COMMVAULT SYSTEMS INC
For the period ended Mar 31, 2026. Filed May 11, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2026 · Filed May 11, 2026
CVLT$166.21+5.0%Stored close · as of Nov 9, 2026
What changed in Risk Factors?
Read the current filingPrevious report: 10-K
Period ended 2025-03-31; filed 2025-05-05.
0001169561-25-000034
Item 1A. Risk FactorsCurrent report: 10-K
Period ended 2026-03-31; filed 2026-05-11.
0001169561-26-000017
Item 1A. Risk FactorsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 157 previous paragraphs and 164 current paragraphs.
37 unchanged; 62 reworded; 65 added; 57 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 1 previous and 1 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (65)
Current report
Many of our competitors have significantly greater financial, technical, sales, and marketing resources than we do, as well as larger installed customer bases and greater brand recognition. These competitors may be better positioned to respond more quickly to new or evolving technologies, customer requirements, and industry standards, or to devote greater resources to the development, promotion, sale, and support of their products. Competition in our industry is influenced by a number of factors, including product functionality, performance, and integration; breadth of platform and workload coverage; ability to invest and scale; pricing and total cost of ownership; global sales infrastructure; quality of technical support; brand recognition and reputation; and the ability to address customers’ evolving cyber resilience requirements. If we are unable to compete effectively across these factors, our competitive position could weaken, and we could experience reduced revenue, margin pressure, or loss of market share, which could adversely affect our business, results of operations, and financial condition.
Current report
In addition, it is often costly and time-consuming for customers to replace existing cyber resilience systems. Most of our prospective and newly adopted customers have previously implemented competing solutions, which may provide incumbent vendors with advantages in retaining those customers due to existing familiarity with customer environments, data architectures, and operational requirements. Some customers may be reluctant to incur the cost, complexity, or operational risk associated with switching vendors, which could limit our ability to win new customers or expand within existing customer environments.
Current report
We also face competitive risks related to the ongoing transition within the industry from traditional on‑premises solutions to cloud‑based and SaaS delivery models. While we have substantially completed our transition from a perpetual licensing model to a subscription‑based model delivered through term‑based licenses or SaaS, certain competitors have operated under cloud‑native models for longer periods. Differences in deployment models, customer adoption rates, infrastructure requirements, and pricing expectations may adversely affect our ability to compete in certain segments or use cases.
Current report
Competition may further intensify as we expand into new markets, as existing competitors broaden their product offerings, and as new competitors enter the market. We also expect increased competition as a result of industry consolidation, including from OEMs, systems and network management companies, and other market participants that may leverage acquisitions, bundled offerings, or established customer relationships to compete with our solutions. Increased competition could result in pricing pressure, reduced margins, loss of market share, or reduced demand for our products, any of which could adversely affect our business, results of operations, and financial condition.
Current report
In addition, the highly competitive nature of the cyber resilience industry makes it challenging to attract and retain skilled employees. Our ability to compete successfully depends, in part, on our ability to hire and retain qualified personnel, and increased competition for talent could increase our costs or adversely affect our ability to execute our business strategy.
Current report
We rely significantly on indirect sales channels for the marketing and distribution of our products and services, including value-added resellers, system integrators, corporate resellers, distributors, OEMs, and marketplace partners. Our resellers represent our most significant distribution channel. Our agreements with resellers are generally non-exclusive, are typically renewed annually, do not contain minimum sales commitments, and, in many cases, may be terminated by either party without cause. In addition, many of our resellers sell data protection and cyber resilience solutions that compete with our offerings. As a result, these resellers may allocate greater resources or prioritize competing products or services, or may discontinue or reduce promotion of our solutions. If a significant number of resellers or certain resellers were to discontinue or materially reduce their sales efforts on our behalf, prioritize competing products, or fail to comply with the terms of their agreements, our business, results of operations, financial condition, and reputation could be adversely affected. In addition, if we fail to effectively manage our reseller relationships, including conflicts among resellers or performance expectations, our sales and operating results could suffer.
Current report
A portion of our future growth depends on our ability to identify, attract, and retain new resellers. Our competitors also use reseller and partner-based arrangements and may be more successful in recruiting partners or entering into exclusive or more favorable arrangements, which could limit our ability to expand or maintain our reseller network. Failure to maintain or expand our network of resellers could impair our ability to grow revenues.
Current report
Further, we have non-exclusive distribution agreements with certain partners that manage portions of our reseller ecosystem and facilitate broader distribution of our solutions. One such partner ("Partner A") accounted for approximately 32%, 35% and 36% of our total revenues for the years ended March 31, 2026, 2025 and 2024, respectively. Separately, a second partner ("Partner B") accounted for approximately 11% of our total revenues for the year ended March 31, 2026. Total revenues for the years ended March 31, 2025 and 2024 for Partner B were less than 10%. If any of these partners were to discontinue or materially reduce their sales of our solutions, terminate their agreements with us, or experience operational or financial difficulties, and if we were unable to effectively replace them or assume management of the affected distribution activities, our business, results of operations, and financial condition could be materially adversely affected.
Current report
Our OEM partners sell and integrate our solutions as part of their offerings and represent a material source of our revenues. These partners have no obligation to sell systems incorporating our solutions, meet minimum sales targets, or recommend our solutions on an exclusive basis, and may terminate their relationships with us at any time. We do not control the timing, shipping expectations, volume, or pricing of systems sold by OEM partners, and in some cases OEM partners may choose to develop or promote competing solutions. In addition, if one OEM partner perceives our relationship with another OEM as competitive, it may decide to reduce or cease its relationship with us. Any material decline in OEM‑related sales could adversely affect our business, revenues, results of operations, and financial condition.
Current report
We also sell our solutions through cloud-based marketplace offerings operated by third-party platform providers. Marketplace providers generally act as agents in these transactions and have no obligation to promote, recommend, or continue to offer our solutions, and may change platform policies, pricing structures, or technical requirements in ways that are unfavorable to us. These transactions include sales to both new and existing customers and may include new purchases, software renewals, expansions by existing customers, and subscriptions for both on‑premise and SaaS offerings. Our inability to effectively compete or maintain visibility within marketplace channels could adversely affect our sales and operating results.
Current report
If we are unable to price our solutions competitively, manage costs associated with delivering our offerings, or maintain the scope and duration of customer subscriptions and support agreements, our business, results of operations, and financial condition could be adversely affected.
Current report
A significant portion of our revenues is derived from subscription arrangements, including term‑based software licenses, associated term‑based support for those licenses, and SaaS arrangements. These arrangements are generally priced in a competitive market and are subject to ongoing pricing pressure from competitors, customer budget constraints, and evolving customer expectations, particularly as customers transition from traditional on‑premises deployments to cloud‑based and SaaS delivery models.
Current report
At the end of an initial or renewal term, customers may elect not to renew, renew for shorter contract durations, reduce the number of workloads, users, or other subscription units, migrate to lower‑cost configurations, or seek concessions related to pricing or contract terms. These outcomes may be driven by competitive offerings, customer cost‑optimization initiatives, broader economic conditions, or changes in customers’ technology strategies. Any such changes could adversely affect our revenues, margins, and long‑term growth prospects.
Current report
Our ability to compete effectively on pricing and contract terms may be further affected by our cost structure, including costs associated with delivering SaaS offerings. As we continue to support hybrid, multi‑cloud, and SaaS deployment models, we incur ongoing infrastructure, hosting, security, and operational costs that may increase over time due to changes in usage patterns, cloud service pricing, or other factors beyond our control. If we are unable to manage these costs effectively or offset them through pricing, operational efficiencies, or volume growth, our margins and profitability could be adversely affected.
Current report
Our reliance on interoperability with third‑party platforms, operating systems, cloud environments, and hardware products, as well as ongoing supply chain constraints, could adversely affect our product development, customer satisfaction, and results of operations.
Current report
Our solutions are designed to interoperate with certain third-party operating systems, cloud platforms, applications, and hardware products that are developed, controlled or distributed by others. These include widely used operating systems such as Windows, UNIX, Linux and other platforms, as well as database technologies, cloud infrastructure services, and hardware products offered by numerous manufacturers. Our ability to deliver and support our solutions depends in part on the continued interoperability of our products with these third‑party technologies.
Current report
When new or updated versions of operating systems, cloud platforms, applications, or hardware products are introduced, or when existing third‑party technologies are modified, we may be required to devote significant time, engineering effort, and financial resources for continued compatibility. We may not be able to complete these development efforts in a timely or cost‑effective manner, or at all. In addition, third parties may make changes to their products, platforms, or commercial terms that degrade the functionality of our solutions, limit our ability to support certain configurations, or require us to make unplanned investments to maintain interoperability.
Current report
Our reliance on third‑party hardware products, particularly for our on-premise license solutions, also exposes us to risks associated with global supply chain disruptions, including increased hardware costs, limited product availability and extended lead times. We provide demand forecasts to our supply chain partners, and if those forecasts prove inaccurate, we could incur or experience delays in fulfilling customer orders. Industry‑wide supply constraints, inflationary pressures, logistics disruptions, or changes in supplier priorities could result in delays in hardware availability or increased costs that are passed on to customers. These conditions may impact our ability to deliver integrated solutions, support certain customer deployments, or meet customer expectations for implementation timelines, which could adversely affect customer satisfaction, demand for our solutions, or our competitive position.
Current report
In addition, uncertainties in the availability, pricing, or performance characteristics of third‑party hardware and infrastructure components may complicate customer purchasing decisions or delay customers’ adoption or expansion of cyber resilience solutions. These risks may be heightened during periods of elevated demand, geopolitical instability, trade restrictions, or other factors beyond our control that affect the global technology supply chain. If we are unable to maintain effective interoperability with third‑party platforms and hardware products, respond adequately to supply chain disruptions, or absorb or pass through increased costs associated with these dependencies, our product development efforts, sales, results of operations, and overall business could be materially adversely affected.
Current report
As a global company, we are exposed to risks arising from uncertainty in domestic and international economic and geopolitical conditions, including changes in trade policy, tariffs and international trade agreements. Actions by the U.S. government or foreign governments, including the imposition of new or increased tariffs or other trade restrictions, could disrupt global supply chains, increase costs, or negatively affect economic conditions in the United States or other markets in which we operate. The scope, timing and impact of such actions remain uncertain and could adversely affect our international operations and financial performance.
Current report
Broader macroeconomic volatility, including inflationary pressures, foreign exchange fluctuations, reduced capital spending, and tightening credit conditions, may cause customers to delay, reduce, or cancel technology investments. These conditions may lengthen sales cycles, increase pricing and negotiation pressure, and make it more difficult for customers, partners, and us to plan and forecast business activity. Increased volatility in foreign currency markets may also adversely affect our results of operations.
Current report
Deterioration in economic conditions in regions where we operate could also result in delayed or reduced customer orders, cancellations, or slower collections on accounts receivable. Our accounts receivables are generally unsecured, and our customers and partners are typically permitted to pay within a specified period following delivery of our solutions. Adverse economic or geopolitical conditions, whether domestic or international, including economic downturns, financial market instability or geopolitical conflicts such as those in the Middle East, and Russia-Ukraine, may impair the liquidity or financial condition of our customers or partners. As a result, customers or partners may delay payments, fail to meet payment obligations, or seek to renegotiate payment terms, which could increase bad debt expense or reduce operating cash flows.
Current report
A significant portion of our revenues is derived from subscription-based and term-based arrangements under which customers may pay over extended periods. A portion of our receivables also consists of unbilled receivables related to revenue recognized in advance of invoicing. These amounts may be subject to extended collection periods and increase our exposure to credit risk, particularly during periods of economic volatility. If customers experience financial difficulty or delay payments, we may experience increased collection risk, higher write-offs, or reduced operating cash flows.
Current report
If global economic conditions worsen or recover more slowly or unevenly than expected, we may not be able to sustain historical growth rates, our business, results of operations and financial condition could be adversely affected, and we may not meet the expectations of analysts or investors, which could cause the market price of our common stock to decline.
Current report
Our sales cycles, especially for larger enterprise and public sector customers, are often lengthy and complex and require significant commitments of time, expense and management resources. These customers typically conduct extensive evaluations, require multiple levels of approval, and may involve formal procurement processes. In many cases, we must invest significant time and resources before a purchasing decision is made, and there is no assurance that these efforts will result in a sale.
Current report
Our sales cycles are subject to risks and delays largely outside of our control, including customers’ budgetary constraints and cycles, internal approval processes, customers’ willingness or ability to replace existing solutions, and the expiration timing of customers’ current contracts. As a result, sales opportunities may be delayed, reduced in scope, or not consummated, even after we have incurred significant sales and marketing expenses.
Current report
To support our SaaS offerings and cloud-based delivery model, we have made, and expect to continue to make, substantial investments and incur ongoing costs related to infrastructure, hosting, security, availability, and operations. As we expand and enhance our SaaS offerings, we continue to invest in technology and platform infrastructure to support customer demand and deliver competitive products. A portion of these costs is associated with long‑term or minimum‑commitment arrangements with third‑party cloud service providers, which may limit our ability to reduce expenses in response to changes in demand.
Current report
Demand for our SaaS offerings may be affected by factors such as customer acceptance, pricing sensitivity, competition, economic conditions, data security and privacy, technological challenges, or changes in customer spending priorities. If demand for our SaaS offerings declines, grows more slowly than expected, or shifts toward lower‑cost usage models, we may not be able to fully realize the anticipated benefits of our infrastructure investments. In addition, if the costs of operating our SaaS offerings increase due to changes in usage patterns, storage requirements, network bandwidth, or third-party cloud pricing, and we are unable to offset those increases through pricing, operational efficiencies, or scale, our business, results of operations, and financial condition, including gross margins, could be adversely affected.
Current report
Our solutions operate across diverse customer environments that include multiple hardware platforms, operating systems, IT infrastructures, and third-party applications. Despite extensive testing, errors, defects, or failures may be discovered after general availability or in connection with new product releases, particularly in customer environments that include unique or non-standard configurations difficult to replicate during testing. Material errors, defects, or vulnerabilities within our solutions could result in delayed deployments, service disruptions, increased remediation or support costs, customer dissatisfaction, loss of revenue, or reduced adoption of our solutions. Defects or vulnerabilities could also expose our solutions to exploitation by malicious actors, further increasing risks . Any failure to promptly detect or remediate these issues could materially adversely affect our business, results of operations, financial condition, and reputation.
Current report
Successful use of our solutions also depends on proper configuration, implementation, training, and ongoing management. Implementations may be technically complex, and it may not be easy to maximize the value of our products without proper implementation, training, and support. Some customers or partners have experienced, or may experience in the future, difficulties implementing or operating our solutions effectively. Failure to properly implement or use our solutions could reduce their effectiveness, expose customers to increased operational or data security risk, including exploitation by malicious actors, and impair customers' ability to achieve intended cyber resilience outcomes. Such failures could result in customer dissatisfaction, reduced renewal or expansion opportunities, or reputational harm, which could adversely affect our business, results of operations, and financial condition.
Current report
Our services include the implementation and design of solutions to meet our customers’ data protection requirements and the efficient deployment of our solutions. Our customers depend on us to resolve issues relating to our solutions. If we or our partners do not effectively install or deploy our solutions, or fail to help our customers quickly resolve support issues, customers may not realize the expected value of our solutions. Failure to provide high‑quality customer support or professional services could result in customer dissatisfaction, reduced renewals or expansion opportunities, or reputational harm. Any such outcomes could adversely affect our business, results of operations, and financial condition.
Current report
A portion of our revenue is generated by sales to government entities, which are subject to unique risks that could adversely affect our business.
Current report
We derive a portion of our revenue from sales to federal, national, state, local, and other government entities, and we may seek to expand such sales in the future. Demand from government customers may be affected by budgetary constraints, shifts in spending priorities, regulatory requirements, and funding authorization, which may be unpredictable and subject to delay. Selling to government entities is often highly competitive, time‑consuming, costly, and may require significant upfront investment without assurance of success. Government customers may also require contract terms that differ from our standard commercial terms, including termination and audit rights, security clearance requirements, and certification or authorization obligations, such as FedRAMP requirements. Compliance with these requirements may increase costs, limit operational flexibility, or delay or restrict our ability to compete for or deliver our solutions to certain government customers.
Current report
Government demand for our solutions may be more volatile and less predictable than commercial demand. Changes in government procurement practices, funding levels, workforce priorities, or administrative initiatives could reduce, delay, or cancel purchases of our solutions, which could adversely affect our business, results of operations, and financial condition.
Current report
We could experience financial or operational setbacks if acquisitions or strategic investments encounter unanticipated challenges, including issues related to governmental approvals, transaction execution, integration difficulties, operational underperformance, or accounting and internal control complexity relative to prior expectations. These transactions may not result in long‑term strategic or financial benefits, and we may be unable to successfully integrate, scale, or otherwise realize the anticipated value of acquired businesses or invested entities. These risks may be heightened for minority investments or early‑stage businesses where we have limited control over management decisions or strategic direction.
Current report
Following the completion of acquisitions or certain strategic investments, we may rely on third parties or sellers to provide transitional administrative, financial reporting, internal control, or other operational support for a period of time. There can be no assurance that such support will be provided in a timely or satisfactory manner, which could disrupt operations, increase costs, or adversely affect our financial reporting, controls, or business performance.
Current report
We have incurred, and may incur in the future, indebtedness to support our operations and strategic objectives, including borrowings under our revolving credit facility and obligations under our $900 million aggregate principal amount of 0% Convertible Senior Notes due 2030. Although we had no borrowings outstanding under our revolving credit facility as of March 31, 2026, our indebtedness could have adverse consequences, including requiring us to use a portion of our cash flows from operations to satisfy debt repayment, redemption, or settlement obligations, thereby reducing cash available for working capital, capital expenditures, strategic investments or acquisitions, share repurchases, or other corporate purposes.
Current report
The convertible senior notes are senior unsecured obligations and include features that may require us, upon conversion, redemption, or the occurrence of certain fundamental events, to settle all or a portion of the obligation in cash, shares of our common stock, or a combination thereof, at our election. Any such cash settlement or repurchase obligations could materially impact our liquidity, particularly if they coincide with other capital needs or adverse market conditions. While we entered into capped call transactions intended to reduce potential dilution upon conversion, such arrangements do not eliminate the potential cash or equity impacts associated with the notes.
Current report
For additional information regarding our debt arrangements, including the terms of our senior convertible notes and revolving credit facility, see Note 17 to the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10‑K.
Current report
Our significant operations in India expose us to operational, economic, and labor‑related risks that could adversely affect our business.
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Removed paragraphs (57)
Previous report
The principal competitive factors in our industry include product functionality and integration, platform coverage, ability to invest and scale, price, worldwide sales infrastructure, global technical support, brand recognition and reputation. If we are unable to address these factors, our competitive position could weaken and we could experience a decline in revenues that could adversely affect our business.
Previous report
It is also costly and time-consuming to change cyber resilience systems. Most of our new customers previously adopted cyber resilience systems, which gives an incumbent competitor an advantage in retaining a customer because the incumbent already understands the network infrastructure, user demands and information technology needs of the customer, and because some customers are reluctant to invest the time and money necessary to change vendors. There are complexities involved in transitioning from traditional on-premises solutions to cloud-based services, including customer adoption rates and the need for scalable infrastructure. Commvault has substantially completed the transition from a perpetual licensing model to a subscription-based model delivered through either term based licenses or SaaS, whereas certain of our competitors are already fully cloud-native.
Previous report
New competitors entering our markets may have a negative impact on our competitive positioning. As we enter new markets, we expect to encounter new competitors. Many of our existing competitors are broadening their product breadth and scope. We expect increased competition from OEMs, including those we partner with, and from systems and network management companies, especially those that have historically focused on the mainframe computer market and have been making acquisitions and broadening their efforts to include cyber resilience products. We expect that competition will increase as a result of future industry consolidation. Increased competition could harm our business by causing, among other things, price reductions of our products, reduced profitability and loss of market share. Additionally, attracting and retaining skilled professionals is a common challenge in the cyber resilience space, due to the intensely competitive nature of the industry.
Previous report
We rely significantly on our value-added resellers, systems integrators and corporate resellers, which we collectively refer to as resellers, for the marketing and distribution of our products and services. Resellers are our most significant distribution channel. However, our agreements with resellers are generally not exclusive, are generally renewable annually, typically do not contain minimum sales requirements and in many cases may be terminated by either party without cause. Many of our resellers carry data protection and cyber resilience solutions that compete with ours. These resellers may give a higher priority to other software or SaaS applications, including those of our competitors, or may not continue to carry data protection and cyber resilience solutions. If a number of resellers were to discontinue or reduce the sales of our products, or were to promote our competitors’ products in lieu of our own, it could have a material adverse effect on our future revenues. Events or occurrences of this nature could seriously harm our sales and results of operations. If we fail to manage our resellers successfully, there may be conflicts between resellers or they could fail to perform as we anticipate, including required compliance with the terms and conditions of our agreement, either of which could reduce our sales or impact our reputation in the market. In addition, we expect that a portion of our sales growth will depend upon our ability to identify and attract new resellers. Our competitors also use reseller arrangements and may be more successful in attracting resellers and could enter into exclusive relationships with resellers that make it difficult to expand our reseller network. Any failure on our part to maintain and/or expand our network of resellers could impair our ability to grow revenues in the future.
Previous report
Further, we have a non-exclusive distribution agreement with Arrow pursuant to which Arrow’s primary role is to enable a more efficient and effective distribution channel for our solutions by managing our resellers and leveraging their own industry experience. Arrow accounted for approximately 35%, 36% and 37% of our total revenues for the years ended March 31, 2025, 2024 and 2023, respectively. If Arrow were to discontinue or reduce the sales of our solutions or if our agreement with Arrow was terminated, and if we were unable to take back the management of our reseller channel or find another distributor to replace Arrow, there could be a material adverse effect on our future business.
Previous report
Our OEMs sell and integrate our solutions which represents a material portion of our revenues. We have no control over the shipping dates or volumes of systems these OEMs sell and they have no obligation to sell systems incorporating our solutions. They also have no obligation to recommend or offer our solutions exclusively or at all. They have no minimum sales requirements and can terminate our relationship at any time. These OEMs also could choose to develop their own data protection and cyber resilience solutions. Our OEM partners compete with one another. If one of our OEM partners views our arrangement with another OEM as competing, it may decide to stop doing business with us. Any material decrease in the volume of sales generated by OEMs could have a material adverse effect on our revenues and results of operations in the future.
Previous report
We also sell our solutions via marketplace offerings which enable customers to purchase our solutions through online platforms, typically hosted by a cloud provider. The marketplace allows us to publish an offer which an end user can then purchase directly, or through the assistance of a partner. Similar to our resellers and OEMs, marketplace providers have no obligation to sell or recommend our solutions or offer our solutions exclusively or at all. Failure to effectively compete in the marketplace could have a material adverse effect on our revenues and results of operations in the future.
Previous report
If the cost for maintenance and support agreements, or our term-based subscription licenses and SaaS arrangements, with our customers is not competitive in the market or if our customers do not renew their agreements, either at all or on terms that are less favorable to us, our business and financial performance might be adversely impacted.
Previous report
Most of our support and maintenance agreements are for a one-year term and thereafter, we pursue renewal thereof. Historically, such renewals have represented a significant portion of our total revenues. If our customers do not renew their annual maintenance and support agreements, either at all or on terms that are less favorable to us, our business and financial performance might be adversely impacted.
Previous report
Additionally, a significant amount of our revenues are from term-based software license and SaaS arrangements. Those arrangements are typically one to three years in duration. If at the end of the initial term, customers elect to not renew, or they renew on terms that are less favorable to us, our business and financial performance might be adversely impacted.
Previous report
As a global company, we have become increasingly subject to the risks arising from adverse changes in domestic and global economic and political conditions. Uncertainty in the macroeconomic environment and associated global economic conditions have in the past resulted in and may continue to result in volatility in credit, equity, debt and foreign currency markets. The U.S. government has and continues to make significant additional changes in U.S. trade policy and may continue to take future actions that could negatively impact U.S. trade. In addition, the U.S. government and certain foreign governments have recently announced new or increased tariffs on imported goods, and additional tariffs or increases in tariffs could be assessed in the future. The future actions of the U.S. administration and foreign governments with respect to tariffs or other international trade agreements and policies remain unclear. A trade war or other governmental action related to tariffs or international trade agreements or policies has the potential to disrupt our international operations and/or the United States or global economy or certain sectors thereof and, thus, could negatively impact our financial performance or business.
Previous report
These global economic conditions can result in slower economic activity, decreased consumer confidence, reduced corporate profits and capital spending, inflation, adverse business conditions and liquidity concerns. There has also been increased volatility in foreign exchange markets. These factors make it difficult for our customers, our vendors and us to accurately forecast and plan future business activities. These factors could cause customers to slow or defer spending on our solutions, which would delay and lengthen sales cycles and negatively affect our results of operations. If such conditions deteriorate or if the pace of economic recovery is slower or more uneven, our results of operations could be adversely affected, we may not be able to sustain the growth rates we have experienced recently, and we could fail to meet the expectations of stock analysts and investors, which could cause the price of our common stock to decline.
Previous report
We continue to invest in our business internationally where there may be significant risks with overseas investments and growth prospects. Increased volatility or declines in the credit, equity, debt and foreign currency markets in these regions could cause delays in or cancellations of orders. Deterioration of economic conditions in the countries in which we do business could also cause slower or impaired collections on accounts receivable.
Previous report
In periods of volatile economic conditions, our exposure to credit risk and payment delinquencies on our accounts receivable significantly increases.
Previous report
Our outstanding accounts receivables are generally not secured. Our standard terms and conditions permit payment within a specified number of days following the receipt of our solution. Volatile economic conditions, including those related to the ongoing Russia-Ukraine conflict, the conflicts in the Middle East and the global response to the conflicts, economic downturns, tariffs or the imposition of new tariffs, trade wars, barriers or restrictions, or threats of such actions, supply chain disruptions, or the financial instability of banking institutions could result in our customers and partners facing liquidity concerns leading to them not being able to satisfy their payment obligations to us, which would have a material adverse effect on our financial condition, operating results and cash flows.
Previous report
In addition, a significant percentage of our revenue is from subscription, or term-based, arrangements. In these arrangements, our customers may pay for solutions over a period of several years. Due to the potential for extended period of collection, we may be exposed to more significant credit risk.
Previous report
We develop solutions that interoperate with certain products, operating systems and hardware developed by others, and if the developers of those operating systems and hardware do not cooperate with us or we are unable to devote the necessary resources so that our solutions interoperate with those systems, our development efforts may be delayed or foreclosed and our business and results of operations may be adversely affected.
Previous report
Our solutions operate primarily on the Windows, UNIX, Linux and Novell Netware operating systems; used in conjunction with Microsoft SQL; and on hardware devices of numerous manufacturers. Our reliance on such hardware components exposes us to potential supply chain disruption, which can delay product deliveries and adversely affect customer satisfaction. When new or updated versions of these operating systems, solution applications, and hardware devices are introduced, it is often necessary for us to develop updated versions of our solution applications so that they interoperate properly with these systems and devices. We may not accomplish these development efforts quickly or cost-effectively, and it is not clear what the relative growth rates of these operating systems and hardware will be.
Previous report
Potential or existing customers, particularly government customers and larger enterprise customers, generally commit significant resources to an evaluation of available solutions and require us to expend substantial time, effort and money educating them as to the value of our solutions. Sales often require an extensive education and marketing effort.
Previous report
We could expend significant funds and resources during a sales cycle and ultimately fail to win the customer. Our sales cycle for all of our products and services is subject to significant risks and delays over which we have little or no control, including our customers’ budgetary constraints; the timing of our customers’ budget cycles and approval processes; our customers’ willingness to replace their current solutions; our need to educate potential customers about the uses and benefits of our solutions; and the timing of the expiration of our customers’ current agreements for similar solutions.
Previous report
In order to deliver our SaaS offerings via a cloud-based deployment, we have made and will continue to make capital investments and incur substantial costs to implement and maintain this business model. In addition, as we look to deliver new or different cloud-based services, we are making significant technology investments to deliver new capabilities and advance our software to deliver cloud-native customer experiences. Our revenues related to SaaS offerings have increased in recent years. If there is a reduction in demand for these services caused by a lack of customer acceptance, technological challenges, weakening economic or political conditions, including as a result of tariffs or the imposition of new tariffs, trade wars, barriers or restrictions, or threats of such actions, security or privacy concerns, inability to properly manage such services, competing technologies and products, decreases in corporate spending or otherwise, our financial results and competitive position could suffer. If these investments do not yield the expected return, or we are unable to decrease the cost of delivering our cloud services, our gross margins, overall financial results, business model and competitive position could suffer.
Previous report
We sell a backup appliance which integrates our solution with hardware. If we fail to accurately predict manufacturing requirements and manage our supply chain, we could incur additional costs or experience manufacturing delays that could harm our business.
Previous report
We generally provide forecasts of our requirements to our supply chain partners on a rolling basis. If our forecast exceeds our actual requirements, a supply chain partner may assess additional charges or we may incur costs for excess inventory they hold, each of which could negatively affect our gross margins. If our forecast is less than our actual requirements, the applicable supply chain partner may have insufficient time or components to produce or fulfill our solutions' requirements, which could delay or interrupt manufacturing of our products or fulfillment of orders for our solutions, and result in delays in shipments, customer dissatisfaction, and deferral or loss of revenue. If we fail to accurately predict our requirements, we may be unable to fulfill those orders or we may be required to record charges for excess inventory. Any of the foregoing could adversely affect our business, financial condition or results of operations.
Previous report
Our complex solutions may contain undetected errors, which could adversely affect not only their performance but also our reputation and the acceptance of our solutions in the market.
Previous report
Our complex solutions may contain undetected errors or failures, especially when they are made generally available or new versions are released. Despite extensive testing by us and customers, we have discovered errors in our solutions in the past and will do so in the future. As a result of past discovered errors, we experienced delays and lost revenues while we corrected those solutions. In addition, customers in the past have brought to our attention “bugs” in our software created by the customers’ unique operating environments, which are often characterized by a wide variety of both standard and non-standard configurations that make pre-release testing very difficult and time consuming. Although we have been able to fix these bugs in the past, we may not always be able to do so. Our solutions may also be subject to intentional attacks by viruses that seek to take advantage of these bugs, errors or other weaknesses. Any of these events may result in the loss of, or delay in, market acceptance of our solutions or damage to our reputation, which would seriously harm our sales, results of operations and financial condition.
Previous report
Our products are deployed by our customers and partners in a wide variety of IT infrastructures, including large-scale, complex technology environments, and we believe our future success will depend, at least in part, on our ability to support such deployments. Implementations of our products may be technically complicated, and it may not be easy to maximize the value of our products without proper implementation, training, and support. Some of our customers have experienced difficulties implementing our products in the past and may experience implementation difficulties in the future. If our customers and partners are unable to implement our products successfully, perceptions of our products may be impaired, our reputation and brand may suffer, or customers may choose not to renew their subscriptions or purchase additional products from us.
Previous report
Any failure by customers or partners to appropriately implement our products could result in customer dissatisfaction, impact the perceived reliability of our products, result in negative press coverage, negatively affect our reputation, and harm our business, financial condition, and results of operations.
Previous report
Our services include the assessment and design of solutions to meet our customers’ storage management requirements and the efficient installation and deployment of our software applications based on specified business objectives. Further, once our software applications are deployed, our customers depend on us to resolve issues relating to our software applications. A high level of service is critical for the successful marketing and sale of our software. If we or our partners do not effectively install or deploy our applications, or succeed in helping our customers quickly resolve post-deployment issues, it would adversely affect our ability to sell software products to existing customers and could harm our reputation with prospective customers. As a result, our failure to maintain high quality support and professional services would have a material adverse effect on our sales of software applications and results of operations.
Previous report
Sales to global federal, state, and local governmental agencies account for a portion of our revenue, and we may in the future increase sales to government entities. This customer base experiences budgetary constraints or shifts in spending priorities regularly which may adversely affect sales of our solutions to government entities. Selling to government entities can be highly competitive, expensive and time consuming, often requiring significant upfront time and expense without any assurance that we will successfully sell our solutions. Government entities may require contract terms that differ from our standard terms and conditions including termination rights favorable for the customer, audit rights, and maintenance of certain security clearances for facilities and employees which can entail administrative time and effort resulting in costs and delays. Engagements with government contracts involve stringent compliance requirements and the potential for increased scrutiny, which could adversely impact operational flexibility.
Previous report
Government demand for our solutions may be more volatile as they are affected by stringent regulations, public sector budgetary cycles, funding authorizations, and the potential for funding reductions or delays, making the time to close such transactions more difficult to predict. The current presidential administration intends to reduce overall government spending and has introduced the Department of Government Efficiency to operationalize this priority; a decline in government spending could negatively impact our revenues and profitability.
Previous report
We could also experience financial or other setbacks if transactions encounter unanticipated problems, including problems related to governmental approval, execution, integration or underperformance relative to prior expectations. Acquisitions may not result in long-term benefits to us or we may not be able to further develop the acquired business in the manner we anticipated.
Previous report
Following the completion of acquisitions, we may have to rely on the seller to provide administrative and other support, including financial reporting and internal controls, and other transition services to the acquired business for a period of time. There can be no assurance that the seller will do so in a manner that is acceptable to us.
Previous report
We are preparing to migrate a significant amount of customers from Red Hat environments, and any disruption, delay, or failure in executing this transition effectively could have a material adverse impact on our business operations and customer relationships.
Previous report
Any delays or issues in the execution of this migration may expose us to financial and operational risks. Additionally, ongoing support and coordination during the transition may result in higher operating costs. If we are unable to successfully complete the migration, our operations and reputation could be materially adversely affected.
Previous report
We have a $100 million revolving credit facility. As of March 31, 2025, there were no borrowings under the credit facility. If we were to borrow substantially against this facility the indebtedness could have adverse consequences, including requiring us to devote a portion of our cash flow from operations to payments of indebtedness, which would reduce the availability of cash flow to fund working capital requirements, capital expenditures and other general purposes; limiting our flexibility in planning for, or reacting to, general adverse economic conditions or changes in our business and the industry in which we operate in; placing us at a competitive disadvantage compared to our competitors that have less debt; and limiting our ability to fund potential acquisitions.
Previous report
If we are unable to effectively manage certain risks and challenges related to our India operations, our business could be harmed.
Previous report
Our India operations are a key factor to our success. We believe that our significant presence in India provides certain important advantages for our business, such as direct access to a large pool of skilled professionals and assistance in growing our business internationally. However, it also creates certain risks that we must effectively manage. As of March 31, 2025, approximately 39% of our employees were located in India. Wage costs differentiate depending on regions throughout the world. Wages in India are increasing at a faster rate than in the many other countries, including the United States. These increases could result in us incurring increased costs for technical professionals and reduced margins. There is intense competition in India for skilled technical professionals, and we expect such competition to increase. As a result, we may be unable to cost-effectively retain our current employee base in India or hire additional new talent. In addition, India has experienced significant inflation, low growth in gross domestic product and shortages of foreign exchange. India also has experienced civil unrest and has been involved in conflicts with neighboring countries. The occurrence of any of these circumstances could result in disruptions to our India operations, which, if continued for an extended period of time, could have a material adverse effect on our business.
Previous report
U.S. dollar would result in lower revenues when translated into U.S. dollars, although operating expenditures would be lower as well.
Previous report
In recent fiscal years, we have selectively hedged our exposure to changes in foreign currency exchange rates on the balance sheet. In the future, we may enter into additional foreign currency-based hedging contracts to reduce our exposure to significant fluctuations in currency exchange rates on the balance sheet, although there can be no assurances that we will do so. However, as our international operations grow, or if dramatic fluctuations in foreign currency exchange rates continue or increase or if our hedging strategies become ineffective, the effect of changes in the foreign currency exchange rates could become material to revenue, operating expenses, and income.
Previous report
•adverse effects in economic conditions in the countries in which we operate, particularly related to the ongoing Russia-Ukraine conflict and the regional conflict in the Middle East;
Showing the first 40 of 57 passages. Open the source sections for the rest.
Reworded paragraphs (62)
Previous wording
Our industry is intensely competitive, and many of our competitors have greater financial, technical and sales and marketing resources and larger installed customer bases, which could enable them to compete more effectively than we do.
Current wording
Our industry is intensely competitive, and many of our competitors have greater resources and larger, established customer bases, which could enable them to compete more effectively than we do.
Previous wording
The cyber resiliency market is intensely competitive, highly fragmented and characterized by rapidly changing technology and evolving standards, changing customer requirements and frequent new product introductions. Competitors vary in size and in the scope and breadth of the products and services offered. We must continually innovate to maintain our market position.
Current wording
The data protection and cyber resilience market is intensely competitive, highly fragmented and characterized by rapidly evolving technology and industry standards, changing customer requirements, and frequent new product introductions. Our competitors vary in size and in the scope and breadth of the products and services they offer. Our primary competitors include Rubrik, Cohesity, and Veeam, and we also face competition from large technology companies, cloud providers, service providers, and other current or emerging market participants that offer products or services that compete with aspects of our portfolio or that customers may view as substitutes for our offerings.
Previous wording
We rely on indirect sales channels, such as value-added resellers, systems integrators, corporate resellers, distributors, OEMs, and marketplaces for the distribution of our solutions, and the failure of these channels to effectively sell our solutions could have a material adverse effect on our revenues and results of operations.
Current wording
We rely on indirect sales channels, including resellers, systems integrators, distributors, OEMs, and marketplaces, and the failure of these channels to effectively sell our solutions could adversely affect our business.
Previous wording
Volatility in the global economy could adversely impact our continued growth, results of operations and our ability to forecast future business.
Current wording
Volatility in the global economy, including changes in trade policy or tariffs, could adversely affect our continued growth, results of operations, financial condition, and our ability to forecast future performance.
Previous wording
We encounter long sales and implementation cycles, particularly for our larger customers, which could have an adverse effect on the size, timing and predictability of our revenues.
Current wording
We can experience long and unpredictable sales and implementation cycles, particularly with large enterprise and government customers, which could adversely affect the size, timing and predictability of our revenues.
Previous wording
If our sales cycles lengthen unexpectedly, they could adversely affect the timing of our revenues or increase costs, which may cause fluctuations in our quarterly revenues and results of operations. Finally, if we are unsuccessful in closing sales of our solutions after spending significant funds and management resources, our operating margins and results of operations could be adversely impacted, and the price of our common stock could decline.
Current wording
If our sales cycles lengthen unexpectedly or if we are unsuccessful in closing anticipated transactions after incurring substantial costs, the timing of our revenues may shift, our operating expenses may increase relative to revenue and our quarterly revenues and results of operations may fluctuate. These factors could adversely affect our business, results of operations, financial condition, and the predictability of our results, and may contribute to volatility in the trading price of our common stock.
Previous wording
We depend on growth in the data protection and cyber resiliency market, and lack of growth or contraction in this market could have a material adverse effect on our sales and financial condition.
Current wording
We depend on growth in the data protection and cyber resiliency market, and a slowdown or contraction in this market could have a material adverse effect on our business, results of operations, and financial condition.
Previous wording
Demand for data protection and cyber resilience solutions is linked to growth in the amount of data generated and stored, demand for data retention and management (whether as a result of regulatory requirements or otherwise) demand for and adoption of new backup devices and networking technologies, and ability to respond to and recover from cyber incidents in a secure environment. Because our solutions are concentrated within the data protection and cyber resiliency market, if the demand for backup and data protection solutions devices declines, our sales, profitability and financial condition would be materially adversely affected.
Current wording
Demand for data protection and cyber resilience solutions is influenced by factors such as growth in the amount of data generated and backed up, demand for data retention and management (whether as a result of regulatory requirements or otherwise) demand for and adoption of new backup devices and networking technologies, and ability to respond to and recover from cyber incidents in a secure environment. Because our solutions are concentrated within the data protection and cyber resiliency market, if the demand for backup and data protection solutions declines, our business, results of operations, and financial condition could be materially adversely affected.
Previous wording
Furthermore, the data protection and cyber resiliency market is dynamic and evolving. Our future financial performance will depend in large part on continued growth in the number of organizations adopting data protection and cyber resilience solutions for their environments. The market for data protection and cyber resilience solutions may not continue to grow at historic rates, or at all. If this market fails to grow or grows more slowly than we currently anticipate, our sales and profitability could be adversely affected.
Current wording
The data protection and cyber resiliency market is dynamic and evolving, and our future financial performance depends in part on continued adoption of these solutions by organizations across industries and geographies. The market may not continue to grow at historical rates, may grow more slowly than we anticipate, or may contract due to economic conditions, technology changes, or alternative approaches to data protection and cyber resilience. If this market slows or fails to materialize as expected, or if customer adoption declines, our business, results of operations, financial condition, and growth prospects could be materially adversely affected.
Previous wording
Our SaaS offerings require costly and continual infrastructure investments and if these investments do not yield the expected return, our business and financial performance might be adversely impacted.
Current wording
Our SaaS offerings require substantial and ongoing infrastructure investments, and if these investments do not yield the expected return, our business, results of operations, and financial condition could be adversely affected.
Previous wording
Incorrect or improper implementation or use of our cyber resilience solutions could result in customer dissatisfaction and harm our business, financial condition, and results of operations.
Current wording
Our complex solutions may contain undetected errors, defects, or vulnerabilities, and incorrect or improper implementation or use of our solutions could result in customer dissatisfaction, increased data security risk, and harm to our business, financial condition, and reputation.
Previous wording
We may not receive significant revenues from our current research and development efforts for several years, if at all.
Current wording
Our investments in research and development may not result in significant revenues, and we may not realize a return on these investments for several years, if at all.
Previous wording
Developing software and technology is expensive, and the investment in product development may involve a long payback cycle. Our research and development expenses were $146.3 million, or 15%, of our total revenues in fiscal 2025, $132.3 million, or 16%, of our total revenues in fiscal 2024 and $141.8 million, or 18%, of our total revenues in fiscal 2023. We believe that we must continue to dedicate a significant amount of resources to our research and development efforts to maintain our competitive position. However, we may not recognize significant revenues from these investments for several years, if at all.
Current wording
Developing software and technology is costly, and investments in product development often involve long and uncertain payback periods. We incurred research and development expenses of $162.2 million, or 14%, of our total revenues in fiscal 2026, $146.3 million, or 15%, of our total revenues in fiscal 2025 and $132.3 million, or 16%, of our total revenues in fiscal 2024, and we expect to continue to dedicate significant resources to research and development to maintain our competitive position. However, research and development initiatives may not result in new products, features, or enhancements that are commercially successful or generate meaningful revenues within anticipated timeframes, or at all. If we are unable to realize an adequate return on our research and development investments, our operating margins, results of operations, and financial condition could be adversely affected.
Previous wording
Our ability to sell our solutions is highly dependent on the quality of our customer support and professional services, and failure to offer high quality customer support and professional services would have a material adverse effect on our sales and results of operations.
Current wording
Our ability to sell our solutions and retain customers is dependent on the quality of our customer support and professional services, and any failure to provide high quality support or services could adversely affect our business, results of operations, and financial condition.
Previous wording
We completed a restructuring plan in fiscal 2025, which we cannot guarantee will achieve its intended results.
Current wording
We implemented new restructuring plans in fiscal 2026, which we cannot guarantee will achieve their intended results.
Previous wording
In fiscal 2024, we initiated a restructuring plan to enhance customer satisfaction, optimize operational efficiency, and align our customer experience functions with our strategic goals. This plan was completed in fiscal 2025. We cannot guarantee the restructuring plan will achieve its intended results. Risks associated with this restructuring plan also include additional unexpected costs, adverse effects on employee morale and the failure to meet operation and growth targets due to the loss of key employees, any of which may impair our ability to achieve anticipated results of operations or otherwise harm our business.
Current wording
In fiscal 2026, we initiated restructuring plans intended to optimize our cost structure, enhance organizational agility, align resources with strategic priorities, and reorganize our business technology function. We cannot guarantee the restructuring plans will achieve their intended results. Risks associated with these restructuring plans also include additional unexpected costs, adverse effects on culture, and failure to meet operating and growth targets, any of which could adversely affect our business, results of operations, and financial condition.
Previous wording
We have engaged, and may continue to engage, in strategic acquisitions or transactions, which could have a material adverse effect on our business, results of operations, financial condition and cash flows.
Current wording
We have engaged, and may continue to engage, in strategic acquisitions, equity investments, and other transactions, which could have a material adverse effect on our business, results of operations, financial condition and cash flows.
Previous wording
Acquisitions involve a number of risks, including diversion of management’s attention, ability to finance the acquisition on attractive terms, failure to retain key personnel or valuable customers, legal liabilities, the need to amortize acquired intangible assets, and intellectual property ownership and infringement risks, any of which could have a material adverse effect on our business, results of operations, financial condition and cash flows. Any additional future acquisitions may also result in the incurrence of indebtedness or the issuance of additional equity securities.
Current wording
Strategic acquisitions and investments involve a number of risks, including diversion of management’s attention, the ability to finance transactions on attractive terms, failure to retain key personnel or customers, exposure to legal or regulatory liabilities, intellectual property ownership and infringement risks, and the need to record and amortize acquired or capitalized intangible assets. In addition, certain equity or strategic investments may be accounted for under complex accounting models, require ongoing valuation judgments, or result in the recognition of impairments, write‑downs, or losses if expected benefits do not materialize, any of which could adversely affect our results of operations or financial condition. Future transactions may also result in the incurrence of indebtedness or the issuance of additional equity securities.
Previous wording
Changes in senior management or key personnel could cause disruption in the Company and have a material effect on our business.
Current wording
Changes in senior management or key personnel could cause disruption in the Company adversely affect our business, results of operations, and financial condition.
Previous wording
We have had, and could have, changes in senior management which could be disruptive to management and operations of the Company and could have a material effect on our business, operating results and financial conditions. Turnover at the senior management level may create instability within the Company, which could impede the Company’s day-to-day operations. Such instability could impede our ability to fully implement our business plan and growth strategy, which would harm our business and prospects.
Current wording
We have experienced, and could continue to experience, changes in senior management, which could be disruptive to our management and operations and could adversely affect our business, results of operations, and financial condition. Turnover at the senior management level may create instability within the Company, which could impede the Company’s day-to-day operations and hinder our ability to effectively implement our business plan and growth strategy.
Previous wording
We rely on our key personnel to execute our existing business operations and identify and pursue new growth opportunities. The loss of key employees could result in significant disruptions to our business, and the integration and training of replacement personnel could be costly, time consuming, cause additional disruptions to our business and be unsuccessful.
Current wording
We rely on our key personnel to execute our business operations and identify and pursue new growth opportunities. The loss of key employees could result in significant disruptions to our business, and efforts to recruit, integrate, and train replacement personnel may be costly, time‑consuming, and disruptive, and may not be successful. Any such events could adversely affect our business, results of operations, and prospects.
Previous wording
Borrowing against our revolving credit facility could adversely affect our operations and financial results.
Current wording
Our existing and future indebtedness, including our senior convertible notes and revolving credit facility, could adversely affect our business, results of operations, and financial condition.
Previous wording
The credit facility also contains financial maintenance covenants, including a leverage ratio and interest coverage ratio, and customary events of defaults. Failure to comply with these covenants could result in an event of default, which, if not cured or waived, could accelerate our repayment obligations. For further discussion on our revolving credit facility, see Note 17 of the notes to the consolidated financial statements.
Current wording
Our revolving credit facility and other debt arrangements contain financial maintenance covenants and other restrictive provisions, including leverage and interest coverage ratios, as well as customary events of default. Failure to comply with these covenants or other terms could result in an event of default, which, if not cured or waived, could accelerate our repayment obligations or limit our access to additional liquidity. In addition, higher levels of debt relative to certain competitors could limit our operational and strategic flexibility, increase our exposure to interest rate or capital market volatility, and place us at a competitive disadvantage.
Previous wording
In recent years, India’s government has adopted policies that are designed to promote foreign investment, including significant tax incentives, relaxation of regulatory restrictions, liberalized import and export duties and preferential rules on foreign investment and repatriations. These policies may not continue. If we are unable to effectively manage any of the foregoing risks related to our India operations, our development efforts could be impaired, our growth could be slowed and our results of operations could be negatively impacted.
Current wording
In recent years, India’s government has adopted policies that are designed to promote foreign investment, including significant tax incentives, relaxation of regulatory restrictions, liberalized import and export duties and preferential rules on foreign investment and repatriations which may not continue. If we are unable to effectively manage any of the foregoing risks related to our India operations, our development efforts could be impaired, our growth could be slowed and our business, results of operations, and financial condition could be adversely affected.
Previous wording
We may experience fluctuations in foreign currency exchange rates that could adversely impact our results of operations.
Current wording
We may experience fluctuations in foreign currency exchange rates that could adversely affect our results of operations and financial condition.
Previous wording
We derive almost half of our revenues from international markets. Our international sales are generally denominated in foreign currencies, and this revenue and related cash flow could be materially affected by currency fluctuations. Our primary exposure is to fluctuations in exchange rates for the U.S. dollar versus the Euro and, to a lesser extent, the Australian dollar, British pound sterling, Canadian dollar, Chinese yuan, Indian rupee, Korean won and Singapore dollar. Changes in currency exchange rates could adversely affect our reported revenues and could require us to reduce our prices to remain competitive in foreign markets, which could also have a material adverse effect on our results of operations. An unfavorable change in the exchange rate of foreign currencies against the
Current wording
Our primary foreign currency exposure is to fluctuations between the U.S. dollar and the Euro and, to a lesser extent, the British pound sterling, Australian dollar, Canadian dollar, Indian rupee, Korean won, Chinese yuan, and Singapore dollar. In addition, certain of our foreign subsidiaries hold assets, and may hold assets or liabilities, denominated in currencies other than their functional currencies, which could increase balance‑sheet volatility. Unfavorable movements in foreign exchange rates could adversely affect our reported revenues, operating expenses, margins, and cash flows, and could require us to adjust pricing to remain competitive in certain markets.
Previous wording
We have significant sales and services operations outside the United States and derive a substantial portion of our revenues from these operations. We generated approximately 46% and 48% of our revenues from outside the United States in fiscal 2025 and fiscal 2024, respectively. International revenue increased 15% in fiscal 2025 compared to fiscal 2024. Expansion of our international operations has and is expected to require a significant amount of attention from our management and substantial financial resources and might require us to add qualified management in these markets.
Current wording
We have significant sales and services operations outside the United States and derive a substantial portion of our revenues from these operations. We generated approximately 47% and 46% of our revenues from outside the United States in fiscal 2026 and fiscal 2025, respectively. Expansion of our international operations requires a significant amount of management attention and financial resources and may require us to add qualified management in these markets.
Previous wording
In addition to facing risks similar to the risks faced by our domestic operations, our international operations are also subject to risks related to the differing legal, political, social and regulatory requirements and economic conditions of many countries, including:
Current wording
In addition to risks faced by our domestic operations, our international operations are subject to risks related to differing legal, political, social and regulatory requirements and economic conditions in the countries in which we operate, including:
Previous wording
•difficulties in coordinating the activities of our geographically dispersed and culturally diverse operations;
Current wording
• difficulties in coordinating geographically dispersed and culturally diverse operations;
Previous wording
•general economic conditions in the countries in which we operate, including seasonal reductions in business activity in the summer months in Europe and in other periods in other countries;
Current wording
• general economic conditions, including seasonal reductions in business activity in certain regions;
Previous wording
•imposition of, or unexpected adverse changes in, foreign laws or regulatory requirements, including those pertaining to sanctions, export restrictions, privacy and data protection, trade and employment restrictions and intellectual property protections;
Current wording
• changes in foreign laws or regulatory requirements, including those relating to sanctions, export controls, privacy and data protection, trade and employment and intellectual property protections;
Previous wording
•longer payment cycles for sales in foreign countries and difficulties in collecting accounts receivable;
Current wording
• longer payment cycles and difficulties in collecting accounts receivable;
Previous wording
Our business in emerging markets requires us to respond to rapid changes in market conditions in those markets. Our overall success in international markets depends, in part, upon our ability to succeed in differing legal, regulatory, economic, social and political conditions. We may not continue to succeed in developing and implementing policies and strategies that will be effective in each location where we do business. The occurrence of any of the foregoing factors may have a material adverse effect on our business and results of operations.
Current wording
Our success in emerging and international markets depends on our ability to operate effectively across these varying environments. We may not succeed in developing and implementing effective policies and strategies in each location where we do business. The occurrence of any of these factors could have an adverse effect on our business, results of operations, and financial condition.
Previous wording
We may be subject to IT system failures, network disruptions, cybersecurity incidents and breaches in data security.
Current wording
We may be subject to IT system failures, network disruptions, cybersecurity incidents and breaches in data security, which could adversely affect our business, results of operations, and financial condition.
Previous wording
IT system failures, network disruptions, cybersecurity incidents and breaches of data security could disrupt our operations by causing delays or cancellation of customer orders, impeding the delivery of our solutions, negatively affecting customer support or professional services, preventing the processing of transactions and reporting of financial results, and disturbing our enterprise resource planning system. IT system failures, network disruptions, cybersecurity incidents and breaches of data security could also result in the unintentional disclosure of customer or our information as well as damage our reputation. There can be no assurance that a system failure, network disruption, cybersecurity incident or data security breach will not have a material adverse effect on our financial condition and operating results. Cybersecurity breaches or incidents and other exploited security vulnerabilities could subject us to significant costs and third-party liabilities, result in improper disclosure of data and violations of applicable privacy and other laws, require us to change our business practices, cause us to incur significant remediation costs, lead to loss of customer confidence in, or decreased use of our products and services, damage our reputation, divert the attention of management from the operation of our business, result in significant compensation or contractual penalties from us to our customers and their business partners as a result of losses to or claims by them, or expose us to litigation, regulatory investigations, and significant fines and penalties.
Current wording
IT system failures, network disruptions, cybersecurity incidents and breaches of data security could disrupt our operations by causing delays or cancellation of customer orders, impeding the delivery of our solutions, negatively affecting customer support or professional services, preventing the processing of transactions and reporting of financial results, and disturbing our enterprise resource planning system. Such events could also subject us to significant costs and third-party liabilities, result in improper disclosure of data and violations of applicable privacy and other laws, require us to change our business practices, cause us to incur significant remediation costs, lead to loss of customer confidence in, or decreased use of our products and services, damage our reputation, divert the attention of management from the operation of our business, result in significant compensation or contractual penalties from us to our customers and their business partners as a result of losses to or claims by them, or expose us to litigation, regulatory investigations, and significant fines and penalties.
Previous wording
Bad actors regularly attempt to gain unauthorized access to our IT systems, and many such attempts are increasingly sophisticated and difficult to detect. These attempts, which might be related to industrial, corporate or other espionage, criminal hackers or nation-state and nation-state supported actors, include trying to covertly introduce malware or ransomware to our environments, impersonating authorized users, as well as other intrusions from nation-state actors and nation-state supported actors. In particular, cyber attacks, including those from organized criminal threat actors, nation-states and nation-state supported actors, are prevalent and severe and could lead to significant interruptions, delays, or outages in our operations, disruptions in our services, loss of data, loss of income, significant extra expense to restore data or systems, reputational loss and the diversion of funds. Cybercriminals are leveraging artificial intelligence (“AI”) to develop more sophisticated and targeted attacks, making detection and prevention increasingly challenging, resulting in heightened risks of security breaches and incidents. As cyberattacks, including AI-driven threats, become increasingly sophisticated, there is an omnipresent need to enhance security measures to protect our systems and data.
Current wording
Bad actors regularly attempt to gain unauthorized access to our IT systems, and many such attempts are growing increasingly sophisticated and difficult to detect. These attempts, which might be related to industrial, corporate or other espionage, criminal hackers or nation-state actors, include trying to covertly introduce malware or ransomware to our environments and impersonating authorized users. In particular, cyberattacks are prevalent and severe and could lead to significant interruptions, delays, or outages in our operations, disruptions in our services, loss of data, loss of income, significant extra expense to restore data or systems, reputational loss and the diversion of funds. Cybercriminals are leveraging artificial intelligence to develop more sophisticated and targeted attacks, making detection and prevention increasingly challenging.
Previous wording
Additionally, due to political uncertainty, our third-party service providers are vulnerable to heightened risks of cybersecurity incidents and security and privacy breaches and incidents caused or initiated by nation-state or affiliated actors, including attacks that could materially disrupt our systems, operations and services, or impact our customers systems, operations, and services. For example, in February and April 2025, Microsoft notified the Company about unauthorized activity within our Azure environment by a suspected nation-state threat actor. As part of the ongoing investigation regarding this activity, the Company immediately activated its incident response plan, issued security advisories, and implemented several advanced security measures, including enhanced rotation of credentials and strengthened security monitoring, among other proactive measures. Similarly, supply chain attacks have increased in frequency and severity, and there have been high-profile incidents of third-party service providers causing widespread disruptions to their customers’ infrastructure due to errors in their SaaS offerings. We cannot guarantee that third parties and infrastructure in our supply chain have not been compromised or that they do not contain exploitable defects or bugs that could result in a breach of or disruption to our Commvault Cloud platform, systems and network or the systems and networks of third parties that support us and our business. Moreover, we may have limited remedies against third-party providers in the event of a service disruption.
Current wording
Supply chain attacks have increased in frequency and severity, and there have been high-profile incidents of third-party service providers causing widespread disruptions to their customers' infrastructure due to errors in their SaaS offerings. We cannot guarantee that third parties and infrastructure in our supply chain have not been compromised or that they do not contain exploitable defects or bugs that could result in a breach of or disruption to our Commvault Cloud platform, systems and network or the systems and networks of third parties that support us and our business. Moreover, we may have limited remedies against third-party providers in the event of a service disruption.
Previous wording
In addition, any failure to successfully implement new information systems and technologies, or improvements or upgrades to existing information systems and technologies in a timely manner could adversely impact our business, internal controls, results of operations, reputation, and financial condition.
Current wording
In addition, any failure to successfully implement new information systems and technologies, or improvements or upgrades to existing information systems and technologies in a timely manner could adversely affect our business, internal controls, results of operations, financial condition, and reputation.
Previous wording
We may not be successful in our initiatives that utilize AI, which could adversely affect our business, reputation, or financial results.
Current wording
We may not be successful in our initiatives that utilize AI, which could adversely affect our business, results of operations, financial condition, and reputation.
Previous wording
There are significant risks involved in utilizing AI and no assurance can be provided that such usage will enhance our business or assist our business in being more efficient or profitable. Known risks currently include accuracy, bias, toxicity, intellectual property infringement or misappropriation, data privacy, and cybersecurity and data provenance. In addition, AI may have errors or inadequacies that are not easily detectable. For example, certain AI may utilize historical data in its analytics. To the extent that such historical data is not indicative of the current or future conditions, or models fail to filter biases in the underlying data or collection methods, such AI usage may lead us to make determinations on behalf of our business, recommendations to our clients, or developments to our products and services, in each case, that may have an adverse effect on our business and financial results. If AI models are incorrectly designed or the data used to train them is overbroad, incomplete, inadequate or biased in some way, our use may inadvertently reduce our efficiency or cause unintentional or unexpected outputs that are incorrect, do not match our business goals, do not comply with our policies or interfere with the performance of our products and services, business and reputation.
Current wording
There are significant risks involved in utilizing AI and no assurance can be provided that such usage will enhance our business or assist our business in being more efficient or profitable. Known risks currently include accuracy, bias, toxicity, intellectual property infringement or misappropriation, data privacy, and cybersecurity, data provenance and reliance on third-party AI models, tools or providers. In addition, AI may have errors or inadequacies that are not easily detectable. For example, certain AI may utilize historical data in its analytics. To the extent that such historical data is not indicative of the current or future conditions, or models fail to filter biases in the underlying data or collection methods, such AI usage may lead us to make determinations on behalf of our business, recommendations to our clients, or developments to our products and services, in each case, that may have an adverse effect on our business and financial results. If AI models are incorrectly designed or the data used to train them is overbroad, incomplete, inadequate or biased in some way, our use may inadvertently reduce our efficiency or cause unintentional or unexpected outputs that are incorrect, do not match our business goals, do not comply with our policies or interfere with the performance of our products and services, business and reputation.
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Previous report — wording carried elsewhere
•failure to develop substantial sales pipeline for our products;