Hello, everyone, and thanks for joining us today for Commvault's fiscal third quarter earnings review and futureready investor event. My name is Michael Melnyk, Head of Investor Relations, and we look forward to spending the next couple of hours with you today. Our leadership team is excited to discuss our view of the dynamic data protection and management market. We'll highlight how our vision and strategy has been brought to life through our transformed software and SaaS portfolio, our optimized go-to-market motion and our focus on execution excellence, all of which are fueling our intended return to sustainable and profitable growth. Given the increased visibility associated with our growing recurring revenue base we'll provide near and long-term targets, and we'll discuss a more comprehensive capital allocation framework. After our prepared remarks, we'll be hosting a moderated Q&A session. [Operator Instructions]. Before I turn it over to our President and CEO, Sanjay Mirchandani, I'll quickly summarize our safe harbor statement. Today, we'll be making forward-looking statements under the safe harbor provisions of the United States securities laws. These statements are based on our current expectations, assumptions and remain subject to risks and uncertainties. Our actual results may differ materially. Factors that could cause our results to differ from these statements can be found in our SEC filings. We're also referencing non-GAAP financial measures and targets. The reconciliation of non-GAAP financial measures to comparable GAAP measures can be found on our Investor Relations website. We hope you enjoy today's program. Sanjay will be joining us after the short video introduction.

Wow, it's a great time to be in this industry. I'm thrilled to be with you today to share our vision and what we see as the opportunity ahead. Thank you for being with us. When I joined Commvault, we focused on 3 priorities: one, simplifying our business to make it easier for partners and customers to work with us; two, radically innovating to meet the market in massive transition; and three, executing by focusing on what matters to deliver results, which is why we've exceeded expectations in 5 of the last 6 quarters, with the only exception at the start of the pandemic. I'm proud to say we've made tremendous progress, ushering in a new era for Commvault. Our high-performing engineering team is innovating faster than ever. Our field is delivering results. And we have a winning team and culture already helping customers with their digital transformations. Before I get into our view of future, let me take a minute to talk about our Q3 results. Simply put, Q3 was our best quarter ever. We delivered all-time highs for total revenue as well as software and product revenue. All of our geographies had a solid quarter. Annual recurring revenues, the primary metric we use to indicate the health of our business also crossed a critical milestone, over $0.5 billion. Finally, we delivered record earnings per share, which demonstrates our balanced approach to revenue growth and profitability. These results reflect and are the result of our transformation over the past 2 years. With that, let me share a little bit about our vision and expectations moving forward. We're here today because 3 things are coming together right now. First, as organizations digitally transform and embrace the cloud, multigenerational data sprawl threatens the fundamental integrity of their business, more on that…

Yes, thanks for having me.

2020 was a lot of things for the world. But one of the things we saw in the business was a lot of our customers accelerating the digital transformations. As we go into 2021, what are you thinking about this? What are you seeing with your customers?

Well, what I'm seeing is that customers are moving very, very quickly. They're trying to provide great virtualization, collaboration spaces for their people, they're trying to secure their environment, and they're trying to accelerate their move to the cloud. And so what this means is that it puts a lot of pressure on the partner ecosystem to move very quickly and on all of us. And I think we've made a lot of progress as an ecosystem in responding to what customers need. Helping our customers recover. And I think what's in the road ahead as we move into 2021, is to help customers then reimagine what does the world look like post-COVID? And how do they really set up their organizations to be more resilient in the future and to really keep the lessons learned from 2020 as we move forward because I think while it's been painful -- the state of the world has been painful. It has enabled everyone to learn new ways of doing business. So I guess I would throw it back to you. You speak to a lot of customers, are you having similar conversations?

We are. And what -- and we look at it from the point of view of data, that's our life. And what we're seeing is data is front and center. Every business is being transformed into a data-centric business. And customers want to be able to manage it, really prioritize it, be able to get value out of it, protect it because the bad guys are at work. And all of this is causing sort of adoption of the cloud, but also causing customers to rethink how they do things. And that's what we see. So Gavriella, I'm going to put you in the spot. Commvault, Metallic, our partnership, very strategic for us, what brought it all together for Microsoft?

Well, I mean, so there's a number of factors. First of all, it's a great representation of Commvault's commitment to its customers when it comes to security, backup and recovery and services. And so we are very happy to continue the strong partnership that we've had for many years and supporting this new delivery. We're working and learning from home has made security and recovery a top concern for our customers. And so it's very timely to market. The service itself within Metallic is easy to configure. It's scalable, it's robust, it safeguards the exchange SharePoint and OneDrive, and also really safeguards the back-end and protects the VMs and the file server. So it's really a great end-to-end solution. So having a partner that has a long history in the market and is incredibly valuable from a customer perspective and also from a Microsoft perspective, is where this partnership really comes to life and where we want to put our efforts. So I'm happy to say that our engineering teams have really worked very closely together to build these solutions and help customers solve the challenges that they're facing today in real-time and glad we were collectively able to get Metallic into the market. So like -- tell me a little bit how is Metallic doing from your perspective?

Well, thank you for sharing your perspective on Metallic. We're really excited about it. This is a product we built ground up for the enterprise. And partnered with Microsoft very closely as we did it. The product is now available across Europe. It's available in Asia, obviously, the United States and Canada. We've added a heap of services into the product over the past quarter or so, and we're getting great traction. As customers are seeing how easy is this to adopt, how easy it is to add additional services around it and how easy it is to grow as their businesses grow with Metallic. So we're really excited about it.

Awesome. I couldn't agree more. I mean I think that Commvault and Microsoft have a proven track record together of over 20 years. And especially now when our customers need us so much, the companies need new innovations from trusted leaders. And while there's still a lot more work that we can do together. I'm very excited about the work that we've done in bringing Metallic to the market and having it built on Azure. So I think that we're in for a great ride as we move into 2021.

Absolutely. We've just begun the products and the partnership and the ecosystem of our partners have incredible potential and most of all, great value for our customers. Gavriella, thank you so much for joining us. We really appreciate it.

You're welcome, and thank you for your leadership and continued partnership with Microsoft.

I want to thank Gavriella for being part of our event. It's partnerships like this that make us excited about what's ahead. In addition, we need to run efficiently as an organization. To use a metaphor: "we have been changing the engines of an airplane while in flight". We have driven massive cost savings by streamlining our organization, driving process efficiencies, increasing our presence in low-cost locations and remaining focused on spending. Next, we have continued to invest. As the market evolves, we need to continue to innovate to stay ahead. I believe we are staying ahead, especially with Metallic, and our Hyperscale X solution. And finally, we've made significant progress in attracting top talent, committing ourselves to transparency and creating a winning culture. I would like to call out another reason for my confidence. We have the right leadership in place. As you know, it's all about the people. During my tenure, we've built a tremendous leadership team, comprised of Commvault veterans and industry leaders who have brought fresh perspective and energy to the company. I'm proud to work alongside them. You'll be hearing from some of them during this meeting. In a few moments, Don, Manoj, Ranga and Geeta, will go a bit deeper into our technological vision and advantages. Then Chris; Riccardo; Sandy; and Gary will discuss our go-to-market strategy. After that, Brian will take you through the detailed financials. And then our independent directors, Martha Bejar behar and YY Lee will shine a light on our important environmental, social and governance initiatives. And before we wrap, we will have 40-minutes to take your questions. With that, thank you for joining us today. And now I'd like to hand it over to Don Foster, an 18-year of Commvault veteran, who makes a huge difference with our customers, to discuss how we're driving innovation. Don?

Thanks, Sanjay, and thank you all for your time. Over the last 24-months, new technology trends have driven new customer needs. And in solving for these new trends, we've uncovered a new strategic problem that organizations face. And as Sanjay described earlier, this is the business integrity gap. Over the last 24-months, we've also released a number of innovations in our product portfolio, focused on closing that gap and allowing customers to control their always-in-motion data environment. Over the next 20-minutes, we'll discuss 3 key trends that highlight and showcase how our product portfolio and strategy are supporting our ability for aggressive market growth. Those three trends are: number one, that IT is actively transforming into a hybrid and multi-cloud landscape; number two, that, that same hybrid multi-cloud landscape is catalyzing the next phase of application modernization with microservices and containers; and number three, there's an increased demand for SaaS driven outcomes for all workloads. Both in the cloud and on-premises. We believe that we are uniquely positioned to handle these data-related challenges that have emerged from these new trends, and more importantly, help customers meet the demands that they have today and tomorrow. Now these five steps that Sanjay covered earlier, really helped to highlight the acceleration that's occurring in the digital business transformation. In fact, it's this acceleration that is widening the business integrity gap for organizations everywhere. Business and IT leaders alike must start thinking differently about their data, ask different questions and find answers through and with technology to implement and enact a new strategy energy that can support the movement to the hybrid multi-cloud world. Working with over 100,000 organizations worldwide, we are confident that we know how to close this business and take a gap. Customers of all types fall somewhere in the spectrum…

Well the pandemic has affected us significantly. We're having to reduce our brand count that we have, we had over 500 brands starting in 2020. And basically having quality near time -- near real-time data that's clear, it can easily flow at a high pace. Given to the right teams, it's of paradigm importance to figure out how to reduce our brand count that we have, we're trying to leverage AI, cognitive services to unlock the potential of the data to more effectively discover our consumer trends and of course, protecting our data assets is very vital.

So it sounds like Coca-Cola has truly become a data driven business. Now I know we've been working with your organization for a number of years now. Why did Coca-Cola choose Commvault over any of the other number of vendors that are in the market space to help manage these data management priorities?

Well, it started out, Microsoft, basically, they said they use Commvault for their SAP HANA footprint, and we need to did the same sort of thing. So we first engaged Commvault as a candidate to orchestrate and catalog, our HANA database backups and other databases, but also we needed to protect data in our field offices and certain plants around the globe. So we needed a solution that was strong in the cloud as well as in hybrid cloud, VMware and our physical environments. So Commvault differentiated itself by checking all of the boxes.

Well, that's fantastic. So everything from on-prem, virtual, physical, cloud, cloud-native, Commvault was a data management solution that helped you solve all of those challenges?

You bet. Yes.

That's a fantastic. Russell, thank you so much for your time today.

Thanks, Don.

What an incredible customer testimonial of our innovation in action in helping Coca-Cola achieve that hybrid and multi-cloud world. Speaking of hybrid and multi-cloud. I'd like to invite our Head of Products, Ranga Rajagopalan, to come and double-click into this topic and really help highlight how we're helping our customers accelerate in their hybrid and multi-cloud world. Ranga, the floor is all yours.

Thank you, Don. As you rightly pointed out, businesses are in different stages of IT transformation, and they are adopting different approaches to the hybrid multi-cloud. Some customers prefer to use cloud as a secure offsite storage while some other customers prefer to use cloud as an on-demand disaster recovery location for their business-critical workloads. Also, as part of the hybrid cloud journey, customers are accelerating the use of Saas, PaaS and cloud needed workloads, all of which require to be protected with the same business SLAs. In short, we can say that no 2 customers are going to have the same approach to the hybrid multi cloud. Through our leadership and innovation in multi-cloud data management we ensure that our customers can achieve that industrialized state of data management regardless of their approach. Let me explain how. traditional on-prem applications continue to be in the dominant application architecture for most businesses, and they need a simple future-proof way for protecting all those applications. Last year, we introduced Commvault HyperScale X as our flagship product, next-generation secondary storage solution powered by our very own Hedvig distributed file system technology, HyperScale X has delivered as an integrated hyper-converged scale-out solution, which can start small and grow as the customers' data needs grow. And with HyperScale X, customers can protect all their hybrid cloud applications. Our entire differentiated data management software is prepackaged into HyperScale X. So our customers can easily turn on any of our intelligent data services that Don was mentioning before, be it backup and recovery or e-discovery, disaster recovery or data governance, any of these services, customers can turn on with HyperScale X through our granular licensing. With our huge and growing set of workloads, we enable our customers to protect all their workloads with HyperScale X as…

Thanks, Ranga. The execution on our product portfolio is proof that we have had a multi-hybrid cloud focus within our technologies and how we deliver solutions for our customers. But it's not just about our product portfolio. It's also about how we work with our partners. Have a quick listen to the testimonial provided by Sabina Joseph, General Manager of Americas Partner Technology at AWS. She provides some really interesting insight about some of the things Commvault and AWS have done together.

My name is Sabina Joseph, and I am responsible for managing our technology partnerships in the Americas at AWS. I want to thank Commvault for your partnership in working with AWS since 2014 to deliver data protection solutions for our mutual customers. Just this past year alone, Commvault has expanded support across many of our AWS services, including supporting our hybrid services. This level of integration gives our mutual customers the flexibility they need regardless of whether or not they're running on-premises, on AWS or in a hybrid architecture. Last month, Commvault presented with one of our large enterprise customers at re:Invent. The presentation showcased how Commvault and AWS protect over 1,200 EC2 instances, 150,000 snapshots and 1.2 petabytes of data. And yet the customer only needed one individual to manage this very large environment. Thanks to Commvault, for your partnership and providing an important solution for customers as they increasingly move to the cloud. Thank you so much for your time.

Thanks Sabina for the fantastic testimonial. Proof, again, that hybrid multi-cloud focus on data management truly leaves that there is no workload left behind. And with the hybrid multi-cloud world, it's also catalyzing the next phase of application modernization from microservices and containers. And with that topic at hand, I'd like to introduce our expert, our resident expert in containers and microservices and seemed product manager, Geeta Vaghela, and she's going to talk us through how we're keeping customers ready for that next transformation of application modernization. Geeta, the floor is all yours.

Thanks, Don. As discussed, businesses are at various points in their IT transformation. And this is actually even more pronounced when we think about next-gen technologies like microservice and containers. In fact, Gartner predicts that 85% of global enterprise will use containers by 2025. This comes with a speed -- with the promise of speed of innovation and digital agility. Which depends on what to use not only to keep pace and respond to adversities and change but to outpace their competitors. The promise of containers and microservices is really the foundation to provide performance, agility and application mobility, but this doesn't come for free. So when we think about the value that was brought to the market by containers and microservices, we also need to think about the new challenges that this introduces. Microservice by design are lightweight and performant. This is great, and it really allows the application efficiency, faster design, reuse and being able to get applications to market faster. But by virtue it no longer contains stateful information. That responsibility now lies with I&O, where state required by an application needs to be managed in a performant way so the applications can still deliver on the lightweight value of it with performt while supporting stateful applications. Similarly, I mentioned reduced development time. So by repurposing the lego blocks with microservices, you can create applications faster. But this means that the glue, the communication between the applications need to be bulletproof. And so there's a real focus in terms of making sure that there is programmability in every component so that you can really get that intra-application communication. And finally, with all of the variations in how you can deploy today with IaaS, PaaS, microservices, on-prem, off-prem, public cloud, hybrid cloud, portability becomes hugely important. And when…

Thank you, Geeta. Well, definitely, you mentioned Saas, and we've definitely seen the way that customers want to consume these new data management solutions to be across a spectrum of different areas, be it packaged software on-premises, maybe be through converged appliances like our HyperScale X and of course, through SaaS offerings like what our Metallic offering offers to customers today. We're incredibly focused on the whole SaaS delivery for customers and ensuring that we can combine this into a single solution for how they manage their data. And with SaaS being a major trend in the marketplace, and we're seeing that increased demand for SaaS-based outcomes regardless of where the workloads live in the cloud or on-premises, we're acutely focused on helping to deliver those types of capabilities. And with that, I'm going to invite Manoj Nair, our General Manager for our Metallic business unit to come and help address exactly what we're doing for the SaaS-based offerings for customers, both today and into the future. Manoj, the floor is all yours.

Thank you, Don. Let's double-click on what Don just said. And why is SaaS really becoming the fastest-growing initiative for customers of all sizes. Today, if you have a workload that you're managing yourself, you're probably already moved it to a SaaS model or you're looking to move to a SaaS model. It doesn't matter what size of customer you are. It's because of the simplicity of the SaaS experience that transense from technology, try before you buy, grow and small, expand as your needs grow. That entire experience is what's making SaaS the fastest growing initiative. And our industry is no different. Data protection as a service is growing faster than traditional data protection. It's into this environment that Metallic was born in October of 2019. And we have been on an innovation tear since then. No one could have predicted the pandemic. But we were ready with our remote workforce support options, and we expanded cloud coverage to include all the major clouds, AWS, Azure, VMware on-premise, in the cloud. We also built out our 3 go-to-market pillars with an expanded partnership with Microsoft between Metallic and Azure that allows us to go directly to use the Microsoft channel and the Microsoft indirect channel. We. Also expanded our coverage in the Commvault channel, both our direct sales force and the large Commvault partner network. Last but not least, very important for a SaaS initiative is growth marketing. And we build out our growth marketing engines to bring in net new customers into the Commvault family. And we're also adding a lot more in terms of our data management capabilities to help with that expansion, including GDPR and compliance. GDPR manage data companies all over the world. If you're a multinational, it doesn't have to be a European country,…

Thanks, Manoj. This is really exciting stuff. All the innovation that we're driving towards our SaaS-based offering completely complements exactly what we're delivering for customers across our entire portfolio. In fact, through the conversation today, we've shown how we're mapping our solutions, our innovation, our strategy to help customers achieve the movement to a hybrid multi-cloud world. Be prepared for that movement towards containerization and microservices and that next evolution of the application modernization journey. And more importantly, to your point, Manoj, showcasing how we can deliver these technologies and these solutions. To help customers achieve that industrialized state of data readiness and to help close that business integrity gap, whether it be through on-premises software, whether it be in the cloud through SaaS or even at the edge. We truly have the best product portfolio to help customers meet these needs across all of these different environments. But products by themselves are not just enough. It's great to have the innovation, a solid product portfolio. How you go-to-market and bring those to your customers and partners is just as important. And so with that, I'm going to pass the baton to my friend and colleague, Chris Powell, to help us deep dive directly into what our go-to-market strategy is and how we're going to bring these solutions to our customers?

Thanks, Don, and thank you all for being here with us today. I'm Chris Powell. I head up our marketing efforts here at Commvault. And I'm pleased to be talking about the ways that we're driving our go-to-market forward. If you think about all of the innovations that you just heard Don and the product folks cover off, they were the ways that we're driving forward and really innovating in some ways that have been accelerated over the past couple of years. That spirit of innovation has really been brought into the ways that we're going to market. And there's three key things that we're going to talk about. First, Riccardo Di Blasio, our Chief Revenue Officer, is going to talk about how he's driving growth in his organization. Second, we'll have Sandy Hamilton, our Head of Customer Success -- Vice President of Customer success, talk about the ways that she's driving the adoption, the renewals, the expansion with our customers in building out a world-class customer success function. And then finally, Gary Merrill, our Vice President of Operations, is going to talk about how we're driving all of this with greater efficiency. So with no further ado, let's get started. Welcome, Riccardo.

Thank you, Chris, and nice meeting, everyone. My name is Riccardo Di Blasio.

So Riccardo, I know when we talk about the ways that we're looking to grow the organization, you have a great way to frame this out in terms of our growth drivers. Can you sort of take everyone through your 3 growth drivers?

So the number one driver we have is our main focus in our traditional business, which is the data protection business. We can do so much more here in order to have our fair share. So the first big part of our growth strategy will be to double-down in our data protection market and keep growing, convincing a lot of organization around the world to switch for a better technology like Commvault. The second one is what we call new business, which is where we are all benefit from all the product portfolio that you saw before that allow us to give us our unique upsell and cross-selling opportunities and really going fishing into addition and additional addressable market. And last but not least, what we call leverages. Which are -- you will see later on the slide, our people, the operating model and a robust partner ecosystem.

Riccardo, this next piece, the first piece you really talk about here, this traditional business, I know that there's so many different key indicators of success that we're seeing? What are some of the ways that you see success in our traditional business today?

Yes. As you know we are operating in a market which is fundamentally going flat. And in spite of that, we've been able to grow double digit, 14% more precisely this year, which is the living proof that we are gaining share at speed. As a consequence of that, we added more than 1,000 logos over the course of the year of new clients that switch into Commvault technology, generating more than one hexabyte of workloads that migrated into the public cloud, leveraging of technology like ours.

So I know that when the market looks at this, some of the best ways that we can explain what's happening is through customer success stories. And we have one of the biggest customer success stories in our history. I know that's occurred just in the last couple of quarters. Talk about that a little bit.

Indeed. And we're very fortunate that this particular case is a very large American retail corporation, part of the Fortune 500, but we have so many cases like this. We've been able to make them switch fundamentally within 3 conversation. Number one is the product. When you're dealing with large, complex legacy environment Commvault is a second to known technology. Capable to provide the best customer experience and the best performance in order to build your data protection platform. The second is the economics we've been able to generate, thanks to that, delivering one of the best total cost of ownership in the industry and a very fast ROI. And last but not least, we've been able to do that thanks to our partners. And in this specific case, thanks to Microsoft, which we've been blessed in having a strong partnership with Microsoft and all the team of Microsoft, that in this case, with joint forces to win a new account.

And that's great speaking of Microsoft. I know we've recently asked Casey McGee from Microsoft to give us some of his thoughts on the partnership with Commvault and how we're going to market.

Over the last year, the pandemic has had a dramatic impact on how businesses serve their customers. The speed and amount of transportation has been dramatic. We've seen a rapid shift to remote work leveraging Office 365 and Teams to replace typical in-person work. Companies are also serving their customers in new and different ways, remote meetings, digital commerce and innovations in supply chain have all transformed. With this, cloud data has grown exponentially. Cybersecurity and data protection have become even more critical to manage for IT decision-makers. One of the most important aspects of the Microsoft-Commvault partnership is our focus on ensuring customers' data is protected through the resiliency, reliability and security of our platform. We believe this starts with Microsoft Azure and is completed through the partnership with Commvault. So our partnership is seeing early progress with accounts of all sizes. We have invested in building a joint sales strategy engaging with our partner network and bringing unique new innovations to market with joint technologies like MCSS. Commvault Microsoft have a rich 20-plus year partnership, and it really shows through how well our field teams partner on our co-selling engagements. We spent a lot of time together on joint account planning in order to more deeply understand our customers, and to help our customers drive their digital transformation and adopt hybrid cloud. Through our work together, Microsoft and Commvault have identified a number of customer scenarios. Where we believe our innovation can help accelerate growth. Microsoft and Commvault have a robust partner channel ecosystem that provides proximity to and engagement with companies of all sizes. This partner ecosystem will play an important role in helping bring Metallic, one of our most important innovations to market. Metallic leverages Commvault's proven technology to bring SaaS delivered innovations to market and to do so in a way that is much faster than a typical bespoke solution. Customers know they can rely on the innovation from Commvault and the trusted cloud platform from Azure. Thank you, Riccardo, for the opportunity to speak with here today, and we deeply appreciate the partnership.

So, Riccardo, the next piece that I know that we are focused on is, as you captured it, really it's driving new business. So when you look at new business, a lot of discussion happened around the products group talking about the expansion of our product portfolio and what that does to our total addressable market can you talk about what the total addressable market expansion means from a field perspective?

Totally. Well, the short answer, we've been able to create a much larger addressable market, $42 billion by year 2024, precisely. And here, the rule of the game is to go above and beyond our data protection market with the upselling and cross-selling of the new product portfolio that the company built over the last couple of years. And this is a very powerful revenue stream for us because not only will allow us to secure better our data protection business, but will give us the opportunity to have one more conversations with our clients on a lot of other things.

So I know the big way that, that's being driven is that broader portfolio that we spoke about earlier, when you're talking with customers, what do they think about this broader portfolio?

They love it because they see this as a data stack. Right? So where at the center, you have our core data protection business, but then you can spend between the value of the data, the data insight and the storage of the data and you can take that stack and deliver it in a ratable model as a service through our Metallic engine. So that hybrid way of delivering technologies and that breadth of technology is a very powerful conversation to have.

So in those conversations with customers and the adoption of the broader portfolio, again, no better way to look at this than with a customer example. So how about this one here in the health care industry?

Yes. We're very luck that this is one of the many examples that you will see while us delivering the data protection business, we've been able to drive more conversation with the client. And convince them to also adopt our new technology HyperScale X as well as having that delivered true Metallic as a service. So we've been able to take a traditional transaction only for data protection and make it larger to a much bigger transaction and have more conversation within the same account. And we do this with existing account, but we also do this with new prospect accounts.

Excellent. So Riccardo, that brings us to your third growth driver, which is around go-to-market leverage. Can you talk a little bit about what that means for you?

Yes, Chris. So the leverage we've been able to generate with our new go-to-market strategy, first of all, is the people. We've been very lucky that we've been able to develop internally, but at the same time, attract from outside people with deep domain expertise that are capable to hit the ground and run out of the gate. Having a material impact in that field productivity. The second is the business model. We've been activating inside sales organization around the world, creating an ecosystem with our account managers and sales engineering. But we've been also able to adopt new technologies AI machine learn driven that are giving us more insight of our field organization, of our segmentation so that we can be more focus in the different segment of the industry that we target. And you heard me before, we're also very lucky that we can benefit and leverage our robust partner ecosystem. And our goal is to double down on this. And not only to meet our current partner but [indiscernible] attract new ones.

So speaking of the partner ecosystem, I know this is a big part of your overall go-to-market efforts and even some recent executive hires that you might want to mention. So how do you see the partner ecosystem within your go-to-market?

Absolutely. It is a fantastic opportunity for us. And yes, I mean, you call it out. We recently hired John Tavares, to lead our new global sales partner organization around the world. And what you see in this slide is just an example, the slide is not exhaustive, but our partnerships span from global system integrators, to cloud providers, to managed service provider, to tech alliances with other vendors like our or with the value-add reseller that are in the territories and the distributors. So unique opportunity, we're not going to be able to be where we want to be without our partners.

So, Riccardo, thanks for all these insights. Let's summarize again for the group. What are these three ways that you're looking to grow the organization, and then we'll bring in to Sandy.

Absolutely. So number one, focus on data protection, our traditional business, gain our fair share by leveraging all the new operating model, our people and our partners doing the same with our newly created addressable market, the new business, the upselling and cross-selling and leveraging the 3 elements of the plan in order to maniacally execute all the above. And this is also an opportunity for me to call it out, the importance of customer success in our organization, and this is a great segue to introduce my partner in crime, Sandy Hamilton, who leads customer success worldwide. Sandy, over to you.

Thank you, Riccardo, and it's great to be here with you all today. When I joined Commvault about 18-months ago, my priority was to build a world-class customer success team. Now that can mean a lot of different things to different people. But here at Commvault, we have aligned all post-sale activities, including enablement and customer education under customer success. Essentially pulling the thread from new customer onboarding through expansion and onto renewal. And that's just what we've been doing over the past 6 quarters. We've built an organization focused on delivering an exceptional experience for our customers that also delivers business value and outcomes for Commvault. A great customer experience in our business is similar to what you or I would want, a partner who is easy to do business with, who makes you feel important and who delivers value for your investment. We have dedicated customer success professionals around the world and increasingly in our center of excellence, which not only provides round-the-clock coverage but financial leverage as well. There are three key business outcomes we are focused on. First is the adoption of Commvault's leading solutions to make sure customers are using what they bought, second, expanding across our portfolio of products and third, ultimately, renewing our subscription installed base. So let's dive a bit deeper into each one of these, starting with adoption. When we work closely with our customers, we set them up for success. They adopt our solutions faster, and then they have the opportunity to expand. Over the past 3 years, there has been a dramatic decrease in time to second purchase. On average, 10-months faster. So what's changed? We have dedicated customer success managers. A programmatic set of onboarding activities and a maniacal focus on education. Things like giving customers best practice…

Yes, yes, no worries, happy to. Thanks for having me. Yes. So as you said, we've had a long-term partnership with Commvault. And for me, that really comes down to just some key aspects, I guess, what the product does for us, value for money and the excellent support we get from Commvault. As part of my job, I'm required to make sure that we are using the best products from a technology point of view for the university. So every so often, I have to go out into the market. And I mean -- and I enjoy doing that as well as part of my job to see what technologies are out there to make sure we're still using what's best for us. And over the years looking at products like HYCU and Veeam and Rubrik, which are great products in their own right. We still circle back to Commvault time and time again for a number of reasons, which I've touched on being that they're often the leader in technology and then feature sets in the product, value for money and probably first and foremost is just the excellent support we get from Commvault, both locally from our reps here and from a professional services and support point of view, and as we've continued to evolve over the year, the universities a lot of rapid change with technology, Commvault has been one of those vendors that keep up with those technology changes to protect the various technologies, the new ones we adopt and put in, and that's been evidenced over the last few years. And even recently, late last year, we put in the HyperScale platform from Commvault. And for us, that kind of was a no-brainer because we already were heavy users of the Nutanix hyperconverged platform. So we kind of knew the great feature set you kind of get out of a hyperconverged platform and how easy it is to support and how much redundancy is built in. So that's been a great journey for us as well and has freed up a lot of our technical resources to focus on other areas.

Super. well, listen, Justin, I apologize that our time today was so short, but I know you have to run. And so I just want to say again, thank you for taking the time. We love to hear stories from our great long time customers like this and I'm sure we'll talk again soon. So thank you.

No worries, thanks for having me.

One of the best things about my role is that I get to speak with so many great customers like Justin, and hear their stories about how Commvault continues to help them achieve their business goals. But now back to our business goals. Let's turn to renewals. Renewals are a strategic imperative for Commvault. We are focused on continuous engagement to understand the customer health, leveraging predictive analytics to identify opportunities and risks, and providing flexibility on licensing models to help customers who want to move from modern -- move to modern-based subscription pricing. And while it's early days with this fiscal year being the first with a meaningful renewal population. Our net retention rate has been firmly above 100% in each quarter of this year. We've increased our customer net promoter score by 19 points to be among best-in-class. And we have almost 1,000 individuals who advocate on our behalf. This all speaks to the fact that customers are staying with us and are happy. So here's what I want you to remember. 3 key takeaways. number 10, the average decrease in the number of months to second purchase. One in three, the number of customers who have subscriptions that are expanding. And 100% plus is the quarterly net retention rate so far this year. So I want to thank you for your time, and now I'm going to turn it over to Gary Merrill, our Head of Operations.

Thanks, Sandy, and hello, everyone. I'm Gary Merrill, VP of Operations. I am excited to study few minutes with you on our third topic, which is outlining the operating leverage we are targeting as we optimize our sales and marketing spend. As you will see with this first visual, since FY '18, we have dramatically reduced our annual sales and marketing expense by about $75 million, while still strategically investing in key growth initiatives. This includes Metallic go-to-market as covered earlier by Manoj, and the build-out of our customer success team as you just heard from Sandy both of which are included in sales and marketing expense. So this is a 1,200 basis point improvement. Through our estimated FY '21 results. For our current year FY '21, we expect that sales and marketing expense will be approximately 41% of revenue, which is a 400 basis point improvement over just FY '20. We expect to drive additional sales and marketing expense leverage. As we approach our FY '23 goal of 38% as a percentage of revenue. To achieve this, I am working with the go-to-market leadership team as we are focused on continued operating discipline tied to our customer segmentation approach. First, we are focusing our account executives on expanding the footprint in our existing installed base and in enterprise prospect accounts. This should then complement our new segmented sales motion, which is intended to cost efficiently secure our subscription renewal opportunity. In FY '22 alone, we estimate that our subscription renewal opportunity is approximately $80 million. 60% larger than the approximate $50 million opportunity just this current fiscal year. As we enter FY '22 and beyond, we anticipate additional leverage from our recently build out inside sales organization as well as our customer success function as the adoption of our…

Thanks, Gary, and thanks Riccardo and Sandy. That was a great summary of the ways that we're looking to win in the market. First, driving growth with Riccardo and talking about the growth drivers in his field organization working with our ecosystem. Second, Sandy talked about the ways we're driving adoption, expansion and renewals with our customers base as she builds out a world-class customer success function, and you just heard from Gary talking about the ways that we we'll drive greater efficiency. Next, I'll hand it over to Brian Carolan, our Chief Financial Officer.

Thanks, Chris, and hello, everyone. Thanks for joining us today. For those of you who don't know me, I'm Brian Carolan Commvault's Chief Financial Officer. These are exciting times for Commvault. And I hope you're joining today's event. Hopefully, you had a chance to review our fiscal third quarter results that we released this morning. I'm pleased to say that this was the largest revenue quarter in the company's history. We set numerous records this past quarter, and here are some of the highlights. Total revenues were $188 million, up 7% year-over-year, a quarterly record. Software and products revenue was $89 million, up 16% year-over-year, also a quarterly record. Large deal revenue, which our deals greater than $100,000 of software grew 19% year-over-year, with the average deal size up 15% year-over-year to approximately $322,000 and that's an important stat for us because our results weren't driven by 1 or 2 mega deals. In fact, the number of 7-figure deals was meaningfully above our recent run rate with solid contributions from all 3 geographic regions. Subscription revenue increased over 50% year-over-year and represented 55% of software products revenue up from 41%, a year ago. Annual recurring revenue increased 11% year-over-year and is now over $500 million. On a constant currency basis, ARR grew 8%. Recurring revenue was approximately $140 million and represented 74% of total revenue compared to 70%, a year ago. Non-GAAP EBITDA grew 26% year-over-year to almost $40 million. Non-GAAP margins were approximately 21%, up 300 basis points year-over-year. We had $33 million of share repurchases during the quarter, and EPS was a record $0.57 per share. To summarize, this was a record quarter for Commvault, and we are pleased with our progress. As you've seen throughout the day, our organization has rallied together over the past 2-years to…

ESG is incredibly important because we are fundamentally a global company in a connected world and an increasingly interconnected world. And this is what powers our business.

ESG is not a destination. ESC is not a check mark for us, but it's very much embedded into our strategy. And so that creates the value that we want to create for all of our shareholders.

2020 has really shown us what a direct role we have to play in supporting the integrity and the continuity and the resilience of our customers, employees and the communities around us. And it has really brought us together from the leadership and the Board, for sure, with the employees and across the many people involved in our business and in our community system.

Our priorities as independent directors. They are the governance of ESG, whether you're thinking about business codeofconduct, data privacy, cybersecurity, human rights, anti-corruption laws, that governance is a part for us. When you think about value creation, we think our value creation for all of our stakeholders, whether we're thinking of employee value creation, innovation, creating solutions and creating services that are second to none is a priority for our Board.

Commvault has really prioritized more inclusive leadership as the focal starting points who help our business through hiring, through career development, proactive mentoring at all stages, plus an increasingly diverse board.

ESG is part of our strategy, and we will continue to evolve and we'll continue to raise the bar. We've made a lot of progress on the diversity inclusion and belonging. It is an amazing organization that is creating value and is executing to our strategy.

We need to make sure that our customers can rely on us, not only with leading-edge technology, really powerful solutions. But so that our customers know the integrity with which we run our business, the integrity with which we behave in the marketplace is something that they can build into the core of their operations and their businesses and to have that assurance that they can rely on us to be a world-class partner in every aspect.

As you can see, Commvault is more than just its innovation and fundamentals. It is also on how we continually strive to be a better company for our employees, customers, shareholders and the communities where we live and work. After all, people want to work for and do business with socially responsible companies. That is core to who we are. And our social responsibility will remain a priority for us this year and in the years to come. And with that, I'll bring back our CEO, Sanjay Mirchandani. Sanjay, welcome back.

Thanks, Brian. As you can see, we are excited about the opportunity ahead and believe we have the people, portfolio, strategy and fundamentals to continue our path to sustainable and responsible growth. We look forward to continuing these conversations with you in the future. During these unusual times, the health of employees, partners and customers is of utmost important to us at Commvault. As an organization, we carefully follow CDC and state COVID guidelines. Everyone that is here in the office today has been tested for COVID and received a negative test result. With that, Brian and I will begin the question-and-answer session, so we can hear from you.

The first question is, your software growth numbers were well above your guided range. Can you give us some more color on the Q3 results and what drove the upside? Well, nobody better than Brian, for that.

Thank you, Sanjay, and hello, everyone. Great to be here. Sure. This was a gratifying quarter for us, a record quarter in many respects, record software, record total revenue, record EPS, as you heard. And what was great is that it was really the quality of the earnings and the quality of the revenues that came in was really important to us. Our large deal revenue, which are our 6-figure software deals and greater was up 19% year-over-year, and the average deal size approximated our four quarter average. So that really means that it was driven by many, many large deals, not just 1 or 2, what we call megadeals. So that was really gratifying to see. Also, our deal is less than $100,000 was also up meaningfully. It's up 10%. So really good contributions from that. Our recurring revenue is still making strides, 74% of our revenue is recurring in nature. Our ARR balance now sits squarely at over $0.5 billion, up 11% year-over-year, 8% constant currency. And also, we saw strong contributions from all of our geographies. The sales and marketing changes that we made 12 to 18 months ago are starting to pay off, and we're starting to see green shoots of that. And then lastly, we did this responsibly. We had our margins improved by 300 basis points year-over-year, resulting in record EPS for us. So with that, I'll turn to the second question. Can you give some more color on the capital allocation plan? I want to make sure I understand the total commitment? Sure, I'd be happy to do that. What we laid out today, we think, is a very responsible and attractive capital allocation plan. We have committed a sizable chunk of our existing cash and future cash flows to share repurchases. Let me break down the numbers. We've actually committed $200 million of our cash over the next 14-months through the end of FY '22 to share repurchases. In addition, starting on April 1, 2021, we will dedicate 75% of our future free cash flows to share repurchases. You add all that up, and that is a sizable commitment from our perspective. And we think it's a great use of our capital, great use of our cash, and we're excited to roll that out today. So let's move on to the next question. I think it's going to be for Sanjay. Sanjay, I'll read this. You outlined a very large TAM, much bigger than what we discussed post Hedvig acquisition. Can you give some more color on the market opportunity? So Sanjay?

Thanks, Brian. So we outlined a $42 billion TAM opportunity based on some logical grouping of layers, if you would, on the opportunity. It starts with core data protection, data protection as a service, insights, analytics, GDPR, GRC type things around the data and then software defined storage. These tend to be fragmented as markets and tend to be difficult for customers to embark upon and get the full life cycle. We think, as customers go through digital transformation, we have a great opportunity here to help them through it. When I speak to CIOs, they are concerned about where their data is. They're concerned about ransomware. They're concerned about the cloud. They're concerned about digital transformation. And we think our portfolio aligns to the opportunity is number one in being able to help our customers in that journey. The next question is -- and I think I'll take this. You announced new pricing and packaging last summer, how is that being accepted? So far, so good. The feedback we're getting, we're pleased with. I think more importantly, the folks that actually have to deal with the pricing with customers and partners appreciate what we've done. We simplified our packaging and licensing in the summer based on feedback. It makes it easier for customers to buy what they need aligned to the workload. So as they add more workloads, they can, in a granular way, acquire licenses and capabilities to work with us. And also to note, our newer technologies and products are subscription-first in alignment with the strategy that Brian and I shared. So we see a growing trend, hopefully, with our subscription revenue. In that light, how should we think about subscription renewal as an opportunity? Brian, why don't you take that one?

Sure. Thanks, Sanjay. We get this question quite a bit, and it's a great question to ask. I think it's important to understand that renewals is just part of the story. We started this journey several years ago. For those of you that may not be as familiar with Commvault. Prior to FY '18, less than 10% of our software revenue was recurring in nature. Beginning in FY '18, we started a concerted effort to move to more recurring based revenue. Now we're happy to report that well north of 50% of our software revenue is considered recurring. Part of this is that when we started selling these contracts, multiyear contracts back in FY '18, they are generally 3 years in length. So fast forward to today, in FY '21, that's actually the first meaningful renewal cycle that we've had for our subscription business. And I would say things are progressing well to date. In fact, our Q3 net retention rate for our entire subscription business is firmly above 100%. The opportunity that we had in FY '21 is a $50 million software opportunity. We see that actually growing to $80 million in FY '22 and then growing again in FY '23. So again, this will be a tailwind for the near-term ahead. It will normalize probably after that point in time as we approach that 70% to 75% range of subscription revenue as a percentage of software. And I think, again, it's more than just about the renewal. It's part of the whole motion that Sandy Hamilton laid out. It's the land, adopt, expand and renew altogether and that's where we're looking at that subscription business with net retention rate above 100%. We're seeing green shoots pop up with respect to our product portfolio and our customer success motion…

I could take the rest of the allocated time to answer that question. We're really excited. The Metallic is doing really well. We've gone from 2 countries at launch to 23 as of yesterday. Our portfolio has gone from 3 core services to 7, supporting major SaaS workloads. We have Office 365 enhancement, salesforce.com. Major cloud providers like Azure, AWS, VMware, all supported, endpoints, supported, hybrid across cloud, supported, on-premise and edge, supported, hundreds of paying customers, ARR has tripled over the past 3 quarters. 1/3 of our customers are enterprise customers with healthy expansion. In fact, 50% of our customers in Metallic have more -- are also using some other Commvault products. It's also bringing in new customers. 40% of our Metallic customers are new to Commvault really enabling our land, expand, adopt motion. How are we doing with the competition? I like to compete on the merits of what we build. On our technology. And I think Metallic has, by far, the best technology in the SaaS data protection as a service capability. We are rolling out services very fast. And we can do that because our core, our heritage is data protection. Metallic is also managed through single interface, whether the workload was originated on-premise, on the edge or on the cloud. While some of the competition may be focused on a particular segment or a particular workload, we have the broadest, our heritage is enterprise. So we build for scale. We're going to win on the merits of all that. The next question is, how have your win rates track over the last couple of years, especially relative to some of the private players, how do you beat the competition? Okay. Another question near and dear to my heart. So we think of the competition very…

Thank you, Sanjay. Well, as you heard from Gary Merrill, he laid out in really good detail. We've done a lot with sales and marketing expense. In fact, we've reduced our spend by roughly $70 million from FY '18 to FY '21, took the overall cost as a percentage of sales from 53% down to our projection of 41% for this fiscal year. So we've accomplished a lot, but we're not done, we're not stopping there. Now we want to make this more repeatable. We want to make it more sustainable. We're focused on rep productivity, rep maturity, partner leverage, adding some complementary customer success functions and resources, also inside sales reps. So I think this is going to also feed into the land, adopt, expand and the renew strategy because as we get more muscle memory here and more recurring revenue, our cost of sales associated with that revenue, we believe, is going to go down. With respect to any details, I would say, just kind of look at the glide path that we're on, Gary laid out that where we're at, 41% in FY '21 is our expectation. We expect to get to 38% by FY '23. I think that journey will accelerate as we go along over the next couple of years, and we're confident in those targets that we laid out. But in summary, we've done a lot, but there's still a lot more to do. Next one is we put out targets a few years ago. How is this different? How confident are you in your near term outlook? I would say, without any doubt, we have many, many reasons to be confident and much more confident, I think, than we were a few years ago. First of all, we have the right markets. We've…

Thanks, Brian. Folks, I know we're at the top of the hour, but we've got a few more questions coming in, so we'll take them. Europe and -- thank you for noticing that Europe and Asia are doing well, but our Americas business is also doing well. We've really put simply, we've got -- our strategy is resonating. The problems we're solving for customers matter. Our technology portfolio is more granular and easier to consume, and our teams, which includes our partner channel are doing a great job getting in front of customers. So notwithstanding the pandemic, we've been able to really drive and make a difference with our customers' digital transformation journey. So it's working and it's working around the planet. You cited -- and I'm going to take two more questions. You cited software-defined storage in your TAM slide. What is the future of Hedvig, just HyperScale X? Or is there a standalone opportunity? Well, when we acquired Hedvig in October, 1.5 years ago, it was driven by three key goals. One was the technology, and it continues to be absolutely state of the art for what it was built. Two, improved margins because incorporating Hedvig into our architecture, we didn't have to pay third-party royalties that were pricy. The third, it gave us an adjacency to roughly a $5 billion software-defined storage market. The outcomes are really quite straightforward. We've been able to integrate Hedvig right into our HyperScale X and we've got a world-class product there that we talked about. We're seeing the margin improvement every day as customers embrace our HyperScale X technology. And there is growing interest every day on stand-alone software defined storage, which we continue to bring to market and innovate around. So the three premises upon which we acquired Hedvig hold and are louder than ever. And folks, the last question, I know you're having fun, but this is the last question. Regarding HyperScale X, help us understand where this fits in your portfolio, how much does it contribute to your current business? I did call it our flagship product. And I mean it because HyperScale X essentially incorporates everything we do, encapsulates everything we build. It is the cornerstone of our strategy. It's central to how we solve hard problems that customers have. It's a simple form factor. You can have it as an appliance. You can have it as a software. The choice is yours as a customer. It ties to the cloud, it ties to the edge. You get ransomware protection built in with an easy button, so to speak. And it gives you that expansion you need over time into the hybrid cloud. We're very excited about this. This -- I keep saying this, this encapsulates everything we do. And as much as you'd like me to call out, the numbers, we don't hear out the numbers for HyperScale X, in particular.

So with that, folks, I think we're out of time. Let's bring this to case. I hope you enjoyed the session, we did. Once again, thank you for all your participation and interest in Commvault. Have a great day.