Increases Annual Recurring Revenue 15% to
$4.0 Billion
Grows Cloud Revenue 26%
Generates Nearly $100 Million of GAAP Net
Income
Splunk Inc. (NASDAQ: SPLK), the cybersecurity and observability
leader, today announced results for its fiscal third quarter ended
October 31, 2023.
Third Quarter 2024 Financial
Highlights
- Total ARR was $4.0 billion, up 15% year-over-year.
- Total revenues were $1.067 billion, with Cloud revenue growing
26% to $469 million.
- GAAP Operating Expenses increased 4% year-over-year; non-GAAP
Operating Expenses decreased by 1% year-over-year.
- Trailing twelve month operating cash flow was $863 million, up
182% year-over-year.
- Trailing twelve month adjusted free cash flow was $857 million,
up 199% year-over-year.
- 851 customers with Total ARR greater than $1 million, an
increase of 97 year-over-year.
"Splunk delivered a solid third quarter and marked several
milestones in our journey to deliver exceptional customer and
shareholder value, including our agreement to join forces with
Cisco,” said Gary Steele, President and CEO of Splunk.
“Organizations are continuing to unlock value with Splunk, and in
Q3 we saw solid momentum in our cloud business as Cloud ARR grew
26% year-over-year and now represents the majority of Total ARR.
Our results demonstrate our accelerated innovation, relentless
customer focus and consistent execution, and I'm confident we are
well-positioned for the future.”
“We remain focused on driving growth and increasing
profitability and are pleased with our progress in Q3. We drove ARR
growth of 15% to $4.0 billion, achieved a non-GAAP operating margin
of 31% and generated nearly $100 million of GAAP net income,” said
Brian Roberts, CFO of Splunk.
Recent Business
Highlights
- Splunk Innovations Drive Digital Resilience: Splunk
continued to accelerate innovation to further strengthen its
industry-leading security and observability product portfolio to
help customers keep their digital systems resilient. New enhanced
capabilities include Splunk Enterprise Security 7.2, Splunk SOAR
6.1.1, Session Replay in Splunk Observability Cloud, Federated
Search for Amazon S3 and Edge Processor advancements.
- Splunk Products Win “Best B2B Enterprise Technology”
Awards: Resulting from customer reviews on PeerSpot, Splunk
SOAR and Splunk Enterprise Security were recognized in four
categories: Security Orchestration, Automation and Response (SOAR),
Security Information and Event Management (SIEM), IT Operations
Analytics and Log Management.
- Splunk Among Top Cybersecurity Leaders Celebrating First
Anniversary of the Open Cybersecurity Schema Framework (OCSF)
Project: OCSF, an open-source project that defines a common
standard for cybersecurity data, announced the general availability
of its vendor-agnostic security schema as part of its first
anniversary.
- Splunk Releases 2023 CISO Report: Splunk published a new
global research report detailing emerging trends, threats and
strategies for today’s security leaders.
- Splunk Releases 2023 Global Impact Report: Splunk’s
third annual Global Impact Report outlines its commitment to
contributing to broader societal challenges and opportunities while
supporting the durability and resilience of its business, and
creating value for its stakeholders.
Third Quarter Investor Presentation and
Stockholder Letter
Visit the Splunk investor relations website to download the
company’s quarterly investor presentation, which includes Splunk
President and CEO Gary Steele’s letter to stockholders. In light of
the pending transaction with Cisco, Splunk will not be hosting an
earnings conference call to review the third quarter or providing a
financial outlook.
Additional Information and Where to Find It
In connection with the proposed transaction and required
stockholder approval, Splunk filed with the SEC a definitive proxy
statement on October 30, 2023. The proxy statement has been mailed
to the stockholders of Splunk. This document is not a substitute
for the proxy statement or any other document which Splunk may file
with the SEC. Splunk’s stockholders are urged to carefully read
the proxy statement (including all amendments, supplements and any
documents incorporated by reference therein) and other relevant
materials filed or to be filed with the SEC and in their entirety
because they contain important information about the proposed
transaction and the parties to the transaction. Investors may
obtain free copies of these documents and other documents filed
with the SEC at its website at www.sec.gov. In addition, investors
may obtain free copies of the documents filed with the SEC by
Splunk by going to Splunk’s Investor Relations page on its
corporate website at https://investors.splunk.com or by contacting
Splunk Investor Relations at ir@splunk.com.
Participants in the Solicitation
Splunk and its executive officers and directors may be deemed to
be participants in the solicitation of proxies from Splunk’s
stockholders with respect to the transaction. Information about
Splunk’s directors and executive officers, including their
ownership of Splunk securities, is set forth in the definitive
proxy statement related to the transaction, which was filed with
the SEC on October 30, 2023, proxy statement for Splunk’s 2023
Annual Meeting of Stockholders, which was filed with the SEC on May
9, 2023, Form 8-K filed with the SEC on September 21, 2023, and
Splunk’s other filings with the SEC. Investors may obtain more
detailed information regarding the direct and indirect interests of
Splunk and its respective executive officers and directors in the
transaction, which may be different than those of Splunk
stockholders generally, by reading the definitive proxy statement
regarding the transaction, which was filed with the SEC.
Safe Harbor Statement
This press release contains forward-looking statements that
involve risks and uncertainties, including statements regarding
Splunk’s positioning for the future; Splunk’s proposed acquisition
by Cisco and the benefits of the acquisition; trends in customer
demand and engagement; statements regarding our operating
efficiency, growth, profitability and cash flows; statements
regarding our products, projects, technology and ongoing product
development, including recently announced products; statements
regarding our partnerships; statements regarding our market
opportunity as well as our ability to meet customer needs; and
trends in the markets for our products, including the security and
observability markets. There are a significant number of factors
that could cause actual results to differ materially from
statements made in this press release, including: the risk that the
proposed transaction with Cisco is not completed on the anticipated
terms or in the time anticipated, including risks related to
obtaining shareholder and regulatory approvals, anticipated tax
treatment, unforeseen liabilities, future capital expenditures,
revenues, expenses, earnings, synergies, economic performance,
indebtedness, financial condition, losses, future prospects,
business and management strategies for the management, expansion
and growth of Splunk’s business and other conditions to the
completion of the transaction; significant transaction costs
associated with the proposed transaction; potential litigation
relating to the proposed transaction; the risk that disruptions
from the proposed transaction will harm Splunk’s business,
including current plans and operations; the ability of Splunk to
implement its business strategy; the impact of the macroeconomic
environment, including inflationary pressures, economic uncertainty
and impacts on information technology spending; risks associated
with Splunk’s growth; the impact of Splunk’s restructuring plans;
risks associated with Splunk’s ability to successfully introduce
and gain market acceptance for new products and technologies;
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; 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, 2023,
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.
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 October 31,
Nine Months Ended October 31,
2023
2022
2023
2022
Revenues Cloud services
$
469,445
$
374,027
$
1,334,043
$
1,043,361
License
429,356
383,584
896,225
851,111
Maintenance and services
168,554
172,158
499,180
508,131
Total revenues
1,067,355
929,769
2,729,448
2,402,603
Cost of revenues Cloud services
136,294
119,558
400,588
361,939
License
2,141
1,259
5,486
4,059
Maintenance and services
71,538
80,948
223,037
244,714
Total cost of revenues
209,973
201,765
629,111
610,712
Gross profit
857,382
728,004
2,100,337
1,791,891
Operating expenses Research and development
232,541
241,395
708,592
754,143
Sales and marketing
403,584
388,094
1,231,724
1,193,929
General and administrative
138,490
118,307
352,331
345,396
Total operating expenses
774,615
747,796
2,292,647
2,293,468
Operating income (loss)
82,767
(19,792
)
(192,310
)
(501,577
)
Interest and other income (expense), net Interest income
26,719
6,700
79,343
12,919
Interest expense
(10,544
)
(11,228
)
(32,645
)
(34,796
)
Other income (expense), net
4,434
(3,945
)
600
(7,548
)
Total interest and other income (expense), net
20,609
(8,473
)
47,298
(29,425
)
Income (loss) before income taxes
103,376
(28,265
)
(145,012
)
(531,002
)
Income tax provision
6,523
4,355
17,803
15,652
Net income (loss)
$
96,853
$
(32,620
)
$
(162,815
)
$
(546,654
)
Basic net income (loss) per share
$
0.58
$
(0.20
)
$
(0.98
)
$
(3.38
)
Diluted net income (loss) per share
$
0.55
$
(0.20
)
$
(0.98
)
$
(3.38
)
Weighted-average shares used in computing basic net income
(loss) per share
167,894
163,044
166,472
161,738
Weighted-average shares used in computing diluted net income (loss)
per share
185,982
163,044
166,472
161,738
Splunk Inc. Condensed Consolidated Balance Sheets
(In thousands) (Unaudited) October
31, 2023 January 31, 2023 Assets Current assets
Cash and cash equivalents
$
927,962
$
690,587
Investments, current
761,746
1,316,347
Accounts receivable, net
1,131,616
1,572,604
Prepaid expenses and other current assets
130,417
174,388
Deferred commissions, current
129,116
116,758
Total current assets
3,080,857
3,870,684
Investments, non-current
41,630
41,700
Accounts receivable, non-current
243,559
314,286
Operating lease right-of-use assets
145,753
186,981
Property and equipment, net
99,466
108,540
Intangible assets, net
78,417
119,588
Goodwill
1,416,920
1,416,920
Deferred commissions, non-current
251,455
242,731
Other assets
33,723
42,493
Total assets
$
5,391,780
$
6,343,923
Liabilities and Stockholders' Equity Current liabilities
Accounts payable
$
5,227
$
15,299
Accrued compensation
282,607
357,550
Accrued expenses and other liabilities
149,373
229,480
Deferred revenue, current
1,384,333
1,657,685
Debt, current
-
775,656
Total current liabilities
1,821,540
3,035,670
Debt, non-current
3,104,926
3,099,289
Operating lease liabilities
156,835
202,268
Deferred revenue, non-current
82,975
91,102
Other liabilities, non-current
26,619
26,107
Total non-current liabilities
3,371,355
3,418,766
Total liabilities
5,192,895
6,454,436
Stockholders' equity Common stock
175
171
Accumulated other comprehensive loss
(1,118
)
(6,363
)
Additional paid-in capital
5,132,002
4,671,776
Treasury stock
(982,624
)
(989,362
)
Accumulated deficit
(3,949,550
)
(3,786,735
)
Total stockholders' equity (deficit)
198,885
(110,513
)
Total liabilities and stockholders' equity
$
5,391,780
$
6,343,923
Splunk Inc. Condensed Consolidated Statements of Cash
Flows (In thousands) (Unaudited) Three
Months Ended October 31, Nine Months Ended October 31,
2023
2022
2023
2022
Cash flows from operating activities Net income (loss)
$
96,853
$
(32,620
)
$
(162,815
)
$
(546,654
)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: Depreciation and amortization
22,065
25,494
69,010
73,446
Amortization of deferred commissions
30,950
27,835
97,093
81,409
Amortization of investment premiums (accretion of discounts), net
5,495
(1,580
)
(4,909
)
(2,062
)
Loss on strategic equity investments, net
-
-
3,414
97
Amortization of debt issuance costs
2,201
2,394
6,642
7,878
Loss on facility exits
5,731
10,000
5,731
10,000
Non-cash operating lease costs
(4,277
)
(274
)
(5,028
)
(3,079
)
Stock-based compensation
193,947
188,604
577,464
601,745
Deferred income taxes
16
(414
)
(493
)
(1,434
)
Loss on disposal of assets
19
-
29
-
Changes in operating assets and liabilities: Accounts receivable,
net
(188,924
)
(145,123
)
511,853
407,983
Prepaid expenses and other assets
78,567
79,630
53,921
96,708
Deferred commissions
(47,763
)
(39,612
)
(118,175
)
(102,366
)
Accounts payable
(20,987
)
(64,402
)
(10,072
)
(40,773
)
Accrued compensation
(18,349
)
(10,496
)
(74,943
)
(148,794
)
Accrued expenses and other liabilities
(56,314
)
(29,082
)
(80,227
)
(46,224
)
Deferred revenue
(13,845
)
38,569
(281,479
)
(214,238
)
Net cash provided by operating activities
85,385
48,923
587,016
173,642
Cash flows from investing activities Purchases of property
and equipment
(3,313
)
(2,579
)
(9,186
)
(9,229
)
Capitalized software development costs
(3,809
)
(816
)
(8,961
)
(5,806
)
Purchases of marketable securities
(446,457
)
(65,142
)
(1,323,475
)
(988,904
)
Maturities of marketable securities
605,349
143,440
1,888,244
352,864
Purchases of strategic investments
(43
)
(260
)
(3,343
)
(6,359
)
Other investment activities
-
98
-
1,534
Net cash provided by (used in) investing activities
151,727
74,741
543,279
(655,900
)
Cash flows from financing activities Proceeds from the
exercise of stock options
183
266
413
1,398
Proceeds from employee stock purchase plan
-
-
51,201
48,596
Settlement of 2023 Notes
(776,661
)
-
(776,661
)
-
Taxes paid related to net share settlement of equity awards
(56,134
)
(38,884
)
(167,873
)
(163,498
)
Net cash used in financing activities
(832,612
)
(38,618
)
(892,920
)
(113,504
)
Net increase (decrease) in cash and cash equivalents
(595,500
)
85,046
237,375
(595,762
)
Cash and cash equivalents at beginning of period
1,523,462
747,883
690,587
1,428,691
Cash and cash equivalents at end of period
$
927,962
$
832,929
$
927,962
$
832,929
Splunk Inc. Operating Metrics
Total Annual Recurring Revenue (“Total ARR”) represents the
annualized value of active cloud services, term licenses and
maintenance contracts at the end of a reporting period. Cloud
Annual Recurring Revenue (“Cloud ARR”) represents the annualized
value of active cloud services contracts at the end of a reporting
period.
Non-GAAP Financial Measures and
Reconciliations
To supplement Splunk’s unaudited interim condensed consolidated
financial statements, which have been prepared in accordance with
generally accepted accounting principles in the United States
(“GAAP”) and applicable rules and regulations of the Securities and
Exchange Commission regarding interim financial reporting, 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 expenses, operating income (loss), operating margin,
income tax provision (benefit), net income (loss), free cash flow
and adjusted 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, restructuring and facility exit charges,
merger-related expenses, capitalized software development costs,
non-cash interest expense related to convertible senior notes and a
net loss (gain) on strategic equity 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, 2023 and
2022. In addition, non-GAAP financial measures include free cash
flow and adjusted free cash flow. Free cash flow represents net
cash provided by operating activities, less purchases of property
and equipment and capitalized software development costs. Adjusted
free cash flow is a non-GAAP measure that additionally excludes
from free cash flow the impact of cash paid for costs incurred as a
result of the proposed Cisco merger. Splunk believes that free cash
flow and adjusted free cash flow provide investors useful
information to better understand the factors and trends affecting
the Company’s performance and liquidity. Both of these free cash
flow measures have limitations as they omit certain components of
the overall cash flow statement and do not represent the residual
cash flow available for discretionary expenditures.
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. Employer payroll tax expense is 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, restructuring and facility exit charges,
merger-related expenses, capitalized software development costs,
non-cash interest expense related to convertible senior notes and a
net loss (gain) on strategic equity 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) (Unaudited)
Reconciliation of Cash Provided By
Operating Activities to Adjusted Free Cash Flow
Three Months Ended October
31,
Nine Months Ended October
31,
Trailing Twelve Months Ended
October 31,
2023
2022
2023
2022
2023
2022
Net cash provided by operating activities
$
85,385
$
48,923
$
587,016
$
173,642
$
863,004
$
306,331
Less purchases of property and equipment
(3,313
)
(2,579
)
(9,186
)
(9,229
)
(13,577
)
(10,070
)
Less capitalized software development costs
(3,809
)
(816
)
(8,961
)
(5,806
)
(11,937
)
(9,324
)
Free cash flow (non-GAAP)
$
78,263
$
45,528
$
568,869
$
158,607
$
837,490
$
286,937
Cash paid for merger-related expenses
19,924
-
19,924
-
19,924
-
Adjusted free cash flow (non-GAAP)
$
98,187
$
45,528
$
588,793
$
158,607
$
857,414
$
286,937
Net cash provided by (used in) investing activities
$
151,727
$
74,741
$
543,279
$
(655,900
)
$
129,020
$
(644,848
)
Net cash used in financing activities
$
(832,612
)
$
(38,618
)
$
(892,920
)
$
(113,504
)
$
(896,990
)
$
(132,935
)
Reconciliation of GAAP to Non-GAAP
Financial Measures Three Months
Ended October 31, 2023 GAAP Stock-based
compensation and related employer payroll tax Amortization
of intangible assets Restructuring and facility exit charges
(2) Merger-related expenses Capitalized software
development costs Non-cash interest expense related to
convertible senior notes Income tax adjustment (1)
Non-GAAP Cloud services cost of revenues
$
136,294
$
(5,412
)
$
(8,100
)
$
(96
)
$
-
$
(3,395
)
$
-
$
-
$
119,291
Cloud services gross margin
71.0
%
1.2
%
1.7
%
-
%
-
%
0.7
%
-
%
-
%
74.6
%
Cost of revenues
209,973
(21,849
)
(9,329
)
(96
)
-
(3,395
)
-
-
175,304
Gross margin
80.3
%
2.1
%
0.9
%
-
%
-
%
0.3
%
-
%
-
%
83.6
%
Research and development
232,541
(82,898
)
-
(2,660
)
-
3,809
-
-
150,792
Sales and marketing
403,584
(62,217
)
(3,953
)
(317
)
-
-
-
-
337,097
General and administrative
138,490
(30,207
)
-
(13,457
)
(22,219
)
-
-
-
72,607
Operating expense
774,615
(175,322
)
(3,953
)
(16,434
)
(22,219
)
3,809
-
-
560,496
Operating income
82,767
197,171
13,282
16,530
22,219
(414
)
-
-
331,555
Operating margin
7.8
%
18.5
%
1.2
%
1.6
%
2.1
%
(0.0
)%
-
%
-
%
31.1
%
Income tax provision
6,523
-
-
-
-
-
-
64,350
70,873
Net income
$
96,853
$
197,171
$
13,282
$
16,530
$
22,219
$
(414
)
$
2,200
$
(64,350
)
$
283,491
_____________________ (1) Represents the income tax adjustment
using our estimated non-GAAP tax rate of 20%. (2) Excludes $1,180
of total stock-based compensation restructuring charges, which are
included under Stock-based compensation and related employer
payroll tax.
Reconciliation of GAAP to
Non-GAAP Financial Measures Three Months Ended October 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 (1) Non-GAAP
Cloud services cost of revenues
$
119,558
$
(5,821
)
$
(7,577
)
$
-
$
-
$
(3,556
)
$
-
$
-
$
102,604
Cloud services gross margin
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
)
-
(692
)
(10,000
)
-
-
-
76,318
Operating expense
747,796
(168,789
)
(5,130
)
(692
)
(10,000
)
816
-
-
564,001
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
_____________________ (1) 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, 2023 GAAP Stock-based compensation
and related employer payroll tax Amortization of intangible
assets Restructuring and facility exit charges (2)
Merger-related expenses Capitalized software development
costs Non-cash interest expense related to convertible
senior notes Loss on strategic equity investments, net
Income tax adjustment (1) Non-GAAP Cloud services
cost of revenues
$
400,588
$
(17,915
)
$
(24,518
)
$
(507
)
$
-
$
(10,821
)
$
-
$
-
$
-
$
346,827
Cloud services gross margin
70.0
%
1.3
%
1.8
%
-
%
-
%
0.8
%
-
%
-
%
-
%
74.0
%
Cost of revenues
629,111
(66,480
)
(28,205
)
(1,604
)
-
(10,821
)
-
-
-
522,001
Gross margin
77.0
%
2.4
%
1.0
%
0.1
%
-
%
0.4
%
-
%
-
%
-
%
80.9
%
Research and development
708,592
(249,341
)
-
(16,641
)
-
8,961
-
-
-
451,571
Sales and marketing
1,231,724
(187,446
)
(12,967
)
(4,363
)
-
-
-
-
-
1,026,948
General and administrative
352,331
(90,314
)
-
(19,020
)
(22,219
)
-
-
-
-
220,778
Operating expense
2,292,647
(527,101
)
(12,967
)
(40,024
)
(22,219
)
8,961
-
-
-
1,699,297
Operating income (loss)
(192,310
)
593,581
41,172
41,628
22,219
1,860
-
-
-
508,150
Operating margin
(7.1
)%
21.8
%
1.5
%
1.5
%
0.8
%
0.1
%
-
%
-
%
-
%
18.6
%
Income tax provision
17,803
-
-
-
-
-
-
-
95,298
113,101
Net income (loss)
$
(162,815
)
$
593,581
$
41,172
$
41,628
$
22,219
$
1,860
$
6,641
$
3,414
$
(95,298
)
$
452,402
_____________________ (1) Represents the income tax adjustment
using our estimated non-GAAP tax rate of 20%. (2) Excludes $3,737
of total stock-based compensation restructuring charges, which are
included under Stock-based compensation and related employer
payroll tax.
Reconciliation of GAAP to
Non-GAAP Financial Measures Nine Months Ended October 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 Loss on
strategic equity investments, net Income tax adjustment
(1) Non-GAAP Cloud services cost of revenues
$
361,939
$
(16,856
)
$
(22,734
)
$
-
$
-
$
(8,989
)
$
-
$
-
$
-
$
313,360
Cloud services gross margin
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 and development
754,143
(256,938
)
-
-
-
5,806
-
-
-
503,011
Sales and marketing
1,193,929
(191,262
)
(15,614
)
-
-
-
-
-
-
987,053
General and administrative
345,396
(101,216
)
-
(692
)
(10,000
)
-
-
-
-
233,488
Operating expense
2,293,468
(549,416
)
(15,614
)
(692
)
(10,000
)
5,806
-
-
-
1,723,552
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
_____________________ (1) 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/20231128570782/en/
Media Contact Patricia Hogan Splunk Inc.
press@splunk.com
Investor Contact Investor Relations Splunk Inc.
ir@splunk.com
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