Commvault Systems, Inc. announced unaudited consolidated financial results for the third quarter and nine months ended December 31, 2017. For the quarter, the company reported total revenues of $180,366,000 against $167,061,000 a year ago. Income from operations was $3,478,000 against $3,842,000 a year ago. Income before income taxes was $3,676,000 against $3,621,000 a year ago. Net loss was $58,945,000 against net income of $1,959,000 a year ago. Diluted net loss per common share was $1.30 against EPS of $0.04 a year ago. Net cash provided by operating activities was $31,210,000 against $26,768,000 a year ago. Purchase of property and equipment was $2,663,000 against $2,405,000 a year ago. Non-GAAP income from operations was $22,025,000 against $23,674,000 a year ago. Non-GAAP net income was $14,100,000 against $14,964,000 a year ago. Non-GAAP diluted net income per share was $0.30 against $0.32 a year ago. Non-GAAP free cash flow was $28,547,000 against $24,363,000 a year ago. Gross margins were 86.6% for the quarter. Operating margins were 12.2% for the quarter, resulting in operating income or EBIT of approximately $22 million.

For the nine months, the company reported total revenues of $514,478,000 against $478,273,000 a year ago. Loss from operations was $5,538,000 against income of $556,000 a year ago. Loss before income taxes was $4,957,000 against income of $131,000 a year ago. Net loss was $60,239,000 against $705,000 a year ago. Diluted net loss per common share was $1.33 against $0.02 a year ago. Net cash provided by operating activities was $60,828,000 against $71,054,000 a year ago. Purchase of property and equipment was $5,297,000 against $4,485,000 a year ago. Non-GAAP income from operations was $53,487,000 against $56,897,000 a year ago. Non-GAAP net income was $34,240,000 against $35,920,000 a year ago. Non-GAAP diluted net income per share was $0.72 against $0.77 a year ago. Non-GAAP free cash flow was $55,531,000 against $66,569,000 a year ago.

For the fourth quarter and full year, the company expects total revenue should approximate $187 million which reflects company continued move to subscription-based pricing and recent lower close rates of large 7-figure deals. EBIT margin percentage to be approximately 13.4% resulting in a full year EBIT margin percentage of approximately 11.2%. Company continues to expect full year free cash flow to slightly exceed non-GAAP EBIT.

For 2018, for the sake of consistency company will continue to use a non-GAAP tax rate of 37% for the remainder of fiscal 2018. The company continue to expect full year 2018 free cash flow to slightly exceed non-GAAP EBIT.

For 2019, company expects total revenue of appropriately $780 million and EBIT of $105 million that would result in margin expansion of approximately 230 basis points. Company currently expects cash taxes to be approximately $7 million. However, based on initial modeling of the new U.S. income tax reform company currently expect that company will reduce non-GAAP tax rate from 37% to approximately 27% which should align with anticipated long term cash tax rate.