Splunk Inc. Announces Fiscal Third Quarter 2019 Financial Results
Software Revenues Up 49%;
Company Increases
Outlook for Current and Next Fiscal Year
Third Quarter 2019 Financial Highlights
-
Software revenues were
$325 million , up 49% year-over-year. -
Total revenues were
$481 million , up 40% year-over-year. -
GAAP operating loss was
$50 million ; GAAP operating margin was negative 10.4%. -
Non-GAAP operating income was
$65.4 million ; non-GAAP operating margin was 13.6%. -
GAAP loss per share was
$0.38 ; non-GAAP income per share was$0.38 . -
Operating cash flow was
$59.1 million with free cash flow of$51.8 million .
“The strength of our results is a testament to Splunk’s pioneering
innovation and the rising demand for data-driven insights across all
industries,” said
CFO Future Retirement
“I speak for all us at
“After so many years with the company, I’m proud of everything we’ve
accomplished including transforming our business model to one that is
primarily renewable on our way to delivering more than
Third Quarter 2019 and Recent Business Highlights:
Customers:
- Signed more than 500 new enterprise customers.
- New and Expansion Customers Include: ATB Financial (
Canada ),Chicago Public Schools ,City of Austin ,Clemson University ,Department of Home Affairs (Australia ),Fleetcor Technologies , GVB (Netherlands ),Jabil ,Norfolk Southern ,Paddy Power Betfair (Ireland ),Randstad (Netherlands ), Softbank (Japan ), SundaySky (Israel ),Teachers Mutual Bank (Australia ),University of Portsmouth (UK ),Vanderbilt University Medical Center
Products:
- Announced the general availability of Splunk Enterprise 7.2 and a new version of Splunk Cloud, which make it easier to ask questions, take precise actions and drive meaningful business outcomes with data no matter where it lives.
-
Announced
Splunk Next, a continually evolving series of visionary beta technologies that brings the power ofSplunk to more data sources and more people. Splunk Next includesSplunk Data Stream Processor,Splunk Data Fabric Search,Splunk Mobile,Splunk Developer Cloud,Splunk Natural Language,Splunk Augmented Reality andSplunk TV. -
Announced the general availability of
Splunk for Industrial IoT, Splunk’s first product for theInternet of Things , to help industrial organizations minimize downtime, shift operations from reactive to proactive and save money. -
Released new versions across the security portfolio including;
Splunk Enterprise Security 5.2 which introduces event sequencing and a new use case library to accelerate investigations;Splunk User Behavior Analytics 4.2, which includes new anomaly scoring rules to improve insider threat detection models; andSplunk Phantom 4.0, which includes clustering support to improve scale and an indicator view to give analysts a threat intelligence-centered view for investigations. -
Announced the general availability of
Splunk ITSI 4.0 to help IT Operations teams better predict and prevent problems with machine learning. -
Announced integrations
with Amazon Web Services (AWS) Security Hub, released a new
integration with AWS Web Access Firewall, and made it easier to
ingest AWS data into
Splunk solutions via Trumpet.
Recognition:
-
Named to
Forbes Digital 100 list, ranking #9 in the top 100 public companies that are shaping the digital economy. - Recognized by IDC’s ‘Worldwide IT Operations Management Software Market Shares, 2017: Hybrid Management Drives Growth’ report as the fastest growing vendor in the IT Operations market.
- Recognized by Gartner’s ‘Market Share Analysis: ITOM, Performance Analysis Software, Worldwide, 2017’ report as #2 in the AIOps/ITIM/Other Monitoring Tools category for the second year in a row.
- Recognized as gaining network security market share “at the expense of SIEM vendors” in IDC’s ‘Worldwide Security and Vulnerability Management Market Shares 2017: Defending the Boundaryless Network’ report.
Appointments:
-
Appointed
Lenny Stein to the newly created position of Senior Vice President of Global Affairs. -
Appointed
Scott Morgan to General Counsel and Secretary. -
Appointed
Jake Loomis to the newly created position of Chief Digital Officer.
Financial Outlook
The company is providing the following guidance for its fiscal fourth
quarter 2019 (ending
-
Total revenues are expected to be approximately
$560 million . - Non-GAAP operating margin is expected to be between 25% and 26%.
The company is updating its previous guidance provided on
-
Total revenues are expected to be approximately
$1.740 billion (was approximately$1.685 billion ). - Non-GAAP operating margin is expected to be between 11.5% and 12.0% (was approximately 11.5%).
The company is updating its previous guidance for its fiscal year 2020
(ending
-
Total revenues are expected to be approximately
$2.15 billion (was approximately$2.0 billion ).
All forward-looking non-GAAP financial measures contained in this section “Financial Outlook” exclude estimates for stock-based compensation and related employer payroll tax, amortization of acquired intangible assets, adjustments related to a financing lease obligation, interest expense related to convertible debt and acquisition-related adjustments, which may be significant.
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 third quarter 2019 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 years 2019 and 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, 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
Splunk Inc. | ||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
Three Months Ended October 31, | Nine Months Ended October 31, | |||||||||||||||||
2018 | 2017 *As Adjusted |
2018 | 2017 *As Adjusted |
|||||||||||||||
Revenues | ||||||||||||||||||
License | $ | 279,603 | $ | 193,810 | $ | 619,246 | $ | 443,603 | ||||||||||
Maintenance and services | 201,380 | 148,679 | 561,679 | 405,878 | ||||||||||||||
Total revenues | 480,983 | 342,489 | 1,180,925 | 849,481 | ||||||||||||||
Cost of revenues | ||||||||||||||||||
License | 5,922 | 3,013 | 16,717 | 9,100 | ||||||||||||||
Maintenance and services | 83,303 | 61,154 | 234,226 | 173,106 | ||||||||||||||
Total cost of revenues | 89,225 | 64,167 | 250,943 | 182,206 | ||||||||||||||
Gross profit | 391,758 | 278,322 | 929,982 | 667,275 | ||||||||||||||
Operating expenses | ||||||||||||||||||
Research and development | 117,722 | 74,080 | 310,818 | 217,152 | ||||||||||||||
Sales and marketing | 264,223 | 198,266 | 726,089 | 558,364 | ||||||||||||||
General and administrative | 59,819 | 35,857 | 168,405 | 111,492 | ||||||||||||||
Total operating expenses | 441,764 | 308,203 | 1,205,312 | 887,008 | ||||||||||||||
Operating loss | (50,006 | ) | (29,881 | ) | (275,330 | ) | (219,733 | ) | ||||||||||
Interest and other income (expense), net | ||||||||||||||||||
Interest income | 8,571 | 2,403 | 15,322 | 6,273 | ||||||||||||||
Interest expense | (12,270 | ) | (2,133 | ) | (16,401 | ) | (6,695 | ) | ||||||||||
Other income (expense), net | (186 | ) | (289 | ) | (657 | ) | (1,771 | ) | ||||||||||
Total interest and other income (expense), net | (3,885 | ) | (19 | ) | (1,736 | ) | (2,193 | ) | ||||||||||
Loss before income taxes | (53,891 | ) | (29,900 | ) | (277,066 | ) | (221,926 | ) | ||||||||||
Income tax provision (benefit) | 1,814 | (232 | ) | 637 | 1,459 | |||||||||||||
Net loss | $ | (55,705 | ) | $ | (29,668 | ) | $ | (277,703 | ) | $ | (223,385 | ) | ||||||
Basic and diluted net loss per share | $ | (0.38 | ) | $ | (0.21 | ) | $ | (1.91 | ) | $ | (1.61 | ) | ||||||
Weighted-average shares used in computing basic and diluted net loss per share |
146,391 | 140,413 | 145,015 | 139,111 | ||||||||||||||
* Prior-period information has been adjusted to reflect the adoption of ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which Splunk adopted on February 1, 2018. | ||||||||||||||||||
Splunk Inc. | ||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||
(In thousands) | ||||||||||
(Unaudited) | ||||||||||
October 31, 2018 | January 31, 2018 *As Adjusted |
|||||||||
Assets | ||||||||||
Current assets | ||||||||||
Cash and cash equivalents | $ | 1,868,116 | $ | 545,947 | ||||||
Investments, current | 803,382 | 619,203 | ||||||||
Accounts receivable, net | 303,316 | 396,413 | ||||||||
Prepaid expenses and other current assets | 69,762 | 70,021 | ||||||||
Deferred commissions, current | 63,492 | 52,451 | ||||||||
Total current assets | 3,108,068 | 1,684,035 | ||||||||
Investments, non-current | 113,747 | 5,375 | ||||||||
Property and equipment, net | 156,502 | 160,880 | ||||||||
Intangible assets, net | 98,738 | 48,142 | ||||||||
Goodwill | 503,388 | 161,382 | ||||||||
Deferred commissions, non-current | 52,003 | 37,920 | ||||||||
Other assets | 107,228 | 41,711 | ||||||||
Total assets | $ | 4,139,674 | $ | 2,139,445 | ||||||
Liabilities and Stockholders' Equity | ||||||||||
Current liabilities | ||||||||||
Accounts payable | $ | 18,669 | $ | 11,040 | ||||||
Accrued compensation | 181,425 | 145,365 | ||||||||
Accrued expenses and other liabilities | 104,715 | 84,631 | ||||||||
Deferred revenue, current | 504,587 | 489,913 | ||||||||
Total current liabilities | 809,396 | 730,949 | ||||||||
Convertible debt, net | 1,614,945 | - | ||||||||
Deferred revenue, non-current | 197,992 | 178,792 | ||||||||
Other liabilities, non-current | 95,474 | 98,383 | ||||||||
Total non-current liabilities | 1,908,411 | 277,175 | ||||||||
Total liabilities | 2,717,807 | 1,008,124 | ||||||||
Stockholders' equity | ||||||||||
Common stock | 148 | 143 | ||||||||
Accumulated other comprehensive income (loss) | (4,583 | ) | 156 | |||||||
Additional paid-in capital | 2,660,472 | 2,086,893 | ||||||||
Accumulated deficit | (1,234,170 | ) | (955,871 | ) | ||||||
Total stockholders' equity | 1,421,867 | 1,131,321 | ||||||||
Total liabilities and stockholders' equity | $ | 4,139,674 | $ | 2,139,445 | ||||||
* Prior-period information has been adjusted to reflect the adoption of ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which Splunk adopted on February 1, 2018. | ||||||||||
Splunk Inc. | ||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||||
(In thousands) | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
Three Months Ended October 31, | Nine Months Ended October 31, | |||||||||||||||||
2018 | 2017 *As Adjusted |
2018 | 2017 *As Adjusted |
|||||||||||||||
Cash flows from operating activities | ||||||||||||||||||
Net loss | $ | (55,705 | ) | $ | (29,668 | ) | $ | (277,703 | ) | $ | (223,385 | ) | ||||||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||||||||
Depreciation and amortization | 13,779 | 10,123 | 37,946 | 30,039 | ||||||||||||||
Amortization of deferred commissions | 22,715 | 12,156 | 55,592 | 32,809 | ||||||||||||||
Amortization of investment premiums (accretion of discounts) | (1,315 | ) | 31 | (1,852 | ) | 373 | ||||||||||||
Amortization of debt discount and issuance costs | 8,491 | - | 8,491 | - | ||||||||||||||
Stock-based compensation | 107,681 | 84,111 | 307,345 | 266,533 | ||||||||||||||
Deferred income taxes | (302 | ) | (1,811 | ) | (427 | ) | (2,677 | ) | ||||||||||
Facility exit charge - adjustment | - | (5,191 | ) | - | (5,191 | ) | ||||||||||||
Changes in operating assets and liabilities, net of acquisitions: |
||||||||||||||||||
Accounts receivable, net | (55,489 | ) | (56,564 | ) | 100,873 | (24,858 | ) | |||||||||||
Prepaid expenses and other assets | (40,847 | ) | (618 | ) | (62,784 | ) | (8,501 | ) | ||||||||||
Deferred commissions | (37,356 | ) | (20,142 | ) | (80,716 | ) | (44,464 | ) | ||||||||||
Accounts payable | 3,781 | 2,956 | 6,771 | 4,919 | ||||||||||||||
Accrued compensation | 48,410 | 21,890 | 36,577 | 15,626 | ||||||||||||||
Accrued expenses and other liabilities | 4,239 | (5,533 | ) | 10,498 | 2,574 | |||||||||||||
Deferred revenue | 40,993 | 40,547 | 28,475 | 73,036 | ||||||||||||||
Net cash provided by operating activities | 59,075 | 52,287 | 169,086 | 116,833 | ||||||||||||||
Cash flows from investing activities | ||||||||||||||||||
Purchases of investments | (611,633 | ) | (177,207 | ) | (810,264 | ) | (517,904 | ) | ||||||||||
Maturities of investments | 177,950 | 175,745 | 525,126 | 514,010 | ||||||||||||||
Acquisitions, net of cash acquired | - | (42,127 | ) | (394,910 | ) | (59,350 | ) | |||||||||||
Purchases of property and equipment | (7,319 | ) | (5,418 | ) | (15,177 | ) | (13,931 | ) | ||||||||||
Other investment activities | (744 | ) | - | (5,119 | ) | - | ||||||||||||
Net cash used in investing activities | (441,746 | ) | (49,007 | ) | (700,344 | ) | (77,175 | ) | ||||||||||
Cash flows from financing activities | ||||||||||||||||||
Proceeds from the exercise of stock options | 341 | 501 | 1,695 | 2,474 | ||||||||||||||
Proceeds from employee stock purchase plan | - | - | 24,201 | 19,282 | ||||||||||||||
Proceeds from the issuance of convertible debt, net of issuance costs | 2,106,225 | - | 2,106,225 | - | ||||||||||||||
Purchase of capped calls | (274,275 | ) | - | (274,275 | ) | - | ||||||||||||
Taxes paid related to net share settlement of equity awards | - | (29,542 | ) | (779 | ) | (88,651 | ) | |||||||||||
Repayment of financing lease obligation | (644 | ) | (497 | ) | (1,862 | ) | (1,299 | ) | ||||||||||
Net cash provided by (used in) financing activities | 1,831,647 | (29,538 | ) | 1,855,205 | (68,194 | ) | ||||||||||||
Effect of exchange rate changes on cash and cash equivalents | (541 | ) | (238 | ) | (1,778 | ) | 504 | |||||||||||
Net increase (decrease) in cash and cash equivalents | 1,448,435 | (26,496 | ) | 1,322,169 | (28,032 | ) | ||||||||||||
Cash and cash equivalents at beginning of period | 419,681 | 419,810 | 545,947 | 421,346 | ||||||||||||||
Cash and cash equivalents at end of period | $ | 1,868,116 | $ | 393,314 | $ | 1,868,116 | $ | 393,314 | ||||||||||
* Prior-period information has been adjusted to reflect the adoption of ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which Splunk adopted on February 1, 2018. | ||||||||||||||||||
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 Operating Activities to Free Cash Flow |
||||||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||
October 31, |
October 31, |
October 31, |
October 31, |
|||||||||||||||||||||||||||||||
Net cash provided by operating activities | $ | 59,075 | $ | 52,287 | $ | 169,086 | $ | 116,833 | ||||||||||||||||||||||||||
Less purchases of property and equipment | (7,319 | ) | (5,418 | ) | (15,177 | ) | (13,931 | ) | ||||||||||||||||||||||||||
Free cash flow (non-GAAP) | $ | 51,756 | $ | 46,869 | $ | 153,909 | $ | 102,902 | ||||||||||||||||||||||||||
Net cash used in investing activities | $ | (441,746 | ) | $ | (49,007 | ) | $ | (700,344 | ) | $ | (77,175 | ) | ||||||||||||||||||||||
Net cash provided by (used in) financing activities | $ | 1,831,647 | $ | (29,538 | ) | $ | 1,855,205 | $ | (68,194 | ) | ||||||||||||||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures |
||||||||||||||||||||||||||||||||||
Three Months Ended October 31, 2018 |
||||||||||||||||||||||||||||||||||
GAAP |
Stock-based |
Amortization of |
Adjustments |
Non-cash |
Income tax |
Non-GAAP | ||||||||||||||||||||||||||||
Cost of revenues | $ | 89,225 | $ | (9,203 | ) | $ | (5,923 | ) | $ | 300 | $ | - | $ | - | $ | 74,399 | ||||||||||||||||||
Gross margin | 81.4 | % | 2.0 | % | 1.2 | % | (0.1 | )% | - | % | - | % | 84.5 | % | ||||||||||||||||||||
Research and development | 117,722 | (35,892 | ) | (249 | ) | 514 | - | - | 82,095 | |||||||||||||||||||||||||
Sales and marketing | 264,223 | (46,527 | ) | (955 | ) | 1,134 | - | - | 217,875 | |||||||||||||||||||||||||
General and administrative | 59,819 | (18,875 | ) | - | 259 | - | - | 41,203 | ||||||||||||||||||||||||||
Operating income (loss) | (50,006 | ) | 110,497 | 7,127 | (2,207 | ) | - | - | 65,411 | |||||||||||||||||||||||||
Operating margin | (10.4 | )% | 23.0 | % | 1.5 | % | (0.5 | )% | - | % | - | % | 13.6 | % | ||||||||||||||||||||
Income tax provision | 1,814 | - | - | - | - | 12,597 | 14,411 | |||||||||||||||||||||||||||
Net income (loss) | $ | (55,705 | ) | $ | 110,497 | $ | 7,127 | $ | (169 |
)(2) |
|
$ | 8,491 | $ | (12,597 | ) | $ | 57,644 | ||||||||||||||||
Net income (loss) per share(1) | $ | (0.38 | ) | $ | 0.38 | |||||||||||||||||||||||||||||
(1) GAAP net loss per share calculated based on 146,391 weighted-average shares of common stock. Non-GAAP net income per share calculated based on 152,691 diluted weighted-average shares of common stock, which includes 6,300 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 $2.0 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 |
||||||||||||||||||||||||||||||||||
Three Months Ended October 31, 2017 |
||||||||||||||||||||||||||||||||||
GAAP *As Adjusted |
Stock-based |
Amortization of |
Adjustments |
Adjustments |
Acquisition- |
Income tax |
Non-GAAP *As Adjusted |
|||||||||||||||||||||||||||
Cost of revenues | $ | 64,167 | $ | (8,116 | ) | $ | (2,873 | ) | $ | 316 | $ | - | $ | - | $ | - | $ | 53,494 | ||||||||||||||||
Gross margin | 81.3 | % | 2.4 | % | 0.8 | % | (0.1 | )% | - | % | - | % | - | % | 84.4 | % | ||||||||||||||||||
Research and development | 74,080 | (25,502 | ) | (130 | ) | 489 | - | - | - | 48,937 | ||||||||||||||||||||||||
Sales and marketing | 198,266 | (37,789 | ) | (561 | ) | 1,170 | - | - | - | 161,086 | ||||||||||||||||||||||||
General and administrative | 35,857 | (14,882 | ) | - | 230 | 5,191 | (643 | ) | - | 25,753 | ||||||||||||||||||||||||
Operating income (loss) | (29,881 | ) | 86,289 | 3,564 | (2,205 | ) | (5,191 | ) | 643 | - | 53,219 | |||||||||||||||||||||||
Operating margin | (8.7 | )% | 25.1 | % | 1.0 | % | (0.6 | )% | (1.5 | )% | 0.2 | % | - | % | 15.5 | % | ||||||||||||||||||
Income tax provision (benefit) | (232 | ) | - | - | - | - | 1,994 |
(3) |
|
13,166 | 14,928 | |||||||||||||||||||||||
Net income (loss) | $ | (29,668 | ) | $ | 86,289 | $ | 3,564 | $ | (111 |
)(2) |
|
$ | (5,191 | ) | $ | (1,351 | ) | $ | (13,166 | ) | $ | 40,366 | ||||||||||||
Net income (loss) per share(1) | $ | (0.21 | ) | $ | 0.28 | |||||||||||||||||||||||||||||
* Prior-period information has been adjusted to reflect the adoption of ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which Splunk adopted on February 1, 2018. | ||||||||||||||||||||||||||||||||||
(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 $2.1 million of interest expense related to the financing lease obligation. | ||||||||||||||||||||||||||||||||||
(3) Represents the partial release of the valuation allowance as a result of an acquisition. | ||||||||||||||||||||||||||||||||||
(4) 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 October 31, 2018 |
||||||||||||||||||||||||||||||||||
GAAP |
Stock-based |
Amortization of |
Adjustments |
Acquisition- |
Non-cash |
Income tax |
Non-GAAP | |||||||||||||||||||||||||||
Cost of revenues | $ | 250,943 | $ | (28,190 | ) | $ | (15,526 | ) | $ | 916 | $ | - | $ | - | $ | - | $ | 208,143 | ||||||||||||||||
Gross margin | 78.8 | % | 2.4 | % | 1.3 | % | (0.1 | )% | - | % | - | % | - | % | 82.4 | % | ||||||||||||||||||
Research and development | 310,818 | (98,648 | ) | (795 | ) | 1,510 | - | - | - | 212,885 | ||||||||||||||||||||||||
Sales and marketing | 726,089 | (139,387 | ) | (1,785 | ) | 3,451 | - | - | - | 588,368 | ||||||||||||||||||||||||
General and administrative | 168,405 | (53,602 | ) | - | 741 | (6,034 | ) | - | - | 109,510 | ||||||||||||||||||||||||
Operating income (loss) | (275,330 | ) | 319,827 | 18,106 | (6,618 | ) | 6,034 | - | - | 62,019 | ||||||||||||||||||||||||
Operating margin | (23.3 | )% | 27.2 | % | 1.5 | % | (0.6 | )% | 0.5 | % | - | % | - | % | 5.3 | % | ||||||||||||||||||
Income tax provision | 637 | - | - | - | 3,313 |
(3) |
|
- | 11,037 | 14,987 | ||||||||||||||||||||||||
Net income (loss) | $ | (277,703 | ) | $ | 319,827 | $ | 18,106 | $ | (456 |
)(2) |
|
$ | 2,721 | $ | 8,491 | $ | (11,037 | ) | $ | 59,949 | ||||||||||||||
Net income (loss) per share(1) | $ | (1.91 | ) | $ | 0.40 | |||||||||||||||||||||||||||||
(1) GAAP net loss per share calculated based on 145,015 weighted-average shares of common stock. Non-GAAP net income per share calculated based on 151,451 diluted weighted-average shares of common stock, which includes 6,436 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 $6.2 million of interest expense related to the financing lease obligation. | ||||||||||||||||||||||||||||||||||
(3) Represents the partial release of the valuation allowance as a result of an acquisition. | ||||||||||||||||||||||||||||||||||
(4) 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 |
||||||||||||||||||||||||||||||||||
Nine Months Ended October 31, 2017 |
||||||||||||||||||||||||||||||||||
GAAP *As Adjusted |
Stock-based |
Amortization of |
Adjustments |
Adjustments |
Acquisition- |
Income tax |
Non-GAAP *As Adjusted |
|||||||||||||||||||||||||||
Cost of revenues | $ | 182,206 | $ | (25,436 | ) | $ | (8,392 | ) | $ | 931 | $ | - | $ | - | $ | - | $ | 149,309 | ||||||||||||||||
Gross margin | 78.6 | % | 2.9 | % | 1.0 | % | (0.1 | )% | - | % | - | % | - | % | 82.4 | % | ||||||||||||||||||
Research and development | 217,152 | (80,100 | ) | (213 | ) | 1,515 | - | - | - | 138,354 | ||||||||||||||||||||||||
Sales and marketing | 558,364 | (124,041 | ) | (1,893 | ) | 3,514 | - | - | - | 435,944 | ||||||||||||||||||||||||
General and administrative | 111,492 | (45,673 | ) | - | 694 | 5,191 | (643 | ) | - | 71,061 | ||||||||||||||||||||||||
Operating income (loss) | (219,733 | ) | 275,250 | 10,498 | (6,654 | ) | (5,191 | ) | 643 | - | 54,813 | |||||||||||||||||||||||
Operating margin | (25.9 | )% | 32.5 | % | 1.2 | % | (0.8 | )% | (0.6 | )% | 0.1 | % | - | % | 6.5 | % | ||||||||||||||||||
Income tax provision | 1,459 | - | - | - | - | 2,540 |
(3) |
|
11,913 | 15,912 | ||||||||||||||||||||||||
Net income (loss) | $ | (223,385 | ) | $ | 275,250 | $ | 10,498 | $ | (339 |
)(2) |
|
$ | (5,191 | ) | $ | (1,897 | ) | $ | (11,913 | ) | $ | 43,023 | ||||||||||||
Net income (loss) per share(1) | $ | (1.61 | ) | $ | 0.30 | |||||||||||||||||||||||||||||
* Prior-period information has been adjusted to reflect the adoption of ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which Splunk adopted on February 1, 2018. | ||||||||||||||||||||||||||||||||||
(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 $6.3 million of interest expense related to the financing lease obligation. | ||||||||||||||||||||||||||||||||||
(3) Represents the partial release of the valuation allowance as a result of an acquisition. | ||||||||||||||||||||||||||||||||||
(4) Represents the tax effect of the non-GAAP adjustments based on the estimated annual effective tax rate of 27%. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20181129005695/en/
Source:
Media Contact
Tom Stilwell
Splunk Inc.
415.852.5561
tstilwell@splunk.com
Investor Contact
Ken Tinsley
Splunk Inc.
415.848.8476
ktinsley@splunk.com