Company: CVLT
Filing Date: 2025-10-29
Form Type: 10-Q
Source: 0001169561-25-000089
Chunk: 96

Company: COMMVAULT SYSTEMS INC
Filing Date: 2025-10-29
Form: 10-Q
Item: Item 2
Chunk 96
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 increase in employee compensation and related expenses is primarily driven by additional headcount, including headcount related to acquisitions. 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 $18.9 million, or 29%, driven by an increase of $14.4 million in employee compensation and related expenses, including an increase of $5.4 million in stock-based compensation. In addition, we incurred $1.8 million in legal and consulting expenses in the second quarter of fiscal 2026 as a result of our response to a non-routine security matter that did not occur in the same period in the prior year.

–Depreciation and amortization expense increased $1.2 million, or 31%, driven by the acquisition of intangible assets.

–Restructuring: Our restructuring plan, initiated in the first quarter of fiscal 2026, is intended to optimize our Business Technology organization. Restructuring expenses were $1.7 million for the six months ended September 30, 2025. These charges relate primarily to severance and associated costs from headcount reductions and include $0.5 million of stock-based compensation resulting from modifications to existing awards granted to certain employees impacted by the plan. We anticipate the workforce realignment and identification of planned technology changes will be completed in fiscal 2026, and the remaining activities under the restructuring plan, including the technology transitions, are expected to be completed in fiscal 2027. Restructuring expenses were $5.2 million for the six months ended September 30, 2024 related to a prior restructuring plan that was completed in fiscal 2025.

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.

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–Change in contingent consideration: During the first quarter of fiscal 2026, we recorded a reduction to expense of $0.5 million related to the final achievement under our contingent consideration arrangement related to the acquisition of Appranix, Inc. The arrangement, with final aggregate consideration of $1.9 million, was contingent upon meeting certain financial metrics by June 30, 2025 and could have ranged up to $4.0 million.

Income Tax Expense

Income tax expense was $3.8 million in the six