[February 27, 2014] |
|
Splunk Inc. Announces Fiscal Fourth Quarter and Full Year 2014 Financial Results
SAN FRANCISCO --(Business Wire)--
Splunk
Inc. (NASDAQ: SPLK), provider of the leading software platform for
real-time operational intelligence, today announced results for its
fiscal fourth quarter and year ended January 31, 2014.
Fourth Quarter 2014 Financial Highlights
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Total revenues were $99.9 million, up 53% year-over-year.
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License revenues were $68.8 million, up 47% year-over-year.
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GAAP operating loss was $32.5 million; GAAP operating margin was
negative 32.5%.
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Non-GAAP operating income was $4.0 million; non-GAAP operating margin
was 4.0%.
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GAAP loss per share was $0.30; non-GAAP income per share was $0.03.
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Operating cash flow was $34.4 million with free cash flow of $32.4
million.
Full Year 2014 Financial Highlights
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Total revenues were $302.6 million, up 52% year-over-year.
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License revenues were $199.0 million, up 46% year-over-year.
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GAAP operating margin was negative 25.9%; non-GAAP operating margin
was negative 0.4%.
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Operating cash flow was $73.8 million with free cash flow of $64.5
million.
"We are delighted to welcome more than 500 new customers to the Splunk
family and now have more than 7,000 customers worldwide," said Godfrey
Sullivan, Chairman and CEO, Splunk. "Customers are choosing Splunk as
their standard for operational intelligence at a faster pace than we
have ever seen. We recognize and appreciate the contribution that both
partners and our new and existing customers have played in our growth."
Fourth Quarter 2014 and Recent Business
Highlights
Customers:
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New and Expansion Customers Include: Air France, Ascension
Health, Auburn University, AURIZON (Australia), Boston Public Library,
Chevron Australia, ChungHwa Telecom-Mobile (Taiwan), City of Austin,
Cornerstone OnDemand, DATEV eG (Germany), Denver International
Airport, DZ BANK AG (Germany), Finanz Informatik, General Electric,
Hospital Corporation of America (HCA), John Lewis (UK), Major League
Baseball Advanced Media, Nottinghamshire Police (UK), Panasonic
Avionics, Paycorp (Australia), PetroChina Tarim Oilfield Company,
Phillips 66, Polycom, Press Association (UK), PT Kalbe Farma Tbk
(Indonesia), Ramsay Health Care (Australia), Shanghai Pudong
Development Bank, Singapore Workforce Development Agency, State of New
Mexico Human Services, SunGard Availability Services, Svyaznoy Bank
(Russia), Symantec, Telenor Group (Norway), United Health Group Inc.,
Viet A Bank (Vietnam), WorldPay (UK) and World Vision Australia.
Product:
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Announced general availability (GA) of the Splunk
App for Enterprise Security 3.0,
which provides enhancements to help find unknown threats, while
continually monitoring for known threats detected by traditional
security infrastructure products.
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Announced the Splunk
ODBC Driver that allows customers to interact with, manipulate and
visualize machine data stored in Splunk Enterprise using existing
business software tools, such as Microsoft Excel or Tableau Desktop.
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Updated the Splunk SDK for Python and released the Splunk
Plug-in for Eclipse to help developers build applications that use
and extend Splunk Enterprise.
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Released the Splunk
App for NetApp to provide comprehensive visibility into the
operational health of NetApp Data ONTAP storage systems.
Acquisitions
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Announced the acquisition of Cloudmeter,
a provider of network data capture technologies. The addition of
Cloudmeter will enhance the ability of Splunk customers to analyze
machine data directly from their networks and correlate it with other
machine-generated data to gain insights across Splunk's core use cases
in application and infrastructure management, IT operations, security
and business analytics.
Partners
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Announced a strategic agreement with Internet2
to bring Splunk technology to hundreds of potential new U.S.
higher-education customers.
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Announced a combined solution with Cisco
Identity Services Engine (ISE) data. The software provides users
with a scalable security intelligence platform to quickly discover and
identify the source of a suspicious event.
Recognition
Financial Outlook
The company is providing the following guidance for its fiscal first
quarter 2015 (ending April 30, 2014):
-
Total revenues are expected to be between $78 million and $80 million.
-
Non-GAAP operating margin is expected to be between negative 8% and
10%.
The company is providing the following guidance for its fiscal year 2015
(ending January 31, 2015):
-
Total revenues are expected to be approximately $400 million.
-
Non-GAAP operating margin is expected to be approximately zero.
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 and amortization of acquired intangible assets.
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 fourth quarter 2014 and
fiscal year 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 1:30 p.m. PT (4:30 p.m. ET) to discuss the company's
financial results and business highlights. Interested parties may access
the call by dialing (866) 501-1535. International parties may access the
call by dialing (216) 672-5582. A live audio webcast of the conference
call will be available through Splunk's Investor Relations website at http://investors.splunk.com/events.cfm.
A replay of the call will be available through March 6, 2014 by dialing
(855) 859-2056 and referencing Conference ID# 45279544.
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 first
quarter and fiscal year 2015 in the paragraphs under "Financial Outlook"
above and other statements regarding momentum in the company's business,
growth in the number of new customers, customer value and
standardization, expansion of existing customer usage, new product
offerings, expected benefits of our recent acquisitions, intended use
and success of acquired products, product investments and developments,
and expected benefits of strategic and partner relationships. 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; 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 October 31, 2013, which is on file with the
U.S. Securities and Exchange Commission. Splunk does not assume any
obligation to update the forward-looking statements provided to reflect
events that occur or circumstances that exist after the date on which
they were made.
About Splunk Inc.
Splunk Inc. (NASDAQ: SPLK) provides the leading software platform for
real-time Operational Intelligence. Splunk® software and cloud services
enable organizations to search, monitor, analyze and visualize
machine-generated big data coming from websites, applications, servers,
networks, sensors and mobile devices. More than 7,000 enterprises,
government agencies, universities and service providers in over 90
countries use Splunk software to deepen business and customer
understanding, mitigate cybersecurity risk, prevent fraud, improve
service performance and reduce cost. Splunk products include Splunk®
Enterprise, Splunk Cloud™, Splunk Storm®, Hunk™: Splunk Analytics for
Hadoop and premium Splunk Apps. To learn more, please visit http://www.splunk.com/company.
Social Media: Twitter
| LinkedIn
| YouTube
| Facebook
Splunk, Splunk>, Listen to Your Data, The Engine for Machine Data,
Hunk, Splunk Cloud, Splunk Storm and SPL are trademarks and registered
trademarks of Splunk Inc. in the United States and other countries. All
other brand names, product names, or trademarks belong to their
respective owners. © 2014 Splunk Inc. All rights reserved.
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SPLUNK INC.
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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(In thousands, except per share data)
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(Unaudited)
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Three Months Ended
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Fiscal Year Ended
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January 31, 2014
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January 31, 2013
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January 31, 2014
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January 31, 2013
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Revenues
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License
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$
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68,794
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$
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46,776
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$
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199,024
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$
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135,922
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Maintenance and services
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31,116
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18,449
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103,599
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63,022
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Total revenues
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99,910
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65,225
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302,623
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198,944
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Cost of revenues
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License
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101
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444
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330
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727
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Maintenance and services 1, 2
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11,097
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6,191
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35,495
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20,697
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Total cost of revenues 4, 5
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11,198
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6,635
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35,825
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21,424
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Gross profit
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88,712
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58,590
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266,798
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177,520
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Operating expenses
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Research and development 1, 3, 4, 5
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26,260
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13,285
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75,895
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41,853
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Sales and marketing 1, 4, 5
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76,336
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40,345
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215,335
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125,098
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General and administrative 3, 4, 5
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18,600
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10,884
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53,875
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32,602
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Total operating expenses
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121,196
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64,514
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345,105
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199,553
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Operating loss
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(32,484
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)
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(5,924
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)
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(78,307
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(22,033
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)
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Interest and other income (expense), net
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Interest income, net
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51
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37
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225
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152
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Other income (expense), net
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(461
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-
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(920
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)
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-
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Change in fair value of preferred stock warrants
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-
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-
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-
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(14,087
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)
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Total interest and other income (expense), net
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(410
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)
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37
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(695
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)
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(13,935
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)
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Loss before income taxes
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(32,894
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)
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(5,887
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)
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(79,002
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)
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(35,968
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)
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Income tax provision (benefit) 6
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(263
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)
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275
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6
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713
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Net loss
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$
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(32,631
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)
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$
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(6,162
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$
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(79,008
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$
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(36,681
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Basic and diluted net loss per share
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$
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(0.30
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$
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(0.06
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$
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(0.75
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$
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(0.46
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Weighted-average shares used in computing basic and diluted net
loss per share
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108,047
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98,996
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105,067
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80,246
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1 Includes amortization of acquired intangible assets as
follows:
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Cost of revenues
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$
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566
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$
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-
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$
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648
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$
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-
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Research and development
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58
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-
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70
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-
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Sales and marketing
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146
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-
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188
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-
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$
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770
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$
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-
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$
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906
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$
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-
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2 Includes charge related to impairment of long-lived
asset
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$
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-
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$
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-
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$
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2,128
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$
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-
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3 Includes acquisition-related costs as follows:
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Research and development
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$
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-
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$
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-
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$
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408
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$
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-
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General and administrative
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314
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-
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314
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-
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$
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314
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$
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-
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$
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722
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$
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-
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4 Includes stock-based compensation expense as follows:
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Cost of revenues
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$
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2,548
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$
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520
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$
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5,283
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$
|
1,217
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Research and development
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9,834
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2,448
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20,829
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|
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6,170
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Sales and marketing
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|
14,587
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|
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3,637
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|
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|
30,012
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|
|
|
|
8,093
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General and administrative
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|
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|
6,275
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|
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1,652
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|
|
|
|
|
13,244
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|
|
|
|
4,000
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|
$
|
33,244
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|
|
|
$
|
8,257
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|
|
$
|
69,368
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|
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$
|
19,480
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5 Includes employer payroll tax on employee stock plans
as follows:
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|
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|
|
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Cost of revenues
|
|
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$
|
74
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$
|
7
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|
|
|
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$
|
171
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|
|
|
$
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7
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|
Research and development
|
|
|
|
|
874
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|
|
|
|
180
|
|
|
|
|
|
1,151
|
|
|
|
|
180
|
|
Sales and marketing
|
|
|
|
|
781
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|
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|
|
458
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|
|
|
|
|
1,688
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|
|
|
|
506
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|
General and administrative
|
|
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|
|
385
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|
248
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|
961
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|
|
|
|
462
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|
|
|
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$
|
2,114
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|
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$
|
893
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|
|
|
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$
|
3,971
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|
|
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$
|
1,155
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6 Includes a partial release of the valuation allowance
due to acquisitions:
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$
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(427
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)
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$
|
-
|
|
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|
|
$
|
(1,174
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)
|
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$
|
-
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SPLUNK INC.
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CONDENSED CONSOLIDATED BALANCE SHEETS
|
(In thousands)
|
(Unaudited)
|
|
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January 31, 2014
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January 31, 2013
|
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ASSETS
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Current assets
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Cash and cash equivalents
|
|
|
|
|
$
|
897,453
|
|
|
|
|
$
|
305,939
|
|
Accounts receivable, net
|
|
|
|
|
|
83,348
|
|
|
|
|
|
63,948
|
|
Prepaid expenses and other current assets
|
|
|
|
|
|
12,019
|
|
|
|
|
|
6,861
|
|
Total current assets
|
|
|
|
|
|
992,820
|
|
|
|
|
|
376,748
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
|
|
|
15,505
|
|
|
|
|
|
13,205
|
|
Intangible assets, net
|
|
|
|
|
|
12,294
|
|
|
|
|
|
-
|
|
Goodwill
|
|
|
|
|
|
19,070
|
|
|
|
|
|
-
|
|
Other assets
|
|
|
|
|
|
642
|
|
|
|
|
|
492
|
|
Total assets
|
|
|
|
|
$
|
1,040,331
|
|
|
|
|
$
|
390,445
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
|
$
|
2,079
|
|
|
|
|
$
|
1,632
|
|
Accrued payroll and compensation
|
|
|
|
|
|
43,876
|
|
|
|
|
|
28,123
|
|
Accrued expenses and other liabilities
|
|
|
|
|
|
12,743
|
|
|
|
|
|
7,636
|
|
Deferred revenue, current portion
|
|
|
|
|
|
149,156
|
|
|
|
|
|
79,568
|
|
Total current liabilities
|
|
|
|
|
|
207,854
|
|
|
|
|
|
116,959
|
|
|
|
|
|
|
|
|
|
|
|
Deferred revenue, non-current
|
|
|
|
|
|
43,165
|
|
|
|
|
|
35,144
|
|
Other liabilities, non-current
|
|
|
|
|
|
4,404
|
|
|
|
|
|
798
|
|
Total non-current liabilities
|
|
|
|
|
|
47,569
|
|
|
|
|
|
35,942
|
|
Total liabilities
|
|
|
|
|
|
255,423
|
|
|
|
|
|
152,901
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
|
|
|
116
|
|
|
|
|
|
101
|
|
Accumulated other comprehensive loss
|
|
|
|
|
|
58
|
|
|
|
|
|
(135
|
)
|
Additional paid-in capital
|
|
|
|
|
|
954,441
|
|
|
|
|
|
328,277
|
|
Accumulated deficit
|
|
|
|
|
|
(169,707
|
)
|
|
|
|
|
(90,699
|
)
|
Total stockholders' equity
|
|
|
|
|
|
784,908
|
|
|
|
|
|
237,544
|
|
Total liabilities and stockholders' equity
|
|
|
|
|
$
|
1,040,331
|
|
|
|
|
$
|
390,445
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SPLUNK INC.
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(In thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Fiscal Year Ended
|
|
|
|
January 31, 2014
|
|
|
January 31, 2013
|
|
|
|
January 31, 2014
|
|
|
January 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows From Operating Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
$
|
(32,631
|
)
|
|
|
$
|
(6,162
|
)
|
|
|
|
$
|
(79,008
|
)
|
|
|
$
|
(36,681
|
)
|
Adjustments to reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
2,192
|
|
|
|
|
1,317
|
|
|
|
|
|
6,692
|
|
|
|
|
4,674
|
|
Impairment of long-lived asset
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
2,128
|
|
|
|
|
-
|
|
Change in fair value of preferred stock warrants
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
14,087
|
|
Stock-based compensation
|
|
|
|
33,244
|
|
|
|
|
8,257
|
|
|
|
|
|
69,368
|
|
|
|
|
19,480
|
|
Excess tax benefits from employee stock plans
|
|
|
|
188
|
|
|
|
|
(462
|
)
|
|
|
|
|
(351
|
)
|
|
|
|
(462
|
)
|
Changes in operating assets and liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable, net
|
|
|
|
(29,353
|
)
|
|
|
|
(23,770
|
)
|
|
|
|
|
(19,400
|
)
|
|
|
|
(29,453
|
)
|
Prepaid expenses, other current and non-current assets
|
|
|
|
(558
|
)
|
|
|
|
(1,378
|
)
|
|
|
|
|
(1,380
|
)
|
|
|
|
(2,658
|
)
|
Accounts payable
|
|
|
|
(96
|
)
|
|
|
|
455
|
|
|
|
|
|
171
|
|
|
|
|
187
|
|
Accrued payroll and compensation
|
|
|
|
13,221
|
|
|
|
|
2,408
|
|
|
|
|
|
15,753
|
|
|
|
|
11,981
|
|
Accrued expenses and other liabilities
|
|
|
|
(2,766
|
)
|
|
|
|
3,380
|
|
|
|
|
|
2,454
|
|
|
|
|
3,446
|
|
Deferred revenue
|
|
|
|
50,988
|
|
|
|
|
40,746
|
|
|
|
|
|
77,421
|
|
|
|
|
62,047
|
|
Net cash provided by operating activities
|
|
|
|
34,429
|
|
|
|
|
24,791
|
|
|
|
|
|
73,848
|
|
|
|
|
46,648
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flow From Investing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisitions, net of cash acquired
|
|
|
|
(20,780
|
)
|
|
|
|
-
|
|
|
|
|
|
(29,738
|
)
|
|
|
|
-
|
|
Change in restricted cash
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
514
|
|
Purchases of property and equipment
|
|
|
|
(2,043
|
)
|
|
|
|
(3,357
|
)
|
|
|
|
|
(9,308
|
)
|
|
|
|
(9,077
|
)
|
Net cash used in investing activities
|
|
|
|
(22,823
|
)
|
|
|
|
(3,357
|
)
|
|
|
|
|
(39,046
|
)
|
|
|
|
(8,563
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flow From Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repayments of term debt
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
(2,289
|
)
|
Proceeds from initial public offering, net of offering costs
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
225,225
|
|
Proceeds from issuance of common stock from employee stock options
|
|
|
|
4,866
|
|
|
|
|
4,773
|
|
|
|
|
|
23,731
|
|
|
|
|
6,896
|
|
Proceeds from exercise of warrant
|
|
|
|
-
|
|
|
|
|
630
|
|
|
|
|
|
-
|
|
|
|
|
630
|
|
Excess tax benefits from employee stock plans
|
|
|
|
(188
|
)
|
|
|
|
462
|
|
|
|
|
|
351
|
|
|
|
|
462
|
|
Proceeds from employee stock purchase plan
|
|
|
|
5,358
|
|
|
|
|
5,311
|
|
|
|
|
|
11,434
|
|
|
|
|
5,311
|
|
Proceeds from follow-on offering, net of offering costs
|
|
|
|
539,339
|
|
|
|
|
-
|
|
|
|
|
|
539,339
|
|
|
|
|
-
|
|
Taxes paid related to net share settlement of equity awards
|
|
|
|
(15,404
|
)
|
|
|
|
-
|
|
|
|
|
|
(18,156
|
)
|
|
|
|
-
|
|
Net cash provided by financing activities
|
|
|
|
533,971
|
|
|
|
|
11,176
|
|
|
|
|
|
556,699
|
|
|
|
|
236,235
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
|
(19
|
)
|
|
|
|
5
|
|
|
|
|
|
13
|
|
|
|
|
20
|
|
Net increase in cash and cash equivalents
|
|
|
|
545,558
|
|
|
|
|
32,615
|
|
|
|
|
|
591,514
|
|
|
|
|
274,340
|
|
Cash and cash equivalents at beginning of period
|
|
|
|
351,895
|
|
|
|
|
273,324
|
|
|
|
|
|
305,939
|
|
|
|
|
31,599
|
|
Cash and cash equivalents at end of period
|
|
|
$
|
897,453
|
|
|
|
$
|
305,939
|
|
|
|
|
$
|
897,453
|
|
|
|
$
|
305,939
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SPLUNK INC.
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 the United States ("GAAP"), Splunk provides investors with
certain non-GAAP financial measures, including non-GAAP gross margin,
non-GAAP operating income (loss), non-GAAP net income (loss), non-GAAP
operating margin and non-GAAP net income (loss) per share (collectively
the "non-GAAP financial measures"). These non-GAAP financial measures
exclude stock-based compensation expense, employer payroll tax expense
related to employee stock plans, the change in fair value of certain
preferred stock warrants previously issued by Splunk, impairment of a
long-lived asset, acquisition-related costs, amortization of acquired
intangible assets and the partial release of the valuation allowance due
to acquisitions. In addition, non-GAAP financial measures include free
cash flow, which represents cash from operations less purchases of
property and equipment. The presentation of the non-GAAP financial
measures is not intended to be considered in isolation or as a
substitute for, or superior to, the financial information prepared and
presented in accordance with GAAP. Splunk uses these non-GAAP financial
measures for financial and operational decision-making purposes and as a
means to evaluate period-to-period comparisons. Splunk believes that
these non-GAAP financial measures provide useful information about
Splunk's operating results, enhance the overall understanding of past
financial performance and future prospects and allow for greater
transparency with respect to key metrics used by management in its
financial and operational decision making. In addition, these non-GAAP
financial measures facilitate comparisons to competitors' operating
results.
Splunk excludes stock-based compensation expense because it is non-cash
in nature and excluding this expense provides meaningful supplemental
information regarding Splunk's operational performance. In particular,
because of varying available valuation methodologies, subjective
assumptions and the variety of award types that companies can use under
FASB ASC Topic 718, Splunk believes that providing non-GAAP financial
measures that exclude this expense allows investors the ability to make
more meaningful comparisons between Splunk's operating results and those
of other companies. Splunk excludes employer payroll tax expense related
to employee stock plans in order for investors to see the full effect
that excluding that stock-based compensation expense had on Splunk's
operating results. These expenses are tied to the exercise or vesting of
underlying equity awards and the price of Splunk's common stock at the
time of vesting or exercise, which may vary from period to period
independent of the operating performance of Splunk's business. Splunk
excludes expense attributable to the change in fair value of certain
preferred stock warrants from its non-GAAP financial measures because it
is a non-recurring, non-cash expense. Splunk also excludes the non-cash
charge for previously capitalized Storm research and development expense
(reflected as an impairment of a long-lived asset) as a result of its
strategic decision to start making its Storm product available at no
cost to customers, a decision that Splunk expects to be infrequent in
nature. Splunk also excludes acquisition-related costs and amortization
of acquired intangible assets from its non-GAAP financial measures
because they are considered by management to be outside of Splunk's core
operating results. Splunk further excludes the partial release of the
valuation allowance due to acquisitions from non-GAAP net income (loss)
and non-GAAP net income (loss) per share because it is also considered
by management to be outside Splunk's core operating results.
Accordingly, Splunk believes that excluding these expenses provides
investors and management with greater visibility to the underlying
performance of its business operations, facilitates comparison of its
results with other periods and may also facilitate comparison with the
results of other companies in its industry. Splunk considers free cash
flow to be a liquidity measure that provides useful information to
management and investors about the amount of cash generated by the
business that can be used for strategic opportunities, including
investing in its business, making strategic acquisitions and
strengthening its balance sheet.
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.
|
|
|
|
SPLUNK INC.
|
Reconciliation of GAAP to Non-GAAP Financial Measures
|
(In thousands, except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Fiscal Year Ended
|
|
|
|
|
|
|
|
January 31, 2014
|
|
January 31, 2013
|
|
|
January 31, 2014
|
|
|
January 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of cash provided by
operating activities to free cash flow:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
|
$
|
34,429
|
|
|
|
$
|
24,791
|
|
|
|
$
|
73,848
|
|
|
|
$
|
46,648
|
|
|
Less purchases of property and equipment
|
|
|
|
|
(2,043
|
)
|
|
|
|
(3,357
|
)
|
|
|
|
(9,308
|
)
|
|
|
|
(9,077
|
)
|
|
Free cash flow (Non-GAAP)
|
|
|
|
$
|
32,386
|
|
|
|
$
|
21,434
|
|
|
|
$
|
64,540
|
|
|
|
$
|
37,571
|
|
|
Net cash used in investing activities
|
|
|
|
$
|
(22,823
|
)
|
|
|
$
|
(3,357
|
)
|
|
|
$
|
(39,046
|
)
|
|
|
$
|
(8,563
|
)
|
|
Net cash provided by financing activities
|
|
|
|
$
|
533,971
|
|
|
|
$
|
11,176
|
|
|
|
$
|
556,699
|
|
|
|
$
|
236,235
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross margin
|
|
|
|
|
88.8
|
|
%
|
|
|
89.8
|
|
%
|
|
|
88.2
|
|
%
|
|
|
89.2
|
|
%
|
Stock-based compensation expense
|
|
|
|
|
2.6
|
|
|
|
|
0.8
|
|
|
|
|
1.7
|
|
|
|
|
0.6
|
|
|
Employer payroll tax on employee stock plans
|
|
|
|
|
0.1
|
|
|
|
|
-
|
|
|
|
|
0.1
|
|
|
|
|
-
|
|
|
Amortization of acquired intangible assets
|
|
|
|
|
0.6
|
|
|
|
|
-
|
|
|
|
|
0.2
|
|
|
|
|
-
|
|
|
Impairment of long-lived asset
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
0.7
|
|
|
|
|
-
|
|
|
Non-GAAP gross margin
|
|
|
|
|
92.1
|
|
%
|
|
|
90.6
|
|
%
|
|
|
90.9
|
|
%
|
|
|
89.8
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating loss
|
|
|
|
$
|
(32,484
|
)
|
|
|
$
|
(5,924
|
)
|
|
|
$
|
(78,307
|
)
|
|
|
$
|
(22,033
|
)
|
|
Stock-based compensation expense
|
|
|
|
|
33,244
|
|
|
|
|
8,257
|
|
|
|
|
69,368
|
|
|
|
|
19,480
|
|
|
Employer payroll tax on employee stock plans
|
|
|
|
|
2,114
|
|
|
|
|
893
|
|
|
|
|
3,971
|
|
|
|
|
1,155
|
|
|
Amortization of acquired intangible assets
|
|
|
|
|
770
|
|
|
|
|
-
|
|
|
|
|
906
|
|
|
|
|
-
|
|
|
Impairment of long-lived asset
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
2,128
|
|
|
|
|
-
|
|
|
Acquisition-related costs
|
|
|
|
|
314
|
|
|
|
|
-
|
|
|
|
|
722
|
|
|
|
|
-
|
|
|
Non-GAAP operating income (loss)
|
|
|
|
$
|
3,958
|
|
|
|
$
|
3,226
|
|
|
|
$
|
(1,212
|
)
|
|
|
$
|
(1,398
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating margin
|
|
|
|
|
(32.5
|
)
|
%
|
|
|
(9.1
|
)
|
%
|
|
|
(25.9
|
)
|
%
|
|
|
(11.1
|
)
|
%
|
Stock-based compensation expense
|
|
|
|
|
33.3
|
|
|
|
|
12.7
|
|
|
|
|
22.9
|
|
|
|
|
9.8
|
|
|
Employer payroll tax on employee stock plans
|
|
|
|
|
2.1
|
|
|
|
|
1.4
|
|
|
|
|
1.3
|
|
|
|
|
0.6
|
|
|
Amortization of acquired intangible assets
|
|
|
|
|
0.8
|
|
|
|
|
-
|
|
|
|
|
0.3
|
|
|
|
|
-
|
|
|
Impairment of long-lived asset
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
0.7
|
|
|
|
|
-
|
|
|
Acquisition-related costs
|
|
|
|
|
0.3
|
|
|
|
|
-
|
|
|
|
|
0.3
|
|
|
|
|
-
|
|
|
Non-GAAP operating margin
|
|
|
|
|
4.0
|
|
%
|
|
|
5.0
|
|
%
|
|
|
(0.4
|
)
|
%
|
|
|
(0.7
|
)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss
|
|
|
|
$
|
(32,631
|
)
|
|
|
$
|
(6,162
|
)
|
|
|
$
|
(79,008
|
)
|
|
|
$
|
(36,681
|
)
|
|
Stock-based compensation expense
|
|
|
|
|
33,244
|
|
|
|
|
8,257
|
|
|
|
|
69,368
|
|
|
|
|
19,480
|
|
|
Change in fair value of preferred stock warrants
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
14,087
|
|
|
Employer payroll tax on employee stock plans
|
|
|
|
|
2,114
|
|
|
|
|
893
|
|
|
|
|
3,971
|
|
|
|
|
1,155
|
|
|
Amortization of acquired intangible assets
|
|
|
|
|
770
|
|
|
|
|
-
|
|
|
|
|
906
|
|
|
|
|
-
|
|
|
Impairment of long-lived asset
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
2,128
|
|
|
|
|
-
|
|
|
Acquisition-related costs
|
|
|
|
|
314
|
|
|
|
|
-
|
|
|
|
|
722
|
|
|
|
|
-
|
|
|
Partial release of the valuation allowance due to acquisitions
|
|
|
|
|
(427
|
)
|
|
|
|
-
|
|
|
|
|
(1,174
|
)
|
|
|
|
-
|
|
|
Non-GAAP net income (loss)
|
|
|
|
$
|
3,384
|
|
|
|
$
|
2,988
|
|
|
|
$
|
(3,087
|
)
|
|
|
$
|
(1,959
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
108,047
|
|
|
|
|
98,996
|
|
|
|
|
105,067
|
|
|
|
|
80,246
|
|
|
Effect of dilutive securities: Employee stock awards and ESPP
|
|
|
|
|
10,685
|
|
|
|
|
16,619
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
Weighted-average shares used in computing Non-GAAP basic and diluted
net income (loss) per share
|
|
|
|
|
118,732
|
|
|
|
|
115,615
|
|
|
|
|
105,067
|
|
|
|
|
80,246
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP basic and diluted net loss per share
|
|
|
|
$
|
(0.30
|
)
|
|
|
$
|
(0.06
|
)
|
|
|
$
|
(0.75
|
)
|
|
|
$
|
(0.46
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP basic and diluted net income (loss) per share
|
|
|
|
$
|
0.03
|
|
|
|
$
|
0.03
|
|
|
|
$
|
(0.03
|
)
|
|
|
$
|
(0.02
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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