What Happened?
Shares of data protection software company Commvault (NASDAQ: CVLT) fell 17.1% in the morning session after the company reported third-quarter financial results that missed analyst expectations for profitability. Commvault posted a non-GAAP earnings per share of $0.91, which fell short of the consensus estimate of $0.94. While revenue grew 18.4% year-over-year to $276.2 million and beat expectations, the company’s adjusted operating income also missed estimates, suggesting the growth was less profitable than anticipated. The market reacted negatively to the profitability misses, which overshadowed the positive news that the company's Annual Recurring Revenue (ARR) surpassed the $1 billion mark. Looking ahead, Commvault expects revenue for the next quarter to be around $299 million, which was in line with analyst estimates.
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What Is The Market Telling Us
Commvault’s shares are quite volatile and have had 19 moves greater than 5% over the last year. But moves this big are rare even for Commvault and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 6 days ago when the stock dropped 2.9% on the news that reports revealed the Trump administration is considering new restrictions on software exports to China. The news amplified investor anxiety surrounding US-China trade relations, triggering a broad sell-off in the technology sector. According to reports, the administration is weighing these limitations as a potential response to China's own trade measures. The uncertainty rattled the market, contributing to declines in major indexes like the S&P 500 and Nasdaq. Proposed export controls of this nature could significantly disrupt the global technology trade, impacting companies that rely on the Chinese market. The move adds to existing macro challenges, creating a cautious outlook among investors for the software industry.
Commvault is down 4.4% since the beginning of the year, and at $145.41 per share, it is trading 25.6% below its 52-week high of $195.41 from September 2025. Investors who bought $1,000 worth of Commvault’s shares 5 years ago would now be looking at an investment worth $3,635.
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