that balanced contribution of all those pieces in the subscription line.

Danielle Abrahamson: So, the first thing I want to say, right, is that this quarter, Q1, we saw a very balanced contribution from all the items on our subscription line, right? So that's our software renewals, our software land expansion opportunities, and our staff. When I think about terms in particular, and I think I mentioned this in my prepared remarks, right, we actually saw a 13% growth rate on our large deals, on our over $100,000 deals.

Danielle Abrahamson: Thanks, Howard. Thanks for the questions. Good morning. So, so the first thing I want to say, right, that

Danielle Abrahamson: And much of that was actually driven by volume. So you mentioned our GRR rate. We are seeing our GRR rate strengthen, so we are seeing good signs, but I really want to highlight the fact that the success of the quarter really came from that balanced contribution of all those pieces in the subscription line.

Speaker Change: This quarter, Q1, we saw a very balanced contribution from all the items on our subscription line, right? So that's our software renewals, our software land expanse opportunities, and our staff.

Speaker Change: When I think about term in particular, and I think I mentioned this in my prepared remarks, we actually saw 13% growth rate on our large deals, on our over $100,000 deals.

Speaker Change: And much of that was actually driven by volume.

Speaker Change: You mentioned our GRR rate. We are seeing our GRR rate strengthen, so we are seeing good signs, but I really want to highlight the fact that the success of the quarter really came from that balanced contribution of all those pieces in the subscription line.

Danielle Abrahamson: Great. Thanks so much, Daniel.

Howard Ma: Great. Thanks so much, Danielle.

James Fish: Your next question comes from the line of James Fish with Piper Sandler. Your line is open.

James Edward Fish: Your next question comes from the line of James Fish with Piper Felder. Your line is open.

Speaker Change: Your next question comes from the line of James Fish with Piper Felder. Your line is open.

James Fish: Hey guys, nice quarter there.

James Edward Fish: Hey guys, nice quarter there. I actually want to go back to last quarter a little bit, where you guys had another good quarter and actually that Dell announcement kind of went fairly unnoticed. Just any update on how that relationship has kind of gone out of the gate and sort of the ability to hit milestones from here?

Sanjay Mirchandani: I actually want to go back to last quarter a little bit, where you guys had another good quarter, and actually that Dell announcement kind of was fairly unnoticed. Just any update on how that relationship has kind of gone out of the gate and sort of the ability to hit milestones. from here.

James Edward Fish: Hey guys, nice quarter there. I actually want to go back to last quarter a little bit where you guys had another good quarter and actually that Dell announcement kind of went fairly unnoticed. Just any update on how that relationship has kind of gone out of the gate and sort of the ability to hit milestones from here?

Sanjay Mirchandani: Hey Jim, Sanjay, how are you? So, you know, as we said when we announced it, right around this time last quarter, it was, we said it was a, you know, it was a long-term sort of initiative for us to go after the install base, the Veritas install base, and partner with Dell on their data domain install base. This is a we're going to, you know, we're going to compete until we decide, until the customer decides they want both.

Sanjay Mirchandani: Hey, Jim Sanjay, how are you? So, you know, when we announced it, sort of right around this time last quarter, it was, we said it was a, you know, it was a long-term sort of initiative for us to go after the install base, the various other install base, and partnering with Dell on the day to the main install base. This is a, we're going to, you know, we're going to compete to, we decide that the customer decides they want both of us. So, that's how, you know, that's how it's working.

James Edward Fish: Hey Jim, Sanjay, how are you? So, you know, when we announced it,

Speaker Change: So right around this time last quarter, we said it was a long-term initiative for us to go after the install base, the Veritas install base, and partnering with Dell on their data domain install base.

Speaker Change: This is a, um, we're going to, you know, we're going to compete until we decide, until the customer decides they want both of us.

Sanjay Mirchandani: So that's how it's working. We're in situations where customers want us to come in, want us to do a proof of concept, want us to help them move. We're in the throes of it, and I never expected it to be a 60, 90-day big hit. This is a ramp that is taking out an entrenched sort of installation base that will take a little bit of time, and it's moving exactly the way we'd expect and want it to. So, nothing yet, but more down the road. You will, you know, we will, we will share more data down there.

Sanjay Mirchandani: We're, you know, in situations where customers want us to come in, want us to do a proof of concept, want us to help them move. We're in the throes of it, and I never expected to be a 60, 90 day big hit. This is, this is a ramp that, you know, is, is picking up an insurance sort of install base that will take a little bit of time, and it's moving exactly the way we'd expect and want. So, nothing yet, but, but more down the road, you will, you know, be able to, you know, be able to send more data down the road.

Speaker Change: So, that's how, you know, that's how it's working. We're, you know, in situations where customers want us to come in, want us to do a proof of concept, want us to help them move, we're in the throes of it.

Speaker Change: And I never expected it to be a 60, 90-day big hit. This is a ramp that, you know, is taking up an entrenched sort of install base that will take a little bit of time, and it's moving exactly the way we'd expect and want.

Speaker Change: So nothing yet, but more down the road, we will share more data down the road.

James Edward Fish: Yeah, it makes sense. And Danielle, thanks for all the color and for jumping on a call here with us.

James Fish: Yeah, it makes sense.

James Fish: And then, you know, thanks for all the color, and if we're talking around the call here with us, but, you know, as we think about this fiscal Q2 guide, why the sequential drop on the description, understanding the duration on term deal sits, you know, is getting closer and closer to two years. But if we look back, you know, three years ago, when deals were kind of being signed at three year durations more so, it was, you know, better than down sequentially in the talus bend, you know, actually accelerating.

James Edward Fish: But, you know, as we think about this Fiscal Q2 guide, why the sequential drop in subscriptions, understanding the duration of term deals since, you know, it's getting closer and closer to two years. But if we look back, you know, three years ago, when deals were kind of being signed at three-year durations more so, it was, you know, better than going down sequentially, and metallics were actually accelerating. So I guess, is this just, you know, being prudently conservative? Or is there something on the macro side that you guys are a little bit more cautious on?

Speaker Change: Yeah, it makes sense. And Danielle, thanks for all the color and for jumping on the call here with us.

Speaker Change: You know, as we think about this Fiscal Q2 guide,

Speaker Change: Why the sequential drop on subscription, understanding the duration on term deals since, you know, it's getting closer and closer to two years.

Speaker Change: But if we look back, you know, three years ago, when deals were kind of being signed at three-year durations more so, it was, you know, better than Dow sequentially and Metallic's been, you know,

Danielle Abrahamson: So, I guess, is this just, you know, being prudently conservative, or is there something on the macro side that you guys are a little bit more cautious on?

Speaker Change: actually accelerating. So I guess is this just, you know, being prudently conservative or is there something on the macro side that you guys are a little bit more cautious on?

Danielle Abrahamson: Hi Jim. Yeah, no. Thanks for the question. So I wouldn't say we're being prudently conservative. I mean, you know, we raised our guidance going into Q2, and a lot of that, a lot of what you see is actually the momentum that we're seeing in SAS, right? So there's a couple pieces that go into that subscription line I mentioned, right? The subscription renewals, which we're going into a slightly smaller pool of renewals in Q2, right?

Danielle Abrahamson: Hi Jim, yeah, no, thanks. Thanks for the question. So, I wouldn't say we're being prudently conservative. I mean, you know, we raised our guidance going into Q2. And a lot of that, a lot of what you see is actually the momentum that we're seeing in staff, right? So, so there's a couple pieces that go into that subscription line I mentioned, right? The, the subscription renewal, which we're going into a slightly, we have a slightly smaller renewal pool in Q2, right? So, we're factoring into that. But really, it goes back into the momentum and the capitalization of our staff in that line, right?

Danielle Abrahamson: Hi Jim. Yeah, no, thanks. Thanks for the question.

Speaker Change: Hi, Jim. Yeah, no, thanks. Thanks for the question. So I wouldn't say we're being prudently conservative. I mean, you know, we raised our guidance going into Q2. And a lot of that, a lot of what you see is actually the momentum that we're seeing in staff.

Speaker Change: Right, so there's a couple pieces that go into that subscription line I mentioned, right? The subscription renewals, which we're going into a slightly, we have a slightly smaller renewal pool in Q2, right? So we're factoring into that, but really it goes back into the momentum and the capitalization of SAS in that line, right? And obviously SAS is recognized readily, so we don't see the benefit of that.

Danielle Abrahamson: So we're factoring that in, but really, it goes back to the momentum and the capitalization of SAS in that line, right? And obviously, SAS is recognized readily, so we don't see the benefit of that, you know, in the following quarter, but instead, over time, and I think you can really see that in the growth rate we're seeing in our SAS ARR.

Danielle Abrahamson: And obviously, staff is recognized rapidly, so we don't see the benefit of that, you know, in the following quarter, but instead over time. And I think you can really see that in the growth rate we're seeing in our staff and RR.

Speaker Change: you know, in the following quarter, but instead over time. And I think you can really see that in the growth rate we're seeing in our staff ARR.

Unknown Executive: Thanks, guys.

Unknown Executive: Thanks.

Rudy Kessinger: Again, if you would like to ask a question, press star 1 on your telephone keypad. Your next question comes from the line of Rudy Kessinger with D.A. Davidson. Your line is open.

Speaker Change: Makes sense. Thanks guys.

Unknown Executive: Again, if you would like to ask a question, press star one on your telephone. Keep that.

Speaker Change: Thanks.

Rudy Kessinger: Your next question comes from the line of Rudy Kensen's room with D.A. Davidson.

Speaker Change: Again, if you would like to ask a question, press star 1 on your telephone keypad. Your next question comes from the line of Rudy Kessinger with D.A. Davidson. Your line is open.

Rudy Kessinger: Your line is open. Yeah, thanks for taking the questions in. And I had my congrats with the quarter of these, the net new A or R figures, especially look very, very impressive.

Rudy Kessinger: Hey guys, thanks for taking my questions and I'll add my congratulations to the quarter. The new ARR figures especially look very, very impressive. I know it sounds like you're saying strengthening the quarter was kind of broad-based. I want to maybe narrow it down to two issues. Firstly, cyber resilience. I believe I heard you say you're starting to monetize that. Could you just expand on that? How materially did that contribute in the quarter? Is there any color you can share just on the type of ASP uplifts you're seeing in deals that include some of your cyber resilience products?

Rudy Kessinger: Hey guys, thanks for taking my questions, and I'll add my congrats to the core of these. The new ARR figures especially look very, very impressive.

Rudy Kessinger: I know it sounds like you're saying, frankly, the quarter was kind of broad-based. I want to maybe narrow it one on two issues. Firstly, the side of resilience, I believe, I heard you say you're starting to monetize that. Did you just expand on that? How materially did that contribute in the quarter? And certainly, you can share just on the type of ASD uplift you're seeing in deals that include some of your side of resilience products. Yeah.

Speaker Change: I know it sounds like you're saying...

Speaker Change: Strengthening the Corridor is kind of broad-based. I want to maybe narrow it down to two issues. Firstly, cyber resilience. I believe I heard you say

Speaker Change: You're starting to monetize that. Could you just expand on that? How materially did that contribute in the quarter? Is there any color you can share just on the type of ASD uplift you're seeing in deals that include some of your cyber resilience products?

Danielle Abrahamson: Yeah, thanks, Rudy, for the question. Good morning.

Danielle Abrahamson: Thanks, Rudy, for the question. Good morning.

Sanjay Mirchandani: Maybe I'll start and talk about the quarter, and then I'll hand it over to Tom Jay to talk about what we're seeing in the broader market, right? So we had a material contribution from our cyber resiliency offerings this quarter; in particular, our cyber recovery and our autonomous recovery bundle. And actually, that traction that we saw this quarter is part of what gave us the confidence to raise the guidance for the rest of the year. Sanjay, do you want to talk through? Yeah, so Rudy, the way to think about our cyber resilience, it isn't one skew.

Sanjay Mirchandani: Maybe I'll start and talk about the quarter, and then I'll hand it over to Sanjay to talk about what we're seeing in the broader market, right? So we had a material contribution from our cyber resiliency offerings this quarter, in particular our cyber recovery and our autonomous recovery bundle. And actually, that traction that we saw this quarter is part of what gave us the confidence to raise the guidance for the rest of the year. Sanjay, do you want to talk through this with me? Yeah. So Rudy said,

Speaker Change: Yeah, thanks Rudy for the question. Good morning. Maybe I'll start and talk about the quarter and then I'll hand it over to Sanjay to talk about what we're seeing in the broader market, right?

Speaker Change: So we had a material contribution from our cyber resiliency offerings this quarter in particular our cyber recovery and our autonomous recovery bundle and actually

Speaker Change: That traction that we saw this quarter is part of what gave us the confidence to raise the guidance for the rest of the year.

Sanjay Mirchandani: Rudy, the way to think about our cyber-resilience isn't one SKU; it's an overall platform with CommVault Cloud that delivers services that are integrated. So in other words, a customer using our software, let's say our cyber-resilience SKU, can avail itself of services that are delivered through the cloud through our SaaS-based capabilities like air gap protection or ThreadWise. Okay, so it's an integrated play, and what we're seeing is that the uplift we're getting is customers actually looking at the platform in its entirety for that solution.

Speaker Change: Sanjay, you want to talk through?

Sanjay Mirchandani: It's an overall platform with CommVault Cloud that delivers services that are integrated. So, in other words, a customer using our software, let's say our cyber resilience skew, can avail of services that are delivered through the cloud through our SaaS-based capabilities like AirGap Protect or ThreatWox. Okay, so it's an integrated play, and what we're seeing is that the uplift for getting as the customer is actually looking at the platform and its entirety for that solution. And since we've released the autonomous and cyber resilience skews, which integrates these services, we've seen a marked uplift in the pipeline and, to some level, even in Q1 on the contribution.

Sanjay Mirchandani: Rudy, the way to think about our cyber-resilience, it isn't one SKU, it's an overall platform with CommVault Cloud that delivers services that are integrated. So in other words, a customer using our software, let's say our cyber-resilience SKU.

Sanjay Mirchandani: can avail of services that are delivered through the cloud through our SaaS-based capabilities like AirGap Protect.

Sanjay Mirchandani: or ThreatWatch.

Speaker Change: Okay so it's an integrated play and what we're seeing is what we're seeing is that the uplift we're getting is the customers actually looking at the platform in its entirety for that solution.

Sanjay Mirchandani: And since we've released the Autonomous and Cyber Resilience SKUs, which integrate these services, we've seen a marked uplift in the pipeline and to some level even in Q1 on the contribution. So that's the way to think about it.

Speaker Change: And since we've released the Autonomous and Cyber Resilience SKUs, which integrate these services, we've seen a marked uplift in the pipeline, and to some level even in Q1, on the contribution. So it's, you know, that's the way to think about it.

Sanjay Mirchandani: So that's the way to think about it.

Sanjay Mirchandani: Okay, got it. And I know James just asked about Dell, and it sounds like you sound confident on it. It's working progress.

Speaker Change: Okay, got it. And I know James just asked about Dell and it sounds like, you know, you sound confident on it, but...

Sanjay Mirchandani: We are competitors. We are also collaborators. So it's a relationship that we're building out, and we're excited about it. I think the potential is massive. And the work is going on. The teams are working.

Speaker Change: It's work in progress, we are competitors, we are also collaborators, so it's a relationship that we're building out and we're excited about it. I think the potential is massive and the work is going on, the teams are working.

Sanjay Mirchandani: Well, I guess the broader question, I guess it's going to be just the pace of legacy displacement between Nogale and obviously a couple others. Have you seen any increase in the pace of legacy displacement to the last couple of quarters, or has it been kind of steady state? No, no, we have. We have, you know, but it's ransomware or not resilience. You know, there's a mark focused by boards, by audit committees, and by leadership teams inside companies to say, are we resilient? Do we have the best technology and the best capabilities to protect ourselves? And some of the legacy stuff is incomplete.

Speaker Change: Yeah, I guess the broader question, I guess, is going to be just the pace of legacy displacement between Nodal and obviously a couple others.

Speaker Change: Have you seen any increase in the pace of legacy displacement over the last couple quarters or has it been...

Sanjay Mirchandani: No, no. We have already. We have. You know, whether it's ransomware or it's about resilience, there is a marked focus by boards, by audit committees, by, you know, leadership teams inside companies to say, are we resilient? Do we have the best technology and the best capabilities to protect ourselves? And some of the legacy stuff is incomplete. And so there is a, you know, a big part of our pipeline is the refresh of some of the install bits.

Speaker Change: on the set.

Speaker Change: [inaudible]

Speaker Change: No, no, we have. We have. You know, whether it's ransomware or thought resilience, you know, there is a, there is a mark.

Speaker Change: focused by boards, by audit committees, by, you know, leadership teams inside companies to say, are we resilient?

Speaker Change: Do we have the best technology and the best capabilities to protect ourselves? And some of the legacy stuff is incomplete. And so there is a, you know, a big part of our pipeline is refresh of some of the install – of the install base.

Sanjay Mirchandani: And so there is a big part of pipeline is refresh of some of the install base. That's helpful. Great.

Rudy Kessinger: Thanks.

Speaker Change: Guys, that's helpful. Great. Thanks again.

Michael Melnyk: That concludes our Q&A session.

Operator: All right, that's helpful. Great. Thanks again. That concludes our Q&A session. I will now turn the conference back over to Mike.

Michael John Melnyk: That concludes our Q&A session. I will now turn the conference back over to Mike Melnyk for closing remarks. Ladies and gentlemen, that concludes today's call. Thank you all for joining.

Michael Melnyk: I will now turn the conference back over to Mike Melnick for closing remarks. Thanks to everyone for joining us today. As a reminder, we have a presentation on the Investor Relations website.

Speaker Change: That concludes our Q&A session. I will now turn the conference back over to Mike Melnyk for closing remarks.

Michael John Melnyk: Thanks for everyone for joining us today. As a reminder, we have a presentation on the Investor Relations website. If you have any questions, feel free to reach out to me, and we look forward to seeing you at some upcoming conferences. Thanks very much.

Michael Melnyk: If you have any questions, feel free to reach out to me, and we look forward to seeing you at some upcoming conferences. Thanks very much.

Unknown Executive: Ladies and gentlemen, that concludes today's call. Thank you all for joining.

Speaker Change: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.