February 28, 2013

Splunk Inc. Announces Fiscal Fourth Quarter and Full Year 2013 Financial Results

Company Surpasses 5,000 Customer Mark; Full Year Revenue Grows 64 percent

SAN FRANCISCO--(BUSINESS WIRE)-- Splunk Inc. (NASDAQ: SPLK), the leading software platform for real-time operational intelligence, today announced results for its fiscal fourth quarter and full year ended January 31, 2013.

"We are thrilled to cross the 5,000 customer mark worldwide by adding another 400-plus new Enterprise customers," said Godfrey Sullivan, Chairman and CEO. "It is gratifying to see our customer relationships evolve to enterprise-wide deployments as organizations choose to standardize on the Splunk platform for their machine-generated data."

Fourth Quarter 2013 Financial Highlights

  • Total revenue was $65.2 million, up 51% year-over-year.
  • License revenue was $46.8 million, up 43% year-over-year.
  • GAAP operating loss was $5.9 million; GAAP operating margin was negative 9.1%.
  • Non-GAAP operating income was $3.2 million; non-GAAP operating margin was 5.0%.
  • GAAP loss per share was $0.06; non-GAAP income per share was $0.03.
  • Operating cash flow was $24.8 million with free cash flow of $21.4 million.

Full Year 2013 Financial Highlights

  • Total revenue was $198.9 million, up 64% from prior year.
  • License revenue was $135.9 million, up 54% from prior year.
  • GAAP operating margin was negative 11.1%; non-GAAP operating margin was negative 0.7%.
  • Operating cash flow was $46.6 million with free cash flow of $37.6 million.

A reconciliation of GAAP to non-GAAP financial measures has been provided in the financial statement tables included in this press release.

Fourth Quarter 2013 and Recent Business Highlights

Customers:
New license customers include: DuPont, LAN Airlines, GOME Electrical Appliances (China), Idealo Internet GmbH (Germany), United States Computer Emergency Readiness Team (US-CERT), Palo Alto Networks, Poste Italiane SPA, City and County of San Francisco — Security Services, City of Chandler Police Department, City of Dayton, the Korea Music Copyright Association, NEC Australia, Nexon (APAC), Parallax Fund, RailCorp, Sacramento Regional Transit, Savvis, Siemens Energy, State of Nevada, Svyaznoy Bank (Russia), State of Montana, T-Mobile Poland, TriZetto Corporation and University of South Australia.

Expansion customers include: U.S. Coast Guard, Aviva (UK), Monster Worldwide, China Construction Bank, Comcast Corporation, U.S. Environmental Protection Agency, Genentech, Boingo Wireless, SKY Italia, Homes.com, Kaspersky Lab (Russia), Meeza (Qatar), Moody's, Robert Bosch GmbH, Row Sham Bow, State of Vermont, Symantec and Telenor Norway.

Product:

  • Released the Splunk App for Enterprise Security 2.2 to take advantage of Splunk Enterprise 5 features, enabling improved scalability for large deployments, faster performance and easier third-party threat intelligence feeds. It also contains new and improved technology add-ons and is more tablet-friendly.
  • Released the Splunk App for VMware 2.0 to enable deep operational visibility into granular performance metrics, logs, tasks, events and topology from hosts, virtual machines and virtual centers.
  • Released the Splunk App for Palo Alto Networks 3.0 to enable users to leverage their machine-generated big data to analyze risk, improve security posture and compliance and address a number of additional operational and regulatory concerns.
  • Announced the general availability (GA) of new software development kits (SDKs) for Java and Python. The Splunk SDK for PHP is in public preview.
  • Released the GA version of Splunk DB Connect to deliver real-time integration between Splunk Enterprise and relational databases.
  • Released Splunk Shuttl to give customers several backend options to archive their data, whether in Amazon S3, Hadoop HDFS or NFS. It allows data to move automatically and, via the user interface, locate and restore data with just a few clicks.

Awards

  • Fast Company named Splunk one of the World's Most Innovative Companies. Splunk is ranked fourth overall for "bringing big data to the masses." Fast Company also ranked Splunk the number one innovator in Big Data.
  • Splunk Enterprise won the gold medal for the Best Security Product in the "2012 Editors' Best Awards" by Penton Media's Windows IT Pro. Splunk Enterprise was also awarded the silver medal for Best Free Tool and the bronze medal for Best Systems Monitoring Product.
  • Named the 2012 Big Data Winner by Enterprise Strategy Group.

Appointments

  • Announced Tim Mather as the company's first Vice President of Security and Compliance Markets and Chief Information Security Officer (CISO).

Splunk4Good

  • Launched the Federal Election Commission Campaign Contribution Explorer to examine who gives the most to political campaigns by occupation, location and other criteria.
  • Partnered with Rock the Vote to help young voters, who get a majority of their news via social media, better follow and understand the online conversation around the 2012 U.S. election campaign. Rock the Vote and Splunk4Good worked together to build a visualization that displayed sets of real-time political data to build a unique social media view to track the issues that young voters were discussing online.
  • Selected to participate in the FEMA Innovation Think Tank to deliver social media metrics around the impact of Hurricane Sandy.

Financial Outlook

The company is providing the following guidance for its fiscal 2014 first quarter (ending April 30, 2013):

  • Total revenue is expected to be between $52 million and $54 million.
  • Non-GAAP operating margin is expected to be between negative 10% and negative 12%.

The company is providing the following guidance for its fiscal 2014 full year (ending January 31, 2014):

  • Total revenue is expected to be between $260 million and $270 million.
  • Non-GAAP operating margin is expected to be approximately zero.

All forward-looking non-GAAP financial measures contained in this section "Financial Outlook" exclude estimates for stock-based compensation expenses and employer payroll tax expense related to employee stock plans. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis.

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 March 7, 2013 by dialing (855) 859-2056 and referencing Conference ID# 93605971.

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 first quarter and fiscal year 2014 in the paragraphs under "Financial Outlook" above, and other statements regarding momentum in the company's business, growth in the number of new customers, existing customer usage, expansion of Splunk software and product developments. 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, particularly as a relatively new public company; risks associated with Splunk's rapid growth, particularly outside of the U.S.; 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 Quarterly Report on Form 10-Q for the quarter ended October 31, 2012 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 engine for machine data™. Splunk® software collects, indexes and harnesses the machine-generated big data coming from the websites, applications, servers, networks and mobile devices that power business. Splunk software enables organizations to monitor, search, analyze, visualize and act on massive streams of real-time and historical machine data. More than 5,200 enterprises, universities, government agencies and service providers in over 90 countries use Splunk Enterprise to gain Operational Intelligence that deepens business and customer understanding, improves service and uptime, reduces cost and mitigates cybersecurity risk. Splunk Storm™, a cloud-based subscription service, is used by organizations developing applications in the cloud.

To learn more, please visit www.splunk.com/company.

Splunk, Splunk Storm and the engine for machine data are registered trademarks or trademarks of Splunk Inc., and/or its subsidiaries and/or affiliates in the United States and/or other jurisdictions. All other brand names, product names or trademarks belong to their respective holders. © 2013 Splunk Inc. All rights reserved.

       
SPLUNK INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
 
 
Three Months Ended Fiscal Year Ended
January 31, January 31, January 31, January 31,
2013 2012 2013 2012
Revenues
License $ 46,776 $ 32,814 $ 135,922 $ 88,308
Maintenance and services   18,449     10,385     63,022     32,652  
Total revenues   65,225     43,199     198,944     120,960  
 
Cost of revenues
License 444 178 727 890
Maintenance and services   6,191     3,257     20,697     10,715  
Total cost of revenues 1, 2   6,635     3,435     21,424     11,605  
Gross profit   58,590     39,764     177,520     109,355  
 
Operating expenses
Research and development 1, 2 13,285 7,334 41,853 23,561
Sales and marketing 1, 2 40,345 26,445 125,098 74,782
General and administrative 1, 2   10,884     6,590     32,602     19,698  
Total operating expenses   64,514     40,369     199,553     118,041  
Operating loss   (5,924 )   (605 )   (22,033 )   (8,686 )
 
Other income (expense), net
Interest income (expense), net 37 (24 ) 152 (94 )
Change in fair value of preferred stock warrants   -     (519 )   (14,087 )   (2,034 )
Total other income (expense), net   37     (543 )   (13,935 )   (2,128 )
Loss before income taxes (5,887 ) (1,148 ) (35,968 ) (10,814 )
Provision for income taxes   275     128     713     178  
Net loss $ (6,162 ) $ (1,276 ) $ (36,681 ) $ (10,992 )
 
 
Basic and diluted net loss per share $ (0.06 ) $ (0.06 ) $ (0.46 ) $

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