Splunk Inc. Announces Fiscal Third Quarter 2014 Financial Results
Revenues Grow 51%; More than 450 New Customers — Highest in Company History
-
Total revenues were
$78.6 million , up 51% year-over-year. -
License revenues were
$50.9 million , up 47% year-over-year. -
GAAP operating loss was
$16.8 million or 21% of revenues. -
Non-GAAP operating income was
$0.9 million or 1% of revenues. -
GAAP loss per share was
$0.16 ; non-GAAP EPS was$0.00 . -
Operating cash flow was
$13.3 million .
"We are pleased to welcome a record number of new customers to
Third Quarter 2014 and Recent Business Highlights
Customers:
- Signed more than 450 new customers, ending the quarter with more than 6,400 customers worldwide.
-
New license customers include:
Alabama Department of Transportation ,Automationdirect.com ,BizMobile Inc. (Japan ), bonprix (Germany ),Digicel Jamaica Ltd. (Jamaica ),Erie Insurance Group ,Gretech Corp. (Korea ), Freshview (Australia ),ING DIRECT (Australia ),KAIST (Korea ),Korea Federation of Community Credit Cooperatives (Korea ), MegaFon (Russia ), NASDAQ OMX, Natixis (Hong Kong), OOCL (Hong Kong),Ohio Department of Public Safety ,Omaha Public Power District , SABIC - Saudi Basic Industries Corporation (Saudi Arabia),Skanska S.A. (Poland ), Tesla Motors,University of New South Wales ,University of Sydney , Zennisshoku Chain (Japan ). -
Expansion customers include:
Betsson Malta Ltd. (Malta ), Cadence Design Systems,Charlotte Russe , Chunghwa Telecom Co., Ltd. (Taiwan ), CONSOL Energy, Constant Contact, Coupang (Korea ),Dell Kace ,U.S. Department of Energy , Discovery Communications, Domino'sPizza, HelloWallet, IDT Corporation, Intuit, KT Cloud (Korea), Li & Fung Ltd. (Hong Kong),Otto Group (Germany ), Newell Rubbermaid, SunGard,Texas Health and Human Services Commission ,University of California, Los Angeles , Urban Outfitters,U.S. Army ,VGTRK —All-Russia State Television and Radio Broadcasting Company (Russia ), zulily.
Product:
-
Announced the general availability of
Splunk ® Enterprise 6, the latest version of the company's award-winning platform for machine data. -
Announced the general availability of
Splunk Cloud™, a new service that delivers Splunk Enterprise in the cloud. With the introduction of Splunk Cloud for large-scale production environments,Splunk Storm, the cloud-based service introduced last year, significantly expanded its free developer offerings to 20GB of total storage per month. - Announced the general availability of Hunk™: Splunk Analytics for Hadoop. Hunk is a fully integrated analytics platform for Hadoop that enables everyone in an organization to interactively explore, analyze and visualize historical data in Hadoop.
-
Released the
Splunk App for Unix and Linux, which provides rapid insights and operational visibility into large-scale Unix and Linux environments. -
Released the
Splunk App for Okta, which brings the power of the Splunk Search Processing Language to data from the Okta service enabling users to visualize logins and app utilization, as well as monitor suspicious activity.
Acquisition:
-
Announced the acquisition of
BugSense Inc. , a leading analytics solution for machine data generated by mobile devices. The addition of BugSense will enhance the ability ofSplunk customers to analyze machine data directly from mobile devices and correlate it with other machine-generated data to gain operational intelligence.
-
Announced Amazon
Machine Images (AMIs) for Splunk Enterprise 6 and Hunk on the
Amazon Web Services (AWS) Marketplace . Splunk also released the new version of theSplunk App for AWS, which leverages the newly announced Amazon CloudTrail, a service that logs allAWS API calls. -
Signed a reseller
agreement with
Hitachi Solutions to distribute Splunk Enterprise acrossJapan . - Announced with Systex the launch of Systex SBOX, which is available to APAC channel partners and customers.
Recognition:
- Received an award naming Splunk Enterprise as the "Most Innovative Big Data Tool" in the competition "Best Big Data in 2013" by COMPUTERWOCHE, a leading German-language weekly magazine for enterprise IT managers and IT professionals.
-
Won the best
SIEM category in the 2013 Readers' Choice Awards by
Information Security magazine and SearchSecurity.com for Splunk Enterprise.
Splunk4Good:
-
Participated in a
White House event, Data toKnowledge to Action : Building New Partnerships, as part of the Obama Administration's call for technology leaders to help harness big data to advance national goals. Splunk4Good is analyzing Regulations.gov data to create a new, public interface to better enable citizens to explore federal regulatory data. - Announced the Ford OpenXC Connected Car Dashboards, a collaborative project with Ford Motor Company that collected and analyzed data from vehicles to gain insight into driving patterns and vehicle performance.
Appointments:
-
Appointed
Stephen Sorkin as chief strategy officer. Sorkin will be responsible for developing and aligning product and business strategies across the company. -
Appointed
Todd Papaioannou as chief technology officer. Papaioannou will help define Splunk's technology vision, strategy and roadmap.
Financial Outlook
The company is providing the following guidance for its fiscal fourth
quarter 2014 (ending
-
Total revenues are expected to be between
$88 million and$90 million . - Non-GAAP operating margin is expected to be between 6% and 8%.
The company is updating its previous guidance for its fiscal year 2014
(ending
-
Total revenues are expected to be between
$291 million and$293 million (were previously expected to be between$275 million and$281 million as ofAugust 29, 2013 ). -
Non-GAAP operating margin is expected to be approximately zero
(unchanged from
August 29, 2013 ).
All forward-looking non-GAAP financial measures contained in this section "Financial Outlook" exclude estimates for stock-based compensation expenses, employer payroll tax expense related to employee stock plans, a non-recurring non-cash charge for impairment of a long-lived asset, acquisition-related costs, amortization of acquired intangible assets as well as the partial release of the valuation allowance due to acquisition.
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 third quarter 2014 and YTD fiscal 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 fourth 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, customer value and standardization, expected benefits of our recent acquisition, expansion of existing customer usage, intended use and success of acquired products, 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; Splunk's transition to a multi-product software and services business; Splunk's inability to successfully integrate acquired businesses and technologies, and general market, political, economic and business conditions.
Additional information on potential factors that could affect Splunk's
financial results is included in the company's Quarterly Report on Form
10-Q for the quarter ended
About
To learn more, please visit www.splunk.com/company.
|
||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
|
|
|
|
|||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Revenues | ||||||||||||||||
License | $ | 50,873 | $ | 34,557 | $ | 130,230 | $ | 89,146 | ||||||||
Maintenance and services | 27,760 | 17,488 | 72,483 | 44,573 | ||||||||||||
Total revenues | 78,633 | 52,045 | 202,713 | 133,719 | ||||||||||||
Cost of revenues | ||||||||||||||||
License | 84 | 62 | 229 | 283 | ||||||||||||
Maintenance and services 1, 2 | 10,441 | 5,817 | 24,398 | 14,506 | ||||||||||||
Total cost of revenues 4, 5 | 10,525 | 5,879 | 24,627 | 14,789 | ||||||||||||
Gross profit | 68,108 | 46,166 | 178,086 | 118,930 | ||||||||||||
Operating expenses | ||||||||||||||||
Research and development 1, 3, 4, 5 | 18,961 | 11,074 | 49,635 | 28,568 | ||||||||||||
Sales and marketing 1, 4, 5 | 53,052 | 32,847 | 138,999 | 84,753 | ||||||||||||
General and administrative 1, 4, 5 | 12,917 | 7,625 | 35,275 | 21,718 | ||||||||||||
Total operating expenses | 84,930 | 51,546 | 223,909 | 135,039 | ||||||||||||
Operating loss | (16,822 | ) | (5,380 | ) | (45,823 | ) | (16,109 | ) | ||||||||
Interest and other income (expense), net | ||||||||||||||||
Interest income, net | 55 | 31 | 174 | 115 | ||||||||||||
Other income (expense), net | (283 | ) | - | (459 | ) | - | ||||||||||
Change in fair value of preferred stock warrants | - | - | - | (14,087 | ) | |||||||||||
Total interest and other income (expense), net | (228 | ) | 31 | (285 | ) | (13,972 | ) | |||||||||
Loss before income taxes | (17,050 | ) | (5,349 | ) | (46,108 | ) | (30,081 | ) | ||||||||
Income tax provision (benefit) 6 | (500 | ) | 125 | 269 | 438 | |||||||||||
Net loss |
$ | (16,550 | ) | $ | (5,474 | ) | $ | (46,377 | ) | $ | (30,519 | ) | ||||
Basic and diluted net loss per share | $ | (0.16 | ) | $ | (0.06 | ) | $ | (0.45 | ) | $ | (0.41 | ) | ||||
Weighted-average shares used in computing basic and diluted net loss per share |
106,008 | 96,671 | 104,063 | 73,951 | ||||||||||||
1 Includes amortization of acquired intangible assets as follows: | ||||||||||||||||
Cost of revenues | $ | 82 | $ | - | $ | 82 | $ | - | ||||||||
Research and development | 12 | - | 12 | - | ||||||||||||
Sales and marketing | 42 | - | 42 | - | ||||||||||||
$ | 136 | $ | - | $ | 136 | $ | - | |||||||||
2 Includes charge related to impairment of long-lived asset: | $ | 2,128 | $ | - | $ | 2,128 | $ | - | ||||||||
3 Includes acquisition-related costs: | $ | 408 | $ | - | $ | 408 | $ | - | ||||||||
4 Includes stock-based compensation expense as follows: | ||||||||||||||||
Cost of revenues | $ | 1,165 | $ | 322 | $ | 2,735 | $ | 697 | ||||||||
Research and development | 4,405 | 1,560 | 10,995 | 3,722 | ||||||||||||
Sales and marketing | 5,947 | 2,093 | 15,425 | 4,456 | ||||||||||||
General and administrative | 2,815 | 710 | 6,969 | 2,348 | ||||||||||||
$ | 14,332 | $ | 4,685 | $ | 36,124 | $ | 11,223 | |||||||||
5 Includes employer payroll tax on employee stock plans as follows: | ||||||||||||||||
Cost of revenues | $ | 53 | $ | - | $ | 97 | $ | - | ||||||||
Research and development | 86 | - | 277 | - | ||||||||||||
Sales and marketing | 315 | - | 907 | 48 | ||||||||||||
General and administrative | 237 | - | 576 | 214 | ||||||||||||
$ | 691 | $ | - | $ | 1,857 | $ | 262 | |||||||||
6 Includes a partial release of the valuation allowance due to acquisition: | $ | (747 | ) | $ | - | $ | (747 | ) | $ | - | ||||||
|
||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
|
|
|||||||
2013 | 2013 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 351,895 | $ | 305,939 | ||||
Accounts receivable, net | 53,995 | 63,948 | ||||||
Prepaid expenses and other current assets | 8,669 | 6,861 | ||||||
Total current assets | 414,559 | 376,748 | ||||||
Property and equipment, net | 14,437 | 13,205 | ||||||
Intangible assets, net | 4,594 | - | ||||||
Goodwill | 5,734 | - | ||||||
Other assets | 502 | 492 | ||||||
Total assets | $ | 439,826 | $ | 390,445 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 2,018 | $ | 1,632 | ||||
Accrued payroll and compensation | 30,655 | 28,123 | ||||||
Accrued expenses and other liabilities | 12,781 | 7,636 | ||||||
Deferred revenue, current portion | 107,712 | 79,568 | ||||||
Total current liabilities | 153,166 | 116,959 | ||||||
Deferred revenue, non-current | 33,433 | 35,144 | ||||||
Other liabilities, non-current | 3,145 | 798 | ||||||
Total non-current liabilities | 36,578 | 35,942 | ||||||
Total liabilities | 189,744 | 152,901 | ||||||
Stockholders' equity | ||||||||
Common stock | 107 | 101 | ||||||
Accumulated other comprehensive loss | (156 | ) | (135 | ) | ||||
Additional paid-in capital | 387,207 | 328,277 | ||||||
Accumulated deficit | (137,076 | ) | (90,699 | ) | ||||
Total stockholders' equity | 250,082 | 237,544 | ||||||
Total liabilities and stockholders' equity | $ | 439,826 | $ | 390,445 | ||||
|
||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||
(In thousands) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
|
|
|
|
|||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Cash Flows From Operating Activities | ||||||||||||||||
Net loss | $ | (16,550 | ) | $ | (5,474 | ) | $ | (46,377 | ) | $ | (30,519 | ) | ||||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization | 1,620 | 1,208 | 4,500 | 3,357 | ||||||||||||
Impairment of long-lived asset | 2,128 | - | 2,128 | - | ||||||||||||
Change in fair value of preferred stock warrants | - | - | - | 14,087 | ||||||||||||
Stock-based compensation | 14,332 | 4,685 | 36,124 | 11,223 | ||||||||||||
Excess tax benefits from employee stock plans | (271 | ) | - | (539 | ) | - | ||||||||||
Changes in operating assets and liabilities | ||||||||||||||||
Accounts receivable, net | (13,249 | ) | (6,497 | ) | 9,953 | (5,683 | ) | |||||||||
Prepaid expenses, other current and non-current assets | 2,775 | (108 | ) | (822 | ) | (1,280 | ) | |||||||||
Accounts payable | 414 | (568 | ) | 267 | (268 | ) | ||||||||||
Accrued payroll and compensation | 8,767 | 7,010 | 2,532 | 9,573 | ||||||||||||
Accrued expenses and other liabilities | (159 | ) | (101 | ) | 5,220 | 66 | ||||||||||
Deferred revenue | 13,510 | 6,298 | 26,433 | 21,301 | ||||||||||||
Net cash provided by operating activities | 13,317 | 6,453 | 39,419 | 21,857 | ||||||||||||
Cash Flow From Investing Activities | ||||||||||||||||
Acquisition, net of cash acquired | (8,958 | ) | - | (8,958 | ) | - | ||||||||||
Change in restricted cash | - | 514 | - | 514 | ||||||||||||
Purchases of property and equipment | (4,035 | ) | (2,246 | ) | (7,265 | ) | (5,720 | ) | ||||||||
Net cash used in investing activities | (12,993 | ) | (1,732 | ) | (16,223 | ) | (5,206 | ) | ||||||||
Cash Flow From Financing Activities | ||||||||||||||||
Repayments of term debt | - | - | - | (2,289 | ) | |||||||||||
Proceeds from initial public offering, net of offering costs | - | - | - | 225,225 | ||||||||||||
Issuance of common stock from exercise of stock options | 6,342 | 298 | 18,865 | 2,123 | ||||||||||||
Excess tax benefits from employee stock plans | 271 | - | 539 | - | ||||||||||||
Proceeds from employee stock purchase plan | - | - | 6,076 | - | ||||||||||||
Taxes paid related to net share settlement of equity awards | (2,239 | ) | - | (2,752 | ) | - | ||||||||||
Net cash provided by financing activities | 4,374 | 298 | 22,728 | 225,059 | ||||||||||||
Effect of exchange rate changes on cash and cash equivalents | 83 | 27 | 32 | 15 | ||||||||||||
Net increase in cash and cash equivalents | 4,781 | 5,046 | 45,956 | 241,725 | ||||||||||||
Cash and cash equivalents at beginning of period | 347,114 | 268,278 | 305,939 | 31,599 | ||||||||||||
Cash and cash equivalents at end of period | $ | 351,895 | $ | 273,324 | $ | 351,895 | $ | 273,324 | ||||||||
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.
|
||||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures | ||||||||||||||
(In thousands, except per share data) | ||||||||||||||
(Unaudited) | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
|
|
|
|
|||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Reconciliation of cash provided by operating activities to free cash flow: |
||||||||||||||
Net cash provided by operating activities |
|
|
|
|
||||||||||
Less purchases of property and equipment | (4,035) | (2,246) | (7,265) | (5,720) | ||||||||||
Free cash flow (Non-GAAP) |
|
|
|
|
||||||||||
Net cash used in investing activities |
|
|
|
|
||||||||||
Net cash provided by financing activities |
|
|
|
|
||||||||||
Gross margin reconciliation: |
||||||||||||||
GAAP gross margin | 86.6 | % | 88.7 | % | 87.9 | % | 88.9 | % | ||||||
Stock-based compensation expense | 1.5 | 0.6 | 1.3 | 0.5 | ||||||||||
Employer payroll tax on employee stock plans | 0.1 | - | - | - | ||||||||||
Amortization of acquired intangible assets | 0.1 | - | - | - | ||||||||||
Impairment of long-lived asset | 2.7 | - | 1.0 | - | ||||||||||
Non-GAAP gross margin | 91.0 | % | 89.3 | % | 90.2 | % | 89.4 | % | ||||||
Operating income (loss) reconciliation: |
||||||||||||||
GAAP operating loss |
|
|
|
|
||||||||||
Stock-based compensation expense | 14,332 | 4,685 | 36,124 | 11,223 | ||||||||||
Employer payroll tax on employee stock plans | 691 | - | 1,857 | 262 | ||||||||||
Amortization of acquired intangible assets | 136 | - | 136 | - | ||||||||||
Impairment of long-lived asset | 2,128 | - | 2,128 | - | ||||||||||
Acquisition-related costs |
408 | - | 408 | - | ||||||||||
Non-GAAP operating income (loss) |
|
|
|
|
||||||||||
Operating margin reconciliation: |
||||||||||||||
GAAP operating margin | (21.4) | % | (10.3) | % | (22.6) | % | (12.0) | % | ||||||
Stock-based compensation expense | 18.2 | 9.0 | 17.8 | 8.4 | ||||||||||
Employer payroll tax on employee stock plans | 0.9 | - | 0.9 | 0.2 | ||||||||||
Amortization of acquired intangible assets | 0.2 | - | 0.1 | - | ||||||||||
Impairment of long-lived asset | 2.7 | - | 1.0 | - | ||||||||||
Acquisition-related costs |
0.5 | - | 0.2 | - | ||||||||||
Non-GAAP operating margin | 1.1 | % | (1.3) | % | (2.6) | % | (3.4) | % | ||||||
Net income (loss) reconciliation: |
||||||||||||||
GAAP net loss |
|
|
|
|
||||||||||
Stock-based compensation expense | 14,332 | 4,685 | 36,124 | 11,223 | ||||||||||
Change in fair value of preferred stock warrants | A | - | - | - | 14,087 | |||||||||
Employer payroll tax on employee stock plans | 691 | - | 1,857 | 262 | ||||||||||
Amortization of acquired intangible assets | 136 | - | 136 | - | ||||||||||
Impairment of long-lived asset | 2,128 | - | 2,128 | - | ||||||||||
Acquisition-related costs |
408 | - | 408 | - | ||||||||||
Partial release of the valuation allowance due to acquisition | (747) | - | (747) | - | ||||||||||
Non-GAAP net income (loss) |
|
|
|
|
||||||||||
Reconciliation of shares used in computing basic and diluted net income (loss) per share: |
||||||||||||||
Weighted-average shares used in computing GAAP basic net loss per share | 106,008 | 96,671 | 104,063 | 73,951 | ||||||||||
Effect of dilutive securities: Employee stock awards and ESPP | 12,117 | - | - | - | ||||||||||
Weighted-average shares used in computing Non-GAAP basic and diluted net income (loss) per share | 118,125 | 96,671 | 104,063 | 73,951 | ||||||||||
GAAP basic and diluted net loss per share |
|
|
|
|
||||||||||
Non-GAAP basic and diluted net income (loss) per share |
|
|
|
|
||||||||||
Notes: |
||||||||||||||
(A) |
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
Investor
Contact
ktinsley@splunk.com
Source:
News Provided by Acquire Media