Company: CVLT
Filing Date: 2025-01-29
Form Type: 10-Q
Source: 0001169561-25-000007
Chunk: 76

Company: COMMVAULT SYSTEMS INC
Filing Date: 2025-01-29
Form: 10-Q
Item: Item 2
Chunk 76
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 expenses increased $24.4 million, or 27%, driven by an $18.8 million increase in employee compensation and sales commissions associated with increased revenues relative to the same period in the prior year, including an increase of $3.7 million in stock-based compensation. 

–Research and development expenses increased $5.6 million, or 16%, driven by increases in employee compensation and related expenses, including an increase of $1.6 million in stock-based compensation.  The increase in employee compensation and related expenses is primarily driven by additional headcount, including the headcount related to the Appranix and Clumio acquisitions completed in April 2024 and October 2024, respectively. Investing in research and development remains a priority for Commvault and we anticipate continued responsible spending related to the development of our software applications and hosted services.

–General and administrative expenses increased $6.0 million, or 21%, driven by increases in accounting and legal expenses related to the acquisitions of Appranix and Clumio, and increases in employee compensation and related expenses, including an increase of $1.7 million in stock-based compensation, which includes an adjustment for the estimated achievement of certain financial performance goals for PSUs, year over year. 

–Restructuring: Our restructuring plan, initiated in the fourth quarter of fiscal 2024, is intended to enhance customer satisfaction through the reorganization and redesign of our customer success functions. The realignment of the customer success structure aims to optimize operational efficiency and improve continuity for our customers through the pre-sales and post-sales experience. Restructuring expenses were $4.0 million for the three months ended December 31, 2024. These charges relate primarily to severance and related costs associated with headcount reductions. These expenses included $0.3 million of stock-based compensation related to modifications of existing awards granted to certain employees impacted by the plan. We anticipate the restructuring plan will be completed by the end of fiscal 2025. There were no restructuring expenses in the three months ended December 31, 2023.

Risks associated with our restructuring plan include additional unexpected costs, adverse effects on employee morale and the failure to meet operational and growth targets due to the loss of key employees, any of which may impair our ability to achieve anticipated results of operations or otherwise harm our business.

–Depreciation and amortization expense increased $1.2 million, driven by the acquisition of intangible assets in fiscal 2025. 

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–Change in contingent consideration: During