CommVault Systems (CVLT) Stock Forecast & Price Target

CommVault Systems Inc. demonstrated significant growth in its financial performance, exiting Q2 2026 with a Total Annual Recurring Revenue (ARR) of $1.04 billion, marking a 22% increase year-over-year. The company also reported a healthy uptick in subscription ARR, which grew 30% to reach $894 million, driven by a substantial 56% increase in SaaS ARR and a stable net revenue retention rate of 125%. With expectations for continued ARR growth of 18%-19% and a solid trajectory in term software volume and new customer additions, CommVault is positioned favorably for future growth in the data and information management sector.

CommVault Systems Inc reported solid second-quarter results with revenue and annual recurring revenue exceeding guidance; however, the company experienced a contraction in term duration, resulting in a missed target for subscription revenue. The decline in term license revenue, which traditionally boasts high margins, was attributed to a 9% quarter-over-quarter reduction in average term duration, further exacerbated by a shift toward lower-margin SaaS subscriptions. Additionally, the company's gross margin contracted by 170 basis points, with a non-GAAP gross margin of 80.6%, below expectations, indicating potential challenges in maintaining profitability as the firm invests for growth amidst these unfavorable trends.