Company: CVLT
Filing Date: 2025-07-02
Form Type: CORRESP
Source: 0001169561-25-000062
Chunk: 4

Company: COMMVAULT SYSTEMS INC
Filing Date: 2025-07-02
Form: CORRESP
Chunk 4
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olidated Statements of Operations, page 47

3. We note subscriptions includes revenues from both products (i.e., the software portion of term-based licenses) and services (SaaS offerings). Please tell us the amount of term-based license software revenue included in this line item for each period presented. Also, tell us your consideration to separately present revenue from these products and services pursuant to Rule 5-03(b) of Regulation S-X.

Response:

We respectfully acknowledge the Staff’s comment and the reference to Rule 5-03(b)(1) of Regulation S-X, which requires separate presentation of revenues from products and services where such disaggregation is material and meaningful to investors.

For the fiscal year ended March 31, 2025, approximately 59% of our total revenue was derived from subscription arrangements. Of this amount, 37% was attributable to term-based license revenue (recognized at a point in time) and 22% to SaaS revenue (recognized ratably over time). These two components are currently aggregated within our “Subscription” revenue line item.

We believe this presentation is appropriate based on the following considerations:

• While the timing of revenue recognition differs under ASC 606, the economic substance of both term-based licenses and SaaS offerings is substantially similar. In both cases, customers receive access to our software for a defined subscription period, and neither arrangement conveys ownership or perpetual rights.

• We note that approximately one-third of our subscription customers utilize both term-based licenses and SaaS offerings, reflecting a growing trend toward hybrid deployment models. This overlap is a strategic focus for the Company and a key area of interest for investors, as we believe it reflects deeper customer engagement and long-term value potential.

• At the conclusion of the subscription term, access to the software is terminated unless renewed, regardless of the deployment method (i.e., on-premise vs. cloud-hosted).

• We believe that aggregating these revenues under a single “Subscription” classification provides a more meaningful view of our recurring revenue base and aligns with how management evaluates and communicates performance to investors.

We also considered the Staff speech by Mark Barrysmith, Professional Accounting Fellow in the Office of the Chief Accountant (December 2007), which acknowledged that the basis for separately presenting product and service revenue is a matter of judgment, including consideration of which form of presentation would be most meaningful to investors, provided it is reasonably grounded, consistently applied, and clearly disclosed.

Accordingly, we believe our current presentation complies with Rule 5-03(b)(1