Company: CVLT
Filing Date: 2025-05-05
Form Type: 10-K
Source: 0001169561-25-000034
Chunk: 78

Company: COMMVAULT SYSTEMS INC
Filing Date: 2025-05-05
Form: 10-K
Item: Item 8
Chunk 78
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 transactions and balances have been eliminated in consolidation.Use of EstimatesThe preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles ("GAAP") requires management to make judgments and estimates that affect the amounts reported in our consolidated financial statements and the accompanying notes. We base our estimates and judgments on historical experience and on various other assumptions that we believe are reasonable under the circumstances. The amounts of assets and liabilities reported in our balance sheets and the amounts of revenues and expenses reported for each of the periods presented are affected by estimates and assumptions, which are used for, but not limited to, the accounting for revenue recognition, income taxes and related reserves, deferred commissions, purchased intangible assets and goodwill. Actual results could differ from those estimates.RevenueWe account for revenue in accordance with Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers ("ASC 606"). We record revenue net of sales tax. For a further discussion of our accounting policies related to revenue, see Note 3 of the notes to the consolidated financial statements. Accounting for Stock-Based CompensationRestricted stock units and performance stock units without a market condition are measured based on the fair market values of the underlying stock on the date of grant. Performance stock units with a market condition are measured using a Monte Carlo model. We recognize stock-based compensation expense using the straight-line method for all stock awards that do not include a market or performance condition. Awards that include a market or performance condition are expensed using the accelerated method.Software Development CostsThe costs for the development of new products and substantial enhancements to existing products are expensed as incurred until technological feasibility has been established, at which time any additional costs would be capitalized in accordance with the accounting guidance for software. Because our current process for developing software is essentially completed concurrently with the establishment of technological feasibility, which occurs upon the completion of a working model, no costs have been capitalized for any of the periods presented.

51

Commvault Systems, Inc. Notes to Consolidated Financial Statements — (Continued) (In thousands, except per share data) 

Advertising CostsWe expense advertising costs as incurred. Advertising expenses were $10,841, $8,514 and $8,663 for the years ended March 31, 2025, 2024 and 2023, respectively. Accounting for Income Taxes We account for income taxes in accordance with ASC Topic 740, Income Taxes ("ASC 740"). The provision for income taxes and effective tax rates are calculated by legal entity and jurisdiction and are based on