Company: CVLT
Filing Date: 2025-01-29
Form Type: 10-Q
Source: 0001169561-25-000007
Chunk: 61

Company: COMMVAULT SYSTEMS INC
Filing Date: 2025-01-29
Form: 10-Q
Item: Item 8
Chunk 61
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 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 the three months ended December 31, 2024, we recorded an expense of $2.5 million related to changes in the estimated fair value of our contingent consideration arrangement. The arrangement is contingent upon meeting certain financial metrics by June 30, 2025 and can range up to $4.0 million. 

Interest Income 

Interest income increased $0.2 million, from $1.4 million in the three months ended December 31, 2023 to $1.6 million in the three months ended December 31, 2024, primarily as a result of the amount of invested funds subject to interest income.

Income Tax Expense

Income tax expense was $4.1 million in the three months ended December 31, 2024 compared to expense of $5.2 million in the three months ended December 31, 2023. The decrease in income tax expense compared to the same period in the prior year relates primarily to the recognition of deferred tax assets that were not recognized in prior years due to the Company’s valuation allowance, as well as windfalls from stock compensation.

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Nine months ended