Company: CVLT
Filing Date: 2025-10-29
Form Type: 10-Q
Source: 0001169561-25-000089
Chunk: 46

Company: COMMVAULT SYSTEMS INC
Filing Date: 2025-10-29
Form: 10-Q
Item: Item 8
Chunk 46
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 minimize the use of unobservable inputs. To measure fair value, we use the following fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable:Level 1 — Observable inputs such as quoted prices in active markets for identical assets or liabilities;Level 2 — Inputs other than Level 1, that are observable for the asset or liability, either directly or indirectly; andLevel 3 — Unobservable inputs that are supported by little or no market activity and that require the reporting entity to develop its own assumptions.The carrying amounts of our cash, cash equivalents, accounts receivable and accounts payable approximate their fair values due to the short-term maturity of these instruments. We held an investment in equity securities of $6,076 as of September 30, 2025, which was valued using the measurement alternative as permitted under ASC 321, Investments - Equity Securities. This investment is included in other assets in the accompanying consolidated balance sheets.There were no financial assets or liabilities measured at fair value on a recurring basis as of September 30, 2025. The following table summarizes the composition of our financial liabilities measured at fair value as of March 31, 2025:Level 1Level 2Level 3TotalContingent consideration$— $— $873 $873 Based on the actual achievement of certain financial metrics as of June 30, 2025, the contingent consideration arrangement related to the acquisition of Appranix, Inc. resulted in final aggregate consideration of $1,855, of which $1,527 was paid in the fourth quarter of fiscal 2025 and $328 was paid during the second quarter of fiscal 2026. The liability, with a fair value of $873 as of March 31, 2025 and classified as a Level 3 investment, was adjusted accordingly, resulting in a $545 reduction in operating expenses on our consolidated statements of operations during the first quarter of fiscal 2026. As the contingent consideration arrangement has been fully settled, no liability remains on our consolidated balance sheets as of September 30, 2025.Financial Instruments for Which Fair Value Is Only DisclosedWe report our financial instruments at fair value with the exception of the Notes. As of September 30, 2025, the estimated fair value of the Notes was $927,090. The fair value was determined based on the quoted price of the Notes in an inactive market on the last trading day of the reporting period and are considered