Splunk Inc. Announces Fiscal Second Quarter 2020 Financial Results
Software Revenues Up 46%; Cloud ARR Surpasses
Second Quarter 2020 Financial Highlights
- Software revenues were
$350 million , up 46% year-over-year. - Total revenues were
$517 million , up 33% year-over-year. - GAAP operating loss was
$87 million ; GAAP operating margin was negative 16.8%. - Non-GAAP operating income was
$47 million ; non-GAAP operating margin was 9.0%. - GAAP loss per share was
$0.67 ; non-GAAP income per share was$0.30 . - Operating cash flow was negative
$129 million with free cash flow of negative$141 million .
“I am excited by our strong quarter, tremendous cloud growth, and our agreement to acquire SignalFx. I am particularly pleased with how quickly we are accelerating our business transformation to cloud, and the impact cloud is having on our customers,” said
“With year-over-year revenue growth of 80% and ARR now over
Business Highlights
Customers:
- Signed almost 500 new enterprise customers.
- New and Expansion Customers Include: ABB (
Switzerland ),Conde Nast , Cox Automotive, Denny’s,DoorDash ,Duke University ,Gatwick Airport (England ),Harvard Business School , Jump Operations,NATO (Belgium ), Nubank (Brazil ), ThePennsylvania State University ,United States Postal Service ,Verizon Media Group , Zoom
Corporate:
Splunk to Acquire Cloud Monitoring Provider SignalFx:Splunk continues to invest in technologies in growth categories that help our customers deliver business outcomes with data. SignalFx is a SaaS leader in real-time monitoring and metrics for cloud infrastructure, microservices and applications. Following the acquisition,Splunk will provide leading solutions in observability and application performance monitoring (APM) for organizations at every stage of their cloud journey, from cloud-native apps to homegrown on-premises applications.Splunk and Partners Make The World More Secure:Deloitte Risk & Financial Advisory andSplunk expanded our strategic relationship as Deloitte’s Fusion Managed Services offerings now incorporate Splunk Phantom, which provides automated security monitoring and response to help clients address evolving cyber threats.Splunk also announced a new integration with AWS Security Hub at AWS re:Inforce. With AWS Security Hub, Splunk Enterprise and Splunk Phantom integrations help accelerate detection, investigation and response to potential threats within AWS security environments.- World-Class Leadership: Splunk’s executive team continues to be recognized for their contributions to the global technology ecosystem.
Splunk president and CEODoug Merritt was named by Ernst & Young as a winner of the Entrepreneur of the Year 2019 Award inNorthern California ;SC Magazine named Splunk GM and senior vice president of Security Markets,Haiyan Song a ‘security veteran luminary’ in its annual Women in Security issue; and Splunk CFOJason Child was named to the San Francisco Business Times’ 2019 “CFO of the Year” list. - Splunk Embraces New Technologies To Support Next-Generation Data: As organizations around the world continue to introduce emerging technology like blockchain,
Splunk is building new tools that enable customers to turn that data into business outcomes. The new Splunk App for Hyperledger Fabric gives customers visibility and analytics into hyperledger technologies. - Turn Data Into Doing at .conf19:
Splunk announced the first round of breakout sessions for .conf19: the 10th AnnualSplunk Users Conference . Over 12,000 attendees are expected to descend onLas Vegas to learn more about how their companies can transform business with data. Register for .conf19, taking place fromOctober 21-24 , on theSplunk website.
Financial Outlook
The company is providing the following guidance for its fiscal third quarter 2020 (ending
- Total revenues are expected to be approximately
$600 million . - Non-GAAP operating margin is expected to be approximately 16%.
The company is updating its previous guidance for its fiscal year 2020 (ending
- Total revenues are expected to be approximately
$2.30 billion (was approximately$2.25 billion ). - Non-GAAP operating margin is expected to be approximately 14% (unchanged from previous guidance).
All forward-looking non-GAAP financial measures contained in this section “Financial Outlook” exclude estimates for stock-based compensation and related employer payroll tax, and amortization of acquired intangible assets.
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 second quarter 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
Safe Harbor Statement
This press release contains forward-looking statements that involve risks and uncertainties, including statements regarding trends in Splunk’s revenue composition, including cloud revenue and transition to a renewable model, statements regarding the SignalFx acquisition and the related benefits, Splunk’s revenue and non-GAAP operating margin targets for the company’s fiscal third quarter and fiscal year 2020 in the paragraphs under “Financial Outlook” above and other statements regarding our market opportunity, the market for data-related products, future growth, momentum, strategy, technology and product innovation, expectations for our industry and business, customer demand, customer success and feedback, expected benefits and scale of our products and expected attendance at our user conference .conf19. 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 Quarterly Report on Form 10-Q for the fiscal quarter ended
About
Splunk Inc. | ||||||||||||||||
Condensed Consolidated Statements of Operations | ||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended July 31, | Six Months Ended July 31, | |||||||||||||||
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
||
Revenues | ||||||||||||||||
License |
$ |
279,279 |
|
$ |
200,668 |
|
$ |
482,141 |
|
$ |
339,643 |
|
||||
Maintenance and services |
|
237,279 |
|
|
187,635 |
|
|
459,267 |
|
|
360,299 |
|
||||
Total revenues |
|
516,558 |
|
|
388,303 |
|
|
941,408 |
|
|
699,942 |
|
||||
Cost of revenues | ||||||||||||||||
License |
|
5,936 |
|
|
5,671 |
|
|
11,618 |
|
|
10,795 |
|
||||
Maintenance and services |
|
92,372 |
|
|
78,077 |
|
|
182,513 |
|
|
150,923 |
|
||||
Total cost of revenues |
|
98,308 |
|
|
83,748 |
|
|
194,131 |
|
|
161,718 |
|
||||
Gross profit |
|
418,250 |
|
|
304,555 |
|
|
747,277 |
|
|
538,224 |
|
||||
Operating expenses | ||||||||||||||||
Research and development |
|
134,110 |
|
|
106,739 |
|
|
263,400 |
|
|
193,096 |
|
||||
Sales and marketing |
|
298,773 |
|
|
243,830 |
|
|
577,734 |
|
|
461,866 |
|
||||
General and administrative |
|
72,264 |
|
|
57,844 |
|
|
138,026 |
|
|
108,586 |
|
||||
Total operating expenses |
|
505,147 |
|
|
408,413 |
|
|
979,160 |
|
|
763,548 |
|
||||
Operating loss |
|
(86,897 |
) |
|
(103,858 |
) |
|
(231,883 |
) |
|
(225,324 |
) |
||||
Interest and other income (expense), net | ||||||||||||||||
Interest income |
|
16,415 |
|
|
3,564 |
|
|
32,761 |
|
|
6,751 |
|
||||
Interest expense |
|
(24,104 |
) |
|
(2,058 |
) |
|
(47,121 |
) |
|
(4,131 |
) |
||||
Other income (expense), net |
|
(654 |
) |
|
(336 |
) |
|
(1,193 |
) |
|
(471 |
) |
||||
Total interest and other income (expense), net |
|
(8,343 |
) |
|
1,170 |
|
|
(15,553 |
) |
|
2,149 |
|
||||
Loss before income taxes |
|
(95,240 |
) |
|
(102,688 |
) |
|
(247,436 |
) |
|
(223,175 |
) |
||||
Income tax provision (benefit) |
|
5,632 |
|
|
811 |
|
|
8,865 |
|
|
(1,177 |
) |
||||
Net loss |
$ |
(100,872 |
) |
$ |
(103,499 |
) |
$ |
(256,301 |
) |
$ |
(221,998 |
) |
||||
Basic and diluted net loss per share |
$ |
(0.67 |
) |
$ |
(0.71 |
) |
$ |
(1.71 |
) |
$ |
(1.54 |
) |
||||
Weighted-average shares used in computing basic and diluted net loss per share |
|
150,306 |
|
|
145,030 |
|
|
149,723 |
|
|
144,306 |
|
Splunk Inc. | ||||||||
Condensed Consolidated Balance Sheets | ||||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
July 31, 2019 | January 31, 2019 | |||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents |
$ |
1,672,005 |
|
$ |
1,876,165 |
|
||
Investments, current |
|
903,864 |
|
|
881,220 |
|
||
Accounts receivable, net |
|
408,908 |
|
|
469,658 |
|
||
Prepaid expenses and other current assets |
|
83,033 |
|
|
73,197 |
|
||
Deferred commissions, current |
|
77,616 |
|
|
78,223 |
|
||
Total current assets |
|
3,145,426 |
|
|
3,378,463 |
|
||
Investments, non-current |
|
94,009 |
|
|
110,588 |
|
||
Operating lease right-of-use assets |
|
215,228 |
|
|
- |
|
||
Property and equipment, net |
|
94,869 |
|
|
158,276 |
|
||
Intangible assets, net |
|
77,417 |
|
|
91,622 |
|
||
Goodwill |
|
503,388 |
|
|
503,388 |
|
||
Deferred commissions, non-current |
|
64,705 |
|
|
64,766 |
|
||
Other assets |
|
292,528 |
|
|
193,140 |
|
||
Total assets |
$ |
4,487,570 |
|
$ |
4,500,243 |
|
||
Liabilities and Stockholders' Equity | ||||||||
Current liabilities | ||||||||
Accounts payable |
$ |
25,924 |
|
$ |
20,418 |
|
||
Accrued compensation |
|
179,846 |
|
|
226,061 |
|
||
Accrued expenses and other liabilities |
|
176,075 |
|
|
125,641 |
|
||
Deferred revenue, current |
|
645,370 |
|
|
673,018 |
|
||
Total current liabilities |
|
1,027,215 |
|
|
1,045,138 |
|
||
Convertible senior notes, net |
|
1,673,569 |
|
|
1,634,474 |
|
||
Operating lease liabilities |
|
191,471 |
|
|
- |
|
||
Deferred revenue, non-current |
|
160,888 |
|
|
204,929 |
|
||
Other liabilities, non-current |
|
587 |
|
|
95,245 |
|
||
Total non-current liabilities |
|
2,026,515 |
|
|
1,934,648 |
|
||
Total liabilities |
|
3,053,730 |
|
|
2,979,786 |
|
||
Stockholders' equity | ||||||||
Common stock |
|
151 |
|
|
149 |
|
||
Accumulated other comprehensive loss |
|
(3,484 |
) |
|
(2,506 |
) |
||
Additional paid-in capital |
|
2,918,277 |
|
|
2,754,858 |
|
||
Accumulated deficit |
|
(1,481,104 |
) |
|
(1,232,044 |
) |
||
Total stockholders' equity |
|
1,433,840 |
|
|
1,520,457 |
|
||
Total liabilities and stockholders' equity |
$ |
4,487,570 |
|
$ |
4,500,243 |
|
Splunk Inc. | ||||||||||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||||||||||
(In thousands) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended July 31, | Six Months Ended July 31, | |||||||||||||||
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
||
Cash flows from operating activities | ||||||||||||||||
Net loss |
$ |
(100,872 |
) |
$ |
(103,499 |
) |
$ |
(256,301 |
) |
$ |
(221,998 |
) |
||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||||||||||
Depreciation and amortization |
|
13,726 |
|
|
12,751 |
|
|
27,141 |
|
|
24,167 |
|
||||
Amortization of deferred commissions |
|
23,850 |
|
|
17,089 |
|
|
53,882 |
|
|
32,877 |
|
||||
Amortization of investment premiums (accretion of discounts) |
|
(2,786 |
) |
|
(361 |
) |
|
(5,645 |
) |
|
(537 |
) |
||||
Amortization of debt discount and issuance costs |
|
20,090 |
|
|
- |
|
|
39,095 |
|
|
- |
|
||||
Stock-based compensation |
|
123,013 |
|
|
105,043 |
|
|
246,076 |
|
|
199,664 |
|
||||
Deferred income taxes |
|
(164 |
) |
|
114 |
|
|
(184 |
) |
|
(125 |
) |
||||
Changes in operating assets and liabilities, net of acquisitions: | ||||||||||||||||
Accounts receivable, net |
|
(123,608 |
) |
|
(39,214 |
) |
|
60,750 |
|
|
156,362 |
|
||||
Prepaid expenses and other assets |
|
(92,449 |
) |
|
1,362 |
|
|
(110,349 |
) |
|
(21,937 |
) |
||||
Deferred commissions |
|
(29,762 |
) |
|
(28,644 |
) |
|
(53,214 |
) |
|
(43,360 |
) |
||||
Accounts payable |
|
2,391 |
|
|
4,068 |
|
|
5,316 |
|
|
2,990 |
|
||||
Accrued compensation |
|
16,562 |
|
|
32,602 |
|
|
(46,215 |
) |
|
(11,833 |
) |
||||
Accrued expenses and other liabilities |
|
20,511 |
|
|
20,599 |
|
|
17,395 |
|
|
6,259 |
|
||||
Deferred revenue |
|
527 |
|
|
11,614 |
|
|
(71,689 |
) |
|
(12,518 |
) |
||||
Net cash provided by (used in) operating activities |
|
(128,971 |
) |
|
33,524 |
|
|
(93,942 |
) |
|
110,011 |
|
||||
Cash flows from investing activities | ||||||||||||||||
Purchases of investments |
|
(250,298 |
) |
|
(175,756 |
) |
|
(539,723 |
) |
|
(198,631 |
) |
||||
Maturities of investments |
|
243,170 |
|
|
173,051 |
|
|
541,595 |
|
|
347,176 |
|
||||
Acquisitions, net of cash acquired |
|
- |
|
|
(110,740 |
) |
|
- |
|
|
(394,910 |
) |
||||
Purchases of property and equipment |
|
(11,534 |
) |
|
(5,562 |
) |
|
(26,434 |
) |
|
(7,858 |
) |
||||
Other investment activities |
|
(875 |
) |
|
- |
|
|
(1,250 |
) |
|
(4,375 |
) |
||||
Net cash used in investing activities |
|
(19,537 |
) |
|
(119,007 |
) |
|
(25,812 |
) |
|
(258,598 |
) |
||||
Cash flows from financing activities | ||||||||||||||||
Proceeds from the exercise of stock options |
|
196 |
|
|
241 |
|
|
556 |
|
|
1,354 |
|
||||
Proceeds from employee stock purchase plan |
|
34,482 |
|
|
24,201 |
|
|
34,482 |
|
|
24,201 |
|
||||
Taxes paid related to net share settlement of equity awards |
|
(48,686 |
) |
|
- |
|
|
(117,693 |
) |
|
(779 |
) |
||||
Repayment of financing lease obligation |
|
- |
|
|
(629 |
) |
|
- |
|
|
(1,218 |
) |
||||
Net cash provided by (used in) financing activities |
|
(14,008 |
) |
|
23,813 |
|
|
(82,655 |
) |
|
23,558 |
|
||||
Effect of exchange rate changes on cash and cash equivalents |
|
(708 |
) |
|
(475 |
) |
|
(1,751 |
) |
|
(1,237 |
) |
||||
Net decrease in cash and cash equivalents |
|
(163,224 |
) |
|
(62,145 |
) |
|
(204,160 |
) |
|
(126,266 |
) |
||||
Cash and cash equivalents at beginning of period |
|
1,835,229 |
|
|
481,826 |
|
|
1,876,165 |
|
|
545,947 |
|
||||
Cash and cash equivalents at end of period |
$ |
1,672,005 |
|
$ |
419,681 |
|
$ |
1,672,005 |
|
$ |
419,681 |
|
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 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 July 31, | Six Months Ended July 31, | |||||||||||||||
|
2019 |
|
|
2018 |
|
|
|
2019 |
|
|
2018 |
|
||||
Net cash provided by (used in) operating activities |
$ |
(128,971 |
) |
$ |
33,524 |
|
$ |
(93,942 |
) |
$ |
110,011 |
|
||||
Less purchases of property and equipment |
|
(11,534 |
) |
|
(5,562 |
) |
|
(26,434 |
) |
|
(7,858 |
) |
||||
Free cash flow (non-GAAP) |
$ |
(140,505 |
) |
$ |
27,962 |
|
$ |
(120,376 |
) |
$ |
102,153 |
|
||||
Net cash used in investing activities |
$ |
(19,537 |
) |
$ |
(119,007 |
) |
$ |
(25,812 |
) |
$ |
(258,598 |
) |
||||
Net cash provided by (used in) financing activities |
$ |
(14,008 |
) |
$ |
23,813 |
|
$ |
(82,655 |
) |
$ |
23,558 |
|
Reconciliation of GAAP to Non-GAAP Financial Measures | |||||||||||||||||||||||||||||||
Three Months Ended July 31, 2019 | |||||||||||||||||||||||||||||||
GAAP | Stock-based compensation and related employer payroll tax |
Amortization of acquired intangible assets |
Non-cash interest expense related to convertible senior notes |
Income tax effects related to non-GAAP adjustments (2) |
Non-GAAP | ||||||||||||||||||||||||||
Cost of revenues |
$ |
|
98,308 |
|
$ |
|
(10,939 |
) |
$ |
|
(5,876 |
) |
$ |
|
- |
|
$ |
|
- |
|
$ |
|
81,493 |
|
|||||||
Gross margin |
|
81.0 |
% |
|
2.1 |
% |
|
1.1 |
% |
|
- |
% |
- |
% |
|
84.2 |
% |
||||||||||||||
Research and development |
|
134,110 |
|
|
(41,393 |
) |
|
(249 |
) |
|
- |
|
|
- |
|
|
92,468 |
|
|||||||||||||
Sales and marketing |
|
298,773 |
|
|
(50,458 |
) |
|
(955 |
) |
|
- |
|
|
- |
|
|
247,360 |
|
|||||||||||||
General and administrative |
|
72,264 |
|
|
(23,578 |
) |
|
- |
|
|
- |
|
|
- |
|
|
48,686 |
|
|||||||||||||
Operating income (loss) |
|
(86,897 |
) |
|
126,368 |
|
|
7,080 |
|
|
- |
|
|
- |
|
|
46,551 |
|
|||||||||||||
Operating margin |
|
(16.8 |
)% |
|
24.4 |
% |
|
1.4 |
% |
|
- |
% |
- |
% |
|
9.0 |
% |
||||||||||||||
Income tax provision |
|
5,632 |
|
|
- |
|
|
- |
|
|
- |
|
|
6,028 |
|
|
11,660 |
|
|||||||||||||
Net income (loss) |
$ |
|
(100,872 |
) |
$ |
|
126,368 |
|
$ |
|
7,080 |
|
$ |
|
20,090 |
|
$ |
|
(6,028 |
) |
$ |
|
46,638 |
|
|||||||
Net income (loss) per share (1) |
$ |
|
(0.67 |
) |
$ |
|
0.30 |
|
(1) |
GAAP net loss per share calculated based on 150,306 weighted-average shares of common stock. Non-GAAP net income per share calculated based on 155,440 diluted weighted-average shares of common stock, which includes 5,134 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 July 31, 2018 | |||||||||||||||||||||||||||||||
GAAP | Stock-based compensation and related employer payroll tax |
Amortization of acquired intangible assets |
Adjustments related to financing lease obligation |
Acquisition- related adjustments |
Income tax effects related to non- GAAP adjustments (3) |
Non-GAAP | |||||||||||||||||||||||||
Cost of revenues |
$ |
83,748 |
|
$ |
(9,438 |
) |
$ |
(5,353 |
) |
$ |
304 |
|
$ |
- |
|
$ |
- |
|
$ |
69,261 |
|||||||||||
Gross margin |
|
78.4 |
% |
|
2.5 |
% |
|
1.4 |
% |
|
(0.1 |
)% |
|
- |
% |
|
- |
% |
|
82.2 |
% |
||||||||||
Research and development |
|
106,739 |
|
|
(34,518 |
) |
|
(268 |
) |
|
507 |
|
|
- |
|
|
- |
|
|
72,460 |
|||||||||||
Sales and marketing |
|
243,830 |
|
|
(47,020 |
) |
|
(652 |
) |
|
1,147 |
|
|
- |
|
|
- |
|
|
197,305 |
|||||||||||
General and administrative |
|
57,844 |
|
|
(17,440 |
) |
|
- |
|
|
248 |
|
|
(2,730 |
) |
|
- |
|
|
37,922 |
|||||||||||
Operating income (loss) |
|
(103,858 |
) |
|
108,416 |
|
|
6,273 |
|
|
(2,206 |
) |
|
2,730 |
|
|
- |
|
|
11,355 |
|||||||||||
Operating margin |
|
(26.7 |
)% |
|
27.9 |
% |
|
1.6 |
% |
|
(0.6 |
)% |
|
0.7 |
% |
|
- |
% |
|
2.9 |
% |
||||||||||
Income tax provision |
|
811 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
2,105 |
|
|
2,916 |
|||||||||||
Net income (loss) |
$ |
(103,499 |
) |
$ |
108,416 |
|
$ |
6,273 |
|
$ |
(151 |
) |
(2 |
) |
$ |
2,730 |
|
$ |
(2,105 |
) |
$ |
11,664 |
|||||||||
Net income (loss) per share (1) |
$ |
(0.71 |
) |
$ |
0.08 |
(1) |
GAAP net loss per share calculated based on 145,030 weighted-average shares of common stock. Non-GAAP net income per share calculated based on 151,441 diluted weighted-average shares of common stock, which includes 6,411 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 $2.1 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 | |||||||||||||||||||||||||
Six Months Ended July 31, 2019 | |||||||||||||||||||||||||
GAAP | Stock-based compensation and related employer payroll tax |
Amortization of acquired intangible assets |
Non-cash interest expense related to convertible senior notes |
Income tax effects related to non- GAAP adjustments (2) |
Non-GAAP | ||||||||||||||||||||
Cost of revenues |
$ |
194,131 |
|
$ |
(22,613 |
) |
$ |
(11,798 |
) |
$ |
- |
|
|
$ |
- |
|
|
$ |
159,720 |
|
|||||
Gross margin |
|
79.4 |
% |
|
2.3 |
% |
|
1.3 |
% |
- |
% |
|
- |
% |
|
83.0 |
% |
||||||||
Research and development |
|
263,400 |
|
|
(84,838 |
) |
|
(498 |
) |
|
- |
|
|
- |
|
|
178,064 |
|
|||||||
Sales and marketing |
|
577,734 |
|
|
(103,862 |
) |
|
(1,910 |
) |
|
- |
|
|
- |
|
|
471,962 |
|
|||||||
General and administrative |
|
138,026 |
|
|
(45,124 |
) |
|
- |
|
|
- |
|
|
- |
|
|
92,902 |
|
|||||||
Operating income (loss) |
|
(231,883 |
) |
|
256,437 |
|
|
14,206 |
|
|
- |
|
|
- |
|
|
38,760 |
|
|||||||
Operating margin |
|
(24.6 |
)% |
|
27.2 |
% |
|
1.5 |
% |
|
- |
% |
|
- |
% |
|
4.1 |
% |
|||||||
Income tax provision |
|
8,865 |
|
|
- |
|
|
- |
|
|
- |
|
|
3,595 |
|
|
12,460 |
|
|||||||
Net income (loss) |
$ |
(256,301 |
) |
$ |
256,437 |
|
$ |
14,206 |
|
$ |
39,095 |
|
$ |
(3,595 |
) |
$ |
49,842 |
|
|||||||
Net income (loss) per share (1) |
$ |
(1.71 |
) |
$ |
0.32 |
|
(1) |
GAAP net loss per share calculated based on 149,723 weighted-average shares of common stock. Non-GAAP net income per share calculated based on 155,619 diluted weighted-average shares of common stock, which includes 5,896 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 | |||||||||||||||||||||||||||||||
Six Months Ended July 31, 2018 | |||||||||||||||||||||||||||||||
GAAP | Stock-based compensation and related employer payroll tax |
Amortization of acquired intangible assets |
Adjustments related to financing lease obligation |
Acquisition- related adjustments |
Income tax effects related to non- GAAP adjustments (4) |
Non-GAAP | |||||||||||||||||||||||||
Cost of revenues |
$ |
161,718 |
|
$ |
(18,987 |
) |
$ |
(9,603 |
) |
$ |
616 |
|
$ |
- |
|
$ |
- |
|
$ |
133,744 |
|
||||||||||
Gross margin |
|
76.9 |
% |
|
2.7 |
% |
|
1.4 |
% |
|
(0.1 |
)% |
- |
% |
- |
% |
|
80.9 |
% |
||||||||||||
Research and development |
|
193,096 |
|
|
(62,756 |
) |
|
(546 |
) |
|
996 |
|
|
- |
|
|
- |
|
|
130,790 |
|
||||||||||
Sales and marketing |
|
461,866 |
|
|
(92,860 |
) |
|
(830 |
) |
|
2,317 |
|
|
- |
|
|
- |
|
|
370,493 |
|
||||||||||
General and administrative |
|
108,586 |
|
|
(34,727 |
) |
|
- |
|
|
482 |
|
|
(6,034 |
) |
|
- |
|
|
68,307 |
|
||||||||||
Operating loss |
|
(225,324 |
) |
|
209,330 |
|
|
10,979 |
|
|
(4,411 |
) |
|
6,034 |
|
|
- |
|
|
(3,392 |
) |
||||||||||
Operating margin |
|
(32.2 |
)% |
|
29.8 |
% |
|
1.6 |
% |
|
(0.6 |
)% |
|
0.9 |
% |
- |
% |
|
(0.5 |
)% |
|||||||||||
Income tax provision (benefit) |
|
(1,177 |
) |
|
- |
|
|
- |
|
|
- |
|
|
3,313 |
|
(3 |
) |
|
(1,560 |
) |
|
576 |
|
||||||||
Net income (loss) |
$ |
(221,998 |
) |
$ |
209,330 |
|
$ |
10,979 |
|
$ |
(287 |
) |
(2 |
) |
$ |
2,721 |
|
$ |
1,560 |
|
$ |
2,305 |
|
||||||||
Net income (loss) per share (1) |
$ |
(1.54 |
) |
$ |
0.02 |
|
(1) |
GAAP net loss per share calculated based on 144,306 weighted-average shares of common stock. Non-GAAP net income per share calculated based on 150,537 diluted weighted-average shares of common stock, which includes 6,231 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 $4.1 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%. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20190821005693/en/
Source:
For more information, please contact:
Media Contact
Richard Brewer-Hay
Splunk Inc.
press@splunk.com
Investor Contact
Ken Tinsley
Splunk Inc.
IR@splunk.com