Splunk Announces CEO Transition
Doug Merritt Steps Down; Graham Smith, Splunk’s Chair, Named Interim CEO
Announces Strong Preliminary Fiscal 2022 Third Quarter Results, Cloud ARR Surpasses
“Splunk has evolved significantly since I joined the team nearly eight years ago, growing from
“As the Board and I considered how to best position Splunk for long-term success and continued growth,” continued Merritt, “We determined now is the right time to transition to our next phase of leadership - in particular, the Board is focused on identifying a leader with a proven track record of scaling operations and growing multi-billion dollar enterprises. I am grateful to have had the opportunity to work alongside our world-class team, who I’m confident will continue to ensure Splunk is the partner of choice to the most forward-thinking and data-centric organizations on the planet.”
Smith has served as a member of Splunk’s Board since 2011 and as Chair since 2019. He has also served in a number of executive positions at Salesforce, including as Chief Financial Officer from
“On behalf of the Board, I want to thank Doug for his innumerable contributions and dedicated years of service to Splunk,” said Smith. “Since his appointment as CEO in 2015, Doug has led Splunk through critical product and business model transformations, which have enabled the company to become the leading data platform across Security, Observability and IT. With the proven success of our ongoing cloud transformation and our team’s strong execution, we are confident that Splunk is well positioned for its next phase of growth.”
“As a long-tenured director with significant experience in scaling cloud businesses, Graham has the expertise and acumen to lead Splunk as we conduct a search for the company’s next CEO,” said
Preliminary Third Quarter 2022 Results
Splunk today announced preliminary results for its third quarter ended
Cloud ARR will be approximately
$1.105 billion, representing 75% year over year growth.
Total ARR will be approximately
$2.825 billion, representing 37% year over year growth.
Total revenues will be approximately
$660 million, representing 19% year over year growth.
- Non-GAAP operating margin will be approximately negative 14%.
“Thanks to our team’s focused execution, we had another excellent quarter and surpassed
As previously announced, Splunk will report results and host its fiscal third quarter 2022 conference call on
These preliminary unaudited financial results are based on preliminary unaudited information and management's estimates, and are inherently uncertain and subject to revision in connection with the company's financial closing procedures and finalization of the company’s financial statements for its fiscal third quarter 2022. Actual results for the fiscal third quarter ended
About Graham Smith
Smith has served as a member of Splunk’s Board since 2011 and as Chair since 2019. Smith served in various executive leadership positions at Salesforce, a provider of enterprise cloud computing software, from 2007 to 2015, including as Chief Financial Officer and most recently as Executive Vice President. Prior to joining Salesforce, Smith served as Chief Financial Officer at
Splunk, Splunk>, Data-to-Everything, D2E and Turn Data Into Doing are trademarks and registered trademarks of
Safe Harbor Statement
This press release contains forward-looking statements that involve risks and uncertainties, including, without limitation, statements regarding Splunk's preliminary unaudited third quarter 2022 financial results (which remain subject to revision); the transformation of Splunk’s business to a subscription model and a cloud-delivered model; the transition of Splunk leadership, including priorities; and Splunk’s other plans, objectives, goals and strategies. There are a significant number of factors that could cause actual results to differ materially from statements made in this press release, including: risks associated with changes and transitions in management personnel; Splunk’s quarter-end closing and review process developments and facts or circumstances affecting the application of Splunk’s critical accounting policies; Splunk’s inability to realize value from its significant investments in the company’s business, including product and service innovations and through acquisitions; Splunk’s shift from sales of licenses to sales of cloud services which impacts the timing of revenue and margins; a shift from generally invoicing multi-year contracts upfront to invoicing on an annual basis, which impacts cash collections; Splunk’s transition to a multi-product software and services business; the impact of new COVID-19 variants such as the Delta variant and related public health measures on our business, 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 cause Splunk’s actual results to differ from our expectations are included in the company’s Quarterly Report on Form 10-Q for the fiscal quarter ended
To supplement Splunk’s condensed consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in
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. Splunk has provided non-GAAP operating margin in this release in order to enable investors to compare estimated actual performance with Splunk’s guidance for its fiscal third quarter 2022.
A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available without unreasonable effort due to the uncertainty regarding, and the potential variability of, many of these costs and expenses that are not determinable until the completion of our quarter-end closing processes. The company has provided a reconciliation of GAAP to non-GAAP financial measures in the financial statement tables for its fiscal second quarter 2022 non-GAAP results that are included on the company’s investor relations website.
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