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# Commvault CFO Defends A Modest Guidance Raise After A Bigger First-Half Beat
- URL: https://www.bullished.co/commvault-cfo-defends-a-modest-guidance-raise-after-a-bigger-first-half-beat-ff2e62b7/
- Published: 2026-10-27T13:52:39.000Z
- Updated: 2026-10-27T13:52:39.000Z
- Description: Gary Merrill says the outlook is built on numbers the company is "comfortable with," and management will revisit it after the third quarter.
- Author: Matteo Parrino
- Tags: Earnings, CVLT, Industry: Technology

[Commvault](https://www.bullished.co/tag/cvlt/)'s chief financial officer, Gary Merrill, defended the size of the company's full-year outlook raise on Tuesday's earnings call, after a KeyBanc analyst pointed out that the first-half beat was bigger than the increase. Commvault, which makes software that helps large organizations protect their data and recover after cyberattacks and outages, now [guides full-year subscription ARR](https://www.prnewswire.com/news-releases/commvault-announces-second-quarter-fiscal-2027-financial-results-302919987.html?ref=bullished.co) to $1.205 billion to $1.215 billion.

## The analyst's math

The KeyBanc analyst said Commvault beat cumulatively by about $10 million or $11 million on subscription annual recurring revenue (ARR) in the first half, on a constant-currency basis. Yet the company raised the full-year figure by only about $8 million. The analyst asked why the second-half guidance did not rise more, while allowing that he might be splitting hairs.

Merrill called it a fair question. He said he and CEO Sanjay Mirchandani aim to give guidance the company is "comfortable with not only hitting but achieving."

## What the second half assumes

Merrill said Commvault added a little over $90 million of net new ARR in the first half on a constant-currency basis. The raised guidance assumes a little over $100 million in the second half. He called that a foundation, with "many more" the company is working toward.

The raised guidance implies about $195 million of net new subscription ARR for the year, Merrill said. He expects SaaS ARR to exceed $500 million by year-end. Merrill said the midyear point is the best time to revisit guidance, and management will look again at the end of the fiscal third quarter.

## The quarter behind the outlook

For the second quarter, Mirchandani said subscription ARR grew 20% to [$1.104 billion](https://seekingalpha.com/news/4657800-commvault-systems-non-gaap-eps-of-1%5F38-beats-by-0%5F14-revenue-of-312%5F39m-beats-by-2%5F11m?ref=bullished.co) and SaaS ARR grew 35% to $454 million. Subscription revenue rose 21% to $269 million, and free cash flow was $71 million.

Merrill said full-year free cash flow is now guided to [$255 million](https://www.prnewswire.com/news-releases/commvault-announces-second-quarter-fiscal-2027-financial-results-302919987.html?ref=bullished.co) to $265 million, with non-GAAP EBIT margins of 21.0% to 21.5%. Asked about margins beyond this year, he said the company has not yet given guidance for next year and will update in about a quarter. Commvault's SHIFT conference runs November 10 to 12 in Nashville.

Management has said it will take another look at guidance after the fiscal third quarter.

### Sources

- [Commvault 2Q Profit, Revenue Rise as AI Drives Demand for Data Recovery, Identity Protection](https://www.marketwatch.com/story/commvault-2q-profit-revenue-rise-as-ai-drives-demand-for-data-recovery-identity-protection-6401bf11?ref=bullished.co) — MarketWatch
- [Commvault: Fiscal Q2 Earnings Snapshot – WTOP News](https://wtop.com/national/2026/10/commvault-fiscal-q2-earnings-snapshot/?ref=bullished.co) — wtop.com
- [CommVault Systems Non-GAAP EPS of $1.38 beats by $0.14, revenue of $312.39M beats by $2.11M (CVLT:NASDAQ) | Seeking Alpha](https://seekingalpha.com/news/4657800-commvault-systems-non-gaap-eps-of-1%5F38-beats-by-0%5F14-revenue-of-312%5F39m-beats-by-2%5F11m?ref=bullished.co) — seekingalpha.com
- [Commvault Announces Second Quarter Fiscal 2027 Financial Results](https://www.prnewswire.com/news-releases/commvault-announces-second-quarter-fiscal-2027-financial-results-302919987.html?ref=bullished.co) — prnewswire.com

### More on Commvault

- [Commvault CEO: 'The Days Of Saying I Have A Backup Are Long Gone'](https://www.bullished.co/commvault-ceo-the-days-of-saying-i-have-a-backup-are-long-gone-7d68d5f6/)
- [Commvault Net Income Nearly Doubles To $29.1 Million As Subscription Revenue Climbs 21%](https://www.bullished.co/commvault-net-income-nearly-doubles-to-29-1-million-as-subscription-revenue-climbs-21-f3fa09ad/)

[All Commvault (CVLT) coverage →](https://www.bullished.co/tag/cvlt/)