Company: CVLT
Filing Date: 2025-05-05
Form Type: 10-K
Source: 0001169561-25-000034
Chunk: 30

Company: COMMVAULT SYSTEMS INC
Filing Date: 2025-05-05
Form: 10-K
Item: Item 1A
Chunk 30
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 principles generally accepted in the United States.

Generally accepted accounting principles in the United States are subject to interpretation by the Financial Accounting Standards Board, the SEC, and various bodies formed to promulgate and interpret appropriate accounting principles. A change in these principles or interpretations could have a significant effect on our reported financial results, and may even affect the reporting of transactions completed before the announcement or effectiveness of a change.

22

Goodwill represents a portion of our assets and any impairment of these assets could negatively impact our results of operations.

At March 31, 2025, our goodwill had a carrying value of approximately $185.3 million, which represented approximately 17% of our total assets. We test goodwill for impairment at least annually at the reporting unit level, or more often if an event occurs or circumstances change that would more likely than not reduce the fair value of its carrying amount. This qualitative assessment requires us to assess and make judgments regarding a variety of factors which impact the fair value of the reporting unit or asset being tested, including business plans, anticipated future cash flows, economic projections and other market data. Because there are inherent uncertainties involved in these factors, significant differences between these estimates and actual results could result in future impairment charges and could materially impact our future financial results. For additional information on our goodwill impairment testing, see Note 2 of the notes to the consolidated financial statements. Any future impairment of this asset could have a material adverse effect on our results of operations, which may adversely affect the market price of our common stock.

Impairment charges of long-lived assets, including assets held for sale, could adversely affect our financial condition and results of operations.

We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. In January 2023, we reclassified our owned corporate headquarters as assets held for sale. As a result, we evaluated the carrying value of our long-lived assets related to the property and determined that the carrying value of those assets may not be fully recoverable, and as such, recorded an impairment charge of $53.5 million in the fourth quarter of fiscal 2023. We recorded an additional $2.9 million impairment in fiscal 2025 related to changes in the estimated fair value less costs to sell. As of March 31, 2025, the sale has not yet been finalized. 

While classified as held for sale, we may need to reassess the fair value of the building at each of our reporting periods and