Company: CVLT
Filing Date: 2025-07-02
Form Type: CORRESP
Source: 0001169561-25-000062
Chunk: 1

Company: COMMVAULT SYSTEMS INC
Filing Date: 2025-07-02
Form: CORRESP
Chunk 1
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 used in managing the business within the management’s discussion and analysis of financial condition and results of operations (MD&A), we have reassessed our disclosures. We understand that when such metrics are material to an understanding of our performance or future results, they should be included in our periodic reports, along with a clear definition, the method of calculation, and an explanation of why management believes the metric provides useful information to investors.

In response to the Staff’s comment, we plan to include the following disclosures in our MD&A beginning with our next Form 10-Q:

We monitor the following key performance indicators to help evaluate the state of our business. We believe the below metrics are material to investors to understand the growth and performance of our business, as they help normalize certain variable factors. Metrics such as Annual Recurring Revenue (ARR), Subscription ARR, SaaS ARR and SaaS Net Dollar Retention (SaaS NRR) provide a consistent view of our recurring revenue profile. ARR, Subscription ARR, and SaaS ARR exclude non-recurring elements and reflect the annualized value of active contracts, while SaaS NRR measures net expansion within our existing customer base. Together, we believe these metrics offer meaningful insight into the health and trajectory of our recurring revenue streams.

[Charts including current fiscal period and prior year fiscal period for ARR, Subscription ARR, SaaS ARR and SaaS Net Dollar Retention to be added to disclosure.]

Annual Recurring Revenue (ARR): ARR represents the annualized recurring value of all active contracts at the end of a reporting period. It includes recurring subscription offerings (including term licenses, SaaS, and utility software), maintenance related to perpetual and term licenses, extended maintenance contracts (enterprise support), and managed services. It excludes non-recurring elements such as perpetual licenses and professional services which are typically delivered at a point in time. ARR is calculated by dividing the total contract value by the number of days in the contract term and multiplying by 365. We believe ARR is a valuable metric for evaluating the growth of our business, as it provides a normalized view of recurring revenue by excluding the variability associated with contract term lengths and omitting contracts that are not expected to renew.

Subscription ARR: Subscription ARR includes only term licenses, SaaS, and utility software arrangements, calculated using the same methodology as ARR. We believe Subscription ARR provides meaningful insight into the growth of our subscription-based offerings by reflecting both new customer acquisition and expansion within our existing customer base. As our most strategically significant and rapidly expanding revenue stream, subscription revenue is central to our long-term growth