Company: CVLT
Filing Date: 2025-10-29
Form Type: 10-Q
Source: 0001169561-25-000089
Chunk: 8

Company: COMMVAULT SYSTEMS INC
Filing Date: 2025-10-29
Form: 10-Q
Item: Item 1
Chunk 8
---
2025 for Partner B were less than 10%.Convertible Senior NotesIn September 2025, we issued $900,000 aggregate principal amount of 0% convertible senior notes due 2030 (the “Notes”), which we account for as a liability in their entirety, measured at amortized cost. Debt issuance costs incurred in connection with the issuance of the Notes are reflected in the consolidated balance sheets as a direct deduction from the carrying amount of the outstanding Notes. These costs are amortized using the effective interest rate method over the term of the Notes and are included within interest expense on the consolidated statements of operations.

8

Table of Contents      Commvault Systems, Inc.Notes to Consolidated Financial Statements - Unaudited (continued)(In thousands, except per share data)

Fair Value of Financial InstrumentsFair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for such asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value should maximize the use of observable inputs and 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