What happened
Shares of Commvault Systems (CVLT 1.37%) were down 20% as of 1:45 p.m. EDT on Tuesday after the company delivered disappointing fiscal second-quarter results. Analysts expected it to report $184.8 million in revenue, but actual revenue only reached $177.8 million.
Commvault also missed on earnings, where adjusted earnings per share came in at $0.48, much lower than the consensus estimate of $0.57.
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So what
While the company saw a significant increase in new customers, the results didn't meet management's expectations, either. CEO Sanjay Mirchandani blamed "delayed software opportunities" and industrywide supply shortages, which caused Commvault's customers some difficulty in acquiring new hardware components and associated software orders.
The market also probably didn't like Commvault's softer outlook for the third quarter. But on the bright side, Mirchandani sees the shortfall in revenue as only a temporary issue that doesn't impact Commvault's long-term opportunity.
Now what
Management's guidance calls for fiscal third-quarter revenue to grow 3.7% year over year to $195 million. It also expects operating margin to be between 21% to 22%, representing an improvement over 19.8% in the year-ago quarter.
In the long term, management is optimistic its data management capabilities will lead to more growth. Commvault's Metallic software-as-a-service is growing and contributing more to annualized recurring revenue, which increased 12% year over year in the last quarter.
"We are capturing market share, expanding our footprint with a more comprehensive portfolio, and we believe that we're in prime position with Metallic to meet the changing needs of customers as they navigate their cloud journeys," Mirchandani said during the earnings call.
