Total Revenues Grew 46%; Company Increases Full Year Revenue
Forecast
SAN FRANCISCO -- (Business Wire)
Splunk
Inc. (NASDAQ:SPLK), provider of the leading software platform for
real-time Operational Intelligence, today announced results for its
fiscal first quarter ended April 30, 2015.
First Quarter 2016 Financial Highlights
-
Total revenues were $125.7 million, up 46% year-over-year.
-
License revenues were $71.9 million, up 40% year-over-year.
-
GAAP operating loss was $71.0 million; GAAP operating margin was
negative 56.5%.
-
Non-GAAP operating loss was $0.7 million; non-GAAP operating margin
was negative 0.6%.
-
GAAP loss per share was $0.57; non-GAAP loss per share was $0.01.
-
Operating cash flow was $28.6 million with free cash flow of $22.2
million.
“Our customers are moving towards enterprise-wide adoption of our
products and solutions for a growing set of use cases,” said Godfrey
Sullivan, Chairman and CEO. “Q1 was a strong quarter and we appreciate
and thank our 9,500 customers, which now include 80 of the Fortune 100.
We welcomed a record number of new customers to Splunk Cloud driven by
the compelling value delivered by our solutions across on-premises,
cloud and hybrid environments.”
First Quarter 2016 and Recent Business
Highlights
Customers:
-
Signed more than 450 new enterprise customers, ending the quarter with
over 9,500 customers worldwide.
New and Expansion Customers Include: Adobe, AOL, Al Rajhi Bank
(Saudi Arabia), Bloomberg, City of Los Angeles, Denver International
Airport, Laing O’Rourke (Australia), Measat Broadcast Network Systems
(Malaysia), New South Wales Electoral Commission (Australia), Partners
HealthCare, Recreational Equipment Inc. (REI), Saudi Arabian Airlines,
Shazam (United Kingdom), SIX Swiss Exchange, Société Générale (France),
Sony Playstation Network, Sky Brasil, Sun Hung Kai Real Estate (Hong
Kong), Swisscom, TASER International, Thomson Reuters, University of
Hong Kong, University of California San Diego and Vivint.
Products:
-
Introduced Splunk
Light, a new and more affordable way for individuals and small IT
environments to get started with Splunk software, with prices starting
at $75 per month.
-
Announced the international availability of Splunk
Cloud through nine Amazon Web Services global regions.
-
Announced a new version of theSplunk
App for Enterprise Security, which doubled its customer base in
fiscal 2015.
-
Released a new version of Splunk
MINT that enables advanced insight on mobile app performance,
problems and usage.
-
Began Windows 2008 R2 and Windows 7 support for the Splunk
App For Stream, adding further operability beyond the pre-existing
options for Linux and Mac.
Recognition:
Appointments:
Financial Outlook
The company is providing the following guidance for its fiscal second
quarter 2016 (ending July 31, 2015):
-
Total revenues are expected to be between $138 million and $140
million.
-
Non-GAAP operating margin is expected to be between 1% and 2%.
The company is updating its previous guidance for its fiscal year 2016
(ending January 31, 2016):
-
Total revenues are expected to be between $610 million and $614
million (was approximately $600 million per prior guidance provided on
February 26, 2015).
-
Non-GAAP operating margin is expected to be between 2% and 3%.
All forward-looking non-GAAP financial measures contained in this
section “Financial Outlook” exclude estimates for stock-based
compensation expenses, employer payroll tax expense related to employee
stock plans, amortization of acquired intangible assets and ground lease
expense related to a build-to-suit lease obligation.
While a reconciliation of non-GAAP guidance measures to corresponding
GAAP measures is not available on a forward-looking basis, the company
has provided a reconciliation of GAAP to non-GAAP financial measures in
the financial statement tables for its fiscal first quarter 2016
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.cfm.
A replay of the call will be available through June 4, 2015 by dialing
(855) 859-2056 and referencing Conference ID 41466777.
Safe Harbor Statement
This press release contains forward-looking statements that involve
risks and uncertainties, including statements regarding Splunk’s revenue
and non-GAAP operating margin targets for the company’s fiscal second
quarter and fiscal year 2016 in the paragraphs under “Financial Outlook”
above and other statements regarding momentum in the company’s business,
customer growth, customer adoption of our products and planned
investments. There are a significant number of factors that could cause
actual results to differ materially from statements made in this press
release, including: Splunk’s limited operating history and experience
developing and introducing new products; including its cloud offerings;
risks associated with Splunk’s rapid growth, particularly outside of the
U.S.; Splunk’s inability to realize value from its significant
investments in its business, including product and service innovations;
Splunk’s transition to a multi-product software and services business;
Splunk’s inability to successfully integrate acquired businesses and
technologies; and general market, political, economic and business
conditions.
Additional information on potential factors that could affect Splunk’s
financial results is included in the company’s Annual Report on Form
10-K for the year ended January 31, 2015, which is on file with the U.S.
Securities and Exchange Commission. 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) provides the leading software platform for
real-time Operational Intelligence. Splunk® software and cloud services
enable organizations to search, monitor, analyze and visualize
machine-generated big data coming from websites, applications, servers,
networks, sensors and mobile devices. More than 9,500 enterprises,
government agencies, universities and service providers in more than 100
countries use Splunk software to deepen business and customer
understanding, mitigate cybersecurity risk, prevent fraud, improve
service performance and reduce cost. Splunk products include Splunk®
Enterprise, Splunk Cloud™, Hunk®, Splunk Light™, Splunk MINT and premium
Splunk Apps. To learn more, please visit http://www.splunk.com/company.
Social Media: Twitter | LinkedIn | YouTube | Facebook
Splunk, Splunk>, Listen to Your Data, The Engine for Machine Data,
Hunk, Splunk Cloud, Splunk Light, SPL and Splunk MINT 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. © 2015 Splunk Inc. All rights reserved.
|
| | | |
| | | |
SPLUNK INC. |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
(In thousands, except per share data) |
(Unaudited) |
| | | | | | | |
|
| | | | | | | |
|
| | Three Months Ended |
| | April 30, | | April 30, |
| | 2015 | | 2014 |
Revenues
| | | | | | | | |
License
| |
$
|
71,872
| | |
$
|
51,274
| |
Maintenance and services
| |
|
53,793
|
| |
|
34,633
|
|
Total revenues
| |
|
125,665
|
| |
|
85,907
|
|
| | | | | | | |
|
Cost of revenues
| | | | | | | | |
License
| | |
1,161
| | | |
78
| |
Maintenance and services
| |
|
21,924
|
| |
|
14,109
|
|
Total cost of revenues 1,2,3 | |
|
23,085
|
| |
|
14,187
|
|
Gross profit
| |
|
102,580
|
| |
|
71,720
|
|
| | | | | | | |
|
Operating expenses
| | | | | | | | |
Research and development
| | |
44,698
| | | |
29,742
| |
Sales and marketing
| | |
101,989
| | | |
71,078
| |
General and administrative 4 | |
|
26,872
|
| |
|
21,003
|
|
Total operating expenses 1,2,3 | |
|
173,559
|
| |
|
121,823
|
|
Operating loss
| |
|
(70,979
|
)
| |
|
(50,103
|
)
|
| | | | | | | |
|
Interest and other income (expense), net
| | | | | | | | |
Interest income, net
| | |
360
| | | |
130
| |
Other income (expense), net
| |
|
89
|
| |
|
(220
|
)
|
Total interest and other income (expense), net
| |
|
449
|
| |
|
(90
|
)
|
Loss before income taxes
| | |
(70,530
|
)
| | |
(50,193
|
)
|
Income tax provision
| |
|
656
|
| |
|
562
|
|
Net loss
| |
$
|
(71,186
|
)
| |
$
|
(50,755
|
)
|
| | | | | | | |
|
Basic and diluted net loss per share
| |
$
|
(0.57
|
)
| |
$
|
(0.43
|
)
|
| | | | | | | |
|
Weighted-average shares used in computing basic and diluted net
loss per share
| |
|
124,548
|
| |
|
117,290
|
|
| | | | | | | | |
| | | | | | | |
|
1 Includes amortization of acquired intangible assets
as follows:
| | | | | | | | |
Cost of revenues
| |
$
|
911
| | |
$
|
687
| |
Research and development
| | |
69
| | | |
69
| |
Sales and marketing
| | |
150
| | | |
147
| |
| | | | | | | |
|
2 Includes stock-based compensation expense as follows:
| | | | | | | | |
Cost of revenues
| |
$
|
6,532
| | |
$
|
3,806
| |
Research and development
| | |
20,075
| | | |
12,587
| |
Sales and marketing
| | |
29,610
| | | |
19,120
| |
General and administrative
| | |
9,892
| | | |
7,726
| |
| | | | | | | |
|
3 Includes employer payroll tax on employee stock plans
as follows:
| | | | | | | | |
Cost of revenues
| |
$
|
263
| | |
$
|
136
| |
Research and development
| | |
903
| | | |
807
| |
Sales and marketing
| | |
1,076
| | | |
880
| |
General and administrative
| | |
580
| | | |
565
| |
| | | | | | | |
|
4 Includes ground lease expense related to
build-to-suit lease obligation
| |
$
|
222
| | |
$
|
-
| |
| | | | | | | |
|
|
| | | |
| | | |
SPLUNK INC. |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(In thousands) |
(Unaudited) |
| | | | | | | |
|
| | | | | | | |
|
| | April 30, | | January 31, |
| | 2015 | | 2015 |
| | | | | | | |
|
ASSETS
| | | | | | | | |
| | | | | | | |
|
Current assets
| | | | | | | | |
Cash and cash equivalents
| |
$
|
413,507
| | |
$
|
387,315
| |
Investments, current portion
| | |
451,636
| | | |
462,849
| |
Accounts receivable, net
| | |
81,341
| | | |
128,413
| |
Prepaid expenses and other current assets
| |
|
19,961
|
| |
|
21,256
|
|
Total current assets
| |
|
966,445
|
| |
|
999,833
|
|
| | | | | | | |
|
Investments, non-current
| | |
177,923
| | | |
165,082
| |
Property and equipment, net
| | |
62,315
| | | |
50,374
| |
Intangible assets, net
| | |
9,285
| | | |
10,416
| |
Goodwill
| | |
19,070
| | | |
19,070
| |
Other assets
| |
|
4,957
|
| |
|
3,016
|
|
Total assets
| |
$
|
1,239,995
|
| |
$
|
1,247,791
|
|
| | | | | | | |
|
LIABILITIES AND STOCKHOLDERS' EQUITY
| | | | | | | | |
| | | | | | | |
|
Current liabilities
| | | | | | | | |
Accounts payable
| |
$
|
3,964
| | |
$
|
3,726
| |
Accrued payroll and compensation
| | |
46,865
| | | |
65,220
| |
Accrued expenses and other liabilities
| | |
27,503
| | | |
27,819
| |
Deferred revenue, current portion
| |
|
249,372
|
| |
|
249,883
|
|
Total current liabilities
| |
|
327,704
|
| |
|
346,648
|
|
| | | | | | | |
|
Deferred revenue, non-current
| | |
55,931
| | | |
54,202
| |
Other liabilities, non-current
| |
|
42,266
|
| |
|
33,620
|
|
Total non-current liabilities
| |
|
98,197
|
| |
|
87,822
|
|
Total liabilities
| |
|
425,901
|
| |
|
434,470
|
|
| | | | | | | |
|
Stockholders' equity
| | | | | | | | |
Common stock
| | |
125
| | | |
123
| |
Accumulated other comprehensive loss
| | |
(847
|
)
| | |
(837
|
)
|
Additional paid-in capital
| | |
1,272,825
| | | |
1,200,858
| |
Accumulated deficit
| |
|
(458,009
|
)
| |
|
(386,823
|
)
|
Total stockholders' equity
| |
|
814,094
|
| |
|
813,321
|
|
Total liabilities and stockholders' equity
| |
$
|
1,239,995
|
| |
$
|
1,247,791
|
|
| | | | | | | |
|
|
| | | |
| | | |
SPLUNK INC. |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
(In thousands) |
(Unaudited) |
| | | | | | | |
|
| | Three Months Ended |
| | April 30, | | April 30, |
| | 2015 | | 2014 |
| | | | | | | |
|
Cash Flows From Operating Activities | | | | | | | | |
Net loss
| |
$
|
(71,186
|
)
| |
$
|
(50,755
|
)
|
Adjustments to reconcile net loss to net cash provided by operating
activities:
| | | | | | | | |
Depreciation and amortization
| | |
3,466
| | | |
2,651
| |
Amortization of investment premiums
| | |
361
| | | |
-
| |
Stock-based compensation
| | |
66,109
| | | |
43,239
| |
Deferred income taxes
| | |
(319
|
)
| | |
(285
|
)
|
Excess tax benefits from employee stock plans
| | |
(466
|
)
| | |
(479
|
)
|
Changes in operating assets and liabilities
| | | | | | | | |
Accounts receivable, net
| | |
47,072
| | | |
31,235
| |
Prepaid expenses, other current and non-current assets
| | |
(327
|
)
| | |
524
| |
Accounts payable
| | |
402
| | | |
386
| |
Accrued payroll and compensation
| | |
(18,355
|
)
| | |
(13,757
|
)
|
Accrued expenses and other liabilities
| | |
640
| | | |
4,461
| |
Deferred revenue
| |
|
1,218
|
| |
|
1,691
|
|
Net cash provided by operating activities
| |
|
28,615
|
| |
|
18,911
|
|
| | | | | | | |
|
Cash Flow From Investing Activities | | | | | | | | |
Purchases of investments
| | |
(160,514
|
)
| | |
(250,883
|
)
|
Maturities of investments
| | |
160,000
| | | |
-
| |
Purchases of property and equipment
| | |
(6,415
|
)
| | |
(4,238
|
)
|
Other investment activities
| |
|
(1,500
|
)
| |
|
-
|
|
Net cash used in investing activities
| |
|
(8,429
|
)
| |
|
(255,121
|
)
|
| | | | | | | |
|
Cash Flow From Financing Activities | | | | | | | | |
Proceeds from the exercise of stock options
| | |
5,366
| | | |
5,836
| |
Excess tax benefits from employee stock plans
| |
|
466
|
| |
|
479
|
|
Net cash provided by financing activities
| |
|
5,832
|
| |
|
6,315
|
|
| | | | | | | |
|
Effect of exchange rate changes on cash and cash equivalents
| |
|
174
|
| |
|
189
|
|
Net increase (decrease) in cash and cash equivalents
| | |
26,192
| | | |
(229,706
|
)
|
Cash and cash equivalents at beginning of period
| |
|
387,315
|
| |
|
897,453
|
|
Cash and cash equivalents at end of period
| |
$
|
413,507
|
| |
$
|
667,747
|
|
| | | | | | | |
|
SPLUNK INC.
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 certain non-GAAP financial measures, including non-GAAP
gross margin, non-GAAP operating income (loss), non-GAAP operating
margin, non-GAAP net income (loss) and non-GAAP net income (loss) per
share (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 table): stock-based
compensation expense, employer payroll tax expense related to employee
stock plans, amortization of acquired intangible assets and ground lease
expense related to a build-to-suit lease obligation. In addition,
non-GAAP financial measures include free cash flow, which represents
cash from operations less purchases of property and equipment. 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.
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. In particular,
because of varying available valuation methodologies, subjective
assumptions and the variety of award types that companies can use under
FASB ASC Topic 718, Splunk believes that providing non-GAAP financial
measures that exclude this expense 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 acquired intangible assets and ground
lease expense related to its build-to-suit lease obligation from its
non-GAAP financial measures because these are considered by management
to be outside of Splunk’s core operating results. Accordingly, Splunk
believes that excluding these expenses provides investors and management
with greater visibility to the underlying performance of its business
operations, facilitates comparison of its results with other periods and
may also facilitate comparison with the results of other companies in
its industry. Splunk considers free cash flow to be a liquidity measure
that provides useful information to management and investors about the
amount of cash generated by the business that can be used for strategic
opportunities, including investing in its business, making strategic
acquisitions and strengthening its balance sheet.
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 non-GAAP
financial measures are meant to supplement and be viewed in conjunction
with GAAP financial measures.
The following table reconciles Splunk’s non-GAAP results to Splunk’s
GAAP results included in this press release.
|
| | | | |
| | | | |
SPLUNK INC. |
Reconciliation of GAAP to Non-GAAP Financial Measures |
(In thousands, except per share data) |
(Unaudited) |
| | | | | | | | | |
|
| | | | | | | | | |
|
| | Three Months Ended |
| | April 30, | | April 30, |
| | 2015 | | 2014 |
| | | | | | | | | |
|
Reconciliation of cash provided by
operating activities to free cash flow: | | | | | | | | | | |
Net cash provided by operating activities
| |
$
|
28,615
| | | |
$
|
18,911
| | |
Less purchases of property and equipment
| |
|
(6,415
|
)
| | |
|
(4,238
|
)
| |
Free cash flow (Non-GAAP)
| |
$
|
22,200
|
| | |
$
|
14,673
|
| |
| | | | | | | | | |
|
Net cash used in investing activities
| |
$
|
(8,429
|
)
| | |
$
|
(255,121
|
)
| |
Net cash provided by financing activities
| |
$
|
5,832
|
| | |
$
|
6,315
|
| |
| | | | | | | | | |
|
Gross margin reconciliation: | | | | | | | | | | |
GAAP gross margin
| | |
81.6
| |
%
| | |
83.5
| |
%
|
Stock-based compensation expense
| | |
5.2
| | | | |
4.4
| | |
Employer payroll tax on employee stock plans
| | |
0.2
| | | | |
0.2
| | |
Amortization of acquired intangible assets
| |
|
0.8
|
| | |
|
0.8
|
| |
Non-GAAP gross margin
| |
|
87.8
|
|
%
| |
|
88.9
|
|
%
|
| | | | | | | | | |
|
Operating loss reconciliation: | | | | | | | | | | |
GAAP operating loss
| |
$
|
(70,979
|
)
| | |
$
|
(50,103
|
)
| |
Stock-based compensation expense
| | |
66,109
| | | | |
43,239
| | |
Employer payroll tax on employee stock plans
| | |
2,822
| | | | |
2,388
| | |
Amortization of acquired intangible assets
| | |
1,130
| | | | |
903
| | |
Ground lease expense related to build-to-suit lease obligation
| |
|
222
|
| | |
|
-
|
| |
Non-GAAP operating loss
| |
$
|
(696
|
)
| | |
$
|
(3,573
|
)
| |
| | | | | | | | | |
|
Operating margin reconciliation: | | | | | | | | | | |
GAAP operating margin
| | |
(56.5
|
)
|
%
| | |
(58.3
|
)
|
%
|
Stock-based compensation expense
| | |
52.6
| | | | |
50.3
| | |
Employer payroll tax on employee stock plans
| | |
2.2
| | | | |
2.7
| | |
Amortization of acquired intangible assets
| | |
0.9
| | | | |
1.1
| | |
Ground lease expense related to build-to-suit lease obligation
| |
|
0.2
|
| | |
|
-
|
| |
Non-GAAP operating margin
| |
|
(0.6
|
)
|
%
| |
|
(4.2
|
)
|
%
|
| | | | | | | | | |
|
Net loss reconciliation: | | | | | | | | | | |
GAAP net loss
| |
$
|
(71,186
|
)
| | |
$
|
(50,755
|
)
| |
Stock-based compensation expense
| | |
66,109
| | | | |
43,239
| | |
Employer payroll tax on employee stock plans
| | |
2,822
| | | | |
2,388
| | |
Amortization of acquired intangible assets
| | |
1,130
| | | | |
903
| | |
Ground lease expense related to build-to-suit lease obligation
| |
|
222
|
| | |
|
-
|
| |
Non-GAAP net loss
| |
$
|
(903
|
)
| | |
$
|
(4,225
|
)
| |
| | | | | | | | | |
|
Net loss per share reconciliation: | | | | | | | | | | |
GAAP basic and diluted net loss per share
| |
$
|
(0.57
|
)
| | |
$
|
(0.43
|
)
| |
Stock-based compensation expense
| | |
0.53
| | | | |
0.36
| | |
Employer payroll tax on employee stock plans
| | |
0.02
| | | | |
0.02
| | |
Amortization of acquired intangible assets
| | |
0.01
| | | | |
0.01
| | |
Ground lease expense related to build-to-suit lease obligation
| |
|
0.00
|
| | |
|
-
|
| |
Non-GAAP basic and diluted net loss per share
| |
$
|
(0.01
|
)
| | |
$
|
(0.04
|
)
| |
| | | | | | | | | |
|
Weighted-average shares used in computing Non-GAAP basic and diluted
net loss per share
| |
|
124,548
|
| | |
|
117,290
|
| |
| | | | | | | | | |
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20150528006516/en/
Contacts:
Splunk Inc.
Sherry Lowe, 415-852-5529
slowe@splunk.com
or
Investor
Contact
Splunk Inc.
Ken Tinsley, 415-848-8476
ktinsley@splunk.com
Source: Splunk Inc.
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