Splunk Inc. Announces Fiscal Second Quarter 2014 Financial Results
Company Crosses 6,000 Customer Mark; Total Revenues Grow 50%
-
Total revenues were
$66.9 million , up 50% year-over-year. -
License revenues were
$43.2 million , up 43% year-over-year. -
GAAP operating loss was
$13.3 million or 19.9% of revenues. -
Non-GAAP operating loss was
$0.8 million or 1.1% of revenues. -
GAAP loss per share was
$0.13 ; non-GAAP loss per share was$0.01 . -
Operating cash flow was
$6.3 million with free cash flow of$4.3 million .
"This past quarter marked a milestone for
Second Quarter 2014 and Recent Business Highlights
Customers:
- Signed more than 400 new customers, ending the quarter with more than 6,000 customers worldwide.
-
New license customers include: Bank of the West, Bombardier (
Germany ), Commercial Bank of Dubai,GitHub, Inc. , Hyundai Heavy Industries Co., Ltd. (HHI) (Korea ),Middle Tennessee State University , Panasonic Corporation, POLITICO, Shaw Communications Inc.,Softbank Telecom Corp. , Sony Corporation,South Carolina Department of Health and Human Services , SunTrust Banks,Westdeutsche Lotterie GmbH & Co. -
Expansion customers include: Adobe,
Bloomberg , CalPERS, Cisco Systems, Inc., Comcast Corporation,Duke Medicine ,Florida Department of Financial Services ,Highmark Blue Cross Blue Shield ,Korea Securities Depository , Moody'sCorporation, Otto GmbH & Co KG (Germany ), Pearson Education,Rally Software , Symantec Corporation, Telstra,TONGYANG Insurance (Korea ),U.S. Air Force ,U.S. Department of the Interior ,U.S. Department of Justice , The Washington Post Company.
Product:
-
Announced the beta version of Hunk:
Splunk Analytics for Hadoop. Hunk (beta) is a new software product
from
Splunk that enables exploration, analysis and visualization of data in Hadoop. -
Announced the general availability (GA) of the latest version of the
Splunk App for VMware to provide accelerated operational visibility into virtualized environments. Customers rely on the Splunk App for VMware to enable proactive monitoring, comprehensive operational analytics and data correlation with all technology tiers beyond virtualization, including applications, operating systems and hardware infrastructure such as servers, storage and network devices. -
Announced the GA of
Splunk Software Developer Kits (SDKs) for C#, PHP and Ruby. These SDKs, along with the SDKs for Java, JavaScript and Python that shipped in December, enable developers to customize and extend the power ofSplunk software, further establishing Splunk Enterprise as the platform for machine data.
Recognition:
-
Won two top awards in the
Asia Pacific region. CeBIT.AU, a leading business technology conference inAustralia , honoredSplunk with its top industry prize, the CeBIT.AU ICT Excellence Award and the CeBIT.AU Business Award for Top Business Solution. -
Named "Best
in Big Data Analytics" at the 2013 Information Management Awards
by NetworkWorld Asia, an enterprise
IT magazine read by more than 16,000 IT professionals.
Financial Outlook
The company is providing the following guidance for its fiscal third
quarter 2014 (ending
-
Total revenues are expected to be between
$69 million and$71 million . - Non-GAAP operating margin is expected to be between zero and negative 2%.
The company is updating its previous guidance for its fiscal year 2014
(ending
-
Total revenues are expected to be between
$275 million and$281 million (were previously expected to be between$266 million and$274 million as ofMay 30, 2013 ). -
Non-GAAP operating margin is expected to be approximately zero
(unchanged from
May 30, 2013 ).
All forward-looking non-GAAP financial measures contained in this section "Financial Outlook" exclude estimates for stock-based compensation expenses and employer payroll tax expense related to employee stock plans.
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 second quarter 2014 and fiscal first half 2014 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 third quarter and fiscal year 2014 in the paragraphs under "Financial Outlook" above and other statements regarding momentum in the company's business, growth in the number of new customers, new product offerings, expansion of existing customer usage, and product investments and developments. 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, particularly as a relatively new public company; 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; 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
About
To learn more, please visit www.splunk.com/company.
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
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2013 | 2012 | 2013 | 2012 | |||||||||||||
Revenues | ||||||||||||||||
License | $ | 43,185 | $ | 30,203 | $ | 79,357 | $ | 54,589 | ||||||||
Maintenance and services | 23,688 | 14,280 | 44,723 | 27,085 | ||||||||||||
Total revenues | 66,873 | 44,483 | 124,080 | 81,674 | ||||||||||||
Cost of revenues | ||||||||||||||||
License | 76 | 92 | 145 | 221 | ||||||||||||
Maintenance and services | 7,345 | 4,553 | 13,957 | 8,689 | ||||||||||||
Total cost of revenues 1, 2 | 7,421 | 4,645 | 14,102 | 8,910 | ||||||||||||
Gross profit | 59,452 | 39,838 | 109,978 | 72,764 | ||||||||||||
Operating expenses | ||||||||||||||||
Research and development 1, 2 | 16,210 | 9,391 | 30,674 | 17,494 | ||||||||||||
Sales and marketing 1, 2 | 44,634 | 27,740 | 85,947 | 51,906 | ||||||||||||
General and administrative 1, 2 | 11,912 | 7,247 | 22,358 | 14,093 | ||||||||||||
Total operating expenses | 72,756 | 44,378 | 138,979 | 83,493 | ||||||||||||
Operating loss | (13,304 | ) | (4,540 | ) | (29,001 | ) | (10,729 | ) | ||||||||
Interest and other income (expense), net | ||||||||||||||||
Interest income, net | 58 | 101 | 119 | 82 | ||||||||||||
Other income (expense), net | (82 | ) | - | (176 | ) | 2 | ||||||||||
Change in fair value of preferred stock warrants | - | - | - | (14,087 | ) | |||||||||||
Total interest and other income (expense), net | (24 | ) | 101 | (57 | ) | (14,003 | ) | |||||||||
Loss before income taxes | (13,328 | ) | (4,439 | ) | (29,058 | ) | (24,732 | ) | ||||||||
Provision for income taxes | 365 | 136 | 769 | 313 | ||||||||||||
Net loss | $ | (13,693 | ) | $ | (4,575 | ) | $ | (29,827 | ) | $ | (25,045 | ) | ||||
Basic and diluted net loss per share | $ | (0.13 | ) | $ | (0.05 | ) | $ | (0.29 | ) | $ | (0.40 | ) | ||||
Weighted-average shares used in computing basic and diluted net loss per share |
104,100 | 95,518 | 103,075 | 62,466 | ||||||||||||
1 Includes stock-based compensation expense as follows: | ||||||||||||||||
Cost of revenues | $ | 865 | $ | 267 | $ | 1,570 | $ | 375 | ||||||||
Research and development | 3,547 | 1,267 | 6,590 | 2,162 | ||||||||||||
Sales and marketing | 5,156 | 1,505 | 9,478 | 2,363 | ||||||||||||
General and administrative | 2,389 | 827 | 4,154 | 1,638 | ||||||||||||
$ | 11,957 | $ | 3,866 | $ | 21,792 | $ | 6,538 | |||||||||
2 Includes employer payroll tax on employee stock plans as follows: | ||||||||||||||||
Cost of revenues | $ | 22 | $ | - | $ | 44 | $ | - | ||||||||
Research and development | 49 | - | 191 | - | ||||||||||||
Sales and marketing | 314 | 48 | 592 | 48 | ||||||||||||
General and administrative | 201 | 214 | 339 | 214 | ||||||||||||
$ | 586 | $ | 262 | $ | 1,166 | $ | 262 | |||||||||
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CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
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2013 | 2013 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 347,114 | $ | 305,939 | ||||
Accounts receivable, net | 40,746 | 63,948 | ||||||
Prepaid expenses and other current assets | 10,547 | 6,861 | ||||||
Total current assets | 398,407 | 376,748 | ||||||
Property and equipment, net | 13,855 | 13,205 | ||||||
Other assets | 403 | 492 | ||||||
Total assets | $ | 412,665 | $ | 390,445 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 1,805 | $ | 1,632 | ||||
Accrued payroll and compensation | 21,888 | 28,123 | ||||||
Accrued expenses and other liabilities | 12,224 | 7,636 | ||||||
Deferred revenue, current portion | 96,908 | 79,568 | ||||||
Total current liabilities | 132,825 | 116,959 | ||||||
Deferred revenue, non-current | 30,727 | 35,144 | ||||||
Other liabilities, non-current | 1,302 | 798 | ||||||
Total non-current liabilities | 32,029 | 35,942 | ||||||
Total liabilities | 164,854 | 152,901 | ||||||
Stockholders' equity: | ||||||||
Common stock | 105 | 101 | ||||||
Accumulated other comprehensive loss | (243 | ) | (135 | ) | ||||
Additional paid-in capital | 368,475 | 328,277 | ||||||
Accumulated deficit | (120,526 | ) | (90,699 | ) | ||||
Total stockholders' equity | 247,811 | 237,544 | ||||||
Total liabilities and stockholders' equity | $ | 412,665 | $ | 390,445 | ||||
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||
(In thousands) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
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2013 | 2012 | 2013 | 2012 | |||||||||||||
Cash Flows From Operating Activities | ||||||||||||||||
Net loss | $ | (13,693 | ) | $ | (4,575 | ) | $ | (29,827 | ) | $ | (25,045 | ) | ||||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization | 1,455 | 1,218 | 2,880 | 2,149 | ||||||||||||
Change in fair value of preferred stock warrants | - | - | - | 14,087 | ||||||||||||
Stock-based compensation | 11,957 | 3,866 | 21,792 | 6,538 | ||||||||||||
Excess tax benefits from employee stock plans | (157 | ) | - | (268 | ) | - | ||||||||||
Changes in operating assets and liabilities | ||||||||||||||||
Accounts receivable, net | (2,830 | ) | (10,201 | ) | 23,202 | 814 | ||||||||||
Prepaid expenses, other current and non-current assets | (3,299 | ) | (1,184 | ) | (3,597 | ) | (1,172 | ) | ||||||||
Accounts payable | (1,065 | ) | (706 | ) | (147 | ) | 300 | |||||||||
Accrued payroll and compensation | 697 | 7,020 | (6,235 | ) | 2,563 | |||||||||||
Accrued expenses and other liabilities | 2,888 | (128 | ) | 5,379 | 167 | |||||||||||
Deferred revenue | 10,298 | 8,526 | 12,923 | 15,003 | ||||||||||||
Net cash provided by operating activities | 6,251 | 3,836 | 26,102 | 15,404 | ||||||||||||
Cash Flow From Investing Activities | ||||||||||||||||
Purchases of property and equipment | (1,967 | ) | (1,597 | ) | (3,230 | ) | (3,474 | ) | ||||||||
Net cash used in investing activities | (1,967 | ) | (1,597 | ) | (3,230 | ) | (3,474 | ) | ||||||||
Cash Flow From Financing Activities | ||||||||||||||||
Repayments of term debt | - | - | - | (2,289 | ) | |||||||||||
Proceeds from initial public offering, net of offering costs | - | (1,161 | ) | - | 225,225 | |||||||||||
Issuance of common stock from exercise of stock options | 5,916 | 1,153 | 12,523 | 1,825 | ||||||||||||
Excess tax benefits from employee stock plans | 157 | - | 268 | - | ||||||||||||
Proceeds from employee stock purchase plan | 6,076 | - | 6,076 | - | ||||||||||||
Taxes paid related to net share settlement of equity awards | (513 | ) | - | (513 | ) | - | ||||||||||
Net cash provided by (used in) financing activities | 11,636 | (8 | ) | 18,354 | 224,761 | |||||||||||
Effect of exchange rate changes on cash and cash equivalents | (58 | ) | (30 | ) | (51 | ) | (12 | ) | ||||||||
Net increase in cash and cash equivalents | 15,862 | 2,201 | 41,175 | 236,679 | ||||||||||||
Cash and cash equivalents at beginning of period | 331,252 | 266,077 | 305,939 | 31,599 | ||||||||||||
Cash and cash equivalents at end of period | $ | 347,114 | $ | 268,278 | $ | 347,114 | $ | 268,278 | ||||||||
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 | Six Months Ended | |||||||||||||||||||||
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2013 | 2012 | 2013 | 2012 | |||||||||||||||||||
Reconciliation of cash provided by operating activities to free cash flow: |
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Net cash provided by operating activities | $ | 6,251 | $ | 3,836 | $ | 26,102 | $ | 15,404 | ||||||||||||||
Less purchases of property and equipment | (1,967 | ) | (1,597 | ) | (3,230 | ) | (3,474 | ) | ||||||||||||||
Free cash flow (Non-GAAP) | $ | 4,284 | $ | 2,239 | $ | 22,872 | $ | 11,930 | ||||||||||||||
Net cash used in investing activities | $ | (1,967 | ) | $ | (1,597 | ) | $ | (3,230 | ) | $ | (3,474 | ) | ||||||||||
Net cash provided by (used in) financing activities | $ | 11,636 | $ | (8 | ) | $ | 18,354 | $ | 224,761 | |||||||||||||
Operating loss reconciliation: |
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GAAP operating loss | $ | (13,304 | ) | $ | (4,540 | ) | $ | (29,001 | ) | $ | (10,729 | ) | ||||||||||
Stock-based compensation expense | A | 11,957 | 3,866 | 21,792 | 6,538 | |||||||||||||||||
Employer payroll tax on employee stock plans | C | 586 | 262 | 1,166 | 262 | |||||||||||||||||
Non-GAAP operating loss | $ | (761 | ) | $ | (412 | ) | $ | (6,043 | ) | $ | (3,929 | ) | ||||||||||
Operating margin reconciliation: |
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GAAP operating margin | (19.9 | ) | % | (10.2 | ) | % | (23.4 | ) | % | (13.1 | ) | % | ||||||||||
Stock-based compensation expense | A | 17.9 | 8.7 | 17.6 | 8.0 | |||||||||||||||||
Employer payroll tax on employee stock plans | C | 0.9 | 0.6 | 0.9 | 0.3 | |||||||||||||||||
Non-GAAP operating margin | (1.1 | ) | % | (0.9 | ) | % | (4.9 | ) | % | (4.8 | ) | % | ||||||||||
Net loss reconciliation: |
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GAAP net loss | $ | (13,693 | ) | $ | (4,575 | ) | $ | (29,827 | ) | $ | (25,045 | ) | ||||||||||
Stock-based compensation expense | A | 11,957 | 3,866 | 21,792 | 6,538 | |||||||||||||||||
Change in fair value of preferred stock warrants | B | - | - | - | 14,087 | |||||||||||||||||
Employer payroll tax on employee stock plans | C | 586 | 262 | 1,166 | 262 | |||||||||||||||||
Non-GAAP net loss | $ | (1,150 | ) | $ | (447 | ) | $ | (6,869 | ) | $ | (4,158 | ) | ||||||||||
Net loss per share reconciliation: |
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GAAP net loss | $ | (0.13 | ) | $ | (0.05 | ) | $ | (0.29 | ) | $ | (0.40 | ) | ||||||||||
Stock-based compensation expense | A | 0.11 | 0.04 | 0.21 | 0.10 | |||||||||||||||||
Change in fair value of preferred stock warrants | B | - | - | - | 0.23 | |||||||||||||||||
Employer payroll tax on employee stock plans | C | 0.01 | - | 0.01 | - | |||||||||||||||||
Non-GAAP basic and diluted net loss per share | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.07 | ) | $ | (0.07 | ) | ||||||||||
Weighted-average shares used in computing Non-GAAP basic and diluted net loss per share |
104,100 | 95,518 | 103,075 | 62,466 | ||||||||||||||||||
Notes: |
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(A) To eliminate stock-based compensation expense. | ||||||||||||||||||||||
(B) To eliminate warrant expense related to the change in the fair
value of our outstanding preferred stock warrants. The final
measurement of the warrants was recorded upon the closing of
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(C) To eliminate employer payroll tax expense related to employee stock plans. |
Investor Contact
ktinsley@splunk.com
or
Press
Contact
slowe@splunk.com
or
Splunk@lewispr.com
Source:
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