Cloud ARR Up 72% Expects Total ARR of
$3.1 Billion by Fiscal Year End
Splunk Inc. (NASDAQ: SPLK), provider of the Data-to-Everything
Platform, today announced results for its fiscal second quarter
ended July 31, 2021.
Second Quarter 2022 Financial
Highlights
- Cloud ARR was $976 million, up 72% year-over-year.
- Total ARR was $2.63 billion, up 37% year-over-year.
- Cloud revenue was $217 million, up 73% year-over-year.
- Total revenues were $606 million, up 23% year-over-year.
- 234 customers with Cloud ARR greater than $1 million, up 100%
year-over-year.
- 582 customers with Total ARR greater than $1 million, up 47%
year-over-year.
“Our team delivered another strong quarter, validating the high
strategic value we deliver to the world’s largest and most dynamic
organizations,” said Doug Merritt, President and CEO of Splunk. “We
doubled the number of customers with Cloud ARR of $1 million
dollars or more as workloads and data continue to shift to cloud.
Our second quarter execution was broad-based with each of our major
geographic regions exceeding our own expectations as more and more
customers around the world rely on Splunk and our market-leading
data platform and cloud-based capabilities.”
“We delivered another quarter of high growth with Total ARR of
$2.63 billion dollars, up 37% year-over-year,” said Jason Child,
Chief Financial Officer, Splunk. “We outperformed in the first half
of the year and are well-positioned heading into the second half.
We expect $1.3 billion of Cloud ARR and Total ARR of well over $3
billion by fiscal year end as we help our customers accelerate
their digital transformations.”
Business Highlights:
New and Expansion Customers Include: Arlo, Chartis Group
LLC, Fujitsu, Hiscox Underwriting Group Services Limited, Intel
Corporation, N-able Technologies, Inc., Norwegian Labour and
Welfare Administration (NAV), and Rover Group, Inc.
- New Cloud-based Platforms Help Customers Maximize the Value
from their Data: Splunk launched the Splunk Observability
Cloud, Splunk IT Cloud, and Splunk Security Cloud to help
organizations safely conquer complexity and fast-track cloud
transformation. In addition, Splunk completed the acquisition of
TruSTAR, a cloud-native security company offering a data-centric
intelligence platform.
- Silver Lake Investment: Silver Lake Partners, a global
leader in technology investing, made a $1 billion investment in
Splunk senior notes to support the continued transformation of
Splunk’s business and management of the company’s capital
structure, including Splunk’s $1 billion share buyback program.
Kenneth Hao, Chairman and Managing Partner of Silver Lake, was also
appointed to Splunk’s Board of Directors.
- Splunk Ranks First in Both IT and Security Market Share
Reports By Gartner, Inc.: Splunk leads IT Operations Management
(ITOM) Performance Analysis and Security Information and Event
Management (SIEM) market share rankings for the second and third
consecutive year in 2020 reports.*
- Splunk Expands Executive Bench and Technical Leadership:
Splunk welcomed Shawn Bice as president of Products and Technology
and appointed executives to the positions of Chief Cloud Officer,
Chief Marketing Officer, and Chief Product Officer.
- Splunk Delivers State of Observability and Security
Reports: Global research reveals that IT leaders’ early
investments in observability lead to improvements in performance,
customer experience and bottom line. As well, security strategy
evolution is necessary to address the increasing complexity of
hybrid, multicloud infrastructures as supply chain attacks and
remote work continues.
Financial Outlook
The company is providing the following guidance for its fiscal
third quarter 2022 (ending October 31, 2021):
- Cloud ARR is expected to be between $1.10 billion and $1.11
billion.
- Total ARR is expected to be between $2.8 billion and $2.825
billion.
- Total revenues are expected to be between $625 million and $650
million.
- Non-GAAP operating margin is expected to be between negative
15% and negative 20%.
The company is providing the following guidance for its fiscal
year 2022 (ending January 31, 2022):
- Cloud ARR is expected to be between $1.305 billion and $1.330
billion.
- Total ARR is expected to be between $3.085 billion and $3.135
billion.
- Total revenues are expected to be between $2.53 billion and
$2.60 billion.
- Non-GAAP operating margin is expected to be between negative
14% and negative 17%.
- Operating Cash Flow is expected to be approximately $100
million.
All forward-looking non-GAAP financial measures contained in
this “Financial Outlook” section exclude estimates for stock-based
compensation and related employer payroll tax, acquisition-related
adjustments, amortization of intangible assets, restructuring and
facility exit charges and capitalized software development
costs.
A reconciliation of non-GAAP guidance measures to corresponding
GAAP measures is not available on a forward-looking basis without
unreasonable effort due to the uncertainty regarding, and the
potential variability of, many of these costs and expenses that may
be incurred in the future. The company has provided a
reconciliation of GAAP to non-GAAP financial measures in the
financial statement tables for its fiscal second quarter 2022
non-GAAP results included in this press release.
Conference Call and
Webcast
Splunk’s executive management team will host a conference call
today beginning at 1:30 p.m. PT (4:30 p.m. ET) to discuss the
company’s financial results and business highlights. Interested
parties may access the call by dialing (866) 501-1535.
International parties may access the call by dialing (216)
672-5582. A live audio webcast of the conference call will be
available through Splunk’s Investor Relations website at
http://investors.splunk.com/events-presentations. A replay of the
call will be available through September 1, 2021 by dialing (855)
859-2056 and referencing Conference ID 2160425.
Safe Harbor Statement
This press release contains forward-looking statements that
involve risks and uncertainties, including statements regarding
Splunk’s guidance for total ARR, cloud ARR, revenue and non-GAAP
operating margin targets for the company’s fiscal third quarter and
fiscal year 2022 and operating cash flow for the company’s fiscal
year 2022 in the paragraphs under “Financial Outlook” above and
elsewhere in this press release, statements regarding our market
opportunity, including trends in the pace of customer digital and
cloud transformation; our global presence and trends in customer
demand, engagement and bookings; the growth of our cloud business;
the market for data-related products and the importance of data and
our ability to leverage these trends; our strategy, technology and
product innovation; expectations for our industry, business and
products, such as our business model, customer demand, our partner
relationships, customer success and feedback, expanding use of
Splunk by customers, and expected benefits and scale of our
products. There are a significant number of factors that could
cause actual results to differ materially from statements made in
this press release, including: risks associated with Splunk’s rapid
growth, particularly outside of the United States; Splunk’s
inability to realize value from its significant investments in the
company’s business, including product and service innovations and
through acquisitions; Splunk’s shift from sales of licenses to
sales of cloud services which impacts the timing of revenue and
margins; a shift from generally invoicing multi-year contracts
upfront to invoicing on an annual basis, which impacts cash
collections; Splunk’s transition to a multi-product software and
services business; Splunk’s inability to successfully integrate
acquired businesses and technologies; Splunk’s inability to service
its debt obligations or other adverse effects related to the
company’s convertible notes; the emergence of new COVID-19 variants
such as the Delta variant, the impact of new variants such as the
Delta variant and related public health measures on our business,
as well as the impact of new variants such as the Delta variant on
the overall economic environment, including customer buying
capacity, urgency and patterns; and general market, political,
economic, business and competitive market conditions.
Additional information on potential factors that could affect
Splunk’s financial results is included in the company’s Quarterly
Report on Form 10-Q for the fiscal quarter ended April 30, 2021,
which is on file with the U.S. Securities and Exchange Commission
(“SEC”) and Splunk’s other filings with the SEC. Splunk does not
assume any obligation to update the forward-looking statements
provided to reflect events that occur or circumstances that exist
after the date on which they were made.
*Gartner, Inc., Market Share Analysis: ITOM, Performance
Analysis Software, Worldwide, 2020; Laurie Wurster and Shailendra
Upadhyay, June 11, 2021; Gartner, Inc., Market Share: All Software
Markets, Worldwide 2020, Neha Gupta et al, April 14, 2021
About Splunk Inc.
Splunk Inc. (NASDAQ: SPLK) turns data into doing with the
Data-to-Everything Platform. Splunk technology is designed to
investigate, monitor, analyze and act on data at any scale.
Splunk, Splunk>, Data-to-Everything, D2E and Turn Data Into
Doing are trademarks and registered trademarks of Splunk Inc. in
the United States and other countries. All other brand names,
product names, or trademarks belong to their respective owners. ©
2021 Splunk Inc. All rights reserved.
Splunk Inc. Condensed Consolidated Statements of
Operations (In thousands, except per share amounts)
(Unaudited)
Three Months Ended July
31,
Six Months Ended July
31,
2021
2020
2021
2020
Revenues Cloud services
$
217,422
$
125,870
$
411,380
$
238,022
License
219,600
176,814
362,881
325,199
Maintenance and services
168,721
188,974
333,533
362,514
Total revenues
605,743
491,658
1,107,794
925,735
Cost of revenues Cloud services
98,016
59,728
186,101
113,218
License
2,459
5,474
6,749
11,540
Maintenance and services
82,932
66,850
162,463
135,911
Total cost of revenues
183,407
132,052
355,313
260,669
Gross profit
422,336
359,606
752,481
665,066
Operating expenses Research and development
259,709
197,297
506,907
389,421
Sales and marketing
382,129
323,687
738,237
642,911
General and administrative
124,928
78,081
287,114
160,805
Total operating expenses
766,766
599,065
1,532,258
1,193,137
Operating loss
(344,430
)
(239,459
)
(779,777
)
(528,071
)
Interest and other income (expense), net Interest income
507
3,581
886
10,056
Interest expense
(39,013
)
(30,148
)
(72,603
)
(54,585
)
Other income (expense), net
1,146
5,917
(77
)
5,243
Total interest and other income (expense), net
(37,360
)
(20,650
)
(71,794
)
(39,286
)
Loss before income taxes
(381,790
)
(260,109
)
(851,571
)
(567,357
)
Income tax provision (benefit)
2,161
1,213
3,381
(456
)
Net loss
$
(383,951
)
$
(261,322
)
$
(854,952
)
$
(566,901
)
Basic and diluted net loss per share
$
(2.34
)
$
(1.64
)
$
(5.23
)
$
(3.58
)
Weighted-average shares used in computing basic and diluted
net loss per share
164,018
158,952
163,615
158,241
Splunk Inc. Condensed Consolidated Balance Sheets
(In thousands) (Unaudited) July 31,
2021 January 31, 2021 Assets Current assets Cash
and cash equivalents
$
2,231,165
$
1,771,064
Investments, current
267,035
87,847
Accounts receivable, net
882,436
1,114,199
Prepaid expenses and other current assets
171,261
162,939
Deferred commissions, current
100,774
136,331
Total current assets
3,652,671
3,272,380
Investments, non-current
36,889
13,728
Accounts receivable, non-current
194,630
347,202
Operating lease right-of-use assets
239,066
356,296
Property and equipment, net
132,841
182,780
Intangible assets, net
192,904
206,153
Goodwill
1,401,628
1,334,888
Deferred commissions, non-current
104,284
69,637
Other assets
91,411
85,422
Total assets
$
6,046,324
$
5,868,486
Liabilities and Stockholders' Equity Current liabilities
Accounts payable
$
45,789
$
9,319
Accrued compensation
302,156
281,986
Accrued expenses and other liabilities
240,994
202,959
Deferred revenue, current
954,070
1,030,484
Total current liabilities
1,543,009
1,524,748
Convertible senior notes, net
3,054,463
2,302,635
Operating lease liabilities
219,242
330,970
Deferred revenue, non-current
80,539
110,418
Other liabilities, non-current
14,406
5,710
Total non-current liabilities
3,368,650
2,749,733
Total liabilities
4,911,659
4,274,481
Stockholders' equity Common stock
165
163
Accumulated other comprehensive loss
(864
)
(592
)
Additional paid-in capital
4,689,282
4,063,885
Treasury stock
(229,515
)
-
Accumulated deficit
(3,324,403
)
(2,469,451
)
Total stockholders' equity
1,134,665
1,594,005
Total liabilities and stockholders' equity
$
6,046,324
$
5,868,486
Splunk Inc. Condensed Consolidated Statements of Cash
Flows (In thousands) (Unaudited) Three
Months Ended July 31, Six Months Ended July 31,
2021
2020
2021
2020
Cash flows from operating activities Net loss
$
(383,951
)
$
(261,322
)
$
(854,952
)
$
(566,901
)
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities: Depreciation and amortization
24,829
22,191
50,625
42,685
Amortization of deferred commissions
35,669
34,242
77,983
61,120
Amortization of investment premiums (accretion of discounts), net
382
(252
)
432
(944
)
Amortization of debt discount and issuance costs
31,226
24,322
57,784
44,738
Gain on extinguishment of convertible senior notes
-
(6,952
)
-
(6,952
)
Repurchase of convertible senior notes attributable to the accreted
interest related to debt discount
-
(22,149
)
-
(22,149
)
Loss on lease termination
-
-
52,524
-
Non-cash operating lease costs
(1,565
)
5,228
571
15,759
Stock-based compensation
204,780
154,873
387,197
313,691
Disposal of property and equipment
33
476
33
981
Deferred income taxes
835
257
(294
)
(644
)
Changes in operating assets and liabilities, net of acquisition:
Accounts receivable, net
(109,548
)
(142,838
)
384,798
184,261
Prepaid expenses and other assets
83,327
17,339
(14,842
)
12,493
Deferred commissions
(47,508
)
(37,939
)
(77,073
)
(60,154
)
Accounts payable
(3,140
)
15,627
19,698
22,963
Accrued compensation
74,247
36,331
20,170
(61,378
)
Accrued expenses and other liabilities
11,395
8,773
17,817
(1,294
)
Deferred revenue
23,069
(18,283
)
(107,731
)
(102,307
)
Net cash provided by (used in) operating activities
(55,920
)
(170,076
)
14,740
(124,032
)
Cash flows from investing activities Purchases of
investments
(269,352
)
-
(289,573
)
(87,135
)
Maturities of investments
-
242,902
87,766
497,725
Acquisition, net of cash acquired
(80,333
)
-
(80,333
)
-
Purchases of property and equipment
(3,510
)
(11,060
)
(4,363
)
(25,816
)
Capitalized software development costs
(2,082
)
(3,585
)
(5,148
)
(7,133
)
Other investment activities
(1,293
)
(511
)
(1,168
)
(2,886
)
Net cash provided by (used in) investing activities
(356,570
)
227,746
(292,819
)
374,755
Cash flows from financing activities Proceeds from the
exercise of stock options
636
1,253
1,174
2,671
Proceeds from employee stock purchase plan
48,246
44,214
48,246
44,214
Proceeds from the issuance of convertible senior notes, net of
issuance costs
982,749
1,246,544
982,749
1,246,544
Purchase of capped calls
-
(137,379
)
-
(137,379
)
Partial repurchase of convertible senior notes
-
(668,929
)
-
(668,929
)
Repurchases of common stock
(192,208
)
-
(192,208
)
-
Taxes paid related to net share settlement of equity awards
(40,966
)
-
(101,781
)
(49,228
)
Net cash provided by financing activities
798,457
485,703
738,180
437,893
Effect of exchange rate changes on cash and cash equivalents
-
2,015
-
626
Net increase in cash and cash equivalents
385,967
545,388
460,101
689,242
Cash and cash equivalents at beginning of period
1,845,198
922,507
1,771,064
778,653
Cash and cash equivalents at end of period
$
2,231,165
$
1,467,895
$
2,231,165
$
1,467,895
Splunk Inc. Operating Metrics
Total Annual Recurring Revenue (“Total ARR”) represents the
annualized revenue run-rate of active cloud services, term license
and maintenance contracts at the end of a reporting period. Cloud
Annual Recurring Revenue (“Cloud ARR”) represents the annualized
revenue run-rate of active cloud services contracts at the end of a
reporting period. Each contract is annualized by dividing the
contract value by the number of days in the contract term and then
multiplying by 365.
Non-GAAP Financial Measures and
Reconciliations
To supplement Splunk’s condensed consolidated financial
statements, which are prepared and presented in accordance with
generally accepted accounting principles in the United States
(“GAAP”), Splunk provides investors with the following non-GAAP
financial measures: cloud services cost of revenues, cloud services
gross margin, cost of revenues, gross margin, research and
development expense, sales and marketing expense, general and
administrative expense, operating income (loss), operating margin,
income tax provision (benefit), net income (loss), net income
(loss) per share and free cash flow (collectively the “non-GAAP
financial measures”). These non-GAAP financial measures exclude all
or a combination of the following (as reflected in the following
reconciliation tables): expenses related to stock-based
compensation and related employer payroll tax, amortization of
intangible assets, acquisition-related adjustments, restructuring
and facility exit charges, capitalized software development costs
and non-cash interest expense related to convertible senior notes.
The non-GAAP financial measures are also adjusted for Splunk's
estimated tax rate on non-GAAP income (loss). To determine the
estimated non-GAAP tax rate, Splunk evaluates financial projections
based on its non-GAAP results and the tax effect of those
projections. The estimated non-GAAP tax rate takes into account
many factors including our operating structure and tax positions.
The non-GAAP tax rate applied to the three and six months ended
July 31, 2021 was 20%. The applicable fiscal 2021 tax rates are
noted in the reconciliations. In addition, non-GAAP financial
measures include free cash flow, which represents operating cash
flow less purchases of property and equipment. Splunk considers
free cash flow to be a liquidity measure that provides useful
information to management and investors about the amount of cash
generated or used by the business.
Splunk excludes stock-based compensation expense because it is
non-cash in nature and excluding this expense provides meaningful
supplemental information regarding Splunk’s operational performance
and allows investors the ability to make more meaningful
comparisons between Splunk’s operating results and those of other
companies. Splunk excludes employer payroll tax expense related to
employee stock plans in order for investors to see the full effect
that excluding that stock-based compensation expense had on
Splunk’s operating results. These expenses are tied to the exercise
or vesting of underlying equity awards and the price of Splunk’s
common stock at the time of vesting or exercise, which may vary
from period to period independent of the operating performance of
Splunk’s business. Splunk also excludes amortization of intangible
assets, acquisition-related adjustments, restructuring and facility
exit charges, capitalized software development costs and non-cash
interest expense related to convertible senior notes from the
applicable non-GAAP financial measures because these adjustments
are considered by management to be outside of Splunk’s core
operating results.
There are limitations in using non-GAAP financial measures
because the non-GAAP financial measures are not prepared in
accordance with GAAP, may be different from non-GAAP financial
measures used by Splunk’s competitors and exclude expenses that may
have a material impact upon Splunk’s reported financial results.
Further, stock-based compensation expense has been and will
continue to be, for the foreseeable future, a significant recurring
expense in Splunk’s business and an important part of the
compensation provided to Splunk’s employees. The presentation of
the non-GAAP financial measures is not intended to be considered in
isolation or as a substitute for, or superior to, the financial
information prepared and presented in accordance with GAAP. Splunk
uses these non-GAAP financial measures for financial and
operational decision-making purposes and as a means to evaluate
period-to-period comparisons. Splunk believes that these non-GAAP
financial measures provide useful information about Splunk’s
operating results, enhance the overall understanding of past
financial performance and future prospects and allow for greater
transparency with respect to key metrics used by management in its
financial and operational decision making. In addition, these
non-GAAP financial measures facilitate comparisons to competitors’
operating results. The non-GAAP financial measures are meant to
supplement and be viewed in conjunction with GAAP financial
measures.
The following tables reconcile Splunk’s GAAP results to Splunk’s
non-GAAP results included in this press release.
Splunk Inc. Reconciliation of GAAP to Non-GAAP Financial
Measures (In thousands, except per share data)
(Unaudited) Reconciliation
of Cash Provided by (Used In) Operating Activities to Free Cash
Flow
Three Months Ended July
31,
Six Months Ended July
31,
2021
2020
2021
2020
Net cash provided by (used in) operating activities
$
(55,920
)
$
(170,076
)
$
14,740
$
(124,032
)
Less purchases of property and equipment
(3,510
)
(11,060
)
(4,363
)
(25,816
)
Free cash flow (non-GAAP)
$
(59,430
)
$
(181,136
)
$
10,377
$
(149,848
)
Net cash provided by (used in) investing activities
$
(356,570
)
$
227,746
$
(292,819
)
$
374,755
Net cash provided by financing activities
$
798,457
$
485,703
$
738,180
$
437,893
Reconciliation of GAAP to Non-GAAP
Financial Measures Three Months
Ended July 31, 2021 GAAP
Stock-basedcompensation andrelated employerpayroll tax
Amortization ofintangible assets
Acquisition-relatedadjustments Restructuring andfacility
exitcharges Capitalizedsoftwaredevelopmentcosts
Non-cash interestexpense related toconvertible seniornotes
Income taxadjustment (2) Non-GAAP Cloud services cost
of revenues
$
98,016
$
(4,698
)
$
(7,299
)
$
-
$
-
$
(594
)
$
-
$
-
$
85,425
Cloud services gross margin
54.9
%
2.2
%
3.4
%
-
%
-
%
0.2
%
-
%
-
%
60.7
%
Cost of revenues
183,407
(22,295
)
(9,758
)
-
-
(594
)
-
-
150,760
Gross margin
69.7
%
3.7
%
1.6
%
-
%
-
%
0.1
%
-
%
-
%
75.1
%
Research and development
259,709
(82,191
)
-
-
-
2,081
-
-
179,599
Sales and marketing
382,129
(65,613
)
(5,101
)
-
(613
)
-
-
-
310,802
General and administrative
124,928
(38,099
)
-
(957
)
6
(533
)
-
-
85,345
Operating loss
(344,430
)
208,198
14,859
957
607
(954
)
-
-
(120,763
)
Operating margin
(56.9
)%
34.4
%
2.5
%
0.2
%
0.1
%
(0.2
)%
-
%
-
%
(19.9
)%
Income tax provision (benefit)
2,161
-
-
-
-
-
-
(27,540
)
(25,379
)
Net loss
$
(383,951
)
$
208,198
$
14,859
$
957
$
607
$
(954
)
$
31,227
$
27,540
$
(101,517
)
Net loss per share (1)
$
(2.34
)
$
1.27
$
0.09
$
0.01
$
-
$
(0.01
)
$
0.19
$
0.17
$
(0.62
)
(1) Calculated based on 164,018 weighted-average shares of
common stock. (2) Represents the income tax adjustment using our
estimated non-GAAP tax rate of 20%.
Reconciliation of GAAP to Non-GAAP Financial
Measures Three Months Ended
July 31, 2020 GAAP Stock-basedcompensation
andrelated employerpayroll tax Amortization ofintangible
assets Restructuring andfacility exit charges
Capitalizedsoftwaredevelopmentcosts Non-cash
interestexpense related toconvertible seniornotes Income
taxadjustment (2) Non-GAAP Cloud services cost of
revenues
$
59,728
$
(2,812
)
$
(5,290
)
$
(229
)
$
-
$
-
$
-
$
51,397
Cloud services gross margin
52.5
%
2.2
%
4.3
%
0.2
%
-
%
-
%
-
%
59.2
%
Cost of revenues
132,052
(14,653
)
(10,511
)
(497
)
-
-
-
106,391
Gross margin
73.1
%
3.1
%
2.1
%
0.1
%
-
%
-
%
-
%
78.4
%
Research and development
197,297
(68,102
)
-
(2,884
)
3,585
-
-
129,896
Sales and marketing
323,687
(52,865
)
(4,333
)
(1,168
)
-
-
-
265,321
General and administrative
78,081
(24,553
)
-
(518
)
-
-
-
53,010
Operating loss
(239,459
)
160,173
14,844
5,067
(3,585
)
-
-
(62,960
)
Operating margin
(48.7
)%
32.6
%
3.0
%
1.0
%
(0.7
)%
-
%
-
%
(12.8
)%
Income tax provision (benefit)
1,213
-
-
-
-
-
(14,366
)
(13,153
)
Net loss
$
(261,322
)
$
160,173
$
14,844
$
5,543
(3)
$
(3,585
)
$
17,369
(4)
$
14,366
$
(52,612
)
Net loss per share (1)
$
(1.64
)
$
1.01
$
0.09
$
0.03
$
(0.02
)
$
0.11
$
0.09
$
(0.33
)
(1) Calculated based on 158,952 weighted-average shares of
common stock. (2) Represents the income tax adjustment using our
estimated non-GAAP tax rate of 20%. (3) Includes a $0.5 million
loss on disposal of property, plant and equipment. (4) Includes
non-cash interest expense of $24.3 million and a $7.0 million
non-recurring gain on extinguishment of convertible senior notes.
Reconciliation of GAAP to Non-GAAP
Financial Measures Six Months
Ended July 31, 2021 GAAP
Stock-basedcompensation andrelated employerpayroll tax
Amortization ofintangible assets
Acquisition-relatedadjustments Restructuring andfacility
exitcharges Capitalizedsoftwaredevelopmentcosts
Non-cash interestexpense related toconvertible seniornotes
Income taxadjustment (2) Non-GAAP Cloud
services cost of revenues
$
186,101
$
(8,368
)
$
(14,040
)
$
-
$
-
$
(1,188
)
$
-
$
-
$
162,505
Cloud services gross margin
54.8
%
2.0
%
3.4
%
-
%
-
%
0.3
%
-
%
-
%
60.5
%
Cost of revenues
355,313
(40,617
)
(19,826
)
-
-
(1,188
)
-
-
293,682
Gross margin
67.9
%
3.7
%
1.8
%
-
%
-
%
0.1
%
-
%
-
%
73.5
%
Research and development
506,907
(162,465
)
(26
)
-
-
5,149
-
-
349,565
Sales and marketing
738,237
(123,331
)
(9,847
)
-
(613
)
-
-
-
604,446
General and administrative
287,114
(71,787
)
-
(957
)
(55,228
)
(709
)
-
-
158,433
Operating loss
(779,777
)
398,200
29,699
957
55,841
(3,252
)
-
-
(298,332
)
Operating margin
(70.4
)%
35.9
%
2.7
%
0.1
%
5.0
%
(0.2
)%
-
%
-
%
(26.9
)%
Income tax provision (benefit)
3,381
-
-
-
-
-
-
(65,849
)
(62,468
)
Net loss
$
(854,952
)
$
398,200
$
29,699
$
957
$
55,841
$
(3,252
)
$
57,786
$
65,849
$
(249,872
)
Net loss per share (1)
$
(5.23
)
$
2.44
$
0.18
$
0.01
$
0.34
$
(0.02
)
$
0.35
$
0.40
$
(1.53
)
(1) Calculated based on 163,615 weighted-average shares of
common stock. (2) Represents the income tax adjustment using our
estimated non-GAAP tax rate of 20%.
Reconciliation of GAAP to Non-GAAP Financial
Measures Six Months Ended July
31, 2020 GAAP Stock-basedcompensation
andrelated employerpayroll tax Amortization ofintangible
assets Restructuring andfacility exit charges
Capitalizedsoftwaredevelopmentcosts Non-cash
interestexpense related toconvertible seniornotes Income
taxadjustment (2) Non-GAAP Cloud services cost of
revenues
$
113,218
$
(5,202
)
$
(10,296
)
$
(229
)
$
-
$
-
$
-
$
97,491
Cloud services gross margin
52.4
%
2.2
%
4.3
%
0.1
%
-
%
-
%
-
%
59.0
%
Cost of revenues
260,669
(28,635
)
(20,884
)
(497
)
-
-
-
210,653
Gross margin
71.8
%
3.0
%
2.3
%
0.1
%
-
%
-
%
-
%
77.2
%
Research and development
389,421
(139,367
)
(25
)
(2,884
)
7,133
-
-
254,278
Sales and marketing
642,911
(112,287
)
(8,666
)
(1,168
)
-
-
-
520,790
General and administrative
160,805
(46,198
)
-
(518
)
-
-
-
114,089
Operating loss
(528,071
)
326,487
29,575
5,067
(7,133
)
-
-
(174,075
)
Operating margin
(57.0
)%
35.3
%
3.2
%
0.5
%
(0.8
)%
-
%
-
%
(18.8
)%
Income tax benefit
(456
)
-
-
-
-
-
(34,564
)
(35,020
)
Net loss
$
(566,901
)
$
326,487
$
29,575
$
5,543
(3)
$
(7,133
)
$
37,785
(4)
$
34,564
$
(140,080
)
Net loss per share (1)
$
(3.58
)
$
2.05
$
0.19
$
0.04
$
(0.05
)
$
0.24
$
0.22
$
(0.89
)
(1) Calculated based on 158,241 weighted-average shares of
common stock. (2) Represents the income tax adjustment using our
estimated non-GAAP tax rate of 20%. (3) Includes a $0.5 million
loss on disposal of property, plant and equipment. (4) Includes
non-cash interest expense of $44.7 million and a $7.0 million
non-recurring gain on extinguishment of convertible senior notes.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210825005728/en/
For more information, please contact: Media
Contact Patricia Hogan Splunk Inc. press@splunk.com
Investor Contact Ken Tinsley Splunk Inc.
IR@splunk.com
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