Total Revenues Grew 40%; Cloud Revenue up
54%
Company Increases Full Year Outlook
Splunk Inc. (NASDAQ: SPLK), the data platform leader for
security and observability, today announced results for its fiscal
third quarter ended October 31, 2022.
Third Quarter 2023 Financial
Highlights
- Total revenues grew 40% to $930 million year-over-year.
- Cloud revenue grew 54% to $374 million year-over-year.
- GAAP operating margin was (2.1%); Non-GAAP operating margin was
21.3%.
- GAAP EPS was $(0.20); Non-GAAP EPS was $0.83.
- Cloud Dollar-Based Net Retention Rate was 127%.
- Customers with total ARR greater than $1 million grew 19% to
754 year-over-year.
“We delivered another solid quarter, with total revenues up 40
percent year-over-year,” said Gary Steele, President and CEO of
Splunk. “Our results underscore the value our customers place in
Splunk. The world’s largest and most innovative enterprises
continue to invest in our platform and make their businesses more
resilient through faster insights and action across security, IT
and DevOps.”
“We remain focused on balancing long-term durable growth with
profitability,” continued Steele. “In addition to our strong top
line results, we also made good progress on our expense reduction
during the quarter. As a result, we are increasing our full-year
outlook for total revenues, profitability and free cash flow.”
Q3 2023 Business
Highlights
- Splunk Named a Leader for the Ninth Consecutive Time in 2022
Gartner® Magic Quadrant™ for Security Information and Event
Management* (SIEM): Splunk has continued to innovate its
flagship security solution, Splunk Enterprise Security, as well as
the rest of the organization’s integrated security portfolio
including Splunk Intelligence Management, Splunk SOAR Cloud, Splunk
Enterprise 9.0 and Splunk Cloud Platform.
- Splunk Among Top Cybersecurity Leaders Contributing to the
Open Cybersecurity Schema Framework (OCSF) Project: Eighteen
technology and cybersecurity leaders recently launched an
open-source project that defines a common standard for
cybersecurity data. The OCSF project will help organizations
detect, investigate and stop cyberattacks faster and more
effectively by removing time-consuming, up-front normalization
tasks.
- Splunk Wins Several Awards for Cybersecurity Innovation and
Best Places to Work: Splunk won the 2022 SC Award for Best SIEM
for Splunk Enterprise Security and six 'Best of' awards resulting
from customer reviews on TrustRadius for Splunk Enterprise
Security, Splunk IT Service Intelligence and Splunk SOAR. Splunk
was also selected by Great Place to Work® as one of the 2022 Best
Workplaces in Technology and as one of the 2022 Best Workplaces for
Women.
- Splunk and AWS Sign a New Five-Year Strategic Collaboration
Agreement: The agreement underscores each organization’s
commitment to enable joint customers to innovate with confidence,
migrate and modernize existing environments with end-to-end cloud
and hybrid visibility, and scale without limits. Together, Splunk
and AWS elevate customer experiences with real-time, full-stack
visibility into applications and AWS services while also providing
data-driven SIEM and security automation to improve productivity
and protect enterprises from security risks.
- Bridging the Data Divide: Splunk continued to spotlight
the data divide’s impacts and possible solutions across multiple
events hosted by the United Nations and the Atlantic Council.
- Splunk Names New Chief Information Security Officer, Chief
People Officer and Platform General Manager: Splunk appointed
Jason Lee as its Chief Information Security Officer (CISO), Sharyl
Givens as Chief People Officer and Tom Casey as Senior Vice
President and General Manager, Platform.
- Splunk Board of Directors Appointments: Richard P.
Wallace, President and CEO of KLA Corporation, and David Tunnell,
Partner at Hellman & Friedman, were appointed to the Splunk
Board of Directors. It was announced that Stephen G. Newberry will
be stepping down from the Board, joining Sara Baack, as previously
announced.
Financial Outlook
The company is providing the following guidance for its fiscal
fourth quarter 2023 (ending January 31, 2023):
- Total revenues are expected to be between $1.055 billion and
$1.085 billion.
- Non-GAAP operating margin is expected to be between 23% and
26%.
The company is updating or reaffirming the following guidance
for its fiscal year 2023 (ending January 31, 2023):
- Total revenues are expected to be between $3.455 billion and
$3.485 billion (was previously between $3.35 billion and $3.4
billion).
- Non-GAAP operating margin is expected to be between 12% and 13%
(was previously 8%).
- Total ARR is expected to be approximately $3.65 billion; Cloud
ARR is expected to be between $1.775 billion and $1.8 billion (was
previously $1.8 billion).
- Free Cash flow is expected to be at least $420 million (was
previously $400 million).
Conference Call and
Webcast
Splunk’s executive management team will host a conference call
beginning at 1:30 p.m. PT (4:30 p.m. ET) today to discuss financial
results and business highlights. Interested parties may access the
call by dialing (800) 715-9871 in the U.S. or (646) 307-1963 from
international locations and referencing conference ID 5441433. A
live audio webcast of the conference call will also be available
through Splunk’s Investor Relations website at
http://investors.splunk.com/events-presentations. An audio webcast
replay of the call will be available for the next 12 months.
Safe Harbor Statement
This press release contains forward-looking statements that
involve risks and uncertainties, including statements regarding
Splunk’s long-term prospects, including Splunk’s guidance for total
revenues and non-GAAP operating margin targets for the company’s
fiscal fourth quarter 2023 and total revenues, non-GAAP operating
margin, Total ARR, Cloud ARR, and free cash flow for the company’s
fiscal year 2023; our global presence and trends in customer demand
and engagement; statements regarding our operating expenses, growth
and profitability; statements regarding our collaboration agreement
with AWS and its benefits to us and our customers; statements
regarding our products, projects, technology and ongoing product
development; statements regarding our market opportunity; the
market for data-related products and the importance of data and our
ability to leverage these trends; expectations for our industry,
business and products, such as our business model, customer demand
and trust, 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: the
macroeconomic environment, including inflationary pressures,
economic uncertainty and impacts on information technology
spending; risks associated with Splunk’s 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;
COVID-19 and related public health measures on our business and the
business of our customers, as well as the impact of new variants 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 July 31, 2022,
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., 2022 Gartner Magic Quadrant for Security
Information and Event Management, Pete Shoard, Andrew Davies,
Mitchell Schneider, October 10, 2022.
Gartner and Magic Quadrant are registered trademarks and service
marks of Gartner, Inc. and/or its affiliates in the U.S. and
internationally and are used herein with permission. All rights
reserved.
Gartner does not endorse any vendor, product or service depicted
in its research publications, and does not advise technology users
to select only those vendors with the highest ratings or other
designation. Gartner research publications consist of the opinions
of Gartner's research organization and should not be construed as
statements of fact. Gartner disclaims all warranties, expressed or
implied, with respect to this research, including any warranties of
merchantability or fitness for a particular purpose.
About Splunk Inc.
Splunk Inc. (NASDAQ: SPLK) helps organizations around the world
turn data into doing. Splunk technology is designed to investigate,
monitor, analyze and act on data at any scale.
Splunk, Splunk>, Data-to-Everything, 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. © 2022
Splunk Inc. All rights reserved.
Splunk Inc. Condensed Consolidated Statements of
Operations (In thousands, except per share amounts)
(Unaudited)
Three Months Ended October 31, Nine Months Ended
October 31,
2022
2021
2022
2021
Revenues Cloud services
$
374,027
$
243,042
$
1,043,361
$
654,422
License
383,584
249,021
851,111
611,902
Maintenance and services
172,158
172,688
508,131
506,221
Total revenues
929,769
664,751
2,402,603
1,772,545
Cost of revenues Cloud services
119,558
100,210
361,939
286,311
License
1,259
1,229
4,059
7,978
Maintenance and services
80,948
86,851
244,714
249,314
Total cost of revenues
201,765
188,290
610,712
543,603
Gross profit
728,004
476,461
1,791,891
1,228,942
Operating expenses Research and development
241,395
265,145
754,143
772,052
Sales and marketing
388,094
386,932
1,193,929
1,125,169
General and administrative
118,307
112,750
345,396
399,864
Total operating expenses
747,796
764,827
2,293,468
2,297,085
Operating loss
(19,792
)
(288,366
)
(501,577
)
(1,068,143
)
Interest and other income (expense), net Interest income
6,700
888
12,919
1,774
Interest expense
(11,228
)
(50,723
)
(34,796
)
(123,326
)
Other income (expense), net
(3,945
)
411
(7,548
)
334
Total interest and other income (expense), net
(8,473
)
(49,424
)
(29,425
)
(121,218
)
Loss before income taxes
(28,265
)
(337,790
)
(531,002
)
(1,189,361
)
Income tax provision (benefit)
4,355
5,532
15,652
8,913
Net loss
$
(32,620
)
$
(343,322
)
$
(546,654
)
$
(1,198,274
)
Basic and diluted net loss per share
$
(0.20
)
$
(2.14
)
$
(3.38
)
$
(7.38
)
Weighted-average shares used in computing basic and diluted
net loss per share
163,044
160,202
161,738
162,474
Splunk Inc. Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
October 31, 2022 January 31, 2022
Assets Current assets Cash and cash equivalents
$
832,929
$
1,428,691
Investments, current
924,296
286,337
Accounts receivable, net
976,580
1,306,666
Prepaid expenses and other current assets
115,238
152,871
Deferred commissions, current
111,414
102,322
Total current assets
2,960,457
3,276,887
Investments, non-current
41,325
46,431
Accounts receivable, non-current
164,792
242,689
Operating lease right-of-use assets
188,877
229,198
Property and equipment, net
112,976
124,900
Intangible assets, net
122,734
164,769
Goodwill
1,401,628
1,401,628
Deferred commissions, non-current
212,741
200,876
Other assets
45,815
103,497
Total assets
$
5,251,345
$
5,790,875
Liabilities and Stockholders' Equity Current liabilities
Accounts payable
$
18,433
$
59,206
Accrued compensation
248,158
396,952
Accrued expenses and other liabilities
204,736
257,979
Deferred revenue, current
1,187,969
1,384,605
Debt, current
775,233
-
Total current liabilities
2,434,529
2,098,742
Debt, non-current
3,097,311
3,137,731
Operating lease liabilities
199,118
225,556
Deferred revenue, non-current
68,982
86,584
Other liabilities, non-current
21,053
19,491
Total non-current liabilities
3,386,464
3,469,362
Total liabilities
5,820,993
5,568,104
Stockholders' equity Common stock
170
167
Accumulated other comprehensive loss
(11,226
)
(1,199
)
Additional paid-in capital
4,496,935
5,032,351
Treasury stock, at cost
(1,000,000
)
(1,000,000
)
Accumulated deficit
(4,055,527
)
(3,808,548
)
Total stockholders' equity
(569,648
)
222,771
Total liabilities and stockholders' equity
$
5,251,345
$
5,790,875
Splunk Inc. Condensed Consolidated Statements of Cash
Flows (In thousands)
(Unaudited)
Three Months Ended October 31, Nine Months Ended
October 31,
2022
2021
2022
2021
Cash flows from operating activities Net loss
$
(32,620
)
$
(343,322
)
$
(546,654
)
$
(1,198,274
)
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities: Depreciation and amortization
25,494
24,000
73,446
74,625
Amortization of deferred commissions
27,835
32,122
81,409
110,105
Amortization of investment premiums (accretion of discounts), net
(1,580
)
656
(2,062
)
1,088
Amortization of debt discount and issuance costs
2,394
41,174
7,878
98,958
Losses on facility exits
10,000
-
10,000
52,524
Non-cash operating lease costs
(274
)
(826
)
(3,079
)
(255
)
Stock-based compensation
188,604
203,760
601,745
590,957
Deferred income taxes
(414
)
(1,374
)
(1,434
)
(1,668
)
Other
-
-
97
33
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable, net
(145,123
)
40,937
407,983
425,735
Prepaid expenses and other assets
79,630
31,782
96,708
16,940
Deferred commissions
(39,612
)
(59,774
)
(102,366
)
(136,847
)
Accounts payable
(64,402
)
(10,172
)
(40,773
)
9,526
Accrued compensation
(10,496
)
(4,423
)
(148,794
)
15,747
Accrued expenses and other liabilities
(29,082
)
47,067
(46,224
)
64,884
Deferred revenue
38,569
(20,988
)
(214,238
)
(128,719
)
Net cash provided by (used in) operating activities
48,923
(19,381
)
173,642
(4,641
)
Cash flows from investing activities Purchases of property
and equipment
(2,579
)
(5,467
)
(9,229
)
(9,830
)
Capitalized software development costs
(816
)
(695
)
(5,806
)
(5,843
)
Purchases of marketable securities
(65,142
)
(69,176
)
(988,904
)
(358,749
)
Maturities of marketable securities
143,440
36,688
352,864
124,454
Purchases of strategic investments
(260
)
(15,450
)
(6,359
)
(15,450
)
Acquisitions, net of cash acquired
-
-
-
(80,333
)
Other investment activities
98
2,115
1,534
947
Net cash provided by (used in) investing activities
74,741
(51,985
)
(655,900
)
(344,804
)
Cash flows from financing activities Proceeds from the
exercise of stock options
266
692
1,398
1,866
Proceeds from employee stock purchase plan
-
-
48,596
48,246
Proceeds from the issuance of convertible senior notes, net of
issuance costs
-
(539
)
-
982,210
Repurchases of common stock
-
(807,792
)
-
(1,000,000
)
Taxes paid related to net share settlement of equity awards
(38,884
)
(47,779
)
(163,498
)
(149,560
)
Net cash used in financing activities
(38,618
)
(855,418
)
(113,504
)
(117,238
)
Net increase (decrease) in cash and cash equivalents
85,046
(926,784
)
(595,762
)
(466,683
)
Cash and cash equivalents at beginning of period
747,883
2,231,165
1,428,691
1,771,064
Cash and cash equivalents at end of period
$
832,929
$
1,304,381
$
832,929
$
1,304,381
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. We calculate cloud dollar-based net retention
rate (“Cloud DBNRR”) by dividing the Cloud ARR at the end of a
period (“Cloud Current Period ARR”) by the Cloud ARR of the same
group of customers at the beginning of that 12-month period. Cloud
Current Period ARR includes existing customer renewals and
expansion, is net of existing customer contraction and churn, and
excludes new customers. For the trailing 12-month Cloud DBNRR, we
take the dollar-weighted average of the Cloud DBNRR over the
trailing 12 months.
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,
non-cash interest expense related to convertible senior notes and a
net loss on strategic investments. The non-GAAP financial measures
are also adjusted for Splunk's current and deferred tax rate on
non-GAAP income (loss). Splunk uses a long-term projected non-GAAP
tax rate to provide consistency across interim reporting periods.
We base our rate on non-GAAP financial projections. In determining
our tax rate, we exclude the impact of nonrecurring items, and we
make assumptions including those about tax legislation and our tax
positions. We applied a 20% non-GAAP tax rate to the three and nine
months ended October 31, 2022 and 2021. In addition, non-GAAP
financial measures include free cash flow, which represents
operating cash flow less purchases of property and equipment and
capitalized software development costs. 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, non-cash
interest expense related to convertible senior notes and a net loss
on strategic investments from the applicable non-GAAP financial
measures because these adjustments are considered by management to
be outside of Splunk’s core operating results. A reconciliation of
non-GAAP guidance measures to corresponding GAAP guidance measures
is not available on a forward-looking basis without unreasonable
effort due to the uncertainty regarding, and the potential
variability of, expenses that may be incurred in the future. For
example, stock-based compensation-related charges, including
related employer payroll tax-related items, are impacted by the
timing of employee stock transactions, the future fair market value
of our common stock, and our future hiring and retention needs, all
of which are difficult to predict and subject to constant change.
We have provided a reconciliation of GAAP to non-GAAP financial
measures in the financial statement tables for our historical
non-GAAP financial results included in this release.
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 October 31, Nine Months Ended October 31,
2022
2021
2022
2021
Net cash provided by (used in) operating activities
$
48,923
$
(19,381
)
$
173,642
$
(4,641
)
Less purchases of property and equipment
(2,579
)
(5,467
)
(9,229
)
(9,830
)
Less capitalized software development costs
(816
)
(695
)
(5,806
)
(5,843
)
Free cash flow (non-GAAP)
$
45,528
$
(25,543
)
$
158,607
$
(20,314
)
Net cash provided by (used in) investing activities
$
74,741
$
(51,985
)
$
(655,900
)
$
(344,804
)
Net cash used in financing activities
$
(38,618
)
$
(855,418
)
$
(113,504
)
$
(117,238
)
Reconciliation of GAAP to Non-GAAP
Financial Measures Three Months
Ended October 31, 2022 GAAP
Stock-basedcompensation andrelated employerpayroll tax
Amortization ofintangible assets
Acquisition-relatedadjustments Restructuringand facility
exitcharges Capitalizedsoftwaredevelopment costs
Non-cash interestexpense related toconvertible seniornotes
Income taxadjustment (2) Non-GAAP Cloud
services cost ofrevenues
$
119,558
$
(5,821
)
$
(7,577
)
$
-
$
-
$
(3,556
)
$
-
$
-
$
102,604
Cloud services grossmargin
68.0
%
1.6
%
2.0
%
-
%
-
%
1.0
%
-
%
-
%
72.6
%
Cost of revenues
201,765
(22,071
)
(8,807
)
-
-
(3,556
)
-
-
167,331
Gross margin
78.3
%
2.4
%
0.9
%
-
%
-
%
0.4
%
-
%
-
%
82.0
%
Research and development
241,395
(80,989
)
-
-
-
816
-
-
161,222
Sales and marketing
388,094
(56,503
)
(5,130
)
-
-
-
-
-
326,461
General and administrative
118,307
(31,297
)
(0
)
(692
)
(10,000
)
-
-
-
76,318
Operating income (loss)
(19,792
)
190,860
13,937
692
10,000
2,740
-
-
198,437
Operating margin
(2.1
)%
20.4
%
1.5
%
0.1
%
1.1
%
0.3
%
-
%
-
%
21.3
%
Income tax provision
4,355
-
-
-
-
-
34,117
38,472
Net income (loss)
$
(32,620
)
$
190,860
$
13,937
$
692
$
10,000
$
2,740
$
2,394
$
(34,117
)
$
153,886
Basic net income (loss)per share (1)
$
(0.20
)
$
1.17
$
0.09
$
-
$
0.06
$
0.02
$
0.01
$
(0.21
)
$
0.94
Diluted net income (loss)per share (1)
$
(0.20
)
$
0.83
(1)
GAAP basic and diluted net loss per share and non-GAAP basic net
loss per share is calculated based on 163,044 weighted-average
shares of common stock. Non-GAAP net income per share is calculated
based on 185,731 diluted weighted-average shares of common stock,
which includes 22,687 potentially dilutive shares related to
convertible notes and employee stock awards. GAAP to non-GAAP
diluted net income (loss) per share is not reconciled due to the
difference in the number of weighted-average shares used to
calculate GAAP and non-GAAP diluted net income (loss) per share.
(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 October 31, 2021
GAAP Stock-basedcompensation andrelated employerpayroll
tax Amortization ofintangible assets
Capitalizedsoftwaredevelopment costs Non-cash
interestexpense relatedto convertiblesenior notes Income
taxadjustment (2) Non-GAAP Cloud services cost of
revenues
$
100,210
$
(4,447
)
$
(7,579
)
$
(2,497
)
$
-
$
-
$
85,687
Cloud services gross margin
58.8
%
1.8
%
3.1
%
1.0
%
-
%
-
%
64.7
%
Cost of revenues
188,290
(21,718
)
(8,806
)
(2,497
)
-
-
155,269
Gross margin
71.7
%
3.3
%
1.2
%
0.4
%
-
%
-
%
76.6
%
Research and development
265,145
(85,896
)
-
693
-
-
179,942
Sales and marketing
386,932
(62,965
)
(5,279
)
-
-
-
318,688
General and administrative
112,750
(35,816
)
-
-
-
-
76,934
Operating loss
(288,366
)
206,395
14,085
1,804
-
-
(66,082
)
Operating margin
(43.4
)%
31.0
%
2.2
%
0.3
%
-
%
-
%
(9.9
)%
Income tax provision (benefit)
5,532
-
-
-
-
(20,398
)
(14,866
)
Net loss
$
(343,322
)
$
206,395
$
14,085
$
1,804
$
41,174
$
20,398
$
(59,466
)
Basic and diluted net loss per share (1)
$
(2.14
)
$
1.29
$
0.08
$
0.01
$
0.26
$
0.13
$
(0.37
)
(1)
Calculated based on 160,202 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 Nine Months Ended October 31, 2022 GAAP
Stock-basedcompensation andrelated employerpayroll tax
Amortization ofintangible assets
Acquisition-relatedadjustments Restructuringand facility
exitcharges Capitalizedsoftwaredevelopment costs
Non-cash interestexpense relatedto convertiblesenior notes
Loss onstrategic investments,net Income taxadjustment
(2) Non-GAAP Cloud services cost ofrevenues
$
361,939
$
(16,856
)
$
(22,734
)
$
-
$
-
$
(8,989
)
$
-
$
-
$
-
$
313,360
Cloud services grossmargin
65.3
%
1.6
%
2.2
%
-
%
-
%
0.9
%
-
%
-
%
-
%
70.0
%
Cost of revenues
610,712
(66,062
)
(26,421
)
-
-
(8,989
)
-
-
-
509,240
Gross margin
74.6
%
2.7
%
1.1
%
-
%
-
%
0.4
%
-
%
-
%
-
%
78.8
%
Research anddevelopment
754,143
(256,938
)
-
-
-
5,806
-
-
-
503,011
Sales and marketing
1,193,929
(191,262
)
(15,614
)
-
-
-
-
-
-
987,053
General andadministrative
345,396
(101,216
)
(0
)
(692
)
(10,000
)
-
-
-
-
233,488
Operating income (loss)
(501,577
)
615,478
42,035
692
10,000
3,183
-
-
-
169,811
Operating margin
(20.9
)%
25.8
%
1.7
%
-
%
0.4
%
0.1
%
-
%
-
%
-
%
7.1
%
Income tax provision
15,652
-
-
-
-
-
14,021
29,673
Net income (loss)
$
(546,654
)
$
615,478
$
42,035
$
692
$
10,000
$
3,183
$
7,878
$
97
$
(14,021
)
$
118,688
Basic net income(loss) per share (1)
$
(3.38
)
$
3.81
$
0.26
$
-
$
0.06
$
0.02
$
0.05
$
-
$
(0.09
)
$
0.73
Diluted net income(loss) per share (1)
$
(3.38
)
$
0.64
(1)
GAAP basic and diluted net loss per share and non-GAAP basic net
loss per share is calculated based on 161,738 weighted-average
shares of common stock. Non-GAAP net income per share is calculated
based on 185,148 diluted weighted-average shares of common stock,
which includes 23,410 potentially dilutive shares related to
convertible notes and employee stock awards. GAAP to non-GAAP
diluted net income (loss) per share is not reconciled due to the
difference in the number of weighted-average shares used to
calculate GAAP and non-GAAP diluted net income (loss) per share.
(2)
Represents the income tax adjustment using our estimated non-GAAP
tax rate of 20%.
Reconciliation of GAAP to
Non-GAAP Financial Measures Nine Months Ended October 31, 2021 GAAP
Stock-based
compensation and related employer payroll
tax
Amortization of
intangible assets
Acquisition-
related
adjustments
Restructuring and
facility exit
charges
Capitalized
software
development costs
Non-cash interest expense
related to convertible senior notes
Income tax adjustment
(2)
Non-GAAP Cloud services cost ofrevenues
$
286,311
$
(12,815
)
$
(21,619
)
$
-
$
-
$
(3,685
)
$
-
$
-
$
248,192
Cloud services gross margin
56.2
%
2.0
%
3.3
%
-
%
-
%
0.6
%
-
%
-
%
62.1
%
Cost of revenues
543,603
(62,335
)
(28,631
)
-
-
(3,685
)
-
-
448,952
Gross margin
69.3
%
3.6
%
1.6
%
-
%
-
%
0.2
%
-
%
-
%
74.7
%
Research and development
772,052
(248,361
)
(26
)
-
-
5,131
-
-
528,796
Sales and marketing
1,125,169
(186,296
)
(15,126
)
-
(613
)
-
-
-
923,134
General and administrative
399,864
(107,603
)
-
(957
)
(55,228
)
-
-
-
236,076
Operating loss
(1,068,143
)
604,595
43,783
957
55,841
(1,446
)
-
-
(364,413
)
Operating margin
(60.3
)%
34.0
%
2.5
%
0.1
%
3.2
%
(0.1
)%
-
%
-
%
(20.6
)%
Income tax provision (benefit)
8,913
-
-
-
-
-
-
(86,248
)
(77,335
)
Net loss
$
(1,198,274
)
$
604,595
$
43,783
$
957
$
55,841
$
(1,446
)
$
98,958
$
86,248
$
(309,338
)
Basic and diluted net loss per
share (1)
$
(7.38
)
$
3.72
$
0.28
$
0.01
$
0.34
$
(0.01
)
$
0.61
$
0.53
$
(1.90
)
(1)
Calculated based on 162,474 weighted-average shares of common
stock.
(2)
Represents the income tax adjustment using our estimated non-GAAP
tax rate of 20%.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221129006202/en/
Media Contact Mara Mort Splunk Inc. press@splunk.com
Investor Contact Ken Tinsley Splunk Inc.
ir@splunk.com
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