Splunk Inc. Announces Fiscal Third Quarter 2013 Financial Results
Company Achieves Record Revenues, License Revenue Grows 56 Percent
"We are pleased to welcome more than 350 new Enterprise customers to the
Third Quarter 2013 Financial Highlights
-
Total revenue was
$52.0 million , up 67% year-over-year. -
License revenue was
$34.6 million , up 56% year-over-year. -
GAAP operating loss was
$5.4 million ; GAAP operating margin was negative 10.3%.
Non-GAAP operating loss was$0.7 million ; non-GAAP operating margin was negative 1.3%. -
GAAP net loss was
$5.5 million and included$4.7 million in non-cash, stock-based compensation expenses; non-GAAP net loss was$0.8 million . -
GAAP loss per share was
$0.06 based on a 96.7 million weighted-average share count; non-GAAP loss per share was$0.01 . -
Operating cash flow was
$6.5 million with free cash flow of$4.2 million .
A reconciliation of GAAP to non-GAAP results is provided in the accompanying table.
Third Quarter 2013 and Recent Business Highlights
Customers:
New license customers include:
Expansion customers include: Adobe,
Product:
- Announced the general availability (GA) of Splunk® Enterprise 5, the fastest, most resilient version of the company's flagship product. The latest release also includes additional developer tools for building big data applications.
-
Released the GA version of
Splunk Storm™, a cloud service for organizations that develop and run applications in the public cloud.
Developers and Content:
-
Announced the GA of
Splunk Hadoop Connect and theSplunk App for HadoopOps to address the common challenges of deploying and running Hadoop. -
Announced the GA of the
Splunk App for PCI Compliance 2.0 for organizations looking for a simple, intuitive reporting and analysis solution that satisfies the requirements for Payment Card Industry (PCI) compliance. -
Released the
Splunk App for Server Virtualization which supports Microsoft Hyper-V and Citrix XenServer. -
Upgraded the
Splunk App for Microsoft Windows Server Active Directory and theSplunk App for Microsoft Exchange to support Windows Server 2012 and Exchange Server 2013. - Released the GA version of the JavaScript SDK, which includes full JSON support and API versioning, in Splunk Enterprise 5.
-
Signed a global
reseller agreement with
Wipro Technologies , the global information technology, consulting and outsourcing business ofWipro Ltd (NYSE:WIT). -
Announced a strategic
alliance under which
Carahsoft Technology Corp. , a government IT solution provider, will proactively market, sell and distributeSplunk software to federal, state and local government agencies and theSplunk reseller partner ecosystem.
Awards:
-
Recognized as the Best IT Security Product of 2012 by
Sweden's Protection and Safety Newspaper in its third annual security awards. - Named the IT Performance Technology winner at the 2012 Ventana Research Technology Innovation Awards.
- Selected as one of the "40 Vendors We're Watching: 2012" by Information Management.
Financial Outlook
The company is providing the following guidance for its fiscal 2013
fourth quarter (ending
-
Total revenue is expected to be between
$58 million and $60 million . - Non-GAAP operating margin is expected to be between 3% and 4%.
The company is updating its previous guidance for its 2013 full fiscal
year (ending
-
Total revenue is now expected to be between
$192 million and $194 million (was previously$183 million to $186 million as ofAugust 30, 2012 ). -
Non-GAAP operating margin is expected to be between negative 1% and
negative 2% (was previously negative 2% to negative 3% as of
August 30, 2012 ).
All forward-looking non-GAAP financial measures contained in this section "Financial Outlook" exclude estimates for stock-based compensation expenses. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis.
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 fourth
quarter and fiscal year 2013 in the paragraphs under "Financial Outlook"
above, and other statements regarding momentum in the company's
business, growth in the number of new customers, existing customer usage
and expansion 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 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 | Nine Months Ended | |||||||||||||||
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|
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October 31, | |||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Revenues | ||||||||||||||||
License | $ | 34,557 | $ | 22,182 | $ | 89,146 | $ | 55,494 | ||||||||
Maintenance and services | 17,488 | 8,991 | 44,573 | 22,267 | ||||||||||||
Total revenues | 52,045 | 31,173 | 133,719 | 77,761 | ||||||||||||
Cost of revenues | ||||||||||||||||
License | 62 | 153 | 283 | 712 | ||||||||||||
Maintenance and services | 5,817 | 3,040 | 14,506 | 7,458 | ||||||||||||
Total cost of revenues1 | 5,879 | 3,193 | 14,789 | 8,170 | ||||||||||||
Gross profit | 46,166 | 27,980 | 118,930 | 69,591 | ||||||||||||
Operating expenses | ||||||||||||||||
Research and development1 | 11,074 | 6,475 | 28,568 | 16,227 | ||||||||||||
Sales and marketing1 | 32,847 | 19,179 | 84,753 | 48,337 | ||||||||||||
General and administrative1 | 7,625 | 5,370 | 21,718 | 13,108 | ||||||||||||
Total operating expenses | 51,546 | 31,024 | 135,039 | 77,672 | ||||||||||||
Operating loss | (5,380 | ) | (3,044 | ) | (16,109 | ) | (8,081 | ) | ||||||||
Other income (expense), net | ||||||||||||||||
Interest income (expense), net | 31 | (27 | ) | 115 | (70 | ) | ||||||||||
Change in fair value of preferred stock warrants | - | (439 | ) | (14,087 | ) | (1,515 | ) | |||||||||
Total other income (expense), net | 31 | (466 | ) | (13,972 | ) | (1,585 | ) | |||||||||
Loss before income taxes | (5,349 | ) | (3,510 | ) | (30,081 | ) | (9,666 | ) | ||||||||
Provision for income taxes | 125 | 50 | 438 | 50 | ||||||||||||
Net loss | $ | (5,474 | ) | $ | (3,560 | ) | $ | (30,519 | ) | $ | (9,716 | ) | ||||
Basic and diluted net loss per share | $ | (0.06 | ) | $ | (0.17 | ) | $ | (0.41 | ) | $ | (0.48 | ) | ||||
Weighted-average shares used in computing basic and diluted net loss per share |
96,671 | 21,220 | 73,951 | 20,069 | ||||||||||||
1 Includes stock-based compensation expense as follows: | ||||||||||||||||
Cost of revenues | $ | 322 | $ | 37 | $ | 697 | $ | 83 | ||||||||
Research and development | 1,560 | 229 | 3,722 | 531 | ||||||||||||
Sales and marketing | 2,093 | 405 | 4,456 | 829 | ||||||||||||
General and administrative | 710 | 370 | 2,348 | 824 | ||||||||||||
$ | 4,685 | $ | 1,041 | $ | 11,223 | $ | 2,267 | |||||||||
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CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(In thousands) | ||||||||
|
January 31, | |||||||
2012 | 2012 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 273,324 | $ | 31,599 | ||||
Accounts receivable, net | 40,178 | 34,495 | ||||||
Prepaid expenses and other current assets | 5,694 | 4,261 | ||||||
Total current assets | 319,196 | 70,355 | ||||||
Restricted cash | - | 514 | ||||||
Property and equipment, net | 10,758 | 8,919 | ||||||
Other assets | 281 | 2,435 | ||||||
Total assets | $ | 330,235 | $ | 82,223 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 1,195 | $ | 1,455 | ||||
Accrued payroll and compensation | 25,715 | 16,142 | ||||||
Accrued expenses and other liabilities | 4,672 | 7,711 | ||||||
Deferred revenue, current portion | 61,964 | 42,923 | ||||||
Term debt, current portion | - | 982 | ||||||
Total current liabilities | 93,546 | 69,213 | ||||||
Deferred revenue, non-current | 12,002 | 9,742 | ||||||
Preferred stock warrant liability | - | 2,133 | ||||||
Other liabilities, non-current | 322 | 561 | ||||||
Term debt, non-current | - | 1,307 | ||||||
Total non-current liabilities | 12,324 | 13,743 | ||||||
Total liabilities | 105,870 | 82,956 | ||||||
Convertible preferred stock | - | 40,913 | ||||||
Stockholders' equity (deficit): | ||||||||
Common stock | 97 | 23 | ||||||
Accumulated other comprehensive loss | (15 | ) | (24 | ) | ||||
Additional paid-in capital | 308,820 | 12,373 | ||||||
Accumulated deficit | (84,537 | ) | (54,018 | ) | ||||
Total stockholders' equity (deficit) | 224,365 | (41,646 | ) | |||||
Total liabilities and stockholders' equity | $ | 330,235 | $ | 82,223 | ||||
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||
(In thousands) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
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|
|
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2012 | 2011 | 2012 | 2011 | |||||||||||||
Cash Flows From Operating Activities | ||||||||||||||||
Net loss | $ | (5,474 | ) | $ | (3,560 | ) | $ | (30,519 | ) | $ | (9,716 | ) | ||||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization |
1,208 | 584 | 3,357 | 1,429 | ||||||||||||
Change in fair value of preferred stock warrants | - | 439 | 14,087 | 1,515 | ||||||||||||
Stock-based compensation | 4,685 | 1,041 | 11,223 | 2,267 | ||||||||||||
Changes in operating assets and liabilities | ||||||||||||||||
Accounts receivable, net | (6,497 | ) | 699 | (5,683 | ) | (7,379 | ) | |||||||||
Prepaid expenses, other current and non-current assets | (108 | ) | 390 | (1,280 | ) | (2,230 | ) | |||||||||
Accounts payable | (568 | ) | (2,052 | ) | (268 | ) | (289 | ) | ||||||||
Accrued payroll and compensation | 7,010 | 2,141 | 9,573 | 2,749 | ||||||||||||
Accrued expenses and other liabilities | (74 | ) | 733 | 81 | 2,006 | |||||||||||
Deferred revenue | 6,298 | 6,286 | 21,301 | 14,263 | ||||||||||||
Net cash provided by operating activities | 6,480 | 6,701 | 21,872 | 4,615 | ||||||||||||
Cash Flow From Investing Activities | ||||||||||||||||
Change in restricted cash | 514 | - | 514 | - | ||||||||||||
Purchases of property and equipment | (2,246 | ) | (2,186 | ) | (5,720 | ) | (6,096 | ) | ||||||||
Net cash used in investing activities | (1,732 | ) | (2,186 | ) | (5,206 | ) | (6,096 | ) | ||||||||
Cash Flow From Financing Activities | ||||||||||||||||
Repayments of financing obligation under sale leaseback | - | (50 | ) | - | (142 | ) | ||||||||||
Repayments of term debt | - | (234 | ) | (2,289 | ) | (475 | ) | |||||||||
Proceeds from term debt | - | - | - | 3,000 | ||||||||||||
Proceeds from initial public offering, net of offering costs | - | - | 225,225 | - | ||||||||||||
Proceeds from early exercise of employee stock options | - | - | - | 735 | ||||||||||||
Issuance of common stock from exercise of stock options | 298 | 983 | 2,123 | 1,623 | ||||||||||||
Net cash provided by financing activities | 298 | 699 | 225,059 | 4,741 | ||||||||||||
Net increase in cash and cash equivalents | 5,046 | 5,214 | 241,725 | 3,260 | ||||||||||||
Cash and cash equivalents at beginning of period | 268,278 | 17,783 | 31,599 | 19,737 | ||||||||||||
Cash and cash equivalents at end of period | $ | 273,324 | $ | 22,997 | $ | 273,324 | $ | 22,997 | ||||||||
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 |
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(In thousands, except per share data) | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||
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October 31, | |||||||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||||||||
Reconciliation of cash provided by operating activities to free cash flow: |
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Net cash provided by operating activities | $ | 6,480 | $ | 6,701 | $ | 21,872 | $ | 4,615 | ||||||||||||||
Less purchases of property and equipment | (2,246 | ) | (2,186 | ) | (5,720 | ) | (6,096 | ) | ||||||||||||||
Free cash flow (Non-GAAP) | $ | 4,234 | $ | 4,515 | $ | 16,152 | $ | (1,481 | ) | |||||||||||||
Net cash used in investing activities | $ | (1,732 | ) | $ | (2,186 | ) | $ | (5,206 | ) | $ | (6,096 | ) | ||||||||||
Net cash provided by financing activities | $ | 298 | $ | 699 | $ | 225,059 | $ | 4,741 | ||||||||||||||
Operating loss reconciliation: |
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GAAP operating loss | $ | (5,380 | ) | $ | (3,044 | ) | $ | (16,109 | ) | $ | (8,081 | ) | ||||||||||
Stock-based compensation expense | A | 4,685 | 1,041 | 11,223 | 2,267 | |||||||||||||||||
Non-GAAP operating loss | $ | (695 | ) | $ | (2,003 | ) | $ | (4,886 | ) | $ | (5,814 | ) | ||||||||||
Operating margin reconciliation: |
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GAAP operating margin | (10.3 | ) | % | (9.8 | ) | % | (12.0 | ) | % | (10.4 | ) | % | ||||||||||
Stock-based compensation expense | A | 9.0 | 3.3 | 8.4 | 2.9 | |||||||||||||||||
Non-GAAP operating margin | (1.3 | ) | % | (6.5 | ) | % | (3.6 | ) | % | (7.5 | ) | % | ||||||||||
Net loss reconciliation: |
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GAAP net loss | $ | (5,474 | ) | $ | (3,560 | ) | $ | (30,519 | ) | $ | (9,716 | ) | ||||||||||
Stock-based compensation expense | A | 4,685 | 1,041 | 11,223 | 2,267 | |||||||||||||||||
Change in fair value of preferred stock warrants | B | - | 439 | 14,087 | 1,515 | |||||||||||||||||
Non-GAAP net loss | $ | (789 | ) | $ | (2,080 | ) | $ | (5,209 | ) | $ | (5,934 | ) | ||||||||||
Net loss per share reconciliation: |
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GAAP net loss per share | $ | (0.06 | ) | $ | (0.17 | ) | $ | (0.41 | ) | $ | (0.48 | ) | ||||||||||
Stock-based compensation expense | A | 0.05 | 0.05 | 0.15 | 0.11 | |||||||||||||||||
Change in fair value of preferred stock warrants |
B |
- | 0.02 | 0.19 | 0.07 | |||||||||||||||||
Non-GAAP basic and diluted loss per share | $ | (0.01 | ) | $ | (0.10 | ) | $ | (0.07 | ) | $ | (0.30 | ) | ||||||||||
Weighted-average shares used in computing basic and diluted net loss per share |
96,671 | 21,220 | 73,951 | 20,069 | ||||||||||||||||||
Notes: |
|||
(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 |
slowe@splunk.com
or
jadew@lewispr.com
or
Investor
Contact
ktinsley@splunk.com
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