[August 28, 2014] |
|
Splunk Inc. Announces Fiscal Second Quarter 2015 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 second quarter ended July 31, 2014.
Second Quarter 2015 Financial Highlights
-
Total revenues were $101.5 million, up 52% year-over-year.
-
License revenues were $62.1 million, up 44% year-over-year.
-
GAAP operating loss was $60.4 million; GAAP operating margin was
negative 59.4%.
-
Non-GAAP operating income was $1.6 million; non-GAAP operating margin
was 1.6%.
-
GAAP net loss per share was $0.51; non-GAAP net income per share was
$0.01.
-
Operating cash flow was $9.3 million with free cash flow of $6.4
million.
"We are pleased to deliver another strong quarter and thank our
customers and partners for their continued support," said Godfrey
Sullivan, Chairman and CEO. "We continue to invest heavily in product
innovation, including the industry's first 100 percent uptime SLA for
Splunk Cloud, we shipped a brand new product - the Splunk App for Stream
for wire data - and delivered a new release of our App for Enterprise
Security. I am also pleased to report the promotion of Haiyan Song to
Senior Vice President, Security Markets."
Second Quarter 2015 and Recent Business
Highlights
Customers:
-
Signed more than 500 new customers, ending the quarter with more than
7,900 customers worldwide.
-
New and Expansion Customers Include: Banco BPI (Portugal), Bass
Pro Shops, Chinese University of Hong Kong, Dell, Dropbox, Echo
Entertainment (Australia), Equinix, GoodData, Itaú Unibanco (Brazil),
Jefferies, La Poste (France), Milliken & Company, NASDAQ, Nordstrom,
PCCW Limited (Hong Kong), Schneider Electric (France), SolarCity,
State of Vermont, State Revenue Office Victoria (Australia), TELUS,
UNE (Colombia), University of Washington and the U.S. Department of
Health and Human Services.
Product:
-
Announced the industry's first 100 percent uptime service level
agreement for Splunk
Cloud and a free Splunk
Online Sandbox to give customers a trial experience of Splunk
Cloud within minutes.
-
Announced the general availability (GA) of the Splunk
App for Stream to capture real-time streaming wire data to support
app management, IT operations, security and business analytics.
-
Announced version 3.1 of the Splunk
App for Enterprise Security that delivers a new risk scoring
framework to enable easier, faster threat detection and containment by
empowering users to assign risk scores to any data.
-
Introduced the Splunk
Mobile App, which allows users to receive real-time alerts and
leverage Splunk Enterprise on the go through an optimized mobile user
experience.
Partners:
-
Announced a technical alliance with Syncsort
to deliver machine data insights from mainframe systems.
Recognition:
-
Named a leader in the Gartner
2014 Magic Quadrant for SIEM.
-
Named to the SD
Times 100 in Big Data and Business Intelligence.
-
Named to Database Trends and Applications 100: The Companies that
Matter Most in Data.
-
Splunk customer Middlesex Hospital named to CIO 100 for use of Splunk
software.
-
Splunk customer UCAS awarded Public Sector Project of the Year by
Computer Weekly for use of Splunk software.
Splunk4Good
-
Launched eRegulations
Insights, an open data analytics project that collects and
analyzes information on public comments submitted through
Regulations.gov.
Financial Outlook
The company is providing the following guidance for its fiscal third
quarter 2015 (ending October 31, 2014):
-
Total revenues are expected to be between $105 million and $107
million.
-
Non-GAAP operating margin is expected to be approximately 1%.
The company is updating its previous guidance for its fiscal year 2015
(ending January 31, 2015):
-
Total revenues are expected to be between $423 million and $428
million (was $402 million and $410 million per prior guidance provided
on May 29, 2014).
-
Non-GAAP operating margin is expected to be approximately 1% (was
approximately zero per guidance provided on May 29, 2014).
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, amortization of acquired intangible assets and ground lease
expense related to a build-to-suit lease obligation.
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 second quarter 2015 and
fiscal first half 2015 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 September 4, 2014 by
dialing (855) 859-2056 and referencing Conference ID 74665266.
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 third
quarter and fiscal year 2015 in the paragraphs under "Financial Outlook"
above and other statements regarding momentum in the company's business,
increasing customer adoption, expected quota carrier growth, expected
success from product and service investments and innovations, expected
benefits from new product offerings, expected profitability, growth
strategies and growth in the number of new customers. 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 and experience developing and
introducing new products; 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, including product and
service innovations; 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 April 30, 2014, 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 7,900 enterprises,
government agencies, universities and service providers in 100 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™ 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.
SPLUNK INC.
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In thousands, except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
July 31,
|
|
July 31,
|
|
July 31,
|
|
July 31,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Revenues
|
|
|
|
|
|
|
|
|
License
|
|
$
|
62,081
|
|
|
$
|
43,185
|
|
|
$
|
113,355
|
|
|
$
|
79,357
|
|
Maintenance and services
|
|
|
39,466
|
|
|
|
23,688
|
|
|
|
74,099
|
|
|
|
44,723
|
|
Total revenues
|
|
|
101,547
|
|
|
|
66,873
|
|
|
|
187,454
|
|
|
|
124,080
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues
|
|
|
|
|
|
|
|
|
License
|
|
|
72
|
|
|
|
76
|
|
|
|
150
|
|
|
|
145
|
|
Maintenance and services 1
|
|
|
14,999
|
|
|
|
7,345
|
|
|
|
29,108
|
|
|
|
13,957
|
|
Total cost of revenues 2,3
|
|
|
15,071
|
|
|
|
7,421
|
|
|
|
29,258
|
|
|
|
14,102
|
|
Gross profit
|
|
|
86,476
|
|
|
|
59,452
|
|
|
|
158,196
|
|
|
|
109,978
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
34,179
|
|
|
|
16,210
|
|
|
|
63,921
|
|
|
|
30,674
|
|
Sales and marketing
|
|
|
79,978
|
|
|
|
44,634
|
|
|
|
151,056
|
|
|
|
85,947
|
|
General and administrative 4
|
|
|
32,676
|
|
|
|
11,912
|
|
|
|
53,679
|
|
|
|
22,358
|
|
Total operating expenses 2,3
|
|
|
146,833
|
|
|
|
72,756
|
|
|
|
268,656
|
|
|
|
138,979
|
|
Operating loss
|
|
|
(60,357
|
)
|
|
|
(13,304
|
)
|
|
|
(110,460
|
)
|
|
|
(29,001
|
)
|
|
|
|
|
|
|
|
|
|
Interest and other income (expense), net
|
|
|
|
|
|
|
|
Interest income, net
|
|
|
163
|
|
|
|
58
|
|
|
|
293
|
|
|
|
119
|
|
Other income (expense), net
|
|
|
(54
|
)
|
|
|
(82
|
)
|
|
|
(274
|
)
|
|
|
(176
|
)
|
Total interest and other income (expense), net
|
|
|
109
|
|
|
|
(24
|
)
|
|
|
19
|
|
|
|
(57
|
)
|
Loss before income taxes
|
|
|
(60,248
|
)
|
|
|
(13,328
|
)
|
|
|
(110,441
|
)
|
|
|
(29,058
|
)
|
Income tax provision
|
|
|
534
|
|
|
|
365
|
|
|
|
1,096
|
|
|
|
769
|
|
Net loss
|
|
$
|
(60,782
|
)
|
|
$
|
(13,693
|
)
|
|
$
|
(111,537
|
)
|
|
$
|
(29,827
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per share
|
|
$
|
(0.51
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
(0.94
|
)
|
|
$
|
(0.29
|
)
|
|
|
|
|
|
|
|
|
|
Weighted-average shares used in computing basic and diluted net
loss per share
|
|
|
119,012
|
|
|
|
104,100
|
|
|
|
118,165
|
|
|
|
103,075
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Includes amortization of acquired intangible assets as
follows:
|
|
|
Cost of revenues
|
|
$
|
703
|
|
|
$
|
-
|
|
|
$
|
1,390
|
|
|
$
|
-
|
|
Research and development
|
|
|
69
|
|
|
|
-
|
|
|
|
138
|
|
|
|
-
|
|
Sales and marketing
|
|
|
150
|
|
|
|
-
|
|
|
|
297
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
2 Includes stock-based compensation expense as follows:
|
|
|
|
|
Cost of revenues
|
|
$
|
3,808
|
|
|
$
|
865
|
|
|
$
|
7,614
|
|
|
$
|
1,570
|
|
Research and development
|
|
|
13,578
|
|
|
|
3,547
|
|
|
|
26,165
|
|
|
|
6,590
|
|
Sales and marketing
|
|
|
21,263
|
|
|
|
5,156
|
|
|
|
40,383
|
|
|
|
9,478
|
|
General and administrative
|
|
|
20,861
|
|
|
|
2,389
|
|
|
|
28,587
|
|
|
|
4,154
|
|
|
|
|
|
|
|
|
|
|
3 Includes employer payroll tax on employee stock plans
as follows:
|
|
|
Cost of revenues
|
|
$
|
97
|
|
|
$
|
22
|
|
|
$
|
233
|
|
|
$
|
44
|
|
Research and development
|
|
|
515
|
|
|
|
49
|
|
|
|
1,322
|
|
|
|
191
|
|
Sales and marketing
|
|
|
401
|
|
|
|
314
|
|
|
|
1,281
|
|
|
|
592
|
|
General and administrative
|
|
|
328
|
|
|
|
201
|
|
|
|
893
|
|
|
|
339
|
|
|
|
|
|
|
|
|
|
|
4 Includes ground lease expense related to build-to-suit
lease obligation:
|
|
$
|
222
|
|
|
$
|
-
|
|
|
$
|
222
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SPLUNK INC.
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(In thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
July 31,
|
|
January 31,
|
|
|
2014
|
|
2014
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
645,398
|
|
|
$
|
897,453
|
|
Investments, current portion
|
|
|
192,217
|
|
|
|
-
|
|
Accounts receivable, net
|
|
|
69,838
|
|
|
|
83,348
|
|
Prepaid expenses and other current assets
|
|
|
9,465
|
|
|
|
12,019
|
|
Total current assets
|
|
|
916,918
|
|
|
|
992,820
|
|
|
|
|
|
|
Investments, non-current
|
|
|
96,590
|
|
|
|
-
|
|
Property and equipment, net
|
|
|
33,852
|
|
|
|
15,505
|
|
Intangible assets, net
|
|
|
12,969
|
|
|
|
12,294
|
|
Goodwill
|
|
|
19,070
|
|
|
|
19,070
|
|
Other assets
|
|
|
2,217
|
|
|
|
642
|
|
Total assets
|
|
$
|
1,081,616
|
|
|
$
|
1,040,331
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
Accounts payable
|
|
$
|
2,636
|
|
|
$
|
2,079
|
|
Accrued payroll and compensation
|
|
|
37,212
|
|
|
|
43,876
|
|
Accrued expenses and other liabilities
|
|
|
21,175
|
|
|
|
12,743
|
|
Deferred revenue, current portion
|
|
|
164,278
|
|
|
|
149,156
|
|
Total current liabilities
|
|
|
225,301
|
|
|
|
207,854
|
|
|
|
|
|
|
Deferred revenue, non-current
|
|
|
42,717
|
|
|
|
43,165
|
|
Other liabilities, non-current
|
|
|
18,797
|
|
|
|
4,404
|
|
Total non-current liabilities
|
|
|
61,514
|
|
|
|
47,569
|
|
Total liabilities
|
|
|
286,815
|
|
|
|
255,423
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
|
|
Common stock
|
|
|
120
|
|
|
|
116
|
|
Accumulated other comprehensive income
|
|
|
42
|
|
|
|
58
|
|
Additional paid-in capital
|
|
|
1,075,883
|
|
|
|
954,441
|
|
Accumulated deficit
|
|
|
(281,244
|
)
|
|
|
(169,707
|
)
|
Total stockholders' equity
|
|
|
794,801
|
|
|
|
784,908
|
|
Total liabilities and stockholders' equity
|
|
$
|
1,081,616
|
|
|
$
|
1,040,331
|
|
|
|
|
|
|
|
|
|
|
SPLUNK INC.
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
July 31,
|
|
July 31,
|
|
July 31,
|
|
July 31,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
Cash Flows From Operating Activities
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(60,782
|
)
|
|
$
|
(13,693
|
)
|
|
$
|
(111,537
|
)
|
|
$
|
(29,827
|
)
|
Adjustments to reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and amortization
|
|
|
2,887
|
|
|
|
1,455
|
|
|
|
5,538
|
|
|
|
2,880
|
|
Amortization of investment premiums
|
|
|
136
|
|
|
|
-
|
|
|
|
136
|
|
|
|
-
|
|
Stock-based compensation
|
|
|
59,510
|
|
|
|
11,957
|
|
|
|
102,749
|
|
|
|
21,792
|
|
Deferred income taxes
|
|
|
(228
|
)
|
|
|
(32
|
)
|
|
|
(513
|
)
|
|
|
(120
|
)
|
Excess tax benefits from employee stock plans
|
|
|
(389
|
)
|
|
|
(157
|
)
|
|
|
(868
|
)
|
|
|
(268
|
)
|
Changes in operating assets and liabilities
|
|
|
|
|
|
|
|
|
|
Accounts receivable, net
|
|
|
(17,725
|
)
|
|
|
(2,830
|
)
|
|
|
13,510
|
|
|
|
23,202
|
|
Prepaid expenses, other current and non-current assets
|
|
|
968
|
|
|
|
(3,267
|
)
|
|
|
1,492
|
|
|
|
(3,477
|
)
|
Accounts payable
|
|
|
5
|
|
|
|
(1,065
|
)
|
|
|
391
|
|
|
|
(147
|
)
|
Accrued payroll and compensation
|
|
|
7,093
|
|
|
|
697
|
|
|
|
(6,664
|
)
|
|
|
(6,235
|
)
|
Accrued expenses and other liabilities
|
|
|
4,878
|
|
|
|
2,888
|
|
|
|
9,339
|
|
|
|
5,379
|
|
Deferred revenue
|
|
|
12,983
|
|
|
|
10,298
|
|
|
|
14,674
|
|
|
|
12,923
|
|
Net cash provided by operating activities
|
|
|
9,336
|
|
|
|
6,251
|
|
|
|
28,247
|
|
|
|
26,102
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flow From Investing Activities
|
|
|
|
|
|
|
|
|
|
Purchases of investments
|
|
|
(53,070
|
)
|
|
|
-
|
|
|
|
(303,953
|
)
|
|
|
-
|
|
Maturities of investments
|
|
|
15,000
|
|
|
|
-
|
|
|
|
15,000
|
|
|
|
-
|
|
Acquisitions, net of cash acquired
|
|
|
(2,500
|
)
|
|
|
-
|
|
|
|
(2,500
|
)
|
|
|
-
|
|
Purchases of property and equipment
|
|
|
(2,908
|
)
|
|
|
(1,967
|
)
|
|
|
(7,146
|
)
|
|
|
(3,230
|
)
|
Net cash used in investing activities
|
|
|
(43,478
|
)
|
|
|
(1,967
|
)
|
|
|
(298,599
|
)
|
|
|
(3,230
|
)
|
|
|
|
|
|
|
|
|
|
|
Cash Flow From Financing Activities
|
|
|
|
|
|
|
|
|
|
Proceeds from the exercise of stock options
|
|
|
3,582
|
|
|
|
5,916
|
|
|
|
9,418
|
|
|
|
12,523
|
|
Excess tax benefits from employee stock plans
|
|
|
389
|
|
|
|
157
|
|
|
|
868
|
|
|
|
268
|
|
Proceeds from employee stock purchase plan
|
|
|
8,355
|
|
|
|
6,076
|
|
|
|
8,355
|
|
|
|
6,076
|
|
Taxes paid related to net share settlement of equity awards
|
|
|
-
|
|
|
|
(513
|
)
|
|
|
-
|
|
|
|
(513
|
)
|
Payment related to build-to-suit lease obligation
|
|
|
(523
|
)
|
|
|
-
|
|
|
|
(523
|
)
|
|
|
-
|
|
Net cash provided by financing activities
|
|
|
11,803
|
|
|
|
11,636
|
|
|
|
18,118
|
|
|
|
18,354
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
(10
|
)
|
|
|
(58
|
)
|
|
|
179
|
|
|
|
(51
|
)
|
Net increase (decrease) in cash and cash equivalents
|
|
|
(22,349
|
)
|
|
|
15,862
|
|
|
|
(252,055
|
)
|
|
|
41,175
|
|
Cash and cash equivalents at beginning of period
|
|
|
667,747
|
|
|
|
331,252
|
|
|
|
897,453
|
|
|
|
305,939
|
|
Cash and cash equivalents at end of period
|
|
$
|
645,398
|
|
|
$
|
347,114
|
|
|
$
|
645,398
|
|
|
$
|
347,114
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 all or a combination of the following (as reflected in the
following reconciliation table): stock-based compensation expense,
employer payroll tax expense related to employee stock plans,
amortization of acquired intangible assets and ground lease expense
related to a build-to-suit lease obligation. 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 amortization of acquired intangible assets from its non-GAAP
financial measures because it is considered by management to be outside
of Splunk's core operating results. Splunk further excludes the ground
lease expense related to its build-to-suit lease obligation from its
non-GAAP operating income (loss), non-GAAP operating margin and non-GAAP
net income (loss) because it is also considered by management to be
outside of 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
|
|
Six Months Ended
|
|
|
|
|
July 31,
|
|
July 31,
|
|
July 31,
|
|
July 31,
|
|
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of cash provided by
operating activities to free cash flow:
|
|
|
|
Net cash provided by operating activities
|
|
$
|
9,336
|
|
|
$
|
6,251
|
|
|
$
|
28,247
|
|
|
$
|
26,102
|
|
|
Less purchases of property and equipment
|
|
|
(2,908
|
)
|
|
|
(1,967
|
)
|
|
|
(7,146
|
)
|
|
|
(3,230
|
)
|
|
Free cash flow (Non-GAAP)
|
|
$
|
6,428
|
|
|
$
|
4,284
|
|
|
$
|
21,101
|
|
|
$
|
22,872
|
|
|
Net cash used in investing activities
|
|
$
|
(43,478
|
)
|
|
$
|
(1,967
|
)
|
|
$
|
(298,599
|
)
|
|
$
|
(3,230
|
)
|
|
Net cash provided by financing activities
|
|
$
|
11,803
|
|
|
$
|
11,636
|
|
|
$
|
18,118
|
|
|
$
|
18,354
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin reconciliation:
|
|
|
|
|
|
|
|
|
|
GAAP gross margin
|
|
|
85.2
|
|
%
|
|
88.9
|
|
%
|
|
84.4
|
|
%
|
|
88.6
|
|
%
|
Stock-based compensation expense
|
|
|
3.7
|
|
|
|
1.3
|
|
|
|
4.1
|
|
|
|
1.3
|
|
|
Employer payroll tax on employee stock plans
|
|
|
0.1
|
|
|
|
-
|
|
|
|
0.1
|
|
|
|
-
|
|
|
Amortization of acquired intangible assets
|
|
|
0.7
|
|
|
|
-
|
|
|
|
0.7
|
|
|
|
-
|
|
|
Non-GAAP gross margin
|
|
|
89.7
|
|
%
|
|
90.2
|
|
%
|
|
89.3
|
|
%
|
|
89.9
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) reconciliation:
|
|
|
|
|
|
|
|
|
|
GAAP operating loss
|
|
$
|
(60,357
|
)
|
|
$
|
(13,304
|
)
|
|
$
|
(110,460
|
)
|
|
$
|
(29,001
|
)
|
|
Stock-based compensation expense
|
|
|
59,510
|
|
|
|
11,957
|
|
|
|
102,749
|
|
|
|
21,792
|
|
|
Employer payroll tax on employee stock plans
|
|
|
1,341
|
|
|
|
586
|
|
|
|
3,729
|
|
|
|
1,166
|
|
|
Amortization of acquired intangible assets
|
|
|
922
|
|
|
|
-
|
|
|
|
1,825
|
|
|
|
-
|
|
|
Ground lease expense related to build-to-suit lease obligation
|
|
|
222
|
|
|
|
-
|
|
|
|
222
|
|
|
|
-
|
|
|
Non-GAAP operating income (loss)
|
|
$
|
1,638
|
|
|
$
|
(761
|
)
|
|
$
|
(1,935
|
)
|
|
$
|
(6,043
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin reconciliation:
|
|
|
|
|
|
|
|
|
|
GAAP operating margin
|
|
|
(59.4
|
)
|
%
|
|
(19.9
|
)
|
%
|
|
(58.9
|
)
|
%
|
|
(23.4
|
)
|
%
|
Stock-based compensation expense
|
|
|
58.6
|
|
|
|
17.9
|
|
|
|
54.8
|
|
|
|
17.6
|
|
|
Employer payroll tax on employee stock plans
|
|
|
1.3
|
|
|
|
0.9
|
|
|
|
2.0
|
|
|
|
0.9
|
|
|
Amortization of acquired intangible assets
|
|
|
0.9
|
|
|
|
-
|
|
|
|
1.0
|
|
|
|
-
|
|
|
Ground lease expense related to build-to-suit lease obligation
|
|
|
0.2
|
|
|
|
-
|
|
|
|
0.1
|
|
|
|
-
|
|
|
Non-GAAP operating margin
|
|
|
1.6
|
|
%
|
|
(1.1
|
)
|
%
|
|
(1.0
|
)
|
%
|
|
(4.9
|
)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) reconciliation:
|
|
|
|
|
|
|
|
|
|
GAAP net loss
|
|
$
|
(60,782
|
)
|
|
$
|
(13,693
|
)
|
|
$
|
(111,537
|
)
|
|
$
|
(29,827
|
)
|
|
Stock-based compensation expense
|
|
|
59,510
|
|
|
|
11,957
|
|
|
|
102,749
|
|
|
|
21,792
|
|
|
Employer payroll tax on employee stock plans
|
|
|
1,341
|
|
|
|
586
|
|
|
|
3,729
|
|
|
|
1,166
|
|
|
Amortization of acquired intangible assets
|
|
|
922
|
|
|
|
-
|
|
|
|
1,825
|
|
|
|
-
|
|
|
Ground lease expense related to build-to-suit lease obligation
|
|
|
222
|
|
|
|
-
|
|
|
|
222
|
|
|
|
-
|
|
|
Non-GAAP net income (loss)
|
|
$
|
1,213
|
|
|
$
|
(1,150
|
)
|
|
$
|
(3,012
|
)
|
|
$
|
(6,869
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
119,012
|
|
|
|
104,100
|
|
|
|
118,165
|
|
|
|
103,075
|
|
|
Effect of dilutive securities: Employee stock awards
|
|
|
6,606
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Weighted-average shares used in computing Non-GAAP basic and diluted
net income (loss) per share
|
|
|
125,618
|
|
|
|
104,100
|
|
|
|
118,165
|
|
|
|
103,075
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP basic and diluted net loss per share
|
|
$
|
(0.51
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
(0.94
|
)
|
|
$
|
(0.29
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP basic and diluted net income (loss) per share
|
|
$
|
0.01
|
|
|
$
|
(0.01
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.07
|
)
|
|
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