Press Releases
« Back
Mar 04, 2020

Splunk Inc. Announces Fiscal Fourth Quarter and Full Year 2020 Financial Results

Total ARR of $1.68 Billion, up 54% year over year;
Full Year Software Revenues Up 40%

SAN FRANCISCO--(BUSINESS WIRE)-- Splunk Inc. (NASDAQ: SPLK), provider of the Data-to-Everything Platform, today announced results for its fiscal fourth quarter and full year ended January 31, 2020.

Fourth Quarter 2020 Financial Highlights

  • Software revenues were $617 million, up 33% year-over-year.
  • Total revenues were $791 million, up 27% year-over-year.
  • GAAP operating loss was $7.8 million; GAAP operating margin was negative 1.0%.
  • Non-GAAP operating income was $191 million; non-GAAP operating margin was 24.1%.
  • GAAP loss per share was $0.15; non-GAAP income per share was $0.96.

Full Year 2020 Financial Highlights

  • Software revenues were $1.686 billion, up 40% year-over-year.
  • Total revenues were $2.359 billion, up 31% year-over-year.
  • GAAP operating loss was $287 million; GAAP operating margin was negative 12.2%.
  • Non-GAAP operating income was $335 million; non-GAAP operating margin was 14.2%.
  • GAAP loss per share was $2.22; non-GAAP income per share was $1.88.
  • Operating cash flow was negative $288 million with free cash flow of negative $389 million.

“This was a transformational year for Splunk. We have transitioned our business model, our product strategy and introduced new and enhanced pricing models as part of our company-wide, cloud-first approach. These shifts have provided unprecedented value to our customers by bringing Data-to-Everything,” said Doug Merritt, President and CEO, Splunk.

“As we deliver increasing value from our expanding product capabilities, customers are turning to our cloud offerings more and more. We expect our cloud products could represent more than 60% of our total software business in the next few years and during this shift, ARR is the best metric to evaluate our growth,” said Jason Child, chief financial officer, Splunk. “We grew ARR by 54% in fiscal year 2020 and are targeting a 40% ARR CAGR over the next three fiscal years.”

Customers

  • Signed more than 450 new customers.
  • New and Expansion Customers Include: ADT LLC, Blue Nile, Carvana, Dairy Farmers of America, Department of Industry, Innovation and Science (Australia), Discovery, Inc., FamilySearch, Mars, Inc., McLaren Racing (England), Mercari (Japan), NHS Digital (England), Nordea (Finland), Swisscom AG (Switzerland), University of California San Diego, The Washington Post

Fiscal Year 2020 & Recent Business Highlights

  • Splunk Unveils The World’s First Data-to-Everything Platform: Splunk’s Data-to-Everything Platform, launched in September 2019, helps over 19,000 global customers unlock trapped value by bringing data to every question, decision and action. Powered by major new products including Splunk Data Fabric Search (DFS), Splunk Data Stream Processor (DSP) and Splunk Business Flow, the Data-to-Everything platform helps customers remove the barriers between data and action, allowing them to know what is happening within their organization and turn data into doing.
  • Strategic Acquisitions Establish Splunk as a Leader in Monitoring and Observability: Splunk continued to lean into an aggressive M&A strategy, helping its customers drive business outcomes with data. Key acquisitions include SignalFx, a SaaS leader in real-time monitoring for cloud infrastructure; Omnition, a SaaS startup that is innovating in distributed tracing; and Streamlio, an open source distributed messaging leader. Each acquired technology will enhance our customers’ ability to bring together operations and development for every kind of IT organization.
  • New Pricing Programs Provide Flexibility to Help Customers Deliver Business Outcomes: Splunk announced new, predictive pricing programs which facilitate long-term planning for customers and extend flexible, transparent pricing as data volumes grow. Splunk also announced new infrastructure-based pricing which allow customers to purchase Splunk based on compute power; and new “Rapid Adoption” packages, which help customers accelerate their data journey with Splunk with the most common IT and Security Operations use cases.
  • World-Class Partners Help Enable Customer Success: Building on its rich partner ecosystem, Splunk continues to invest in new and expanded partnerships that help customers turn data into doing. Notable Splunk Partner+ Program agreements include those with Accenture, who offer more trained and certified Splunk resources than any partner; Cisco, who is rapidly bringing integrated Splunk solutions to market; Deloitte, who now incorporates Splunk Phantom in its Fusion Managed Services offerings; and SAP, who partners with Splunk to help customers enable the Intelligent Enterprise.
  • Global Splunk Workforce Grows in Parallel with Rise of Data: Splunk is a destination workplace for employees looking to create trophy experiences in their career. Splunk opened and expanded several significant new offices around the globe, reaching nearly 6,000 global employees. Splunk also continues to be recognized as an outstanding place to work, being listed as a 2019 LinkedIn Top Company, and also a 2019 Fortune Best Workplace for Diversity and Women, as well as a 2019 Great Place to Work Best Workplace for Millennials and Parents, amongst others.

Financial Outlook

The company is providing the following guidance for its fiscal first quarter 2021 (ending April 30, 2020):

  • Total revenues are expected to be approximately $450 million.
  • Non-GAAP operating margin is expected to be approximately negative 25%.

The company is providing the following guidance for its fiscal year 2021 (ending January 31, 2021):

  • Total revenues are expected to be approximately $2.6 billion.
  • Non-GAAP operating margin is expected to be approximately breakeven.

All forward-looking non-GAAP financial measures contained in this section “Financial Outlook” exclude estimates for stock-based compensation and related employer payroll tax, acquisition-related adjustments, amortization of acquired intangible assets and capitalized software costs.

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 fourth quarter and full year 2020 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 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-presentations. A replay of the call will be available through March 11, 2020 by dialing (855) 859-2056 and referencing Conference ID 2863284.

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 2021 in the paragraphs under “Financial Outlook” above and other statements regarding our market opportunity, the market for data-related products, future growth and related targets, including our cloud software business mix, momentum, strategy, technology and product innovation, expectations for our industry and business, including our business model, customer demand, customer success and feedback, expanding use of Splunk by customers, our acquisitions and acquisition strategy, and expected benefits and scale of our products and pricing strategy. 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 its business, including product and service innovations and through acquisitions; Splunk’s shift from sales of perpetual licenses in favor of sales of term licenses and subscription agreements for our cloud services; 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 our convertible notes; 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, 2019, 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) turns data into doing with the Data-to-Everything Platform. Splunk technology is designed to investigate, monitor, analyze and act on data at any scale.

Splunk, Splunk>, Data-to-Everything, D2E 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. © 2020 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,

2020

2019

 

2020

2019

   
Revenues  
License

$

517,542

 

$

411,031

 

 

$

1,373,367

 

$

1,030,277

 

Maintenance and services

 

273,640

 

 

211,054

 

 

 

985,559

 

 

772,733

 

Total revenues

 

791,182

 

 

622,085

 

 

 

2,358,926

 

 

1,803,010

 

   
Cost of revenues  
License

 

6,702

 

 

5,810

 

 

 

24,116

 

 

22,527

 

Maintenance and services

 

121,136

 

 

87,923

 

 

 

405,672

 

 

322,149

 

Total cost of revenues

 

127,838

 

 

93,733

 

 

 

429,788

 

 

344,676

 

Gross profit

 

663,344

 

 

528,352

 

 

 

1,929,138

 

 

1,458,334

 

   
Operating expenses  
Research and development

 

197,513

 

 

131,151

 

 

 

619,800

 

 

441,969

 

Sales and marketing

 

367,116

 

 

303,861

 

 

 

1,263,873

 

 

1,029,950

 

General and administrative

 

106,484

 

 

69,183

 

 

 

332,602

 

 

237,588

 

Total operating expenses

 

671,113

 

 

504,195

 

 

 

2,216,275

 

 

1,709,507

 

Operating income (loss)

 

(7,769

)

 

24,157

 

 

 

(287,137

)

 

(251,173

)

   
Interest and other income (expense), net  
Interest income

 

8,769

 

 

16,136

 

 

 

54,142

 

 

31,458

 

Interest expense

 

(24,722

)

 

(25,562

)

 

 

(96,249

)

 

(41,963

)

Other income (expense), net

 

(999

)

 

(856

)

 

 

(2,407

)

 

(1,513

)

Total interest and other income (expense), net

 

(16,952

)

 

(10,282

)

 

 

(44,514

)

 

(12,018

)

Income (loss) before income taxes

 

(24,721

)

 

13,875

 

 

 

(331,651

)

 

(263,191

)

Income tax provision (benefit)

 

(1,993

)

 

11,749

 

 

 

5,017

 

 

12,386

 

Net income (loss)

$

(22,728

)

$

2,126

 

 

$

(336,668

)

$

(275,577

)

   
   
Net income (loss) per share  
Basic

$

(0.15

)

$

0.01

 

 

$

(2.22

)

$

(1.89

)

Diluted

$

(0.15

)

$

0.01

 

 

$

(2.22

)

$

(1.89

)

   
Weighted-average shares used in computing net income (loss) per share  
Basic

 

155,915

 

 

147,697

 

 

 

151,949

 

 

145,707

 

Diluted

 

155,915

 

 

153,325

 

 

 

151,949

 

 

145,707

 

   

Splunk Inc.

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)
   
   
January 31, 2020   January 31, 2019
   
Assets  
Current assets  
Cash and cash equivalents

$

778,653

 

 

$

1,876,165

 

Investments, current

 

976,508

 

 

 

881,220

 

Accounts receivable, net

 

838,743

 

 

 

469,658

 

Prepaid expenses and other current assets

 

129,839

 

 

 

73,197

 

Deferred commissions, current

 

99,072

 

 

 

78,223

 

Total current assets

 

2,822,815

 

 

 

3,378,463

 

   
Investments, non-current

 

35,370

 

 

 

110,588

 

Accounts receivable, non-current

 

468,934

 

 

 

155,471

 

Operating lease right-of-use assets

 

267,086

 

 

 

-

 

Property and equipment, net

 

156,928

 

 

 

158,276

 

Intangible assets, net

 

238,415

 

 

 

91,622

 

Goodwill

 

1,292,840

 

 

 

503,388

 

Deferred commissions, non-current

 

88,990

 

 

 

64,766

 

Other assets

 

68,093

 

 

 

37,669

 

Total assets

$

5,439,471

 

 

$

4,500,243

 

   
Liabilities and Stockholders' Equity  
Current liabilities  
Accounts payable

$

18,938

 

 

$

20,418

 

Accrued compensation

 

286,159

 

 

 

226,061

 

Accrued expenses and other liabilities

 

177,822

 

 

 

125,641

 

Deferred revenue, current

 

829,377

 

 

 

673,018

 

Total current liabilities

 

1,312,296

 

 

 

1,045,138

 

   
Convertible senior notes, net

 

1,714,630

 

 

 

1,634,474

 

Operating lease liabilities

 

235,631

 

 

 

-

 

Deferred revenue, non-current

 

176,832

 

 

 

204,929

 

Other liabilities, non-current

 

653

 

 

 

95,245

 

Total non-current liabilities

 

2,127,746

 

 

 

1,934,648

 

Total liabilities

 

3,440,042

 

 

 

2,979,786

 

   
Stockholders' equity  
Common stock

 

157

 

 

 

149

 

Accumulated other comprehensive loss

 

(5,312

)

 

 

(2,506

)

Additional paid-in capital

 

3,566,055

 

 

 

2,754,858

 

Accumulated deficit

 

(1,561,471

)

 

 

(1,232,044

)

Total stockholders' equity

 

1,999,429

 

 

 

1,520,457

 

Total liabilities and stockholders' equity

$

5,439,471

 

 

$

4,500,243

 

   
Splunk Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
   
   
Three Months Ended January 31,   Fiscal Year Ended January 31,

2020

2019

 

2020

2019

   
Cash flows from operating activities  
Net loss

$

(22,728

)

$

2,126

 

 

$

(336,668

)

$

(275,577

)

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

 

21,582

 

 

14,484

 

 

 

67,661

 

 

52,430

 

Amortization of deferred commissions

 

29,275

 

 

22,275

 

 

 

104,353

 

 

77,867

 

Amortization of investment premiums (accretion of discounts)

 

(1,584

)

 

(2,891

)

 

 

(9,553

)

 

(4,743

)

Amortization of debt discount and issuance costs

 

20,679

 

 

19,528

 

 

 

80,156

 

 

28,019

 

Stock-based compensation

 

166,496

 

 

134,585

 

 

 

545,424

 

 

441,930

 

Disposal of property and equipment

 

1,974

 

 

-

 

 

 

1,974

 

 

-

 

Deferred income taxes

 

(1,385

)

 

(3,637

)

 

 

(1,783

)

 

(4,064

)

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

 

(365,503

)

 

(247,155

)

 

 

(679,891

)

 

(220,940

)

Prepaid expenses and other assets

 

(41,535

)

 

(4,904

)

 

 

(82,919

)

 

6,970

 

Deferred commissions

 

(64,965

)

 

(49,769

)

 

 

(149,426

)

 

(130,485

)

Accounts payable

 

(4,312

)

 

2,469

 

 

 

(5,441

)

 

9,240

 

Accrued compensation

 

71,719

 

 

44,636

 

 

 

58,898

 

 

81,213

 

Accrued expenses and other liabilities

 

(19,153

)

 

20,253

 

 

 

(187

)

 

30,751

 

Deferred revenue

 

150,609

 

 

175,368

 

 

 

119,766

 

 

203,843

 

Net cash provided by (used in) operating activities

 

(58,831

)

 

127,368

 

 

 

(287,636

)

 

296,454

 

   
Cash flows from investing activities  
Purchases of investments

 

(270,632

)

 

(299,588

)

 

 

(1,086,317

)

 

(1,109,852

)

Maturities of investments

 

274,841

 

 

229,012

 

 

 

1,080,812

 

 

754,138

 

Acquisitions, net of cash acquired

 

(18,574

)

 

-

 

 

 

(594,870

)

 

(394,910

)

Purchases of property and equipment

 

(47,595

)

 

(7,983

)

 

 

(101,119

)

 

(23,160

)

Capitalized software development costs

 

(2,589

)

 

-

 

 

 

(2,589

)

 

-

 

Other investment activities

 

(148

)

 

(375

)

 

 

(3,898

)

 

(5,494

)

Net cash used in investing activities

 

(64,697

)

 

(78,934

)

 

 

(707,981

)

 

(779,278

)

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

 

2,919

 

 

258

 

 

 

3,543

 

 

1,953

 

Proceeds from employee stock purchase plan

 

25,901

 

 

22,141

 

 

 

60,383

 

 

46,342

 

Proceeds from the issuance of convertible debt, net of issuance costs

 

-

 

 

(929

)

 

 

-

 

 

2,105,296

 

Purchase of capped calls

 

-

 

 

-

 

 

 

-

 

 

(274,275

)

Taxes paid related to net share settlement of equity awards

 

-

 

 

(62,590

)

 

 

(164,160

)

 

(63,369

)

Repayment of financing lease obligation

 

-

 

 

(660

)

 

 

-

 

 

(2,522

)

Net cash provided by (used in) financing activities

 

28,820

 

 

(41,780

)

 

 

(100,234

)

 

1,813,425

 

   
Effect of exchange rate changes on cash and cash equivalents

 

(109

)

 

1,395

 

 

 

(1,661

)

 

(383

)

Net increase (decrease) in cash and cash equivalents

 

(94,817

)

 

8,049

 

 

 

(1,097,512

)

 

1,330,218

 

Cash and cash equivalents at beginning of period

 

873,470

 

 

1,868,116

 

 

 

1,876,165

 

 

545,947

 

Cash and cash equivalents at end of period

$

778,653

 

$

1,876,165

 

 

$

778,653

 

$

1,876,165

 

   

Splunk Inc.
Operating Metrics

Total Annual Recurring Revenue (“ARR”) represents the annualized revenue run-rate of active subscription, term license, and maintenance contracts at the end of a reporting period. Contracts are annualized by dividing the total 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: 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 acquired intangible assets, adjustments related to a financing lease obligation, acquisition-related adjustments, including the partial release of the valuation allowance due to acquisitions, adjustments related to restructuring charges and facility exits, capitalized software development costs, a legal settlement charge and non-cash interest expense related to convertible senior notes that were issued in the fiscal third quarter of 2019. The adjustments for the financing lease obligation are to reflect the expense Splunk would have recorded if its build-to-suit lease arrangement had been deemed an operating lease instead of a financing lease and is calculated as the net of actual ground lease expense, depreciation and interest expense over estimated straight-line rent expense. The non-GAAP financial measures are also adjusted for Splunk's estimated tax rate on non-GAAP income (loss). To determine the annual non-GAAP tax rate, Splunk evaluates a financial projection based on its non-GAAP results. The annual non-GAAP tax rate takes into account other factors including Splunk's current operating structure, its existing tax positions in various jurisdictions and key legislation in major jurisdictions where Splunk operates. The non-GAAP tax rate applied to the three and twelve months ended January 31, 2020 was 20%. Splunk provides updates to this rate on an annual basis, or more frequently if material changes occur. The applicable fiscal 2019 tax rates are noted in the reconciliations. In addition, non-GAAP financial measures include free cash flow, which represents cash from operations less purchases of property and equipment. 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.

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 acquired intangible assets, adjustments related to a financing lease obligation, acquisition-related adjustments, including the partial release of the valuation allowance due to acquisitions, adjustments related to restructuring charges and facility exits, capitalized software development costs, a legal settlement charge and non-cash interest expense related to convertible senior notes from the applicable non-GAAP financial measures because these expenses are considered by management to be outside of Splunk’s core operating results. Accordingly, Splunk believes that excluding these expenses provides investors and management with greater visibility to the underlying performance of its business operations, facilitates comparison of its results with other periods and may also facilitate comparison with the results of other companies in its industry. Splunk considers free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that can be used for strategic opportunities, including investing in its business, making strategic acquisitions and strengthening its balance sheet.

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 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,

2020

2019

2020

2019

Net cash provided by (used in) operating activities

$

(58,831

)

$

127,368

 

$

(287,636

)

$

296,454

 

Less purchases of property and equipment

 

(47,595

)

 

(7,983

)

 

(101,119

)

 

(23,160

)

Free cash flow (non-GAAP)

$

(106,426

)

$

119,385

 

$

(388,755

)

$

273,294

 

Net cash used in investing activities

$

(64,697

)

$

(78,934

)

$

(707,981

)

$

(779,278

)

Net cash provided by (used in) financing activities

$

28,820

 

$

(41,780

)

$

(100,234

)

$

1,813,425

 

 
 
 
Reconciliation of GAAP to Non-GAAP Financial Measures
Three Months Ended January 31, 2020
GAAP Stock-based compensation and related employer payroll tax Amortization of acquired intangible assets Adjustments related to restructuring charges and facility exits Capitalized software development costs Legal settlement charge Non-cash interest expense related to convertible senior notes Income tax effects related to non-GAAP adjustments (2) Non-GAAP
 
Cost of revenues

$

127,838

 

$

(13,136

)

$

(9,854

)

$

-

 

$

-

 

$

-

 

$

-

 

$

-

 

$

104,848

 

Gross margin

 

83.8

%

 

1.7

%

 

1.2

%

-

%

-

%

-

%

-

%

-

%

 

86.7

%

 
Research and development

 

197,513

 

 

(59,865

)

 

(25

)

 

(5,628

)

 

2,589

 

 

-

 

 

-

 

 

-

 

 

134,584

 

Sales and marketing

 

367,116

 

 

(68,156

)

 

(4,333

)

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

294,627

 

General and administrative

 

106,484

 

 

(29,733

)

 

-

 

 

(482

)

 

-

 

 

(10,000

)

 

-

 

 

-

 

 

66,269

 

Operating income (loss)

 

(7,769

)

 

170,890

 

 

14,212

 

 

6,110

 

 

(2,589

)

 

10,000

 

 

-

 

 

-

 

 

190,854

 

Operating margin

 

(1.0

)%

 

21.5

%

 

1.8

%

 

0.8

%

 

(0.3

)%

 

1.3

%

-

%

-

%

 

24.1

%

 
Income tax provision (benefit)

 

(1,993

)

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

40,910

 

 

38,917

 

Net income (loss)

$

(22,728

)

$

170,890

 

$

14,212

 

$

6,110

 

$

(2,589

)

$

10,000

 

$

20,679

 

$

(40,910

)

$

155,664

 

Net income (loss) per share (1)

$

(0.15

)

$

0.96

 

 
(1) GAAP net loss per share calculated based on 155,915 weighted-average shares of common stock. Non-GAAP net income per share calculated based on 161,389 diluted weighted-average shares of common stock, which includes 5,474 potentially dilutive shares related to employee stock awards. GAAP to non-GAAP 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 tax effect of the non-GAAP adjustments based on the estimated annual effective tax rate of 20%.
 
 
 
Reconciliation of GAAP to Non-GAAP Financial Measures
Three Months Ended January 31, 2019
GAAP Stock-based compensation and related employer payroll tax Amortization of acquired intangible assets Adjustments related to financing lease obligation Non-cash interest expense related to convertible senior notes Income tax effects related to non-GAAP adjustments (3) Non-GAAP
 
Cost of revenues

$

93,733

 

$

(11,239

)

$

(5,916

)

$

302

 

$

-

 

$

-

 

$

76,880

 

Gross margin

 

84.9

%

 

1.7

%

 

1.0

%

 

-

%

-

%

-

%

 

87.6

%

 
Research and development

 

131,151

 

 

(42,669

)

 

(246

)

 

519

 

 

-

 

 

-

 

 

88,755

 

Sales and marketing

 

303,861

 

 

(57,999

)

 

(955

)

 

1,123

 

 

-

 

 

-

 

 

246,030

 

General and administrative

 

69,183

 

 

(25,443

)

 

-

 

 

261

 

 

-

 

 

-

 

 

44,001

 

Operating income

 

24,157

 

 

137,350

 

 

7,117

 

 

(2,205

)

 

-

 

 

-

 

 

166,419

 

Operating margin

 

3.9

%

 

22.2

%

 

1.1

%

 

(0.4

)%

-

%

-

%

 

26.8

%

 
Income tax provision

 

11,749

 

 

-

 

 

-

 

 

-

 

 

-

 

 

23,788

 

 

35,537

 

Net income

$

2,126

 

$

137,350

 

$

7,117

 

$

(183

)

(2

)

$

19,528

 

$

(23,788

)

$

142,150

 

Net income per share (1)

$

0.01

 

$

0.90

 

$

0.05

 

$

-

 

$

0.13

 

$

(0.16

)

$

0.93

 

 
(1) Calculated based on 153,325 diluted weighted-average shares of common stock, which includes 5,628 potentially dilutive shares related to employee stock awards.
(2) Includes $2.0 million of interest expense related to the financing lease obligation.
(3) Represents the tax effect of the non-GAAP adjustments based on the estimated annual effective tax rate of 20%.
 
 
 
Reconciliation of GAAP to Non-GAAP Financial Measures
Fiscal Year Ended January 31, 2020
GAAP Stock-based compensation and related employer payroll tax Amortization of acquired intangible assets

Acquisition- related adjustments

Adjustments related to restructuring charges and facility exits Capitalized software development costs Legal settlement charge Non-cash interest expense related to convertible senior notes Income tax effects related to non-GAAP adjustments (3) Non-GAAP
 
Cost of revenues

$

429,788

 

$

(46,478

)

$

(29,516

)

$

-

 

$

-

 

$

-

 

$

-

 

$

-

 

$

-

 

$

353,794

 

Gross margin

 

81.8

%

 

1.9

%

 

1.3

%

-

%

-

%

-

%

-

%

-

%

-

%

 

85.0

%

 
Research and development

 

619,800

 

 

(190,404

)

 

(697

)

 

(12

)

 

(5,628

)

 

2,589

 

 

-

 

 

-

 

 

-

 

 

425,648

 

Sales and marketing

 

1,263,873

 

 

(223,812

)

 

(8,324

)

 

(172

)

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

1,031,565

 

General and administrative

 

332,602

 

 

(101,939

)

 

-

 

 

(7,408

)

 

(482

)

 

-

 

 

(10,000

)

 

-

 

 

-

 

 

212,773

 

Operating income (loss)

 

(287,137

)

 

562,633

 

 

38,537

 

 

7,592

 

 

6,110

 

 

(2,589

)

 

10,000

 

 

-

 

 

-

 

 

335,146

 

Operating margin

 

(12.2

)%

 

23.9

%

 

1.6

%

 

0.3

%

 

0.3

%

 

(0.1

)%

 

0.4

%

-

%

-

%

 

14.2

%

 
Income tax provision

 

5,017

 

 

-

 

 

-

 

 

6,006

 

(2

)

 

-

 

 

-

 

 

-

 

 

-

 

 

63,135

 

 

74,158

 

Net income (loss)

$

(336,668

)

$

562,633

 

$

38,537

 

$

1,586

 

$

6,110

 

$

(2,589

)

$

10,000

 

$

80,157

 

$

(63,135

)

$

296,631

 

Net income (loss) per share (1)

$

(2.22

)

$

1.88

 

 
(1) GAAP net loss per share calculated based on 151,949 weighted-average shares of common stock. Non-GAAP net income per share calculated based on 157,815 diluted weighted-average shares of common stock, which includes 5,866 potentially dilutive shares related to employee stock awards. GAAP to non-GAAP 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 partial release of the valuation allowance.
(3) Represents the tax effect of the non-GAAP adjustments based on the estimated annual effective tax rate of 20%.
 
 
 
Reconciliation of GAAP to Non-GAAP Financial Measures
Fiscal Year Ended January 31, 2019
GAAP Stock-based compensation and related employer payroll tax Amortization of acquired intangible assets Adjustments related to financing lease obligation Acquisition- related adjustments Non-cash interest expense related to convertible senior notes Income tax effects related to non-GAAP adjustments (4) Non-GAAP
 
Cost of revenues

$

344,676

 

$

(39,429

)

$

(21,444

)

$

1,218

 

$

-

 

$

-

 

$

-

 

$

285,021

 

Gross margin

 

80.9

%

 

2.2

%

 

1.2

%

 

(0.1

)%

-

%

-

%

-

%

 

84.2

%

 
Research and development

 

441,969

 

 

(141,315

)

 

(1,041

)

 

2,029

 

 

-

 

 

-

 

 

-

 

 

301,642

 

Sales and marketing

 

1,029,950

 

 

(197,384

)

 

(2,740

)

 

4,573

 

 

-

 

 

-

 

 

-

 

 

834,399

 

General and administrative

 

237,588

 

 

(79,045

)

 

-

 

 

1,002

 

 

(6,034

)

 

-

 

 

-

 

 

153,511

 

Operating income (loss)

 

(251,173

)

 

457,173

 

 

25,225

 

 

(8,822

)

 

6,034

 

 

-

 

 

-

 

 

228,437

 

Operating margin

 

(13.9

)%

 

25.4

%

 

1.4

%

 

(0.5

)%

 

0.3

%

-

%

-

%

 

12.7

%

 
Income tax provision

 

12,386

 

 

-

 

 

-

 

 

-

 

 

3,313

 

(3

)

 

-

 

 

34,826

 

 

50,525

 

Net income (loss)

$

(275,577

)

$

457,173

 

$

25,225

 

$

(636

)

(2

)

$

2,721

 

$

28,019

 

$

(34,826

)

$

202,099

 

Net income (loss) per share (1)

$

(1.89

)

$

1.33

 

 
(1) GAAP net loss per share calculated based on 145,707 weighted-average shares of common stock. Non-GAAP net income per share calculated based on 152,126 diluted weighted-average shares of common stock, which includes 6,419 potentially dilutive shares related to employee stock awards. GAAP to non-GAAP 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) Includes $8.2 million of interest expense related to the financing lease obligation.
(3) Represents the partial release of the valuation allowance.
(4) Represents the tax effect of the non-GAAP adjustments based on the estimated annual effective tax rate of 20%.
 

 

Media Contact
Richard Brewer-Hay
Splunk Inc.
press@splunk.com

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

Source: Splunk Inc.