Splunk Inc. Announces Fiscal First Quarter 2018 Financial Results
Revenues Grew 30%; Company Raises Full-Year Outlook
First Quarter 2018 Financial Highlights
-
Total revenues were
$242.4 million , up 30% year-over-year. -
Total billings were
$242.8 million , up 30% year-over-year. -
GAAP operating loss was
$97.5 million ; GAAP operating margin was negative 40.2%. -
Non-GAAP operating loss was
$2.8 million ; non-GAAP operating margin was negative 1.2%. -
GAAP loss per share was
$0.73 ; non-GAAP loss per share was$0.01 . -
Operating cash flow was
$41.4 million with free cash flow of$35.8 million .
"We are living in a data-driven world and
First Quarter 2018 and Recent Business Highlights:
Customers:
- Signed nearly 500 new enterprise customers.
-
New and expansion customers include:
Alabama Department of Transportation ,Airport Authority Hong Kong , Black Box Corporation,California Department of Social Services , Cerner Corporation, Experian Consumer Services,Jefferson County Public Schools , Lockheed Martin, Lloyd's Bank (UK ), Merck KGaA (Germany ),Monash University , Party City, Practice Fusion, STARTEK,State of Kansas , Tata Consultancy Services (India ), Take-Two, Trustpower Limited (NZ), Wirecard Technologies (Germany ),UK Ministry of Defence ,University of New Mexico ,University of North Carolina at Chapel Hill andU.S. Navy .
Products:
-
Announced support
for SaaS Contracts in
AWS Marketplace to enable seamless procurement and deployment of Splunk Cloud, ensuring fast time-to-value for customers leveragingSplunk solutions across theirAmazon Web Services (AWS) and hybrid environments. -
Announced
Splunk DB Connect 3.0, which enables powerful connections betweenSplunk and the structured data world of SQL and JDBC.
Corporate:
-
Named one of the "Best
Places to Work" in the
Bay Area by the San Francisco BusinessTimes for the 10th consecutive year. -
Recognized as one of
Washington , D.C.'s "50 Great Places to Work" by the Washingtonian. -
Splunk Enterprise attained Common
Criteria Certification for
Splunk 6.4.5 from theNational Information Assurance Partnership (NIAP).
- Announced a strategic alliance and new integration with New Relic, unifying machine data analytics and performance monitoring to help enterprises improve customer experiences and drive revenues.
-
Announced five new members of the
Splunk Adaptive Response Initiative atRSA Conference 2017:AlgoSec , Demisto,RedSeal , Resolve Systems and Symantec (Advanced Threat Protection). - Announced the winners of Splunk's FY2017 Global Partner+ Program Awards, which honors partners who go beyond expectations to deliver outstanding customer successes.
Recognition:
- Announced Splunk's position as a Leader in The Forrester Wave™: Security Analytics Platforms, Q1 2017 report. Forrester awarded Splunk Enterprise Security (ES) with the highest possible scores for real-time monitoring, scalability and detection technologies.
-
Splunk ES received a 5-Star review from
SC Magazine , which notedSplunk as an analytics-driven SIEM with straightforward functionality at a very reasonable price. -
Splunk won three awards in TechWorld's techies 2017: Best Security Technology of the Year, Best Cloud Technology of the Year and the Grand Prix Award. -
Splunk was named a 2016-17 winner in The Cloud Awards in the category of Best Hybrid Cloud Solution.
Events:
- Splunk's Women in Technology (WiT) group hosted over 200 women at the Bay Area Girl Geek Dinner for an evening of networking, education and empowerment.
-
Hosted SplunkLive! events in
Germany ,San Francisco ,Minneapolis andWashington, D.C . Presentations can be found on the SplunkLive! website.
Financial Outlook
The company is providing the following guidance for its fiscal second
quarter 2018 (ending
-
Total revenues are expected to be between
$267 million and$269 million . - Non-GAAP operating margin is expected to be approximately 4%.
The company is updating its previous guidance for its fiscal year 2018
(ending
-
Total billings are expected to be approximately
$1.425 billion (was approximately$1.4 billion per prior guidance provided onJanuary 12, 2017 ). -
Total revenues are expected to be approximately
$1.195 billion (was approximately$1.185 billion per prior guidance provided onFebruary 23, 2017 ). - Non-GAAP operating margin is expected to be approximately 8% (unchanged from prior guidance).
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 adjustments related to a financing lease obligation.
A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, many of these costs and expenses that may be incurred in the future. The company has provided a reconciliation of GAAP to non-GAAP financial measures in the financial statement tables for its fiscal first quarter 2018 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
Safe Harbor Statement
This press release contains forward-looking statements that involve
risks and uncertainties, including statements regarding Splunk's
revenue, billings and non-GAAP operating margin targets for the
company's fiscal second quarter and fiscal year 2018 in the paragraphs
under "Financial Outlook" above and other statements regarding future
growth, strategy, subscription business, cloud adoption, customer demand
and penetration, app ecosystem, and expected benefits of new products.
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
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 fiscal year ended
About
Social Media: Twitter
| LinkedIn
|
|
||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||
(In thousands, except per share data) | ||||||||||
(Unaudited) | ||||||||||
Three Months Ended | ||||||||||
|
|
|||||||||
2017 | 2016 | |||||||||
Revenues | ||||||||||
License | $ | 116,726 | $ | 100,992 | ||||||
Maintenance and services | 125,722 | 84,960 | ||||||||
Total revenues | 242,448 | 185,952 | ||||||||
Cost of revenues | ||||||||||
License | 2,928 | 2,962 | ||||||||
Maintenance and services | 55,235 | 36,538 | ||||||||
Total cost of revenues | 58,163 | 39,500 | ||||||||
Gross profit | 184,285 | 146,452 | ||||||||
Operating expenses | ||||||||||
Research and development | 71,298 | 67,371 | ||||||||
Sales and marketing | 173,948 | 145,151 | ||||||||
General and administrative | 36,496 | 32,073 | ||||||||
Total operating expenses | 281,742 | 244,595 | ||||||||
Operating loss | (97,457 | ) | (98,143 | ) | ||||||
Interest and other income (expense), net | ||||||||||
Interest income (expense), net | (528 | ) | (403 | ) | ||||||
Other income (expense), net | (608 | ) | (1,125 | ) | ||||||
Total interest and other income (expense), net | (1,136 | ) | (1,528 | ) | ||||||
Loss before income taxes | (98,593 | ) | (99,671 | ) | ||||||
Income tax provision | 1,338 | 1,225 | ||||||||
Net loss | $ | (99,931 | ) | $ | (100,896 | ) | ||||
Basic and diluted net loss per share | $ | (0.73 | ) | $ | (0.77 | ) | ||||
Weighted-average shares used in computing basic | ||||||||||
and diluted net loss per share | 137,785 | 131,494 |
|
|||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||||
(In thousands) | |||||||||||||
(Unaudited) | |||||||||||||
|
|
||||||||||||
2017 | 2017 | ||||||||||||
Assets | |||||||||||||
Current assets | |||||||||||||
Cash and cash equivalents | $ | 466,427 | $ | 421,346 | |||||||||
Investments, current portion | 620,805 | 662,096 | |||||||||||
Accounts receivable, net | 171,260 | 238,281 | |||||||||||
Prepaid expenses and other current assets | 44,864 | 38,650 | |||||||||||
Total current assets | 1,303,356 | 1,360,373 | |||||||||||
Investments, non-current | 5,000 |
|
5,000 | ||||||||||
Property and equipment, net | 165,356 |
|
166,395 | ||||||||||
Intangible assets, net | 35,022 |
|
37,713 | ||||||||||
|
124,642 |
|
124,642 | ||||||||||
Other assets | 25,210 |
|
24,423 | ||||||||||
Total assets | $ | 1,658,586 |
|
$ | 1,718,546 | ||||||||
Liabilities and Stockholders' Equity | |||||||||||||
Current liabilities | |||||||||||||
Accounts payable | $ | 8,239 |
|
$ | 7,503 | ||||||||
Accrued payroll and compensation | 89,104 |
|
100,092 | ||||||||||
Accrued expenses and other liabilities | 72,107 |
|
81,071 | ||||||||||
Deferred revenue, current portion | 469,072 |
|
478,707 | ||||||||||
Total current liabilities | 638,522 |
|
667,373 | ||||||||||
Deferred revenue, non-current | 156,720 |
|
146,752 | ||||||||||
Other liabilities, non-current | 99,610 |
|
99,260 | ||||||||||
Total non-current liabilities | 256,330 |
|
246,012 | ||||||||||
Total liabilities | 894,852 |
|
913,385 | ||||||||||
Stockholders' equity | |||||||||||||
Common stock | 138 |
|
137 | ||||||||||
Accumulated other comprehensive loss | (3,589 | ) |
|
(3,013 | ) | ||||||||
Additional paid-in capital | 1,887,900 |
|
1,828,821 | ||||||||||
Accumulated deficit | (1,120,715 | ) |
|
(1,020,784 | ) | ||||||||
Total stockholders' equity | 763,734 |
|
805,161 | ||||||||||
Total liabilities and stockholders' equity | $ | 1,658,586 |
|
$ | 1,718,546 |
|
|||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
(In thousands) | |||||||||||
(Unaudited) | |||||||||||
Three Months Ended | |||||||||||
|
|
||||||||||
2017(1) |
|
2016 | |||||||||
Cash flows from operating activities | |||||||||||
Net loss | $ | (99,931 | ) | $ | (100,896 | ) | |||||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 9,103 | 6,461 | |||||||||
Amortization of investment premiums | 217 | 258 | |||||||||
Stock-based compensation | 90,055 | 91,370 | |||||||||
Deferred income taxes | 101 | (506 | ) | ||||||||
Excess tax benefits from employee stock plans | - | (692 | ) | ||||||||
Changes in operating assets and liabilities, net of acquisitions: | |||||||||||
Accounts receivable, net | 67,021 | 83,058 | |||||||||
Prepaid expenses, other current and non-current assets | (7,057 | ) | (8,119 | ) | |||||||
Accounts payable | 714 | 99 | |||||||||
Accrued payroll and compensation | (10,988 | ) | (33,727 | ) | |||||||
Accrued expenses and other liabilities | (8,210 | ) | (2,891 | ) | |||||||
Deferred revenue | 333 | 1,274 | |||||||||
Net cash provided by operating activities | 41,358 | 35,689 | |||||||||
Cash flow from investing activities | |||||||||||
Purchases of investments | (122,473 | ) | (142,787 | ) | |||||||
Maturities of investments | 163,065 | 133,120 | |||||||||
Purchases of property and equipment | (5,605 | ) | (3,709 | ) | |||||||
Net cash provided by (used in) investing activities | 34,987 | (13,376 | ) | ||||||||
Cash flow from financing activities | |||||||||||
Proceeds from the exercise of stock options | 1,487 | 1,664 | |||||||||
Excess tax benefits from employee stock plans | - | 692 | |||||||||
Taxes paid related to net share settlement of equity awards | (32,462 | ) | (21,731 | ) | |||||||
Repayment of financing lease obligation | (317 | ) | - | ||||||||
Net cash used in financing activities | (31,292 | ) | (19,375 | ) | |||||||
Effect of exchange rate changes on cash and cash equivalents | 28 | 766 | |||||||||
Net increase in cash and cash equivalents | 45,081 | 3,704 | |||||||||
Cash and cash equivalents at beginning of period | 421,346 | 424,541 | |||||||||
Cash and cash equivalents at end of period | $ | 466,427 | $ | 428,245 |
(1) During the current quarter, |
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
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 tables reconcile Splunk's non-GAAP results to Splunk's GAAP results included in this press release.
|
|||||||||||||||||||||||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures | |||||||||||||||||||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||
Reconciliation of Cash Provided by Operating Activities to Free Cash Flow |
|||||||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||
2017 | 2016 | ||||||||||||||||||||||||||||||||
Net cash provided by operating activities | $ | 41,358 | $ | 35,689 | |||||||||||||||||||||||||||||
Less purchases of property and equipment | (5,605 | ) | (3,709 | ) | |||||||||||||||||||||||||||||
Free cash flow (Non-GAAP) | $ | 35,753 | $ | 31,980 | |||||||||||||||||||||||||||||
Net cash provided by (used in) investing activities | $ | 34,987 | $ | (13,376 | ) | ||||||||||||||||||||||||||||
Net cash used in financing activities | $ | (31,292 | ) | $ | (19,375 | ) | |||||||||||||||||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures |
|||||||||||||||||||||||||||||||||
Three Months Ended |
|||||||||||||||||||||||||||||||||
GAAP |
Stock-based |
Employer payroll |
Amortization of |
Adjustments |
Income tax |
Non-GAAP | |||||||||||||||||||||||||||
Cost of revenues | $ | 58,163 | $ | (8,192 | ) | $ | (441 | ) | $ | (2,649 | ) | $ | 306 | $ | - | $ | 47,187 | ||||||||||||||||
Gross margin | 76.0 | % | 3.3 | % | 0.2 | % | 1.1 | % | (0.1 | )% | - | % | 80.5 | % | |||||||||||||||||||
Research and development | 71,298 | (26,797 | ) | (1,251 | ) | (28 | ) | 531 | - | 43,753 | |||||||||||||||||||||||
Sales and marketing | 173,948 | (40,643 | ) | (1,772 | ) | (16 | ) | 1,170 | - | 132,687 | |||||||||||||||||||||||
General and administrative | 36,496 | (14,423 | ) | (677 | ) | - | 237 | - | 21,633 | ||||||||||||||||||||||||
Operating loss | (97,457 | ) | 90,055 | 4,141 | 2,693 | (2,244 | ) |
|
- | (2,812 | ) | ||||||||||||||||||||||
Operating margin | (40.2 | )% | 37.1 | % | 1.7 | % | 1.1 | % | (0.9 | )% | - | % | (1.2 | )% | |||||||||||||||||||
Income tax provision (benefit) | 1,338 | - | - | - | - | (1,833 | ) | (495 | ) | ||||||||||||||||||||||||
Net loss | $ | (99,931 | ) | $ | 90,055 | $ | 4,141 | $ | 2,693 | $ | (130 |
)(2) |
|
|
$ | 1,833 | $ | (1,339 | ) | ||||||||||||||
Net loss per share(1) | $ | (0.73 | ) | $ | 0.66 | $ | 0.03 | $ | 0.02 | $ | - | $ | 0.01 | $ | (0.01 | ) | |||||||||||||||||
(1) Calculated based on 137,785 basic and diluted weighted-average shares of common stock. | |||||||||||||||||||||||||||||||||
(2) Includes |
|||||||||||||||||||||||||||||||||
(3) Represents the tax effect of the non-GAAP adjustments based on the estimated annual effective tax rate of 27%. Application of this annual effective tax rate to the non-GAAP pre-tax loss during the quarter resulted in a non-GAAP tax benefit, which is expected to be offset by future tax expense. | |||||||||||||||||||||||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures |
|||||||||||||||||||||||||||||||||
Three Months Ended |
|
||||||||||||||||||||||||||||||||
GAAP |
Stock-based |
Employer payroll |
Amortization of |
Adjustments |
Income tax |
Non-GAAP | |||||||||||||||||||||||||||
Cost of revenues | $ | 39,500 | $ | (7,555 | ) | $ | (262 | ) | $ | (2,912 | ) | $ | 26 | $ | - | $ | 28,797 | ||||||||||||||||
Gross margin | 78.8 | % | 4.0 | % | 0.1 | % | 1.6 | % | - | % | - | % | 84.5 | % | |||||||||||||||||||
Research and development | 67,371 | (29,206 | ) | (756 | ) | (71 | ) | 58 | - | 37,396 | |||||||||||||||||||||||
Sales and marketing | 145,151 | (40,233 | ) | (1,026 | ) | (151 | ) | 118 | - | 103,859 | |||||||||||||||||||||||
General and administrative | 32,073 | (14,376 | ) | (441 | ) | - | 26 | - | 17,282 | ||||||||||||||||||||||||
Operating loss | (98,143 | ) | 91,370 | 2,485 | 3,134 | (228 | ) | - | (1,382 | ) | |||||||||||||||||||||||
Operating margin | (52.8 | )% | 49.2 | % | 1.3 | % | 1.7 | % | (0.1 | )% | - | % | (0.7 | )% | |||||||||||||||||||
Income tax provision (benefit) | 1,225 | - | - | - | - | (1,523 | ) | (298 | ) | ||||||||||||||||||||||||
Net loss | $ | (100,896 | ) | $ | 91,370 | $ | 2,485 | $ | 3,134 | $ | 1,263 |
(2) |
|
|
$ | 1,523 | $ | (1,121 | ) | ||||||||||||||
Net loss per share(1) | $ | (0.77 | ) | $ | 0.70 | $ | 0.02 | $ | 0.02 | $ | 0.01 | $ | 0.01 | $ | (0.01 | ) | |||||||||||||||||
(1) Calculated based on 131,494 basic and diluted weighted-average shares of common stock. | |||||||||||||||||||||||||||||||||
(2) Includes |
|||||||||||||||||||||||||||||||||
(3) For consistency, prior year non-GAAP net loss has been adjusted to reflect the tax effect of the non-GAAP adjustments based on the annual effective tax rate of 21%. Application of this annual effective tax rate to the non-GAAP pre-tax loss during the quarter resulted in a non-GAAP tax benefit, which is offset by future tax expense. |
|||||||||||||||||||||||||||||||||
Reconciliation of Total Billings |
|||||||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||
2017 | 2016 | ||||||||||||||||||||||||||||||||
Total revenues | $ | 242,448 | $ | 185,952 | |||||||||||||||||||||||||||||
Increase in deferred revenue | 333 | 1,274 | |||||||||||||||||||||||||||||||
Billings (Non-GAAP) | $ | 242,781 | $ | 187,226 | |||||||||||||||||||||||||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20170525005992/en/
Media Contact:
slowe@splunk.com
or
Investor
Contact:
ktinsley@splunk.com
Source:
News Provided by Acquire Media