Splunk Inc. Announces Fiscal Fourth Quarter and Full Year 2015 Financial Results
Full Year Revenues Grew 49%; Added Over 600 New Customers in Fourth Quarter
Fourth Quarter 2015 Financial Highlights
-
Total revenues were
$147.4 million , up 48% year-over-year. -
License revenues were
$98.1 million , up 43% year-over-year. -
GAAP operating loss was
$57.1 million ; GAAP operating margin was negative 38.7%. -
Non-GAAP operating income was
$11.5 million ; non-GAAP operating margin was 7.8%. -
GAAP loss per share was
$0.47 ; non-GAAP income per share was$0.09 . -
Operating cash flow was
$51.5 million with free cash flow of$48.8 million .
Full Year 2015 Financial Highlights
-
Total revenues were
$450.9 million , up 49% year-over-year. -
License revenues were
$283.2 million , up 42% year-over-year. - GAAP operating margin was negative 47.9%; non-GAAP operating margin was 2.7%.
-
Operating cash flow was
$104.0 million with free cash flow of$90.0 million .
"We are proud to welcome more than 600 new customers to the
Fourth Quarter 2015 and Recent Business Highlights
Customers:
- Signed more than 600 new enterprise customers, ending the fiscal year with over 9,000 customers worldwide.
-
New and Expansion Customers Include: Accor (
France ), Auchan (France ),Bank Gospodarstwa Krajowego (Poland ), DATEV (Germany ),Gamesys (United Kingdom ), ICBC Asia (Hong Kong ),Kaspersky Lab (Russia ), Lennar Corporation, Macy's,New York City Metropolitan Transportation Authority , Red Hat, SA Power Networks (Australia ),Sephora , theScore (Canada ), Tesco (United Kingdom ), Toyota Motor Corporation,U.S. Department of State , Walmart Brasil,The Washington Post and Zillow.
Product:
-
Introduced the new
Splunk App for AWS to deliver real-time security and operational visibility into AWS CloudTrail, Amazon CloudWatch, billing and Amazon S3 data. -
Released the new
Splunk Mobile App to support enterprise security requirements such as single sign-on and Mobile Device Management compatibility. -
Introduced the
Splunk App for Salesforce, a service available only on Splunk Cloud to analyze adoption and usage data, monitor security threats and detect application delivery issues in Salesforce. -
Released the new
Splunk App for Microsoft Exchange with a new Exchange Service Analyzer to give insight into the health of the entire Exchange environment.
Recognition:
-
Splunk named one of Fast Company's Ten Most Innovative Companies in Big Data for the third consecutive year. - Splunk Enterprise voted Best Business Application by V3 Readers.
-
Splunk Enterprise named Best
Big Data Analytics Solution by
Government Security News . -
Splunk named one of the Coolest Cloud Software Vendors of 2015 by CRN. -
Splunk's
Emilio Umeoka named one of the CRN Channel Chiefs of 2015. -
Splunk named to Deloitte's 2014 Technology Fast 500.
Appointments:
- Appointed Adam Bangle, Vice President of EMEA.
-
Promoted
Anthony Palladino to Vice President ofAmericas . -
Promoted
Bill Cull to Vice President of Worldwide Public Sector. -
Promoted
Emilio Umeoka to Vice President ofAsia Pacific andWorldwide Partners .
Financial Outlook
The company is providing the following guidance for its fiscal first
quarter 2016 (ending
-
Total revenues are expected to be between
$116 million and$118 million . - Non-GAAP operating margin is expected to be between negative 2% and 4%.
The company is updating its previous guidance for its fiscal year 2016
(ending
-
Total revenues are expected to be approximately
$600 million (was approximately$575 million per prior guidance provided onNovember 20, 2014 ).
The company is providing the following guidance for its fiscal year 2016
(ending
- 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, ground lease expense related to a build-to-suit lease obligation, impairment of a long-lived asset and acquisition-related costs.
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 fourth quarter 2015 and fiscal year 2015 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 and non-GAAP operating margin targets for the company's fiscal first quarter and fiscal year 2016 in the paragraphs under "Financial Outlook" above and other statements regarding momentum in the company's business, expected success from product and service investments and innovations, customer adoption and growth strategies. 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 Quarterly Report on Form
10-Q for the quarter ended
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
Three Months Ended | Fiscal Year Ended | |||||||||||||||||
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2015 | 2014 | 2015 | 2014 | |||||||||||||||
Revenues | ||||||||||||||||||
License | $ | 98,082 | $ | 68,794 | $ | 283,191 | $ | 199,024 | ||||||||||
Maintenance and services | 49,310 | 31,116 | 167,684 | 103,599 | ||||||||||||||
Total revenues | 147,392 | 99,910 | 450,875 | 302,623 | ||||||||||||||
Cost of revenues | ||||||||||||||||||
License | 1,174 | 101 | 1,859 | 330 | ||||||||||||||
Maintenance and services 5 | 20,366 | 11,097 | 66,519 | 35,495 | ||||||||||||||
Total cost of revenues 1,2,3 | 21,540 | 11,198 | 68,378 | 35,825 | ||||||||||||||
Gross profit | 125,852 | 88,712 | 382,497 | 266,798 | ||||||||||||||
Operating expenses | ||||||||||||||||||
Research and development | 47,335 | 26,260 | 150,790 | 75,895 | ||||||||||||||
Sales and marketing | 107,695 | 76,336 | 344,471 | 215,335 | ||||||||||||||
General and administrative 4 | 27,921 | 18,600 | 103,046 | 53,875 | ||||||||||||||
Total operating expenses 1,2,3,6 | 182,951 | 121,196 | 598,307 | 345,105 | ||||||||||||||
Operating loss | (57,099 | ) | (32,484 | ) | (215,810 | ) | (78,307 | ) | ||||||||||
Interest and other income (expense), net | ||||||||||||||||||
Interest income, net | 262 | 51 | 754 | 225 | ||||||||||||||
Other income (expense), net | 542 | (461 | ) | 216 | (920 | ) | ||||||||||||
Total interest and other income (expense), net | 804 | (410 | ) | 970 | (695 | ) | ||||||||||||
Loss before income taxes | (56,295 | ) | (32,894 | ) | (214,840 | ) | (79,002 | ) | ||||||||||
Income tax provision (benefit) 7 | 733 | (263 | ) | 2,276 | 6 | |||||||||||||
Net loss | $ | (57,028 | ) | $ | (32,631 | ) | $ | (217,116 | ) | $ | (79,008 | ) | ||||||
Basic and diluted net loss per share | $ | (0.47 | ) | $ | (0.30 | ) | $ | (1.81 | ) | $ | (0.75 | ) | ||||||
|
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Weighted-average shares used in computing basic and diluted net loss per share |
122,385 |
108,047 | 119,775 | 105,067 | ||||||||||||||
1 Includes amortization of acquired intangible assets as follows: | ||||||||||||||||||
Cost of revenues | $ | 911 | $ | 566 | $ | 3,004 | $ | 648 | ||||||||||
Research and development | 69 | 58 | 776 | 70 | ||||||||||||||
Sales and marketing | 150 | 146 | 597 | 188 | ||||||||||||||
2 Includes stock-based compensation expense as follows: | ||||||||||||||||||
Cost of revenues | $ | 5,536 | $ | 2,548 | $ | 17,189 | $ | 5,283 | ||||||||||
Research and development | 19,260 | 9,834 | 60,777 | 20,829 | ||||||||||||||
Sales and marketing | 28,606 | 14,587 | 90,064 | 30,012 | ||||||||||||||
General and administrative | 9,792 | 6,275 | 46,149 | 13,244 | ||||||||||||||
3 Includes employer payroll tax on employee stock plans as follows: | ||||||||||||||||||
Cost of revenues | $ | 295 | $ | 74 | $ | 639 | $ | 171 | ||||||||||
Research and development | 1,570 | 874 | 3,219 | 1,151 | ||||||||||||||
Sales and marketing | 1,182 | 781 | 2,850 | 1,688 | ||||||||||||||
General and administrative | 1,000 | 385 | 2,160 | 961 | ||||||||||||||
4 Includes ground lease expense related to build-to-suit lease obligation | $ | 222 | $ | - | $ | 666 | $ | - | ||||||||||
5 Includes charge related to impairment of long-lived asset | $ | - | $ | - | $ | - | $ | 2,128 | ||||||||||
6 Includes acquisition-related costs as follows: | ||||||||||||||||||
Research and development | $ | - | $ | - | $ | - | $ | 408 | ||||||||||
General and administrative | - | 314 | - | 314 | ||||||||||||||
7 Includes a partial release of the valuation allowance due to acquisition | $ | - | $ | (427 | ) | $ | - | $ | (1,174 | ) | ||||||||
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CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
(In thousands) | |||||||||
(Unaudited) | |||||||||
|
|
||||||||
2015 | 2014 | ||||||||
ASSETS | |||||||||
Current assets | |||||||||
Cash and cash equivalents | $ | 387,315 | $ | 897,453 | |||||
Investments, current portion | 462,849 | - | |||||||
Accounts receivable, net | 128,413 | 83,348 | |||||||
Prepaid expenses and other current assets | 21,256 | 12,019 | |||||||
Total current assets | 999,833 | 992,820 | |||||||
Investments, non-current | 165,082 | - | |||||||
Property and equipment, net | 50,374 | 15,505 | |||||||
Intangible assets, net | 10,416 | 12,294 | |||||||
Goodwill | 19,070 | 19,070 | |||||||
Other assets | 3,016 | 642 | |||||||
Total assets | $ | 1,247,791 | $ | 1,040,331 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
Current liabilities | |||||||||
Accounts payable | $ | 3,726 | $ | 2,079 | |||||
Accrued payroll and compensation | 65,220 | 43,876 | |||||||
Accrued expenses and other liabilities | 27,819 | 12,743 | |||||||
Deferred revenue, current portion | 249,883 | 149,156 | |||||||
Total current liabilities | 346,648 | 207,854 | |||||||
Deferred revenue, non-current | 54,202 | 43,165 | |||||||
Other liabilities, non-current | 33,620 | 4,404 | |||||||
Total non-current liabilities | 87,822 | 47,569 | |||||||
Total liabilities | 434,470 | 255,423 | |||||||
Stockholders' equity | |||||||||
Common stock | 123 | 116 | |||||||
Accumulated other comprehensive income (loss) | (837 | ) | 58 | ||||||
Additional paid-in capital | 1,200,858 | 954,441 | |||||||
Accumulated deficit | (386,823 | ) | (169,707 | ) | |||||
Total stockholders' equity | 813,321 | 784,908 | |||||||
Total liabilities and stockholders' equity | $ | 1,247,791 | $ | 1,040,331 | |||||
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||||
(In thousands) | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
Three Months Ended | Fiscal Year Ended | |||||||||||||||||
|
|
|
|
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2015 | 2014 | 2015 | 2014 | |||||||||||||||
Cash Flows From Operating Activities | ||||||||||||||||||
Net loss | $ | (57,028 | ) | $ | (32,631 | ) | $ | (217,116 | ) | $ | (79,008 | ) | ||||||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||||||||
Depreciation and amortization | 3,526 | 2,192 | 12,494 | 6,692 | ||||||||||||||
Amortization of investment premiums | 323 | - | 775 | - | ||||||||||||||
Stock-based compensation | 63,194 | 33,244 | 214,179 | 69,368 | ||||||||||||||
Deferred income taxes | 466 | (186 | ) | (327 | ) | (1,374 | ) | |||||||||||
Excess tax benefits from employee stock plans | 261 | 188 | (847 | ) | (351 | ) | ||||||||||||
Impairment of long-lived asset | - | - | - | 2,128 | ||||||||||||||
Changes in operating assets and liabilities | ||||||||||||||||||
Accounts receivable, net | (45,863 | ) | (29,353 | ) | (45,065 | ) | (19,400 | ) | ||||||||||
Prepaid expenses, other current and non-current assets | (9,243 | ) | (372 | ) | (11,284 | ) | (6 | ) | ||||||||||
Accounts payable | 721 | (96 | ) | 1,766 | 171 | |||||||||||||
Accrued payroll and compensation | 16,739 | 13,221 | 21,344 | 15,753 | ||||||||||||||
Accrued expenses and other liabilities | 3,624 | (2,766 | ) | 16,297 | 2,454 | |||||||||||||
Deferred revenue | 74,808 | 50,988 | 111,764 | 77,421 | ||||||||||||||
Net cash provided by operating activities | 51,528 | 34,429 | 103,980 | 73,848 | ||||||||||||||
Cash Flow From Investing Activities | ||||||||||||||||||
Purchases of investments | (129,433 | ) | - | (820,710 | ) | - | ||||||||||||
Maturities of investments | 129,000 | - | 192,000 | - | ||||||||||||||
Acquisitions, net of cash acquired | - | (20,780 | ) | (2,500 | ) | (29,738 | ) | |||||||||||
Purchases of property and equipment | (2,750 | ) | (2,043 | ) | (13,950 | ) | (9,308 | ) | ||||||||||
Net cash used in investing activities | (3,183 | ) | (22,823 | ) | (645,160 | ) | (39,046 | ) | ||||||||||
Cash Flow From Financing Activities | ||||||||||||||||||
Proceeds from the exercise of stock options | 3,987 | 4,866 | 16,792 | 23,731 | ||||||||||||||
Excess tax benefits from employee stock plans | (261 | ) | (188 | ) | 847 | 351 | ||||||||||||
Proceeds from employee stock purchase plan | 6,139 | 5,358 | 14,494 | 11,434 | ||||||||||||||
Taxes paid related to net share settlement of equity awards | - | (15,404 | ) | - | (18,156 | ) | ||||||||||||
Payment related to build-to-suit lease obligation | - | - | (523 | ) | - | |||||||||||||
Proceeds from follow-on offering, net of offering costs | - | 539,339 | - | 539,339 | ||||||||||||||
Net cash provided by financing activities | 9,865 | 533,971 | 31,610 | 556,699 | ||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | (448 | ) | (19 | ) | (568 | ) | 13 | |||||||||||
Net increase (decrease) in cash and cash equivalents | 57,762 | 545,558 | (510,138 | ) | 591,514 | |||||||||||||
Cash and cash equivalents at beginning of period | 329,553 | 351,895 | 897,453 | 305,939 | ||||||||||||||
Cash and cash equivalents at end of period | $ | 387,315 | $ | 897,453 | $ | 387,315 | $ | 897,453 | ||||||||||
Non-GAAP financial measures and reconciliations
To supplement Splunk's 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 table reconciles Splunk's non-GAAP results to Splunk's GAAP results included in this press release.
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Reconciliation of GAAP to Non-GAAP Financial Measures | ||||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
Three Months Ended | Fiscal Year Ended | |||||||||||||||||
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2015 | 2014 | 2015 | 2014 | |||||||||||||||
Reconciliation of cash provided by operating activities to free cash flow: |
||||||||||||||||||
Net cash provided by operating activities | $ | 51,528 | $ | 34,429 | $ | 103,980 | $ | 73,848 | ||||||||||
Less purchases of property and equipment | (2,750 | ) | (2,043 | ) | (13,950 | ) | (9,308 | ) | ||||||||||
Free cash flow (Non-GAAP) | $ | 48,778 | $ | 32,386 | $ | 90,030 | $ | 64,540 | ||||||||||
Net cash used in investing activities | $ | (3,183 | ) | $ | (22,823 | ) | $ | (645,160 | ) | $ | (39,046 | ) | ||||||
Net cash provided by financing activities | $ | 9,865 | $ | 533,971 | $ | 31,610 | $ | 556,699 | ||||||||||
Gross margin reconciliation: |
||||||||||||||||||
GAAP gross margin | 85.4 | % | 88.8 | % | 84.8 | % | 88.2 | % | ||||||||||
Stock-based compensation expense | 3.8 | 2.6 | 3.9 | 1.7 | ||||||||||||||
Employer payroll tax on employee stock plans | 0.2 | 0.1 | 0.1 | 0.1 | ||||||||||||||
Amortization of acquired intangible assets | 0.6 | 0.6 | 0.7 | 0.2 | ||||||||||||||
Impairment of long-lived asset |
- | - | - | 0.7 | ||||||||||||||
Non-GAAP gross margin | 90.0 | % | 92.1 | % | 89.5 | % | 90.9 | % | ||||||||||
Operating income (loss) reconciliation: |
||||||||||||||||||
GAAP operating loss | $ | (57,099 | ) | $ | (32,484 | ) | $ | (215,810 | ) | $ | (78,307 | ) | ||||||
Stock-based compensation expense | 63,194 | 33,244 | 214,179 | 69,368 | ||||||||||||||
Employer payroll tax on employee stock plans | 4,047 | 2,114 | 8,868 | 3,971 | ||||||||||||||
Amortization of acquired intangible assets | 1,130 | 770 | 4,377 | 906 | ||||||||||||||
Impairment of long-lived asset | - | - | - | 2,128 | ||||||||||||||
Acquisition-related costs | - | 314 | - | 722 | ||||||||||||||
Ground lease expense related to build-to-suit lease obligation | 222 | - | 666 | - | ||||||||||||||
Non-GAAP operating income (loss) | $ | 11,494 | $ | 3,958 | $ | 12,280 | $ | (1,212 | ) | |||||||||
Operating margin reconciliation: |
||||||||||||||||||
GAAP operating margin | (38.7 | ) | % | (32.5 | ) | % | (47.9 | ) | % | (25.9 | )% | |||||||
Stock-based compensation expense | 42.8 | 33.3 | 47.5 | 22.9 | ||||||||||||||
Employer payroll tax on employee stock plans | 2.7 | 2.1 | 2.0 | 1.3 | ||||||||||||||
Amortization of acquired intangible assets | 0.8 | 0.8 | 1.0 | 0.3 | ||||||||||||||
Impairment of long-lived asset | - | - | - | 0.7 | ||||||||||||||
Acquisition-related costs | - | 0.3 | - | 0.3 | ||||||||||||||
Ground lease expense related to build-to-suit lease obligation | 0.2 | - | 0.1 | - | ||||||||||||||
Non-GAAP operating margin | 7.8 | % | 4.0 | % | 2.7 | % | (0.4 | )% | ||||||||||
Net income (loss) reconciliation: |
||||||||||||||||||
GAAP net loss | $ | (57,028 | ) | $ | (32,631 | ) | $ | (217,116 | ) | $ | (79,008 | ) | ||||||
Stock-based compensation expense | 63,194 | 33,244 | 214,179 | 69,368 | ||||||||||||||
Employer payroll tax on employee stock plans | 4,047 | 2,114 | 8,868 | 3,971 | ||||||||||||||
Amortization of acquired intangible assets | 1,130 | 770 | 4,377 | 906 | ||||||||||||||
Impairment of long-lived asset | - | - | - | 2,128 | ||||||||||||||
Acquisition-related costs | - | 314 | - | 722 | ||||||||||||||
Ground lease expense related to build-to-suit lease obligation | 222 | - | 666 | - | ||||||||||||||
Partial release of the valuation allowance due to acquisition | - | (427 | ) | - | (1,174 | ) | ||||||||||||
Non-GAAP net income (loss) | $ | 11,565 | $ | 3,384 | $ | 10,974 | $ | (3,087 | ) | |||||||||
Reconciliation of shares used in computing basic and diluted net income (loss) per share: |
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Weighted-average shares used in computing GAAP basic net loss per share | 122,385 | 108,047 | 119,775 | 105,067 | ||||||||||||||
Effect of dilutive securities: Employee stock awards | 6,216 | 10,685 | 7,364 | - | ||||||||||||||
Weighted-average shares used in computing Non-GAAP basic and diluted net income (loss) per share | 128,601 | 118,732 | 127,139 | 105,067 | ||||||||||||||
GAAP basic and diluted net loss per share | $ | (0.47 | ) | $ | (0.30 | ) | $ | (1.81 | ) | $ | (0.75 | ) | ||||||
Non-GAAP basic and diluted net income (loss) per share | $ | 0.09 | $ | 0.03 | $ | 0.09 | $ | (0.03 | ) | |||||||||
slowe@splunk.com
Investor
Contact
ktinsley@splunk.com
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