Splunk Inc. Announces Fiscal Third Quarter 2018 Financial Results
Total Revenues Grew 34%; Company Boosts Full Year Outlook
Third Quarter 2018 Financial Highlights
-
Total revenues were
$328.7 million , up 34% year-over-year. -
Total billings were
$381.6 million , up 38% year-over-year. -
GAAP operating loss was
$50.8 million ; GAAP operating margin was negative 15.5%. -
Non-GAAP operating profit was
$32.3 million ; non-GAAP operating margin was positive 9.8%. -
GAAP loss per share was
$0.36 ; non-GAAP earnings per share was$0.17 . -
Operating cash flow was
$52.3 million with free cash flow of$46.9 million .
"I'm proud of our global performance for the quarter and our increased
outlook through the rest of the year," said
Third Quarter 2018 and Recent Business Highlights:
Customers:
- Signed more than 450 new enterprise customers.
-
New and Expansion Customers Include: 21st Century Fox,
Arizona State University , ATB Financial, Atlassian,Banner Health ,BCD Travel , Blackbaud, Blucora, CallidusCloud, Cincinnati Children'sHospital Medical Center ,Daimler (Germany ),Deakin University (Australia ),Defense Health Agency ,Derbyshire Fire & Rescue (England ), The E.W. Scripps Company,Johns Hopkins University , Li & Fung (Hong Kong ), Nutanix, Norsk Helsenett (Norway ),PIMCO ,Purdue University , SAS,Smithsonian Institution ,Texas Department of Transportation ,U.S. Army ,U.S. Department of Homeland Security Data Center , VodafoneEgypt , Yahoo! JAPAN
Products:
- Announced at .conf2017 a new suite of solutions and expanded machine learning capabilities across Splunk's product portfolio to bring machine learning to the mainstream.
-
Announced
Splunk Enterprise 7.0 with advancements in machine learning and support for metrics to accelerate monitoring and alerting by at least 20x. -
Announced
Splunk IT Service Intelligence (ITSI) 3.0 to revolutionize event monitoring by combining service context with machine learning. -
Announced
Splunk User Behavior Analytics (UBA) 4.0, enabling customers to create and load their own machine learning models to identify custom anomalies and threats via a new software development kit (SDK). -
Announced
Splunk Enterprise Security (ES) Content Update, a new subscription service that regularly delivers dynamic, pre-packaged security content to Splunk ES customers. -
Announced
Splunk Essentials for Fraud Detection, a freeSplunk app that guides customers on how to useSplunk to identify and investigate different types of fraud.
Corporate:
-
Acquired selected assets of
Rocana Inc. , a company providing analytics solutions for the IT market, to extend Splunk's IT operations leadership. -
Acquired
SignalSense Inc. , a company offering cloud-based advanced data collection and breach detection solutions, further advancing Splunk's machine learning capabilities. -
Showcased flexible pricing
programs tailored to fit the needs of all customers and deliver
value no matter where organizations are in their
Splunk journey. -
Unveiled new, free training
programs to help military veterans and youth train for careers in
technology through Splunk4Good in partnership with nonprofits AWS
re:Start, NPower,
Wounded Warrior Project and Year Up. -
Inducted 42 members of the 2018
cohort of the SplunkTrust program to recognize some of the most
dedicated members of the
Splunk Community .
- Showcased rapid growth of the company's global partner ecosystem at .conf2017, with the Partner+ Program helping 950 partners worldwide drive market opportunity and profitability.
-
Introduced new versions of the
Splunk Add-on forAmazon Web Services (AWS) and Splunk App for AWS with major enhancements around ingestion speed and setup usability. -
Announced the general availability of
Booz Allen Hamilton Cyber4Sight forSplunk , a solution empowering security analysts and threat hunters with actionable threat intelligence. -
Released the new
Splunk App for Puppet Enterprise and Splunk ITSI Module for Puppet Enterprise in partnership withPuppet Labs to help customers address issues in real-time through machine learning. -
Expanded partnership with Dell EMC with the new
Dell EMC Ready Systems forSplunk , a pre-engineered portfolio of purpose-built systems for Splunk Enterprise.
Recognition:
- Named to Fortune Magazine's inaugural Future 50 list, which highlights the most forward-looking, innovative companies in the world.
-
Named to the 2017
Technology Fast 500 for the fifth consecutive year. Sponsored by
Deloitte, the list recognizes 500 of the fastest-growing companies in
North America . - Listed as a "Vendor to Watch" in the Gartner 2017 Magic Quadrant for Digital Marketing Analytics.
Events:
-
Hosted .conf2017:
the 8th Annual
Splunk Conference inWashington , drawing more than 7,000Splunk enthusiasts, customers and partners. - Honored the winners of the 2017 Revolution Awards at .conf2017, recognizing spectacular achievements from Splunk's worldwide customers and partners.
-
Hosted the first-ever SplunkLive! in
Montreal and additional SplunkLive! events in cities worldwide, includingBeijing ,Seattle ,Shanghai andSingapore . Presentations can be found on the SplunkLive! website.
Appointments:
-
Appointed
Sara Baack , chief marketing officer of Equinix, andElisa Steele , former CEO and president ofJive Software , to Splunk's Board of Directors. -
Promoted
Susan St. Ledger to the newly created role of president, worldwide field operations.
Financial Outlook
The company is providing the following guidance for its fiscal fourth
quarter 2018 (ending
-
Total revenues are expected to be between
$388 million and$390 million . - Non-GAAP operating margin is expected to be approximately 16%.
The company is updating its previous guidance provided on
-
Total billings are expected to be approximately
$1.485 billion (was approximately$1.450 billion ). -
Total revenues are expected to be between
$1.239 and$1.241 billion (was between$1.210 and$1.215 billion ). - Non-GAAP operating margin is expected to be approximately 8.5% (was approximately 8%).
The company is providing the following guidance for its fiscal year 2019
(ending
-
Total revenues are expected to be approximately
$1.550 billion . - Non-GAAP operating margin is expected to be approximately 10.5%.
All forward-looking non-GAAP financial measures contained in this section "Financial Outlook" exclude estimates for expenses related to stock-based compensation and related employer payroll tax, amortization of acquired intangible assets, adjustments related to a financing lease obligation, adjustments related to facility exits and acquisition-related adjustments.
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 the excluded 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 third quarter 2018 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, billings, and non-GAAP operating margin targets for the
company's fiscal fourth quarter, fiscal year 2018 and/or fiscal year
2019 in the paragraphs under "Financial Outlook" above and other
statements regarding future growth, strategy, including with respect to
our acquisitions, pricing programs and their expected benefits, our
partner programs and their expected benefits, customer demand and
penetration, expanding use 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
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
|
|
|
|
|||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Revenues | ||||||||||||||||
License | $ | 179,829 | $ | 139,725 | $ | 439,406 | $ | 356,412 | ||||||||
Maintenance and services | 148,824 | 105,064 | 411,659 | 287,082 | ||||||||||||
Total revenues | 328,653 | 244,789 | 851,065 | 643,494 | ||||||||||||
Cost of revenues | ||||||||||||||||
License | 3,013 | 2,883 | 9,100 | 8,713 | ||||||||||||
Maintenance and services | 61,154 | 45,791 | 173,106 | 124,077 | ||||||||||||
Total cost of revenues | 64,167 | 48,674 | 182,206 | 132,790 | ||||||||||||
Gross profit | 264,486 | 196,115 | 668,859 | 510,704 | ||||||||||||
Operating expenses | ||||||||||||||||
Research and development | 74,080 | 85,659 | 217,152 | 220,254 | ||||||||||||
Sales and marketing | 205,364 | 167,330 | 570,596 | 462,709 | ||||||||||||
General and administrative |
35,857 | 34,079 | 111,492 | 100,464 | ||||||||||||
Total operating expenses | 315,301 | 287,068 | 899,240 | 783,427 | ||||||||||||
Operating loss | (50,815 | ) | (90,953 | ) | (230,381 | ) | (272,723 | ) | ||||||||
Interest and other income (expense), net | ||||||||||||||||
Interest income (expense), net | 270 | (823 | ) | (422 | ) | (2,023 | ) | |||||||||
Other income (expense), net | (289 | ) | (348 | ) | (1,771 | ) | (2,536 | ) | ||||||||
Total interest and other income (expense), net |
(19 | ) | (1,171 | ) | (2,193 | ) | (4,559 | ) | ||||||||
Loss before income taxes | (50,834 | ) | (92,124 | ) | (232,574 | ) | (277,282 | ) | ||||||||
Income tax provision (benefit) | (232 | ) | 1,367 | 1,459 | 3,702 | |||||||||||
Net loss | $ | (50,602 | ) | $ | (93,491 | ) | $ | (234,033 | ) | $ | (280,984 | ) | ||||
Basic and diluted net loss per share | $ | (0.36 | ) | $ | (0.69 | ) | $ | (1.68 | ) | $ | (2.11 | ) | ||||
Weighted-average shares used in computing basic and diluted net loss per share |
140,413 | 134,677 | 139,111 | 133,273 | ||||||||||||
|
||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
|
|
|||||||
2017 | 2017 | |||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 393,314 | $ | 421,346 | ||||
Investments, current portion | 665,075 | 662,096 | ||||||
Accounts receivable, net | 264,497 | 238,281 | ||||||
Prepaid expenses and other current assets | 44,545 | 38,650 | ||||||
Total current assets | 1,367,431 | 1,360,373 | ||||||
Investments, non-current | 5,000 |
|
5,000 | |||||
Property and equipment, net | 161,249 |
|
166,395 | |||||
Intangible assets, net | 52,434 |
|
37,713 | |||||
|
161,382 |
|
124,642 | |||||
Other assets | 28,284 |
|
24,423 | |||||
Total assets | $ | 1,775,780 |
|
$ | 1,718,546 | |||
Liabilities and Stockholders' Equity | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 12,409 |
|
$ | 7,503 | |||
Accrued payroll and compensation | 115,733 |
|
100,092 | |||||
Accrued expenses and other liabilities | 74,680 |
|
81,071 | |||||
Deferred revenue, current portion | 516,401 |
|
478,707 | |||||
Total current liabilities | 719,223 |
|
667,373 | |||||
Deferred revenue, non-current | 185,712 |
|
146,752 | |||||
Other liabilities, non-current | 99,140 |
|
99,260 | |||||
Total non-current liabilities | 284,852 |
|
246,012 | |||||
Total liabilities | 1,004,075 |
|
913,385 | |||||
Stockholders' equity | ||||||||
Common stock | 141 |
|
137 | |||||
Accumulated other comprehensive loss | (2,074 | ) |
|
(3,013 | ) | |||
Additional paid-in capital | 2,028,455 |
|
1,828,821 | |||||
Accumulated deficit | (1,254,817 | ) |
|
(1,020,784 | ) | |||
Total stockholders' equity | 771,705 |
|
805,161 | |||||
Total liabilities and stockholders' equity | $ | 1,775,780 |
|
$ | 1,718,546 | |||
|
||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||
(In thousands) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
|
|
|
|
|||||||||||||
2017 |
2016 | 2017 | 2016 | |||||||||||||
Cash flows from operating activities | ||||||||||||||||
Net loss | $ | (50,602 | ) | $ | (93,491 | ) | $ | (234,033 | ) | $ | (280,984 | ) | ||||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization | 10,123 | 8,279 | 30,039 | 22,914 | ||||||||||||
Amortization of investment premiums | 31 | 173 | 373 | 620 | ||||||||||||
Stock-based compensation | 84,111 | 105,014 | 266,533 | 285,247 | ||||||||||||
Deferred income taxes | (1,811 | ) | 78 | (2,677 | ) | (620 | ) | |||||||||
Excess tax benefits from employee stock plans | - | 476 | - | (551 | ) | |||||||||||
Non-cash facility exit adjustment | (5,191 | ) | - | (5,191 | ) | - | ||||||||||
Changes in operating assets and liabilities, net of acquisitions: | ||||||||||||||||
Accounts receivable, net | (56,415 | ) | (41,227 | ) | (26,216 | ) | 9,176 | |||||||||
Prepaid expenses, other current and non-current assets | (618 | ) | (4,951 | ) | (8,501 | ) | (8,128 | ) | ||||||||
Accounts payable | 2,956 | 1,265 | 4,919 | 1,530 | ||||||||||||
Accrued payroll and compensation | 21,890 | 18,447 | 15,626 | (12,538 | ) | |||||||||||
Accrued expenses and other liabilities | (5,100 | ) | 19,413 | (693 | ) | 32,992 | ||||||||||
Deferred revenue | 52,913 | 31,796 | 76,654 | 49,652 | ||||||||||||
Net cash provided by operating activities | 52,287 | 45,272 | 116,833 | 99,310 | ||||||||||||
Cash flow from investing activities | ||||||||||||||||
Purchases of investments | (177,207 | ) | (207,255 | ) | (517,904 | ) | (523,783 | ) | ||||||||
Maturities of investments | 175,745 | 156,000 | 514,010 | 446,275 | ||||||||||||
Acquisitions, net of cash acquired | (42,127 | ) | - | (59,350 | ) | - | ||||||||||
Purchases of property and equipment | (5,418 | ) | (12,969 | ) | (13,931 | ) | (27,219 | ) | ||||||||
Other investment activities | - | - | - | (3,500 | ) | |||||||||||
Net cash used in investing activities | (49,007 | ) | (64,224 | ) | (77,175 | ) | (108,227 | ) | ||||||||
Cash flow from financing activities | ||||||||||||||||
Proceeds from the exercise of stock options | 501 | 1,752 | 2,474 | 7,355 | ||||||||||||
Excess tax benefits from employee stock plans | - | (476 | ) | - | 551 | |||||||||||
Proceeds from employee stock purchase plan | - | - | 19,282 | 15,183 | ||||||||||||
Taxes paid related to net share settlement of equity awards | (29,542 | ) | (26,533 | ) | (88,651 | ) | (73,355 | ) | ||||||||
Repayment of financing lease obligation | (497 | ) | - | (1,299 | ) | - | ||||||||||
Net cash used in financing activities | (29,538 | ) | (25,257 | ) | (68,194 | ) | (50,266 | ) | ||||||||
Effect of exchange rate changes on cash and cash equivalents | (238 | ) | (147 | ) | 504 | 235 | ||||||||||
Net decrease in cash and cash equivalents | (26,496 | ) | (44,356 | ) | (28,032 | ) | (58,948 | ) | ||||||||
Cash and cash equivalents at beginning of period | 419,810 | 409,949 | 421,346 | 424,541 | ||||||||||||
Cash and cash equivalents at end of period | $ | 393,314 | $ | 365,593 | $ | 393,314 | $ | 365,593 | ||||||||
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.
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||||||||||||||||||||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures | ||||||||||||||||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||
Reconciliation of Cash Provided by Operating Activities to Free Cash Flow |
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Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||
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|
|
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2017 | 2016 | 2017 | 2016 | |||||||||||||||||||||||||||
Net cash provided by operating activities | $ | 52,287 | $ | 45,272 | $ | 116,833 | $ | 99,310 | ||||||||||||||||||||||
Less purchases of property and equipment | (5,418 | ) | (12,969 | ) | (13,931 | ) | (27,219 | ) | ||||||||||||||||||||||
Free cash flow (non-GAAP) | $ | 46,869 | $ | 32,303 | $ | 102,902 | $ | 72,091 | ||||||||||||||||||||||
Net cash used in investing activities | $ | (49,007 | ) | $ | (64,224 | ) | $ | (77,175 | ) | $ | (108,227 | ) | ||||||||||||||||||
Net cash used in financing activities | $ | (29,538 | ) | $ | (25,257 | ) | $ | (68,194 | ) | $ | (50,266 | ) | ||||||||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures |
||||||||||||||||||||||||||||||
Three Months Ended |
||||||||||||||||||||||||||||||
GAAP |
Stock-based |
Amortization of |
Adjustments |
Adjustments |
Acquisition- |
Income tax |
Non-GAAP |
|||||||||||||||||||||||
Cost of revenues | $ | 64,167 | $ | (8,116) | $ | (2,873) | $ | 316 | $ | - | $ | - | $ | - | $ | 53,494 | ||||||||||||||
Gross margin | 80.5% | 2.4% | 0.9% | (0.1)% | -% | -% | -% | 83.7% | ||||||||||||||||||||||
Research and development | 74,080 | (25,502) | (130) | 489 | - | - | - | 48,937 | ||||||||||||||||||||||
Sales and marketing | 205,364 | (37,789) | (561) | 1,170 | - | - | - | 168,184 | ||||||||||||||||||||||
General and administrative | 35,857 | (14,882) | - | 230 | 5,191 | (643) | - | 25,753 | ||||||||||||||||||||||
Operating income (loss) | (50,815) | 86,289 | 3,564 | (2,205) | (5,191) | 643 | - | 32,285 | ||||||||||||||||||||||
Operating margin | (15.5)% | 26.3% | 1.1% | (0.7)% | (1.6)% | 0.2% | -% | 9.8% | ||||||||||||||||||||||
Income tax provision | (232) | - | - | - | - | 1,995 | 7,514 | 9,277 | ||||||||||||||||||||||
Net income (loss) | $ | (50,602) | $ | 86,289 | $ | 3,564 | $ | (111) |
(2) |
$ | (5,191) | $ | (1,352) | $ | (7,514) | $ | 25,083 | |||||||||||||
Net income (loss) per share(1) | $ | (0.36) | $ | 0.17 | ||||||||||||||||||||||||||
(1) GAAP net loss per share calculated based on 140,413 weighted-average shares of common stock. Non-GAAP net income per share calculated based on 144,415 diluted weighted-average shares of common stock, which includes 4,002 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 |
||||||||||||||||||||||||||||||
(3) Represents the tax effect of the non-GAAP adjustments based on the estimated annual effective tax rate of 27%. | ||||||||||||||||||||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures |
||||||||||||||||||||||||||||||
Three Months Ended |
||||||||||||||||||||||||||||||
GAAP |
Stock-based |
Amortization of |
Adjustments |
Income tax |
Non-GAAP | |||||||||||||||||||||||||
Cost of revenues | $ | 48,674 | $ | (7,740) | $ | (2,814) | $ | 276 | $ | - | $ | 38,396 | ||||||||||||||||||
Gross margin | 80.1% | 3.2% | 1.1% | (0.1)% | -% | 84.3% | ||||||||||||||||||||||||
Research and development | 85,659 | (45,889) | (63) | 559 | - | 40,266 | ||||||||||||||||||||||||
Sales and marketing | 167,330 | (39,462) | (110) | 1,124 | - | 128,882 | ||||||||||||||||||||||||
General and administrative | 34,079 | (13,803) | - | 236 | - | 20,512 | ||||||||||||||||||||||||
Operating income (loss) | (90,953) | 106,894 | 2,987 | (2,195) | - | 16,733 | ||||||||||||||||||||||||
Operating margin | (37.2)% | 43.7% | 1.2% | (0.9)% | -% | 6.8% | ||||||||||||||||||||||||
Income tax provision | 1,367 | - | - | - | 2,336 | 3,703 | ||||||||||||||||||||||||
Net income (loss) | $ | (93,491) | $ | 106,894 | $ | 2,987 | $ | (123) |
(2) |
$ | (2,336) | $ | 13,931 | |||||||||||||||||
Net income (loss) per share(1) | $ | (0.69) | $ | 0.10 | ||||||||||||||||||||||||||
(1) GAAP net loss per share calculated based on 134,677 weighted-average shares of common stock. Non-GAAP net income per share calculated based on 138,401 diluted weighted-average shares of common stock, which includes 3,724 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 |
||||||||||||||||||||||||||||||
(3) For consistency, prior year non-GAAP net loss has been adjusted to reflect the tax effect of the non-GAAP adjustments based on the annual effective tax rate of 21%. | ||||||||||||||||||||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures |
||||||||||||||||||||||||||||||
Nine Months Ended |
||||||||||||||||||||||||||||||
GAAP |
Stock-based |
Amortization of |
Adjustments |
Adjustments |
Acquisition- |
Income tax |
Non-GAAP |
|||||||||||||||||||||||
Cost of revenues | $ | 182,206 | $ | (25,436) | $ | (8,392) | $ | 931 | $ | - | $ | - | $ | - | $ | 149,309 | ||||||||||||||
Gross margin | 78.6% | 3.0% | 1.0% | (0.1)% | -% | -% | -% | 82.5% | ||||||||||||||||||||||
Research and development | 217,152 | (80,100) | (213) | 1,515 | - | - | - | 138,354 | ||||||||||||||||||||||
Sales and marketing | 570,596 | (124,041) | (1,893) | 3,514 | - | - | - | 448,176 | ||||||||||||||||||||||
General and administrative | 111,492 | (45,673) | - | 694 | 5,191 | (643) | - | 71,061 | ||||||||||||||||||||||
Operating income (loss) | (230,381) | 275,250 | 10,498 | (6,654) | (5,191) | 643 | - | 44,165 | ||||||||||||||||||||||
Operating margin | (27.1)% | 32.4% | 1.2% | (0.8)% | (0.6)% | 0.1% | -% | 5.2% | ||||||||||||||||||||||
Income tax provision | 1,459 | - | - | - | - | 2,540 | 9,038 | 13,037 | ||||||||||||||||||||||
Net income (loss) | $ | (234,033) | $ | 275,250 | $ | 10,498 | $ | (339) |
(2) |
$ | (5,191) | $ | (1,897) | $ | (9,038) | $ | 35,250 | |||||||||||||
Net income (loss) per share(1) | $ | (1.68) | $ | 0.25 | ||||||||||||||||||||||||||
(1) GAAP net loss per share calculated based on 139,111 weighted-average shares of common stock. Non-GAAP net income per share calculated based on 143,552 diluted weighted-average shares of common stock, which includes 4,441 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 |
||||||||||||||||||||||||||||||
(3) Represents the tax effect of the non-GAAP adjustments based on the estimated annual effective tax rate of 27%. | ||||||||||||||||||||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures |
||||||||||||||||||||||||||||||
Nine Months Ended |
||||||||||||||||||||||||||||||
GAAP |
Stock-based |
Amortization of |
Adjustments |
Income tax |
Non-GAAP | |||||||||||||||||||||||||
Cost of revenues | $ | 132,790 | $ | (23,075) | $ | (8,612) | $ | 561 | $ | - | $ | 101,664 | ||||||||||||||||||
Gross margin | 79.4% | 3.6% | 1.3% | (0.1)% | -% | 84.2% | ||||||||||||||||||||||||
Research and development | 220,254 | (104,269) | (193) | 1,172 | - | 116,964 | ||||||||||||||||||||||||
Sales and marketing | 462,709 | (120,883) | (412) | 2,373 | - | 343,787 | ||||||||||||||||||||||||
General and administrative | 100,464 | (43,448) | - | 513 | - | 57,529 | ||||||||||||||||||||||||
Operating income (loss) | (272,723) | 291,675 | 9,217 | (4,619) | - | 23,550 | ||||||||||||||||||||||||
Operating margin | (42.4)% | 45.4% | 1.4% | (0.7)% | -% | 3.7% | ||||||||||||||||||||||||
Income tax provision | 3,702 | - | - | - | 1,465 | 5,167 | ||||||||||||||||||||||||
Net income (loss) | $ | (280,984) | $ | 291,675 | $ | 9,217 | $ | 994 |
(2) |
$ | (1,465) | $ | 19,437 | |||||||||||||||||
Net income (loss) per share(1) | $ | (2.11) | $ | 0.14 | ||||||||||||||||||||||||||
(1) GAAP net loss per share calculated based on 133,273 weighted-average shares of common stock. Non-GAAP net income per share calculated based on 136,690 diluted weighted-average shares of common stock, which includes 3,417 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 |
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(3) For consistency, prior year non-GAAP net loss has been adjusted to reflect the tax effect of the non-GAAP adjustments based on the annual effective tax rate of 21%. | ||||||||||||||||||||||||||||||
Reconciliation of Total Billings |
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Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||
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2017 | 2016 | 2017 | 2016 | |||||||||||||||||||||||||||
Total revenues | $ | 328,653 | $ | 244,789 | $ | 851,065 | $ | 643,494 | ||||||||||||||||||||||
Increase in deferred revenue | 52,913 | 31,796 | 76,654 | 49,652 | ||||||||||||||||||||||||||
Billings (non-GAAP) | $ | 381,566 | $ | 276,585 | $ | 927,719 | $ | 693,146 |
View source version on businesswire.com: http://www.businesswire.com/news/home/20171116006317/en/
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