Good morning, ladies and gentlemen, and welcome to the Commvault Fourth Quarter 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will have a question-and-answer session, and instructions will be given at that time. As a reminder, this conference call is being recorded. I would now like to turn the call over to your host for today's conference, Mr. Michael Picariello, Director of Investor Relations. Sir, you may begin.

Thank you. Good morning. Thanks for dialing in today for our fourth quarter 2017 earnings call. With me on the call are Bob Hammer, Chairman, President and Chief Executive Officer; Al Bunte, Chief Operating Officer; and Brian Carolan, Chief Financial Officer. Before we begin, I'd like to remind everyone that statements made during this call, including the question-and-answer session at the end of the call, may include forward-looking statements, including statements regarding financial projections and future performance. All these statements that relate to our beliefs, plans, expectations, or intentions regarding the future are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 and are based on our current expectations. Actual results may differ materially due to a number of risks and uncertainties, such as competitive factors, difficulties, and delays inherent in the development, manufacturing, marketing, and sale of software products and related services, and general economic conditions. For a discussion of these and other risks and uncertainties affecting our business, please see the Risk Factors contained in our Annual Report in Form 10-K and our most recent quarterly report in Form 10-Q, and other SEC filings and in the cautionary statement contained in our press release and on our website. The company undertakes no responsibility to update the information in this conference call under any circumstance. In addition, the development and timing of any product release, as well as any of its features or functionality, remain at our sole discretion. Our earnings press release was issued over the wire services earlier today and has also been furnished to the SEC as an 8-K filing. The press release is also available on our Investor Relations website. On this conference call, we will provide non-GAAP financial results. A reconciliation between the non-GAAP and GAAP measures could be found on Table IV accompanying the press release and posted on our website. As you may have noticed in our press release issued earlier this morning, we have early adopted the new revenue recognition accounting standard. As part of today's call, we will be sending slides during our discussion of the impact of the new rules. If you have not already done so, I would suggest logging into the webcast now. Please also note that in order to best see the slides, we would suggest enabling full screen slide mode within the webcast. Directions on how to enable the full screen model are currently being displayed within the webcast. This conference call is also being recorded for replay and is being webcast. An archive of today's webcast will be available on our website following the call. I will now turn the call over to our CEO and President, Bob Hammer.

Thanks, Mike. Good morning, everyone, and thanks for joining our fourth quarter and FY 2017 year-end earnings call. We achieved strong fourth quarter financial performance, which is highlighted by a 15% year-over-year license revenue growth and 10% sequential license growth. These results were driven by an increase in both the number and size of enterprise revenue transactions. We had good contributions from all three global sales theaters. Please note that Commvault has adapted a new revenue standard, ASC 606 effective April 1, 2017. As a result, the format of this earnings call is going to be slightly different. I will be covering most of the financial highlights from Q4. These results are all reported under current GAAP rules and not the new revenue standards. Brian Carolan will then spend majority of his prepared remarks describing the details of the new revenue standard as it relates to Commvault. After Brian's summary, I will close out the call with comments on our plans to continue to improve performance in FY 2018, including an overview of our FY 2018 product releases. Let me briefly summarize our Q4 financial results. Software revenues were up 15% year-over-year, and 18% year-over-year on a constant currency basis. Total revenues were up 8% year-over-year, and 10% year-over-year on a constant currency basis. EBIT margin was 12.5%; EPS was $0.29 per share; free cash flow was $27 million. During Q4 2017, we repurchased approximately $25 million, or approximately 505,000 shares of our common stock at an average cost of $49.54 per share. We added 43 net employees in fiscal Q4, ending the quarter with 2,656 employees. We added approximately 600 new customers in the quarter. The highlights for the quarter were, we had strong sales execution in all theaters on a year-over-year growth basis. Software revenue in Americas, EMEA,…

Thanks, Bob, and good morning, everyone. For this fiscal quarter, I'm going to provide some abbreviated financial highlights in order to leave more time to discuss the new revenue recognition standard, ASC 606, which we adopted effective April 1, 2017. Please note that the financial highlights mentioned below are based on the old revenue recognition standard and not the new standard. I'll discuss the impact of the new standard on recast FY 2017 results shortly. There are also tables included in our press release issued earlier this morning, which help bridge the gap between our reported results under the old and new revenue recognition standards. Then lastly, my remarks are accompanied by a slide presentation, which is available on the webcast site for this call. If you are not already logged into that webcast, I would suggest doing that now. The strengthening of the U.S. dollar compared to certain foreign currencies had a significant impact on year-over-year revenue growth for both the quarter and fiscal year. Q4 total revenues were approximately $173 million, representing an increase of 8% over the prior-year period and 4% sequentially. On a constant currency basis, Q4 total revenues were up 10% year-over-year. For the full fiscal year, we reported total revenues of approximately $651 million, representing an increase of 9% over fiscal 2016. Total revenues for fiscal 2017 were up 11% year-over-year on a constant currency basis. Q4 software revenue was approximately $85 million, which increased 15% year-over-year and 10% sequentially. On a constant currency basis, Q4 software revenue was up 18% year-over-year. And for the full fiscal year, software revenue was approximate $296 million, representing an increase of 15% over fiscal 2016. Software revenue for fiscal 2017 was up 17% year-over-year on a constant currency basis. Services revenue for Q4 was approximately $88 million,…

Thank you, Brian. In FY 2017, we achieved a good turnaround in license revenue growth from a negative 9% in FY 2016 to a positive 15% in FY 2017. Our objective in FY 2018 is to further improve license revenue growth with a significantly enhanced product portfolio, combined with new pricing models and increased distribution leverage. Our enhanced product portfolio is clearly focused on providing market-leading solutions for customers dealing with big three trends in the market. Number one, the journey to the cloud; secondly, IT infrastructure modernization with solutions that have similar cost flexibility and high utilization rates as public cloud infrastructures; and thirdly, increasing strategic need for modern business analytics. Aligned with those trends, Commvault is bringing to market the largest new product cycle in our history, one that outpaces both our legacy competitors and new market entrants. Our objective with all our new products is to provide the best-in-breed solutions that meet customers' demands to make complex tasks simple. Commvault has been known for having the best solutions, but not always the most simple to deploy and manage. Now, we are delivering both. We are launching key new products in this June 2017 quarter. The new products include an enhanced platform for the cloud, new hyperconverged solutions for secondary storage infrastructure modernization, new solution set products and extensions, new service offerings for endpoint, Commvault managed services, and new solutions for service providers. Additional products will be launched this calendar year, including significant enhancements to our Commvault Data Platform for business analytics. Concurrent with the launch of new products, we are introducing new subscription-based pricing models for our Commvault Data Platform, which align with how customers consume both cloud infrastructures, as well as the new hyperconverged on-premise storage infrastructures. I'll now spend a minute on the enhancements to…

Thank you. Thank you, Bob. Operator, can we please open the line for questions?

Thank you. Our first question comes from the line of Joel Fishbein with BTIG. Your line is open.

Good morning, guys, and congrats on an awesome quarter. I thought the one number that stood out to me that you didn't really address on the call was the bookings number. The bookings number was up a lot. Can you just talk about that? Because related to that is what's happening – you mentioned big – deal funnel is big. If you could give us any examples of any recent wins would be helpful. Thanks.

I'll let Brian answer the question on deferred. But on big deal wins, a press release went out this morning with a whole number of those big deal wins, Joel, so pick a copy of that. But they were across all theaters and across all industries, so extremely encouraging. As far as the Q1 big deal funnel, it is about as large as we've seen in Q1 in our history. So it's very encouraging. To open (44:05) the quarter with that kind of funnel and we got off to quite a good start in the first month of the new fiscal year as well.

Hi, Joel. It's Brian here, and just to answer your question about the billings and bookings performance. We saw a nice sequential uptick in deferred revenue. It was up 9% sequentially in Q4. That was really driving the overall billings number for us, and that's a result of us going through the maintenance pricing realignment. We're entering into longer-term contracts with customers. And also we saw a slight uptick in multiyear maintenance sales in Q4.

Great. Just one quick follow-up to that was the – and, Brian, you alluded to this on the call is that, the maintenance pricing is pretty much behind you now. I mean, is that – we just have one more quarter, is that correct? I just want to make that clear.

Yes, that is fair to say. We're at the tail end of that maintenance pricing realignment process. Now it just needs to work its way through the P&L for the first half of FY 2018, and we'll see a resurgence in services revenue and that's our expectation for the second half of the fiscal year.

Great. Thank you so much.

Our next question comes from Jason Ader with William Blair. Your line is open. Jason N. Ader - William Blair & Co. LLC: Yeah, thank you. Brian, I just had a question on the expected impact from the shift to subscription in fiscal 2018 just from a revenue headwind standpoint?

I'll answer that, Jason. I don't think it's going to be a headwind. I think it's going to be a tailwind. It's early, so we don't have enough data. But it aligns really well with how customers want to buy and it appears – like, it's just too early to say – clearly, some of this acceleration in funnel growth in these big deals is tied to our new pricing models. So, I would assume, from an assumption standpoint, at this point that that will be a tailwind for us and not a headwind. Jason N. Ader - William Blair & Co. LLC: Okay, great. And then just a quick follow-up on the large deal question. Do you have any $5 million or above deals in the quarter?

We had several seven-figure deals closed in the quarter.

Yeah, and a lot of seven-figure deals closed.

But no $5 million.

But no $5 million per se. Jason N. Ader - William Blair & Co. LLC: No $5 million or above. Okay. Thank you.

Our next question comes from the line of Abhey Lamba with Mizuho Securities. Your line is open.

Yeah, thank you. Congrats on a good quarter. Bob, you seem a lot confident going into first quarter, especially as we have also tough compares for the next two quarters. Can you talk about the fundamental drivers that give you the confidence? I understand we have a good start to the year going forward. What are the fundamental drivers that give you confidence (47:27) double-digit license growth over the next couple of quarters, especially as new products are going to be launched? And is the traction (47:34) from these new products required for you to hit those targets?

Yeah, I understand. So, fundamentally, we've got really good momentum in the business, and I would call this on our core. So take big deal data protection and management, particularly as it relates to the journey to the cloud, are standalone products had an outstanding year last year, outstanding and awesome. And we've had excellent sales execution, and I'll combine that with a really good, solid big deal funnel going into the quarter. The fact that now in our core we've got major enhancements to the platform on our core journey to the cloud combined with new pricing models and enhanced standalone. So we're coming into the year in a really strong position, not to mention the fact that we had a good solid first month. And then in addition to that, as we mentioned, now we're launching this quarter our move into secondary storage with whole series of hyper – clearly leading-edge hyperconverged solutions against anybody. And right on the back of that are a series of new standalone solutions, and right on the back of that is analytics. And you combine that with enhancements we're making to our distribution and strategic partner leverage, you've got the elements in place. So this is a big, what I call, execution exercise, because all the pieces are now in our hand, and now the question is how high up is up.

Got it. Thank you, Bob. And, Brian, you mentioned in your ASC 606 kind of impact on 2017. Just wanted one clarification in adjustments to revenue there are some operating expense reclassification. Can you elaborate on that, how these expenses kind of fall into the revenue bucket?

Yes, Abhey. So these were payments made back to our distribution network in the form of marketing development funds. And under the new revenue standard, it needs to be accounted for as a contra revenue adjustment as opposed to an operating expense.

Got it. Thank you.

Our next question is from Srini Nandury with Summit Redstone. Your line is open.

All right. Thank you for taking my question, Bob. In prepared remarks, you mentioned you plan to introduce several new products. Can you give us some color and preview them a little bit, if possible, and when would they be introduced? Thank you very much.

I'm going to let Al – I've summarized it and I forgot to mention in my last comment that we're significantly expanding our managed service and SaaS offerings as well. So, Al, why don't you take this?

Yeah. I think the new products are of great interest. Bob just alluded to a big one. Some of them are tied to our platform enhancements. The first big one is our storage services layer, which is applicable to hyperconverged architectures for secondary environments. As Bob said, that's a really good play. There's lots of things there, particularly in the secondary storage space putting, if you will, our data services on top of modern architecture. We're doing a number of things also with our UX, our user experience capabilities, that's now going across almost all of our product line. We're getting extremely good feedback from our channel, our sales guys, and of course, our customers on all those enhancements. And then we went through our product line and did a number of things, what I call cloud-ize (52:02) on our recent sales kickoff around our VM protection. We're doing many more things with Live Sync. We're doing change block tracking. We're doing a number of instant access kind of capabilities, copy management, doing things in the orchestration space with not only DR, but dev-test, and many more. As Bob just alluded, one of the things we're getting really good feedback on is our SaaS offerings, be it end user, be it archive, be it backup, and of course, our managed services offerings as well. And again, as Bob alluded, these are all upon us in terms of new offerings and new solutions out there. Services side, we're doing some cool new things as well. Bob fell off the chair.

Our next question is from Aaron Rakers with Stifel. Your line is open. Aaron Rakers - Stifel, Nicolaus & Co., Inc.: Yeah. Thanks for taking the question. Congratulations and I do have a follow-up as well. Kind of following-up on that last question, as you look at your expectations for fiscal 2018 and we think about the opportunity expansion that might exist from new pricing models as well as the new solutions you're coming out, how would you characterize the expansion of your total addressable market, your opportunity set, and how meaningfully that's factored in currently to that fiscal 2018 outlook?

Yeah, it's a good question. It's a significant expansion on TAM. For sake of argument, let's just say it's 15% TAM expansion, could be a lot bigger than that depending on the numbers you use in the hyperconverged area, so it could be a lot larger than that. So, yes, it's a meaningful expansion of TAM, Aaron. Aaron Rakers - Stifel, Nicolaus & Co., Inc.: Okay. And is that – just real quickly, is that a material contributor to your fiscal 2018 views that you could be slightly above where the current consensus is at?

So, let me be clear. I think the consensus is reasonable. I said all along that our longer-term objective is to get this company back. First, get our license revenue growth north of 20%, and then the services line would swing around and match it, so that in time total revenues would be growing at 20%. With all the things we have in our hand, that objective is achievable. It may take us a little bit of time to do that, but the opportunity is right in front of us, Aaron, right now. Aaron Rakers - Stifel, Nicolaus & Co., Inc.: Okay. And then the follow-up question I had was, as you think about that revenue growth, and then you start to think about the productivity of your sales force, I'm curious of where you think you're at, what inning maybe you're in, in terms of what you would deem to be an appropriate productivity level for sales and how we think about that relative to the operating margin.

So, we have significant sales productivity built into our internal FY 2018 plans. As we've said all along, in the second half of FY 2018, operating margins will begin to swing around significantly, particularly in the fourth quarter. And once you get into FY 2019, you have significant operating margin expansion again. So, if you wanted to think of what's possible, what's possible is when you get into FY 2020, you're back north of that – or in that 20% operating margin range. So, that is a doable objective or goal. It's not what I would put in your models, but that is certainly the way we're thinking about the business internally. So it allows us to invest and stay ahead of the market, and we are ahead of the market now in all competitors. It allows us a – the massive market expansion opportunity, by the way, is going to be business analytics, but that's going to take a few years to impact the numbers, but it will impact the numbers in FY 2019, because it's substantial. So, we've got all the expansion on our core business that Al just went through, which is massive. And right on back of that we're coming with another big business expansion opportunity here. So it took us a little while to get all this foundation in place, but it's in place now to, one, accelerate growth; and two, we worked the models as we've done in the past to get our operating margins back in line, including significant improvements in sales productivity. Aaron Rakers - Stifel, Nicolaus & Co., Inc.: Perfect. Thank you.

Okay.

Our next question is from Alex Kurtz with Pacific Crest Securities. Your line is open.

Yeah, thanks, guys. Bob, maybe you could just take us through why the deal size in the enterprise space seems to be improving and sort of how that's playing out with customers as they implement these hybrid cloud solutions. Is it just that you're getting exposure to more capacity in the environments, more applications than you were a couple years ago and is that really the big trend or is there some other dynamic that's driving the improvements in the deal size and the bigger deal flow?

I'll speak, and I'll let Al jump in afterward. I think the issue in the expansion is, is that in major enterprises, as they are shifting to the cloud and thinking about business analytics and – how they're going to – they're more data-focused than they were. There's a shift from infrastructure focus to what do I do with my data and applications. And as they start to think that way, we become much more strategic and relevant, so we're taking out numbers of competitors in these big accounts to solve problems across, I call it, core data protection and, as Al mentioned, DR and archive and how I manage the cloud and how do I set myself up for analytics and what do I do with my data at the edge? So, these deals are much more comprehensive and we're taking out legacy competitors at an increased rate and we are expanding into more use cases. So it's kind of all the above. And, Al, I'll let you take the...

Yeah, I think you're right on the money. I'd also add that our sales leadership and our sales management, particularly at the enterprise level, talk across all regions has dramatically improved.

Yeah.

So, they're doing a great job.

Yeah.

And again, back to Bob's point, I think, as Bob and I said on a lot of EBCs (59:19) there's people coming in, just had a couple yesterday, people are looking for a federated, standard broad-based enterprise class solution. Personally, I think there is less and less interest in point level solutions or departmental level these days. And again, as all the dynamics Bob talked about in terms of cloud hybrid environments, portability, diverse operations, a lot of mobile users, all that environment is – it's serious, it's serious requirement, and there's not a lot of people that can handle it.

And you combine that with our services and support assets, because we've made massive investments in services and support, so that we become the trusted advisor on helping these customers architect and manage these environments. And then your support now has to be a lot more comprehensive and automated than it was before, and those investments were very significant over the last several years and they're really paying off for us now.

All right. Thanks, guys.

Our next question is from the line of Andrew Nowinski with Piper Jaffray. Your line is open. Andrew James Nowinski - Piper Jaffray & Co.: All right. Thanks and congrats on the nice quarter. Just a question and a follow-up on Microsoft. They've been a strategic partner for a long time. But can you give us any color on how Microsoft might be incentivizing their own salespeople to close Commvault deals and whether you're seeing any inflection in revenue growth from Microsoft?

I'd say the Microsoft partnership continues to improve significantly. They are a great partner. They're helping us align their field and ours, to Al's point, in terms of helping customers turning to the cloud. They're a big customer of ours internally. So they are a significant factor in a lot of these major deals, where we're working together to provide cloud-based solutions. So that partnership continues to expand, and I can't say enough about how engaged they are and how proactive they are in working with us to the benefit of our mutual customers. Andrew James Nowinski - Piper Jaffray & Co.: Got it. Thanks. And then, given the increasing adoption of Office 365, is that also a tailwind for Commvault?

Office 365 is a major tailwind. I'll let Al go into that.

Yeah. Office 365 is working for us very well, again, with Microsoft. I think back to your core question, though, is Microsoft and a number of our cloud partners, the alignment is generally around most of their field and most of their internal people are totally incented around driving cloud usage and cloud capacity. So we're a big use case, obviously, for that. It works well with Microsoft and a number of the other cloud guys.

To that point, their sales teams get comped on selling Commvault. That was the question that I had answered.

Right, right. That's where I was going. And that as well. So that's always a nice alignment feature here with our partners. Andrew James Nowinski - Piper Jaffray & Co.: Got it. Thanks, guys.

So Office 365 cuts across a number of different apps in Office 365. And since our data projection and search is a lot more comprehensive across, we added value to the customers, because sometimes they want to bring critical data from Office 365, let's say, to our data warehouse for analytics and things like that, and we provide those kinds of capabilities. So it's definitely a tailwind for us.

Yeah. As well as archive and compliance and all those things.

Right.

It's all right to answer that question.

Yeah. Andrew James Nowinski - Piper Jaffray & Co.: Okay. Thank you.

Our next question is from the line of Michael Turits with Raymond James. Your line is open. Michael Turits - Raymond James & Associates, Inc.: Hey, guys. Good morning. Thanks for all the patient explanation on ASC 606. Brian, my question is less about ASC 606 and just about the economics of license versus equivalent type of subscription deal, sort of a follow-up, I think, to Jason Ader's question. So, if we look back at slide 12, that sample $300 million deal over three years. Can you give us a sense for what that would've looked like in a license basis, license and maintenance, and this is a three-year breakeven, so it would be same $300 million over three years?

It would be very close, Michael. I think that the way the economics work in this – again, this is a simple representative transaction. But under perpetual sales, we would recognize the bulk of the software revenue upfront and that's a reasonable amount of maintenance that we recognize over the following three years. It would be very close. And I think over time, this will result in a recurring revenue stream for us beyond the three-year period, and incremental cash flows and revenue. Michael Turits - Raymond James & Associates, Inc.: Right. And so, the license upfront, it would show in a pure license deal you think would be equivalent or smaller or larger than that $185 million in a subscription deal?

Might be a little less upfront. Again, this though is going to drive new customer adoption and also benefit our existing customers as they expand into cloud workload. So, as Bob said, we view this as a tailwind. We have increasing confidence in FY 2018 despite our adoption of this. So it's not necessarily we're counting on the new revenue standard to get there at all, and this is going to end up being kind of a tailwind for us.

What some of these customers are doing is, since this is an OpEx, they – those deals could be two or three times larger than a typical perpetual deal, because they're now putting that in a three-year committed model and we're recognizing it upfront, and we're also working on mechanisms to get the cash upfront as well. So it's working, and it ties to our platform, because it's very difficult to do this without the kind of platform model that we have. Michael Turits - Raymond James & Associates, Inc.: Great. Okay. Thanks for the clarification, guys.

And our next question is from Eric Martinuzzi with Lake Street Capital. Your line is open.

Hi. Congrats on the quarter and very encouraging outlook. I had a question for Brian. Regarding the recast revenues for 2017, do you have for the full year FY 2017 the geographic breakout of the revenue for the three different geos?

Eric, we don't have that on our fingertips, I'm sorry.

Okay. And then just...

On a recast basis.

From a broad strokes here as far as you talked about a full year 2018 guide on the revs of high single digits, maybe address it that way the three different segments where we're growing – where the growth rates of the...

So based off of historical GAAP, we saw very good growth this past quarter internationally, especially in APAC. You'll notice that from our disclosures. And on a relative basis, I mean, I'd say all three theaters are functioning very well. We're seeing strong performance in the Americas. We're seeing strong contribution from larger enterprise transactions. In EMEA, we have got good progress and APAC, as I mentioned, was up quite a bit. In fact, APAC was up something like 38% on a constant currency basis for the full 12 months.

Okay. Thank you.

Thank you. And I'm not showing any further questions. Ladies and gentlemen, this does conclude the program and you may now disconnect. Everyone, have a great day.