It has been about a month since the last earnings report for Commvault Systems (CVLT Quick QuoteCVLT - Free Report) . Shares have added about 11.6% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Commvault due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for CommVault Systems, Inc. before we dive into how investors and analysts have reacted as of late.

CVLT Q1 Earnings Beat Estimates, Revenues Rise Y/Y on SaaS Growth

Commvault reported first-quarter fiscal 2027 non-GAAP earnings of $1.42 per share, up 40.6% year over year. The figure beat the Zacks Consensus Estimate of $1.18 by 20.3%.

Revenues advanced 11.4% to $314.13 million and surpassed the consensus mark by 0.99%. Results benefited from strong SaaS demand, subscription growth and improving profitability. Subscription annual recurring revenues (ARR) increased 22% to $1.05 billion.

CVLT’s Subscription Revenues Maintain Momentum

Subscription revenues increased 16% year over year to $267.03 million and accounted for 85% of total revenues, up from 81% in the prior-year quarter.

Term-based license revenues rose 1% to $110.42 million, while term-based support revenues climbed 18% to $56.06 million. SaaS revenues surged 39% to $100.55 million, crossing the $100 million quarterly threshold for the first time.

Perpetual license revenues increased 19% to $8.70 million. However, perpetual support revenues declined 19% to $25.48 million, while other services revenues fell 7% to $12.93 million.

Commvault’s ARR Growth Reflects SaaS Strength

Subscription ARR reached $1.05 billion, up from $867.31 million a year earlier. CVLT added $39 million in net new subscription ARR during the quarter, driven by continued strength in its SaaS offerings.

SaaS ARR grew 38% to $424.34 million from $306.87 million. The company surpassed 10,000 active SaaS customers, while subscription net dollar retention remained steady at 114%.

Identity resilience and data security offerings represented more than one-third of net new subscription ARR. Emerging SaaS offerings, including Clumio S3 Protection, Google Workspace and Azure DevOps, also recorded strong growth.

CVLT Benefits From Broader Platform Adoption

The percentage of Commvault-managed SaaS customers using at least two products increased to 49% from 42% a year earlier. This reflected continued upselling and cross-selling across the Commvault Cloud Platform.

Management highlighted identity resilience as an important entry point for broader platform adoption. Demand was supported by customers seeking to protect identity systems, govern data access and recover operations following cyber incidents.

Commvault also expanded its relationship with Microsoft. Its cyber-resilience capabilities are expected to become available as a native independent software vendor service on Microsoft Azure, making the platform easier to integrate into Azure-based workflows.

Commvault’s Margins Expand on Operating Leverage

Gross margin reached 82.1% in the reported quarter. SaaS gross margin improved 635 basis points year over year to 70.6%, aided by product optimization, acquisition integration and strategic agreements with hyperscaler partners.

Operating expenses increased 7% to $185 million but declined as a percentage of revenues to 59% from 61% a year earlier. Headcount remained roughly flat year over year.

Non-GAAP EBIT increased to $71.47 million from $58.25 million. The corresponding margin expanded 210 basis points to 22.8%, marking the company’s strongest quarterly EBIT margin performance in more than a decade.

CVLT’s Cash Flow and Balance Sheet Remain Solid

Operating cash flow increased to $51.67 million from $31.68 million in the year-ago quarter. Free cash flow rose 71% to $51.10 million, reflecting stronger collections and continued spending discipline.

Commvault ended the quarter with cash and cash equivalents of $929.84 million, up from $899.99 million at the end of fiscal 2026. During the quarter, the company repurchased roughly 98,000 shares for $10 million.

Management continues to target share repurchases equal to approximately 60% of annual free cash flow while retaining balance sheet flexibility.

Commvault Updates Fiscal 2027 Profit Outlook

For the second quarter of fiscal 2027, subscription revenues are projected between $264 million and $268 million. Total revenues are expected to be approximately $310 million, while the non-GAAP EBIT margin is forecast at about 20%.

For fiscal 2027, CVLT raised its subscription revenue outlook to $1.119-$1.129 billion from $1.115-$1.125 billion. Subscription ARR guidance was maintained at $1.20-$1.21 billion, with SaaS ARR expected to exceed $500 million.

The company continues to expect total revenues of $1.30-$1.31 billion and free cash flow of $250-$260 million. Non-GAAP EBIT margin guidance was increased by 50 basis points to approximately 21%.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a upward trend in estimates review.

VGM Scores

Currently, Commvault has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock has a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Commvault has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Commvault is part of the Zacks Computer - Software industry. Over the past month, SAP (SAP Quick QuoteSAP - Free Report) , a stock from the same industry, has gained 13.8%. The company reported its results for the quarter ended June 2026 more than a month ago.

SAP reported revenues of $11.48 billion in the last reported quarter, representing a year-over-year change of +12.1%. EPS of $1.85 for the same period compares with $1.70 a year ago.

For the current quarter, SAP is expected to post earnings of $2.04 per share, indicating a change of +9.7% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for SAP. Also, the stock has a VGM Score of D.