CVLT

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How CVLT rewrote its risk factors

10-K ITEM 1A · FY2025 → FY2026

Text kept

11%

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281

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+143

words, now 10,837

New in FY2026

Risks Related to Our Business and Industry Our industry is intensely competitive, and many of our competitors have greater resources and larger, established customer bases, which could enable them to compete more effectively than we do.
The data protection and cyber resilience market is intensely competitive, highly fragmented and characterized by rapidly evolving technology and industry standards, changing customer requirements, and frequent new product introductions.
Our competitors vary in size and in the scope and breadth of the products and services they offer.
Our primary competitors include Rubrik, Cohesity, and Veeam, and we also face competition from large technology companies, cloud providers, service providers, and other current or emerging market participants that offer products or services that compete with aspects of our portfolio or that customers may view as substitutes for our offerings.
Many of our competitors have significantly greater financial, technical, sales, and marketing resources than we do, as well as larger installed customer bases and greater brand recognition.
These competitors may be better positioned to respond more quickly to new or evolving technologies, customer requirements, and industry standards, or to devote greater resources to the development, promotion, sale, and support of their products.
Competition in our industry is influenced by a number of factors, including product functionality, performance, and integration; breadth of platform and workload coverage; ability to invest and scale; pricing and total cost of ownership; global sales infrastructure; quality of technical support; brand recognition and reputation; and the ability to address customers’ evolving cyber resilience requirements.
If we are unable to compete effectively across these factors, our competitive position could weaken, and we could experience reduced revenue, margin pressure, or loss of market share, which could adversely affect our business, results of operations, and financial condition.
In addition, it is often costly and time-consuming for customers to replace existing cyber resilience systems.
Most of our prospective and newly adopted customers have previously implemented competing solutions, which may provide incumbent vendors with advantages in retaining those customers due to existing familiarity with customer environments, data architectures, and operational requirements.
Some customers may be reluctant to incur the cost, complexity, or operational risk associated with switching vendors, which could limit our ability to win new customers or expand within existing customer environments.
We also face competitive risks related to the ongoing transition within the industry from traditional on‑premises solutions to cloud‑based and SaaS delivery models.
While we have substantially completed our transition from a perpetual licensing model to a subscription‑based model delivered through term‑based licenses or SaaS, certain competitors have operated under cloud‑native models for longer periods.
Differences in deployment models, customer adoption rates, infrastructure requirements, and pricing expectations may adversely affect our ability to compete in certain segments or use cases.
Competition may further intensify as we expand into new markets, as existing competitors broaden their product offerings, and as new competitors enter the market.
We also expect increased competition as a result of industry consolidation, including from OEMs, systems and network management companies, and other market participants that may leverage acquisitions, bundled offerings, or established customer relationships to compete with our solutions.
Increased competition could result in pricing pressure, reduced margins, loss of market share, or reduced demand for our products, any of which could adversely affect our business, results of operations, and financial condition.
In addition, the highly competitive nature of the cyber resilience industry makes it challenging to attract and retain skilled employees.
Our ability to compete successfully depends, in part, on our ability to hire and retain qualified personnel, and increased competition for talent could increase our costs or adversely affect our ability to execute our business strategy.
We rely on indirect sales channels, including resellers, systems integrators, distributors, OEMs, and marketplaces, and the failure of these channels to effectively sell our solutions could adversely affect our business.
We rely significantly on indirect sales channels for the marketing and distribution of our products and services, including value-added resellers, system integrators, corporate resellers, distributors, OEMs, and marketplace partners.
Our resellers represent our most significant distribution channel.
Our agreements with resellers are generally non-exclusive, are typically renewed annually, do not contain minimum sales commitments, and, in many cases, may be terminated by either party without cause.
In addition, many of our resellers sell data protection and cyber resilience solutions that compete with our offerings.
As a result, these resellers may allocate greater resources or prioritize competing products or services, or may discontinue or reduce promotion of our solutions.
If a significant number of resellers or certain resellers were to discontinue or materially reduce their sales efforts on our behalf, prioritize competing products, or fail to comply with the terms of their agreements, our business, results of operations, financial condition, and reputation could be adversely affected.
In addition, if we fail to effectively manage our reseller relationships, including conflicts among resellers or performance expectations, our sales and operating results could suffer.
A portion of our future growth depends on our ability to identify, attract, and retain new resellers.
Our competitors also use reseller and partner-based arrangements and may be more successful in recruiting partners or entering into exclusive or more favorable arrangements, which could limit our ability to expand or maintain our reseller network.
Failure to maintain or expand our network of resellers could impair our ability to grow revenues.
Further, we have non-exclusive distribution agreements with certain partners that manage portions of our reseller ecosystem and facilitate broader distribution of our solutions.
One such partner ("Partner A") accounted for approximately 32%, 35% and 36% of our total revenues for the years ended March 31, 2026, 2025 and 2024, respectively.
Separately, a second partner ("Partner B") accounted for approximately 11% of our total revenues for the year ended March 31, 2026.
Total revenues for the years ended March 31, 2025 and 2024 for Partner B were less than 10%.
If any of these partners were to discontinue or materially reduce their sales of our solutions, terminate their agreements with us, or experience operational or financial difficulties, and if we were unable to effectively replace them or assume management of the affected distribution activities, our business, results of operations, and financial condition could be materially adversely affected.
Our OEM partners sell and integrate our solutions as part of their offerings and represent a material source of our revenues.
These partners have no obligation to sell systems incorporating our solutions, meet minimum sales targets, or recommend our solutions on an exclusive basis, and may terminate their relationships with us at any time.
We do not control the timing, shipping expectations, volume, or pricing of systems sold by OEM partners, and in some cases OEM partners may choose to develop or promote competing solutions.
In addition, if one OEM partner perceives our relationship with another OEM as competitive, it may decide to reduce or cease its relationship with us.
Any material decline in OEM‑related sales could adversely affect our business, revenues, results of operations, and financial condition.

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Gone since FY2025

Risks Related to Our Business and Industry Our industry is intensely competitive, and many of our competitors have greater financial, technical and sales and marketing resources and larger installed customer bases, which could enable them to compete more effectively than we do.
The cyber resiliency market is intensely competitive, highly fragmented and characterized by rapidly changing technology and evolving standards, changing customer requirements and frequent new product introductions.
Competitors vary in size and in the scope and breadth of the products and services offered.
We must continually innovate to maintain our market position.
The principal competitive factors in our industry include product functionality and integration, platform coverage, ability to invest and scale, price, worldwide sales infrastructure, global technical support, brand recognition and reputation.
If we are unable to address these factors, our competitive position could weaken and we could experience a decline in revenues that could adversely affect our business.
It is also costly and time-consuming to change cyber resilience systems.
Most of our new customers previously adopted cyber resilience systems, which gives an incumbent competitor an advantage in retaining a customer because the incumbent already understands the network infrastructure, user demands and information technology needs of the customer, and because some customers are reluctant to invest the time and money necessary to change vendors.
There are complexities involved in transitioning from traditional on-premises solutions to cloud-based services, including customer adoption rates and the need for scalable infrastructure.
Commvault has substantially completed the transition from a perpetual licensing model to a subscription-based model delivered through either term based licenses or SaaS, whereas certain of our competitors are already fully cloud-native.
New competitors entering our markets may have a negative impact on our competitive positioning.
As we enter new markets, we expect to encounter new competitors.
Many of our existing competitors are broadening their product breadth and scope.
We expect increased competition from OEMs, including those we partner with, and from systems and network management companies, especially those that have historically focused on the mainframe computer market and have been making acquisitions and broadening their efforts to include cyber resilience products.
We expect that competition will increase as a result of future industry consolidation.
Increased competition could harm our business by causing, among other things, price reductions of our products, reduced profitability and loss of market share.
Additionally, attracting and retaining skilled professionals is a common challenge in the cyber resilience space, due to the intensely competitive nature of the industry.
We rely on indirect sales channels, such as value-added resellers, systems integrators, corporate resellers, distributors, OEMs, and marketplaces for the distribution of our solutions, and the failure of these channels to effectively sell our solutions could have a material adverse effect on our revenues and results of operations.
We rely significantly on our value-added resellers, systems integrators and corporate resellers, which we collectively refer to as resellers, for the marketing and distribution of our products and services.
Resellers are our most significant distribution channel.
However, our agreements with resellers are generally not exclusive, are generally renewable annually, typically do not contain minimum sales requirements and in many cases may be terminated by either party without cause.
Many of our resellers carry data protection and cyber resilience solutions that compete with ours.
These resellers may give a higher priority to other software or SaaS applications, including those of our competitors, or may not continue to carry data protection and cyber resilience solutions.
If a number of resellers were to discontinue or reduce the sales of our products, or were to promote our competitors’ products in lieu of our own, it could have a material adverse effect on our future revenues.
Events or occurrences of this nature could seriously harm our sales and results of operations.
If we fail to manage our resellers successfully, there may be conflicts between resellers or they could fail to perform as we anticipate, including required compliance with the terms and conditions of our agreement, either of which could reduce our sales or impact our reputation in the market.
In addition, we expect that a portion of our sales growth will depend upon our ability to identify and attract new resellers.
Our competitors also use reseller arrangements and may be more successful in attracting resellers and could enter into exclusive relationships with resellers that make it difficult to expand our reseller network.
Any failure on our part to maintain and/or expand our network of resellers could impair our ability to grow revenues in the future.
Further, we have a non-exclusive distribution agreement with Arrow pursuant to which Arrow’s primary role is to enable a more efficient and effective distribution channel for our solutions by managing our resellers and leveraging their own industry experience.
Arrow accounted for approximately 35%, 36% and 37% of our total revenues for the years ended March 31, 2025, 2024 and 2023, respectively.
If Arrow were to discontinue or reduce the sales of our solutions or if our agreement with Arrow was terminated, and if we were unable to take back the management of our reseller channel or find another distributor to replace Arrow, there could be a material adverse effect on our future business.
Our OEMs sell and integrate our solutions which represents a material portion of our revenues.
We have no control over the shipping dates or volumes of systems these OEMs sell and they have no obligation to sell systems incorporating our solutions.
They also have no obligation to recommend or offer our solutions exclusively or at all.
They have no minimum sales requirements and can terminate our relationship at any time.
These OEMs also could choose to develop their own data protection and cyber resilience solutions.
Our OEM partners compete with one another.
If one of our OEM partners views our arrangement with another OEM as competing, it may decide to stop doing business with us.
Any material decrease in the volume of sales generated by OEMs could have a material adverse effect on our revenues and results of operations in the future.

and 246 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2025 ↗, FY2026 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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