Commvault Attracts Suitors As Buyout Interest Emerges

Commvault stepped into Friday as an unlikely source of market intrigue after interest from multiple parties pushed the company into sale talks. The company has brought in Goldman Sachs to help review its options, unexpectedly turning a quiet software name into one of the market’s more eligible bachelors. Thoma Bravo is among the firms that have expressed interest, and the stock jumped more than 17% before giving back part of that gain. That is a nice change of pace for a company whose products usually become most important only after something has already gone wrong.

At first glance, the sudden interest looked surprising, but a closer look shows Commvault’s core business has been moving in this direction for some time. In its most recent quarter, Commvault reported record revenue of $314 million, up 19% from a year earlier, while annualized recurring revenue climbed 22% to $1.085 billion. Subscription revenue rose 30% to $206 million, SaaS revenue increased 44% to $87 million, and the company said it now has more than 14,000 subscription customers. That's not the profile of a company fading into obscurity. Commvault kept stacking results, quietly gaining ground while much of the market was busy chasing frothier things.

Commvault sells software that helps businesses protect and recover data across cloud and enterprise environments when cyberattacks, ransomware, system failures, or simple operator error show up to ruin someone’s day. At a time when investors have been more selective about which software names still merit a premium, Commvault has been turning out the kind of recurring-revenue and growth results that still get swiped right. Backup and recovery may not be the sexiest part of tech, but it has a way of becoming everyone’s favorite rebound the minute something catches fire.

There is still no guarantee a deal happens, and the parties involved have declined to comment, so investors are not looking at signatures yet. For now, investors are left with something more useful than pure deal chatter. The company's full-year guidance calls for roughly $1.177 billion to $1.180 billion in revenue, about 18% ARR growth, and a non-GAAP EBIT margin of 19% to 20%. That is a pretty decent place to start. If a deal comes together, that may amplify the story, but Commvault has already shown there was a real business worth noticing underneath all along.

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