Revenues Grew 39% in Q4; Quarterly Revenues
Exceed $1B for the First Time
Full Year Cloud Revenue Up 54%
Quarterly GAAP Net Income of $269M
Splunk Inc. (NASDAQ: SPLK), the cybersecurity and observability
leader, today announced results for its fiscal fourth quarter and
full year ended January 31, 2023.
Fourth Quarter 2023 Financial
Highlights
- Total revenues were $1.251 billion, an increase of 39%
year-over-year.
- GAAP operating margin was 21.3%; Non-GAAP operating margin was
37.9%.
- GAAP net income was $269 million; GAAP EPS was $1.44.
- Operating cash flow was $276 million; Free cash flow was $269
million.
- 790 customers with total ARR greater than $1 million, an
increase of 115 year-over-year.
Full Year 2023 Financial
Highlights
- Total revenues were $3.654 billion, up 37% year-over-year.
- Total ARR was $3.674 billion, up 18% year-over-year.
- Cloud revenue was $1.457 billion, up 54% year-over-year.
- GAAP operating margin was (6.4)%; Non-GAAP operating margin was
17.6%.
- Operating cash flow was $450 million; Free cash flow was $427
million.
“Our team delivered a solid finish to an important transitional
year for Splunk, positioning us well for our next chapter,” said
Gary Steele, President and CEO of Splunk. “More than ever, Splunk
plays a critical role in helping our customers ensure their digital
systems are resilient, secure and able to adapt to constant change.
As we begin our new fiscal year, we remain committed to delivering
durable growth and substantially increasing free cash flow.”
“Total ARR grew by 18% to $3.674 billion and annual free cash
flow nearly quadrupled as the team continued its focus on driving
results and improving operating efficiency,” said Brian Roberts,
CFO of Splunk. “In a time of economic uncertainty, we are pleased
with our strategic, competitive and financial position to deliver
significant value to our customers and substantially increase free
cash flow margins in FY24 through expected growth and continued
operating efficiencies.”
Q4 2023 Business
Highlights
- Splunk Names New Chief Financial Officer: Splunk
appointed Brian Roberts as the company’s Chief Financial Officer
(CFO).
- Splunk Connects with Hundreds of Public Sector Customers and
Partners: Splunk welcomed hundreds of government, public
institutional and higher education customers and partners to
Washington D.C. for its annual public sector event, GovSummit.
- Splunk Recognized as a Security Analytics Leader:
Industry analyst firm Forrester Research recognized Splunk as a
leader in The Forrester Wave™: Security Analytics Platforms, Q4
2022. The company received the highest possible scores in the
product vision, planned enhancements, market approach and partner
ecosystem criteria. Splunk was also named a leader in the 2022 IDC
MarketScape: Worldwide SIEM 2022 Vendor Assessment.*
- Splunk Security Innovation: Splunk Enterprise Security
7.1 is now available and features three new capabilities to help
security teams detect suspicious behavior in real time, quickly
discover the scope of an incident to respond accurately, and
improve security workflow efficiencies using embedded
frameworks.
- Splunk Releases 2022 Global Impact Report: Splunk’s
second annual Global Impact Report details the company’s progress
across four areas: social impact, ethical and inclusive growth,
data responsibility, and environmental sustainability.
- Best Place to Work: Splunk was recognized as one of
Great Place to Work’s 2022 Best Workplaces for Parents in the U.S.
for a fourth consecutive year.
Financial Outlook
The company is providing the following guidance for its fiscal
first quarter 2024 (ending April 30, 2023):
- Total ARR is expected to be approximately $3.7 billion.
- Total revenues are expected to be between $710 million and $725
million.
- Non-GAAP operating margin is expected to be between negative 3%
and negative 5%.
- Free cash flow is expected to be approximately $475
million.
The company is providing the following guidance for its fiscal
year 2024 (ending January 31, 2024):
- Total ARR is expected to be between $4.125 billion and $4.175
billion.
- Total revenues are expected to be between $3.85 billion and
$3.9 billion.
- Non-GAAP operating margin is expected to be between 16.5% and
17.5%.
- Free cash flow is expected to be between $775 million and $795
million.
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.
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 5884905. A
live audio webcast and replay of the conference call will also be
available on Splunk’s Investor Relations website at
https://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
ARR, total revenues, non-GAAP operating margin and free cash flow
targets for the company’s fiscal first quarter 2024 and fiscal year
2024; our global presence and trends in customer demand and
engagement; statements regarding our operating efficiency, growth
and profitability; 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; 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 October 31, 2022,
which is on file with the U.S. Securities and Exchange Commission
(“SEC”) and Splunk’s other filings with the SEC, including its
Annual Report on Form 10-K that will be filed within 60 days of
Splunk’s fiscal year end. 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.
*2022 IDC MarketScape: Worldwide SIEM 2022 Vendor Assessment
(doc #US49029922, November 2022)
About Splunk Inc.
Splunk Inc. (NASDAQ: SPLK) helps build a safer and more
resilient digital world. Organizations trust Splunk to prevent
security, infrastructure, and application issues from becoming
major incidents, absorb shocks from digital disruptions, and
accelerate digital transformation.
Splunk, Splunk>, 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. © 2023 Splunk Inc. All rights
reserved.
Splunk Inc. Condensed Consolidated Statements of
Operations (In thousands, except per share amounts)
(Unaudited) Three Months Ended January 31,
Fiscal Year Ended January 31,
2023
2022
2023
2022
Revenues Cloud services
$
413,934
$
289,363
$
1,457,295
$
943,785
License
670,005
444,579
1,521,116
1,056,481
Maintenance and services
167,166
167,177
675,297
673,398
Total revenues
1,251,105
901,119
3,653,708
2,673,664
Cost of revenues Cloud services
128,360
111,963
490,299
398,274
License
1,253
1,237
5,312
9,215
Maintenance and services
75,670
77,166
320,384
326,480
Total cost of revenues
205,283
190,366
815,995
733,969
Gross profit
1,045,822
710,753
2,837,713
1,939,695
Operating expenses Research and development
243,027
257,522
997,170
1,029,574
Sales and marketing
427,589
409,431
1,621,518
1,534,600
General and administrative
109,135
122,486
454,531
522,350
Total operating expenses
779,751
789,439
3,073,219
3,086,524
Operating income (loss)
266,071
(78,686
)
(235,506
)
(1,146,829
)
Interest and other income (expense), net Interest income
12,482
809
25,401
2,583
Interest expense
(11,230
)
(51,272
)
(46,026
)
(174,598
)
Other income (expense), net
(1,772
)
(2,273
)
(9,320
)
(1,939
)
Total interest and other income (expense), net
(520
)
(52,736
)
(29,945
)
(173,954
)
Income (loss) before income taxes
265,551
(131,422
)
(265,451
)
(1,320,783
)
Income tax provision (benefit)
(3,241
)
9,401
12,411
18,314
Net income (loss)
$
268,792
$
(140,823
)
$
(277,862
)
$
(1,339,097
)
Net income (loss) per share - basic
$
1.64
$
(0.88
)
$
(1.71
)
$
(8.29
)
Net income (loss) per share - diluted
$
1.44
$
(0.88
)
$
(1.71
)
$
(8.29
)
Weighted-average shares used in computing basic net income
(loss) per share
164,262
159,217
162,376
161,628
Weighted-average shares used in computing diluted net income (loss)
per share
187,002
159,217
162,376
161,628
Splunk Inc. Condensed Consolidated Balance
Sheets (In thousands) (Unaudited)
January 31, 2023 January 31, 2022 Assets
Current assets Cash and cash equivalents
$
690,587
$
1,428,691
Investments, current
1,316,347
286,337
Accounts receivable, net
1,600,591
1,306,666
Prepaid expenses and other current assets
174,388
152,871
Deferred commissions, current
116,758
102,322
Total current assets
3,898,671
3,276,887
Investments, non-current
41,700
46,431
Accounts receivable, non-current
286,299
242,689
Operating lease right-of-use assets
186,981
229,198
Property and equipment, net
108,540
124,900
Intangible assets, net
119,588
164,769
Goodwill
1,416,920
1,401,628
Deferred commissions, non-current
242,731
200,876
Other assets
42,493
103,497
Total assets
$
6,343,923
$
5,790,875
Liabilities and Stockholders' Equity Current liabilities
Accounts payable
$
15,299
$
59,206
Accrued compensation
357,550
396,952
Accrued expenses and other liabilities
229,480
257,979
Deferred revenue, current
1,657,685
1,384,605
Debt, current
775,656
-
Total current liabilities
3,035,670
2,098,742
Debt, non-current
3,099,289
3,137,731
Operating lease liabilities
202,268
225,556
Deferred revenue, non-current
91,102
86,584
Other liabilities, non-current
26,107
19,491
Total non-current liabilities
3,418,766
3,469,362
Total liabilities
6,454,436
5,568,104
Stockholders' equity Common stock
171
167
Accumulated other comprehensive loss
(6,363
)
(1,199
)
Additional paid-in capital
4,682,414
5,032,351
Treasury stock
(1,000,000
)
(1,000,000
)
Accumulated deficit
(3,786,735
)
(3,808,548
)
Total stockholders' equity
(110,513
)
222,771
Total liabilities and stockholders' equity
$
6,343,923
$
5,790,875
Splunk Inc. Condensed Consolidated Statements of
Cash Flows (In thousands) (Unaudited)
Three Months Ended January 31, Fiscal Year Ended January
31,
2023
2022
2023
2022
Cash flows from operating activities Net income (loss)
$
268,792
$
(140,823
)
$
(277,862
)
$
(1,339,097
)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: Depreciation and amortization
26,024
24,520
99,470
99,145
Amortization of deferred commissions
29,796
34,745
111,205
144,850
Amortization of investment premiums (accretion of discounts), net
(2,590
)
653
(4,652
)
1,741
Amortization of debt discount and issuance costs
2,401
41,889
10,279
140,847
Loses on facility exits
-
-
10,000
47,124
Non-cash operating lease costs
3,403
9,446
324
9,191
Stock-based compensation
187,393
203,861
789,138
794,818
Deferred income taxes
(1,261
)
1,089
(2,695
)
(579
)
Other
782
752
879
785
Changes in operating assets and liabilities, net of acquisition:
Accounts receivable, net
(745,160
)
(513,226
)
(337,177
)
(87,491
)
Prepaid expenses and other assets
(54,633
)
(25,155
)
42,075
(8,215
)
Deferred commissions
(65,130
)
(105,233
)
(167,496
)
(242,080
)
Accounts payable
(3,134
)
23,589
(43,907
)
33,115
Accrued compensation
109,392
99,219
(39,402
)
114,966
Accrued expenses and other liabilities
30,887
19,795
(15,337
)
90,079
Deferred revenue
489,026
457,568
274,788
328,849
Net cash provided by operating activities
275,988
132,689
449,630
128,048
Cash flows from investing activities Purchases of property
and equipment
(4,391
)
(841
)
(13,620
)
(10,671
)
Capitalized software development costs
(2,976
)
(3,518
)
(8,782
)
(9,361
)
Purchases of marketable securities
(547,654
)
(29,992
)
(1,536,558
)
(388,741
)
Maturities of marketable securities
163,086
53,670
515,950
178,124
Purchases of strategic investments
(375
)
(8,300
)
(6,734
)
(23,750
)
Acquisitions, net of cash acquired
(21,950
)
-
(21,950
)
(80,333
)
Other investment activities
-
33
1,534
980
Net cash provided by (used in) investing activities
(414,260
)
11,052
(1,070,160
)
(333,752
)
Cash flows from financing activities Proceeds from the
exercise of stock options
59
564
1,457
2,430
Proceeds from employee stock purchase plan
29,722
31,692
78,318
79,938
Proceeds from the issuance of convertible senior notes, net of
issuance costs
-
(290
)
-
981,920
Repurchases of common stock
-
-
-
(1,000,000
)
Taxes paid related to net share settlement of equity awards
(33,851
)
(51,397
)
(197,349
)
(200,957
)
Net cash used in financing activities
(4,070
)
(19,431
)
(117,574
)
(136,669
)
Net increase (decrease) in cash and cash equivalents
(142,342
)
124,310
(738,104
)
(342,373
)
Cash and cash equivalents at beginning of period
832,929
1,304,381
1,428,691
1,771,064
Cash and cash equivalents at end of period
$
690,587
$
1,428,691
$
690,587
$
1,428,691
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 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 twelve months ended January 31,
2023 and 2022. 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.
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 Operating Activities to Free Cash
Flow Three Months Ended January 31, Fiscal
Year Ended January 31,
2023
2022
2023
2022
Net cash provided by operating activities
$
275,988
$
132,689
$
449,630
$
128,048
Less purchases of property and equipment
(4,391
)
(841
)
(13,620
)
(10,671
)
Less capitalized software development costs
(2,976
)
(3,518
)
(8,782
)
(9,361
)
Free cash flow (non-GAAP)
$
268,621
$
128,330
$
427,228
$
108,016
Net cash provided by (used in) investing activities
$
(414,260
)
$
11,052
$
(1,070,160
)
$
(333,752
)
Net cash used in financing activities
$
(4,070
)
$
(19,431
)
$
(117,574
)
$
(136,669
)
Reconciliation of GAAP to Non-GAAP
Financial Measures Three Months
Ended January 31, 2023
GAAP
Stock-based
compensation and
related employer
payroll tax
Amortization of
intangible assets
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 of revenues
$
128,360
$
(6,226
)
$
(8,209
)
$
-
$
(3,788
)
$
-
$
-
$
110,137
Cloud services gross margin
69.0
%
1.5
%
2.0
%
-
%
0.9
%
-
%
-
%
73.4
%
Cost of revenues
205,283
(21,775
)
(9,438
)
-
(3,788
)
-
-
170,282
Gross margin
83.6
%
1.7
%
0.8
%
-
%
0.3
%
-
%
-
%
86.4
%
Research and development
243,027
(88,741
)
-
-
2,976
-
-
157,262
Sales and marketing
427,589
(61,690
)
(4,908
)
(3,968
)
-
-
-
357,023
General and administrative
109,135
(16,850
)
-
-
-
-
-
92,285
Operating expense
779,751
(167,281
)
(4,908
)
(3,968
)
2,976
-
-
606,570
Operating income
266,071
189,056
14,346
3,968
812
-
-
474,253
Operating margin
21.3
%
15.1
%
1.1
%
0.3
%
0.1
%
-
%
-
%
37.9
%
Income tax provision (benefit)
(3,241
)
-
-
-
-
-
98,468
95,227
Net income
$
268,792
$
189,056
$
14,346
$
3,968
$
812
$
2,401
$
(98,468
)
$
380,907
Basic net income per share (1)
$
1.64
$
1.15
$
0.10
$
0.02
-
$
0.01
$
(0.60
)
$
2.32
Diluted net income per share (1)
$
1.44
$
2.04
(1)
GAAP basic net income per share and Non-GAAP basic net income per
share is calculated based on 164,262 weighted-average shares of
common stock. GAAP diluted net income per share and Non-GAAP
diluted net income per share is calculated based on 187,002 diluted
weighted-average shares of common stock, which includes 22,740
potentially dilutive shares related to convertible notes and
employee stock awards. GAAP to non-GAAP diluted net income 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 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 January 31, 2022
GAAP
Stock-based
compensation and
related employer
payroll tax
Amortization of
intangible assets
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 of revenues
$
111,963
$
(4,739
)
$
(7,578
)
$
-
$
(2,747
)
$
-
$
-
$
96,899
Cloud services gross margin
61.3
%
1.6
%
2.7
%
-
%
0.9
%
-
%
-
%
66.5
%
Cost of revenues
190,366
(19,500
)
(8,806
)
-
(2,747
)
-
-
159,313
Gross margin
78.9
%
2.1
%
1.0
%
-
%
0.3
%
-
%
-
%
82.3
%
Research and development
257,522
(84,817
)
-
-
3,518
-
-
176,223
Sales and marketing
409,431
(65,884
)
(5,242
)
-
-
-
-
338,305
General and administrative
122,486
(36,159
)
-
(3,268
)
-
-
-
83,059
Operating expense
789,439
(186,860
)
(5,242
)
(3,268
)
3,518
-
-
597,587
Operating income (loss)
(78,686
)
206,360
14,048
3,268
(771
)
-
-
144,219
Operating margin
(8.7
)%
22.8
%
1.6
%
0.4
%
(0.1
)%
-
%
-
%
16.0
%
Income tax provision
9,401
-
-
-
-
-
17,273
26,674
Net income (loss)
$
(140,823
)
$
206,360
$
14,048
$
3,268
$
(771
)
$
41,889
$
(17,273
)
$
106,698
Basic net income (loss) per share (1)
$
(0.88
)
$
1.29
$
0.09
$
0.02
$
-
$
0.26
$
(0.11
)
$
0.67
Diluted net income (loss) per share (1)
$
(0.88
)
$
0.66
(1)
GAAP basic and diluted net loss per share and non-GAAP basic net
loss per share calculated based on 159,217 weighted-average shares
of common stock. Non-GAAP net income per share calculated based on
160,765 diluted weighted-average shares of common stock, which
includes 1,548 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 Fiscal Year Ended January 31, 2023
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
Loss on
strategic
investments,
net
Income tax
adjustment (2)
Non-GAAP
Cloud services cost of revenues
$
490,299
$
(23,082
)
$
(30,943
)
$
-
$
-
$
(12,777
)
$
-
$
-
$
-
$
423,497
Cloud services gross margin
66.4
%
1.6
%
2.0
%
-
%
-
%
0.9
%
-
%
-
%
-
%
70.9
%
Cost of revenues
815,995
(87,837
)
(35,859
)
-
-
(12,777
)
-
-
-
679,522
Gross margin
77.7
%
2.4
%
1.0
%
-
%
-
%
0.3
%
-
%
-
%
-
%
81.4
%
Research and development
997,170
(345,679
)
-
-
-
8,782
-
-
-
660,273
Sales and marketing
1,621,518
(252,952
)
(20,522
)
-
(3,968
)
-
-
-
-
1,344,076
General and administrative
454,531
(118,066
)
-
(692
)
(10,000
)
-
-
-
-
325,773
Operating expense
3,073,219
(716,697
)
(20,522
)
(692
)
(13,968
)
8,782
-
-
-
2,330,122
Operating income (loss)
(235,506
)
804,534
56,381
692
13,968
3,995
-
-
-
644,064
Operating margin
(6.4
)%
22.0
%
1.5
%
0.0
%
0.4
%
0.1
%
-
%
-
%
-
%
17.6
%
Income tax provision
12,411
-
-
-
-
-
-
-
112,488
124,899
Net income (loss)
$
(277,862
)
$
804,534
$
56,381
$
692
$
13,968
$
3,995
$
10,279
$
97
$
(112,488
)
$
499,596
Basic net income (loss) per share (1)
$
(1.71
)
$
4.95
$
0.36
$
-
$
0.09
$
0.02
$
0.06
$
-
$
(0.69
)
$
3.08
Diluted net income (loss) per share (1)
$
(1.71
)
$
2.69
(1)
GAAP basic and diluted net loss per share and non-GAAP basic
net loss per share calculated based on 162,376 weighted-average
shares of common stock. Non-GAAP net income per share calculated
based on 185,791 diluted weighted-average shares of common stock,
which includes 23,415 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 Fiscal Year Ended January 31, 2022
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 of revenues
$
398,274
$
(17,554
)
$
(29,197
)
$
-
$
-
$
(6,432
)
$
-
$
-
$
345,091
Cloud services gross margin
57.8
%
1.9
%
3.0
%
-
%
-
%
0.7
%
-
%
-
%
63.4
%
Cost of revenues
733,969
(81,835
)
(37,438
)
-
-
(6,432
)
-
-
608,264
Gross margin
72.5
%
3.1
%
1.4
%
-
%
-
%
0.2
%
-
%
-
%
77.2
%
Research and development
1,029,574
(333,178
)
(26
)
-
-
8,649
-
-
705,019
Sales and marketing
1,534,600
(252,180
)
(20,368
)
-
(613
)
-
-
-
1,261,439
General and administrative
522,350
(143,762
)
-
(957
)
(58,496
)
-
-
-
319,135
Operating expense
3,086,524
(729,120
)
(20,394
)
(957
)
(59,109
)
8,649
-
-
2,285,593
Operating loss
(1,146,829
)
810,955
57,832
957
59,109
(2,217
)
-
-
(220,193
)
Operating margin
(42.9
)%
30.4
%
2.2
%
-
%
2.2
%
(0.1
)%
-
%
-
%
(8.2
)%
Income tax provision (benefit)
18,314
-
-
-
-
-
-
(68,975
)
(50,661
)
Net loss
$
(1,339,097
)
$
810,955
$
57,832
$
957
$
59,109
$
(2,217
)
$
140,847
$
68,975
$
(202,639
)
Basic and diluted net loss per share (1)
$
(8.29
)
$
5.01
$
0.36
$
0.01
$
0.37
$
(0.01
)
$
0.87
$
0.43
$
(1.25
)
(1)
Calculated based on 161,628 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/20230301005451/en/
For more information, please contact: Media
Contact Mara Mort Splunk Inc. press@splunk.com
Investor Contact Ken Tinsley Splunk Inc.
ir@splunk.com
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