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Mar 02, 2022

Splunk Announces Fiscal Fourth Quarter and Full Year 2022 Financial Results

Total ARR Grew 32% to $3.1B; Full Year Cloud Revenue up 70%

Names Gary Steele Chief Executive Officer

SAN FRANCISCO--(BUSINESS WIRE)--Mar. 2, 2022-- Splunk Inc. (NASDAQ: SPLK), the data platform leader for security and observability, today announced results for its fiscal fourth quarter and full year ended January 31, 2022.

Fourth Quarter 2022 Financial Highlights

  • Cloud ARR was $1.34 billion, up 65% year-over-year.
  • Total ARR was $3.12 billion, up 32% year-over-year.
  • Cloud revenue was $289 million, up 69% year-over-year.
  • Total revenues were $901 million, up 21% year-over-year.
  • 317 customers with cloud ARR greater than $1 million, up 70% year-over-year.
  • 675 customers with total ARR greater than $1 million, up 32% year-over-year.

Full Year 2022 Financial Highlights

  • Cloud revenue was $944 million, up 70% year-over-year.
  • Total revenues were $2.67 billion, up 20% year-over-year.
  • Operating cash flow was $128 million with free cash flow of $117 million.

“Q4 was an excellent finish to a strong year for Splunk,” said Graham Smith, interim CEO and chair of Splunk. “Our team delivered across our platform, observability and security businesses as organizations around the world turned to Splunk to monitor and secure their business-critical infrastructure and applications.”

“We reached a significant milestone as we surpassed $3 billion in total ARR last year, with cloud revenue growing 70%,” said Jason Child, CFO of Splunk. “The impact of our business transformation on our financials is normalizing, and we’re well positioned for strong growth in revenue and cash flow.”

Leadership Changes

In a separate release issued today, Splunk announced the appointment of Gary Steele as Chief Executive Officer and a member of the company’s Board of Directors, effective April 11, 2022. Graham Smith, who has served as Interim CEO since November 2021, will return to his role as Chair of the Splunk Board when Steele joins the company. In addition, Teresa Carlson, President and Chief Growth Officer, will be stepping down to pursue other career opportunities.

Q4 2022 Business Highlights:

New, Expansion and Renewal Customers Include: Box, Inc., CVS Health, Fred Loya Insurance, Intel Corporation and Papa John’s International, Inc.

  • Splunk Security Innovation: Splunk’s latest Enterprise Security release is now generally available and features enhanced threat detection with advanced security analytics, an executive summary dashboard, and a new user experience.
  • Splunk Observability Enhancements: Splunk Application Performance Monitoring (APM)’s AlwaysOn Profiling is now generally available with continuous visibility of code-level performance, a new AutoDetect feature with out-of-the-box detectors and alerts to help users get started in minutes as well as Log Observer Connect functionality that allows users to explore the data already being sent to existing Splunk instances.
  • Splunk Joins the U.S. Cybersecurity and Infrastructure Security Agency’s Joint Cyber Defense Collaborative: This industry-government partnership focuses on planning, threat analysis and defensive operations to combat cyberthreats.
  • Splunk Wins Naval Information Warfare Systems Command (NAVWAR) Award: Splunk SOAR won the NAVWAR’s Artificial Intelligence Applications to Autonomous Cybersecurity Challenge (AI ATAC) series at the U.S. Navy-hosted HACKtheMACHINE Unmanned event.
  • Splunk Announces Net Zero Commitment and Releases 2021 Global Impact Report: Splunk revealed its intent to achieve net zero greenhouse gas emissions by 2050 and released its 2021 Global Impact Report to detail its approach and engagement with the societal and environmental issues that matter most to its stakeholders and business.

Financial Outlook

The company is providing the following guidance for its fiscal first quarter 2023 (ending April 30, 2022):

  • Total revenues are expected to be between $615 million and $635 million.
  • Non-GAAP operating margin is expected to be between negative 20% and negative 25%.

The company is providing the following guidance for its fiscal year 2023 (ending January 31, 2023):

  • Cloud ARR is expected to be at least $2 billion.
  • Total ARR is expected to be approximately $3.9 billion.
  • Total revenues are expected to be between $3.25 billion and $3.3 billion.
  • Non-GAAP operating margin is expected to be between 0% and 2%.
  • Operating cash flow is expected to be at least $400 million.

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) to discuss financial results and business highlights. Interested parties may access the call by dialing (866) 501-1535 in the U.S. or (216) 672-5582 from international locations. A live audio webcast of the conference call will be available through Splunk’s Investor Relations website at http://investors.splunk.com/events-presentations. A replay of the call will be available through March 9, 2022 by dialing (855) 859-2056 and referencing Conference ID 2073649.

Safe Harbor Statement

This press release contains forward-looking statements that involve risks and uncertainties, including statements regarding Splunk’s guidance for revenue and non-GAAP operating margin targets for the company’s fiscal first quarter 2023, and cloud ARR, total ARR, revenue, non-GAAP operating margin and operating cash flow for the company’s fiscal year 2023; statements regarding our market opportunity, including trends in the pace of customer digital and cloud transformation; our global presence and trends in customer demand and engagement; the growth of our cloud business; the market for data-related products and the importance of data and our ability to leverage these trends; our strategy, technology and product innovation; 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: risks associated with Splunk’s rapid 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; 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; 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; the emergence and impact of new COVID-19 variants 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 affect Splunk’s financial results is included in the company’s Quarterly Report on Form 10-Q for the fiscal quarter ended October 31, 2021, 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 organizations around the world turn data into doing. Splunk technology is designed to investigate, monitor, analyze and act on data at any scale.

Splunk, Splunk>, Data-to-Everything, 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. © 2022 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,

   

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Revenues                
Cloud services  

$

289,363

 

 

$

171,396

 

 

$

943,785

 

 

$

554,132

 

License  

 

444,579

 

 

 

405,954

 

 

 

1,056,481

 

 

 

971,378

 

Maintenance and services  

 

167,177

 

 

 

167,728

 

 

 

673,398

 

 

 

703,875

 

Total revenues  

 

901,119

 

 

 

745,078

 

 

 

2,673,664

 

 

 

2,229,385

 

Cost of revenues                
Cloud services  

 

111,963

 

 

 

75,718

 

 

 

398,274

 

 

 

252,290

 

License  

 

1,237

 

 

 

4,315

 

 

 

9,215

 

 

 

20,864

 

Maintenance and services  

 

77,166

 

 

 

69,863

 

 

 

326,480

 

 

 

274,191

 

Total cost of revenues  

 

190,366

 

 

 

149,896

 

 

 

733,969

 

 

 

547,345

 

Gross profit  

 

710,753

 

 

 

595,182

 

 

 

1,939,695

 

 

 

1,682,040

 

Operating expenses                
Research and development  

 

257,522

 

 

 

211,383

 

 

 

1,029,574

 

 

 

791,026

 

Sales and marketing  

 

409,431

 

 

 

369,999

 

 

 

1,534,600

 

 

 

1,336,056

 

General and administrative  

 

122,486

 

 

 

100,398

 

 

 

522,350

 

 

 

335,144

 

Total operating expenses  

 

789,439

 

 

 

681,780

 

 

 

3,086,524

 

 

 

2,462,226

 

Operating loss  

 

(78,686

)

 

 

(86,598

)

 

 

(1,146,829

)

 

 

(780,186

)

Interest and other income (expense), net                
Interest income  

 

809

 

 

 

1,412

 

 

 

2,583

 

 

 

13,850

 

Interest expense  

 

(51,272

)

 

 

(34,519

)

 

 

(174,598

)

 

 

(123,076

)

Other income (expense), net  

 

(2,273

)

 

 

(16,169

)

 

 

(1,939

)

 

 

(11,636

)

Total interest and other income (expense), net  

 

(52,736

)

 

 

(49,276

)

 

 

(173,954

)

 

 

(120,862

)

Loss before income taxes  

 

(131,422

)

 

 

(135,874

)

 

 

(1,320,783

)

 

 

(901,048

)

Income tax provision  

 

9,401

 

 

 

3,674

 

 

 

18,314

 

 

 

6,932

 

Net loss  

$

(140,823

)

 

$

(139,548

)

 

$

(1,339,097

)

 

$

(907,980

)

                 
Basic and diluted net loss per share  

$

(0.88

)

 

$

(0.86

)

 

$

(8.29

)

 

$

(5.68

)

                 
Weighted-average shares used in computing basic and diluted net loss per share  

 

159,217

 

 

 

162,009

 

 

 

161,628

 

 

 

159,744

 

                 
Splunk Inc.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
         
         
   

January 31, 2022

 

January 31, 2021

Assets        
Current assets        
Cash and cash equivalents  

$

1,428,691

 

 

$

1,771,064

 

Investments, current  

 

286,337

 

 

 

87,847

 

Accounts receivable, net  

 

1,306,666

 

 

 

1,114,199

 

Prepaid expenses and other current assets  

 

152,871

 

 

 

162,939

 

Deferred commissions, current  

 

102,322

 

 

 

136,331

 

Total current assets  

 

3,276,887

 

 

 

3,272,380

 

Investments, non-current  

 

46,431

 

 

 

13,728

 

Accounts receivable, non-current  

 

242,689

 

 

 

347,202

 

Operating lease right-of-use assets  

 

229,198

 

 

 

356,296

 

Property and equipment, net  

 

124,900

 

 

 

182,780

 

Intangible assets, net  

 

164,769

 

 

 

206,153

 

Goodwill  

 

1,401,628

 

 

 

1,334,888

 

Deferred commissions, non-current  

 

200,876

 

 

 

69,637

 

Other assets  

 

103,497

 

 

 

85,422

 

Total assets  

$

5,790,875

 

 

$

5,868,486

 

Liabilities and Stockholders' Equity        
Current liabilities        
Accounts payable  

$

59,206

 

 

$

9,319

 

Accrued compensation  

 

396,952

 

 

 

281,986

 

Accrued expenses and other liabilities  

 

257,979

 

 

 

202,959

 

Deferred revenue, current  

 

1,384,605

 

 

 

1,030,484

 

Total current liabilities  

 

2,098,742

 

 

 

1,524,748

 

Convertible senior notes, net  

 

3,137,731

 

 

 

2,302,635

 

Operating lease liabilities  

 

225,556

 

 

 

330,970

 

Deferred revenue, non-current  

 

86,584

 

 

 

110,418

 

Other liabilities, non-current  

 

19,491

 

 

 

5,710

 

Total non-current liabilities  

 

3,469,362

 

 

 

2,749,733

 

Total liabilities  

 

5,568,104

 

 

 

4,274,481

 

Stockholders' equity        
Common stock  

 

167

 

 

 

163

 

Accumulated other comprehensive loss  

 

(1,199

)

 

 

(592

)

Additional paid-in capital  

 

5,032,351

 

 

 

4,063,885

 

Treasury stock  

 

(1,000,000

)

 

 

-

 

Accumulated deficit  

 

(3,808,548

)

 

 

(2,469,451

)

Total stockholders' equity  

 

222,771

 

 

 

1,594,005

 

Total liabilities and stockholders' equity  

$

5,790,875

 

 

$

5,868,486

 

         
Splunk Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
                 
                 
   

Three Months Ended January 31,

 

Fiscal Year Ended January 31,

   

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Cash flows from operating activities                
Net loss  

$

(140,823

)

 

$

(139,548

)

 

$

(1,339,097

)

 

$

(907,980

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:                
Depreciation and amortization  

 

24,520

 

 

 

26,397

 

 

 

99,145

 

 

 

93,666

 

Amortization of deferred commissions  

 

34,745

 

 

 

42,878

 

 

 

144,850

 

 

 

142,095

 

Amortization of investment premiums (accretion of discounts), net  

 

653

 

 

 

223

 

 

 

1,741

 

 

 

(667

)

Loss on strategic investment  

 

-

 

 

 

4,500

 

 

 

-

 

 

 

4,500

 

Amortization of debt discount and issuance costs  

 

41,889

 

 

 

27,322

 

 

 

140,847

 

 

 

98,977

 

Gain on extinguishment of convertible senior notes  

 

-

 

 

 

-

 

 

 

-

 

 

 

(6,952

)

Repurchase of convertible senior notes attributable to the accreted interest related to debt discount  

 

-

 

 

 

-

 

 

 

-

 

 

 

(22,149

)

Loss on lease termination  

 

-

 

 

 

-

 

 

 

47,124

 

 

 

-

 

Non-cash operating lease costs  

 

9,446

 

 

 

9,627

 

 

 

9,191

 

 

 

25,410

 

Stock-based compensation  

 

203,861

 

 

 

166,174

 

 

 

794,818

 

 

 

618,655

 

Disposal of property and equipment  

 

752

 

 

 

64

 

 

 

785

 

 

 

1,045

 

Deferred income taxes  

 

1,089

 

 

 

(1,581

)

 

 

(579

)

 

 

(3,590

)

Changes in operating assets and liabilities, net of acquisitions:                
Accounts receivable, net  

 

(513,226

)

 

 

(344,617

)

 

 

(87,491

)

 

 

(153,724

)

Prepaid expenses and other assets  

 

(25,155

)

 

 

(31,020

)

 

 

(8,215

)

 

 

(45,476

)

Deferred commissions  

 

(105,233

)

 

 

(60,230

)

 

 

(242,080

)

 

 

(160,001

)

Accounts payable  

 

23,589

 

 

 

(3,903

)

 

 

33,115

 

 

 

(9,082

)

Accrued compensation  

 

99,219

 

 

 

(4,115

)

 

 

114,966

 

 

 

(3,805

)

Accrued expenses and other liabilities  

 

19,795

 

 

 

17,311

 

 

 

90,079

 

 

 

3,814

 

Deferred revenue  

 

457,568

 

 

 

266,752

 

 

 

328,849

 

 

 

134,402

 

Net cash provided by (used in) operating activities  

 

132,689

 

 

 

(23,766

)

 

 

128,048

 

 

 

(190,862

)

Cash flows from investing activities                
Purchases of marketable securities  

 

(29,992

)

 

 

-

 

 

 

(388,741

)

 

 

(87,135

)

Maturities of marketable securities  

 

53,670

 

 

 

252,558

 

 

 

178,124

 

 

 

995,878

 

Purchases of strategic investments  

 

(8,300

)

 

 

-

 

 

 

(23,750

)

 

 

-

 

Acquisitions, net of cash acquired  

 

-

 

 

 

(44,625

)

 

 

(80,333

)

 

 

(56,383

)

Purchases of property and equipment  

 

(841

)

 

 

(8,800

)

 

 

(10,671

)

 

 

(37,107

)

Capitalized software development costs  

 

(3,518

)

 

 

(3,899

)

 

 

(9,361

)

 

 

(14,602

)

Other investment activities  

 

33

 

 

 

-

 

 

 

980

 

 

 

(3,461

)

Net cash provided by (used in) investing activities  

 

11,052

 

 

 

195,234

 

 

 

(333,752

)

 

 

797,190

 

Cash flows from financing activities                
Proceeds from the exercise of stock options  

 

564

 

 

 

389

 

 

 

2,430

 

 

 

3,473

 

Proceeds from employee stock purchase plan  

 

31,692

 

 

 

35,735

 

 

 

79,938

 

 

 

79,949

 

Proceeds from the issuance of convertible senior notes, net of issuance costs  

 

(290

)

 

 

-

 

 

 

981,920

 

 

 

1,246,544

 

Purchase of capped calls  

 

-

 

 

 

-

 

 

 

-

 

 

 

(137,379

)

Partial repurchase of convertible senior notes  

 

-

 

 

 

-

 

 

 

-

 

 

 

(668,929

)

Repurchases of common stock  

 

-

 

 

 

-

 

 

 

(1,000,000

)

 

 

-

 

Taxes paid related to net share settlement of equity awards  

 

(51,397

)

 

 

(91,541

)

 

 

(200,957

)

 

 

(140,776

)

Net cash provided by (used in) financing activities  

 

(19,431

)

 

 

(55,417

)

 

 

(136,669

)

 

 

382,882

 

Effect of exchange rate changes on cash and cash equivalents  

 

-

 

 

 

2,750

 

 

 

-

 

 

 

3,201

 

Net increase (decrease) in cash and cash equivalents  

 

124,310

 

 

 

118,801

 

 

 

(342,373

)

 

 

992,411

 

Cash and cash equivalents at beginning of period  

 

1,304,381

 

 

 

1,652,263

 

 

 

1,771,064

 

 

 

778,653

 

Cash and cash equivalents at end of period  

$

1,428,691

 

 

$

1,771,064

 

 

$

1,428,691

 

 

$

1,771,064

 

                 

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.

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 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 strategic investment impairment. 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, 2022 and 2021. In addition, non-GAAP financial measures include free cash flow, which represents operating cash flow less purchases of property and equipment. 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 strategic investment impairment 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 (Used In) Operating Activities to Free Cash Flow
                   
     

Three Months Ended January 31,

 

Fiscal Year Ended January 31,

     

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Net cash provided by (used in) operating activities    

$

132,689

 

 

$

(23,766

)

 

$

128,048

 

 

$

(190,862

)

Less purchases of property and equipment    

 

(841

)

 

 

(8,800

)

 

 

(10,671

)

 

 

(37,107

)

Free cash flow (non-GAAP)    

$

131,848

 

 

$

(32,566

)

 

$

117,377

 

 

$

(227,969

)

Net cash provided by (used in) investing activities    

$

11,052

 

 

$

195,234

 

 

$

(333,752

)

 

$

797,190

 

Net cash provided by (used in) financing activities    

$

(19,431

)

 

$

(55,417

)

 

$

(136,669

)

 

$

382,882

 

                   
                               
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 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 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 employee stock awards. GAAP to non-GAAP diluted net income (loss) per share is not reconciled due to the difference in the number of shares used to calculate basic and diluted weighted-average shares of common stock.
(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, 2021
 

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

 

Impairment
of strategic

investment

 

Income tax
adjustment (2)

 

Non-GAAP

Cloud services cost of revenues

$

75,718

 

 

$

(3,105

)

 

$

(7,163

)

 

$

-

 

 

$

257

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

65,707

 

Cloud services gross margin

 

55.8

%

 

 

1.8

%

 

 

4.2

%

 

 

-

%

 

 

(0.1

)%

 

 

-

%

 

 

-

%

 

 

-

%

 

 

-

%

 

 

61.7

%

Cost of revenues

 

149,896

 

 

 

(15,947

)

 

 

(9,862

)

 

 

-

 

 

 

257

 

 

 

(594

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

123,750

 

Gross margin

 

79.9

%

 

 

2.1

%

 

 

1.3

%

 

 

-

%

 

 

-

%

 

 

0.1

%

 

 

-

%

 

 

-

%

 

 

-

%

 

 

83.4

%

Research and development

 

211,383

 

 

 

(74,640

)

 

 

-

 

 

 

-

 

 

 

(2,972

)

 

 

3,899

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

137,670

 

Sales and marketing

 

369,999

 

 

 

(48,789

)

 

 

(4,746

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

316,464

 

General and administrative

 

100,398

 

 

 

(30,669

)

 

 

-

 

 

 

(1,119

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

68,610

 

Operating income (loss)

 

(86,598

)

 

 

170,045

 

 

 

14,608

 

 

 

1,119

 

 

 

2,715

 

 

 

(3,305

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

98,584

 

Operating margin

 

(11.6

)%

 

 

22.7

%

 

 

1.9

%

 

 

0.2

%

 

 

0.4

%

 

 

(0.4

)%

 

 

-

%

 

 

-

%

 

 

-

%

 

 

13.2

%

Income tax provision

 

3,674

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

12,552

 

 

 

16,226

 

Net income (loss)

$

(139,548

)

 

$

170,045

 

 

$

14,608

 

 

$

1,119

 

 

$

2,715

 

 

$

(3,305

)

 

$

27,322

 

 

$

4,500

 

 

$

(12,552

)

 

$

64,904

 

Basic net income (loss) per share (1)

$

(0.86

)

 

$

1.04

 

 

$

0.09

 

 

$

0.01

 

 

$

0.02

 

 

$

(0.02

)

 

$

0.17

 

 

$

0.03

 

 

$

(0.08

)

 

$

0.40

 

Diluted net income (loss) per share (1)

$

(0.86

)

                                 

$

0.38

 

____________________

(1) GAAP basic and diluted net loss per share calculated based on 162,009 weighted-average shares of common stock. Non-GAAP net income per share calculated based on 168,711 diluted weighted-average shares of common stock, which includes 6,702 potentially dilutive shares related to employee stock awards and conversion spread on our convertible notes. GAAP to non-GAAP diluted net income (loss) per share is not reconciled due to the difference in the number of shares used to calculate basic and diluted weighted-average shares of common stock.

(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 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%.

 
Reconciliation of GAAP to Non-GAAP Financial Measures
Fiscal Year Ended January 31, 2021
 

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

 

Impairment
of strategic
investment

 

Income tax

adjustment (2)

 

Non-GAAP

Cloud services cost of revenues

$

252,290

 

 

$

(11,026

)

 

$

(23,169

)

 

$

-

 

 

$

28

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

218,123

 

Cloud services gross margin

 

54.5

%

 

 

2.0

%

 

 

4.1

%

 

 

-

%

 

 

-

%

 

 

-

%

 

 

-

%

 

 

-

%

 

 

-

%

 

 

60.6

%

Cost of revenues

 

547,345

 

 

 

(58,828

)

 

 

(40,245

)

 

 

-

 

 

 

(240

)

 

 

(1,188

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

446,844

 

Gross margin

 

75.4

%

 

 

2.6

%

 

 

1.9

%

 

 

-

%

 

 

-

%

 

 

0.1

%

 

 

-

%

 

 

-

%

 

 

-

%

 

 

80.0

%

Research and development

 

791,026

 

 

 

(278,677

)

 

 

(25

)

 

 

-

 

 

 

(5,856

)

 

 

14,602

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

521,070

 

Sales and marketing

 

1,336,056

 

 

 

(206,380

)

 

 

(17,745

)

 

 

-

 

 

 

(1,168

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,110,763

 

General and administrative

 

335,144

 

 

 

(95,545

)

 

 

-

 

 

 

(3,342

)

 

 

(518

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

235,739

 

Operating loss

 

(780,186

)

 

 

639,430

 

 

 

58,015

 

 

 

3,342

 

 

 

7,782

 

 

 

(13,414

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(85,031

)

Operating margin

 

(35.0

)%

 

 

28.7

%

 

 

2.7

%

 

 

0.1

%

 

 

0.3

%

 

 

(0.6

)%

 

 

-

%

 

 

-

%

 

 

-

%

 

 

(3.8

)%

Income tax provision (benefit)

 

6,932

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(28,711

)

 

 

(21,779

)

Net loss

$

(907,980

)

 

$

639,430

 

 

$

58,015

 

 

$

3,342

 

 

$

8,258

 

(3

)

$

(13,414

)

 

$

92,024

 

(4

)

$

4,500

 

 

$

28,711

 

 

$

(87,114

)

Basic and diluted net loss per share (1)

$

(5.68

)

 

$

4.00

 

 

$

0.35

 

 

$

0.02

 

 

$

0.05

 

 

$

(0.08

)

 

$

0.58

 

 

$

0.03

 

 

$

0.18

 

 

$

(0.55

)

____________________

(1) Calculated based on 159,744 weighted-average shares of common stock.

(2) Represents the income tax adjustment using our estimated non-GAAP tax rate of 20%.
(3) Includes a $0.5 million loss on disposal of property, plant and equipment.
(4) Includes non-cash interest expense of $99.0 million and a $7.0 million non-recurring gain on extinguishment of convertible senior notes.

 

Media Contact
Mara Mort
Splunk Inc.
press@splunk.com

Investor Contact
Ken Tinsley
Splunk Inc.
ir@splunk.com

Source: Splunk Inc.