CommVault Systems Inc. (NASDAQ: CVLT) stock plummeted 5.12% on Wednesday, despite reporting solid third-quarter fiscal 2025 results and raising its full-year guidance, as the company's strong performance was overshadowed by concerns over its declining profitability and heightened cybersecurity risks.
The data protection and cybersecurity firm reported a 21% year-over-year increase in revenue to $262.6 million, driven by robust growth in its subscription revenue, which surged 39% to $158 million. The company's SaaS (Software-as-a-Service) annual recurring revenue (ARR) also witnessed impressive growth of 75% on a constant currency basis.
However, CommVault's net income fell 36% to $11 million, and its profit margin declined from 7.9% in the third quarter of fiscal 2024 to 4.2%. The company's earnings per share (EPS) of $0.25 also missed analyst estimates by a significant 45%, contributing to the stock's decline.