[February 26, 2015] |
|
Splunk Inc. Announces Fiscal Fourth Quarter and Full Year 2015 Financial Results
Splunk
Inc. (NASDAQ:SPLK), provider of the leading software platform for
real-time Operational Intelligence, today announced results for its
fiscal fourth quarter and full year ended January 31, 2015.
Fourth Quarter 2015 Financial Highlights
-
Total revenues were $147.4 million, up 48% year-over-year.
-
License revenues were $98.1 million, up 43% year-over-year.
-
GAAP operating loss was $57.1 million; GAAP operating margin was
negative 38.7%.
-
Non-GAAP operating income was $11.5 million; non-GAAP operating margin
was 7.8%.
-
GAAP loss per share was $0.47; non-GAAP income per share was $0.09.
-
Operating cash flow was $51.5 million with free cash flow of $48.8
million.
Full Year 2015 Financial Highlights
-
Total revenues were $450.9 million, up 49% year-over-year.
-
License revenues were $283.2 million, up 42% year-over-year.
-
GAAP operating margin was negative 47.9%; non-GAAP operating margin
was 2.7%.
-
Operating cash flow was $104.0 million with free cash flow of $90.0
million.
"We are proud to welcome more than 600 new customers to the Splunk
family, which now includes over 9,000 customers around the world," said
Godfrey Sullivan, Chairman and CEO. "We finished FY15 with
strong performance across the board and posted our best quarter yet
for both Splunk Cloud and the Splunk App for Enterprise Security. Our
investments in cloud and solutions are helping to drive global customer
adoption."
Fourth Quarter 2015 and Recent Business
Highlights
Customers:
-
Signed more than 600 new enterprise customers, ending the fiscal year
with over 9,000 customers worldwide.
-
New and Expansion Customers Include: Accor (France), Auchan
(France), Bank Gospodarstwa Krajowego (Poland), DATEV (Germany),
Gamesys (United Kingdom), ICBC Asia (Hong Kong), Kaspersky Lab
(Russia), Lennar Corporation, Macy's, New York City Metropolitan
Transportation Authority, Red Hat, SA Power Networks (Australia),
Sephora, theScore (Canada), Tesco (United Kingdom), Toyota Motor
Corporation, U.S. Department of State, Walmart Brasil, The Washington
Post and Zillow.
Product:
-
Introduced the new Splunk
App for AWS to deliver real-time security and operational
visibility into AWS CloudTrail, Amazon CloudWatch, billing and Amazon
S3 data.
-
Released the new Splunk
Mobile App to support enterprise security requirements such as
single sign-on and Mobile Device Management compatibility.
-
Introduced the Splunk
App for Salesforce, a service available only on Splunk Cloud to
analyze adoption and usage data, monitor security threats and detect
application delivery issues in Salesforce.
-
Released the new Splunk
App for Microsoft Exchange with a new Exchange Service Analyzer to
give insight into the health of the entire Exchange environment.
Recognition:
Appointments:
-
Appointed Adam Bangle, Vice President of EMEA.
-
Promoted Anthony Palladino to Vice President of Americas.
-
Promoted Bill Cull to Vice President of Worldwide Public Sector.
-
Promoted Emilio Umeoka to Vice President of Asia Pacific and Worldwide
Partners.
Financial Outlook
The company is providing the following guidance for its fiscal first
quarter 2016 (ending April 30, 2015):
-
Total revenues are expected to be between $116 million and $118
million.
-
Non-GAAP operating margin is expected to be between negative 2% and 4%.
The company is updating its previous guidance for its fiscal year 2016
(ending January 31, 2016):
-
Total revenues are expected to be approximately $600 million (was
approximately $575 million per prior guidance provided on November 20,
2014).
The company is providing the following guidance for its fiscal year 2016
(ending January 31, 2016):
-
Non-GAAP operating margin is expected to be between 2% and 3%.
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, ground lease
expense related to a build-to-suit lease obligation, impairment of a
long-lived asset and acquisition-related costs.
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 2015 and
fiscal year 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 March 5, 2015 by dialing
(855) 859-2056 and referencing Conference ID 72662995.
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 2016 in the paragraphs under "Financial Outlook"
above and other statements regarding momentum in the company's business,
expected success from product and service investments and innovations,
customer adoption and growth strategies. 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; including its cloud offerings; 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 October 31, 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 9,000 enterprises,
government agencies, universities and service providers in more than 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™, Hunk®, Splunk MINT Express™ 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, SPL, Splunk MINT Express and Splunk
MINT Enterprise 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. © 2015 Splunk
Inc. All rights reserved.
|
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|
SPLUNK INC.
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In thousands, except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Three Months Ended
|
|
|
Fiscal Year Ended
|
|
|
|
January 31,
|
|
January 31,
|
|
|
January 31,
|
|
January 31,
|
|
|
|
2015
|
|
2014
|
|
|
2015
|
|
2014
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
License
|
|
|
$
|
98,082
|
|
|
$
|
68,794
|
|
|
|
$
|
283,191
|
|
|
$
|
199,024
|
|
Maintenance and services
|
|
|
|
49,310
|
|
|
|
31,116
|
|
|
|
|
167,684
|
|
|
|
103,599
|
|
Total revenues
|
|
|
|
147,392
|
|
|
|
99,910
|
|
|
|
|
450,875
|
|
|
|
302,623
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues
|
|
|
|
|
|
|
|
|
|
|
License
|
|
|
|
1,174
|
|
|
|
101
|
|
|
|
|
1,859
|
|
|
|
330
|
|
Maintenance and services 5
|
|
|
|
20,366
|
|
|
|
11,097
|
|
|
|
|
66,519
|
|
|
|
35,495
|
|
Total cost of revenues 1,2,3
|
|
|
|
21,540
|
|
|
|
11,198
|
|
|
|
|
68,378
|
|
|
|
35,825
|
|
Gross profit
|
|
|
|
125,852
|
|
|
|
88,712
|
|
|
|
|
382,497
|
|
|
|
266,798
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
|
47,335
|
|
|
|
26,260
|
|
|
|
|
150,790
|
|
|
|
75,895
|
|
Sales and marketing
|
|
|
|
107,695
|
|
|
|
76,336
|
|
|
|
|
344,471
|
|
|
|
215,335
|
|
General and administrative 4
|
|
|
|
27,921
|
|
|
|
18,600
|
|
|
|
|
103,046
|
|
|
|
53,875
|
|
Total operating expenses 1,2,3,6
|
|
|
|
182,951
|
|
|
|
121,196
|
|
|
|
|
598,307
|
|
|
|
345,105
|
|
Operating loss
|
|
|
|
(57,099
|
)
|
|
|
(32,484
|
)
|
|
|
|
(215,810
|
)
|
|
|
(78,307
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other income (expense), net
|
|
|
|
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|
|
|
|
|
|
Interest income, net
|
|
|
|
262
|
|
|
|
51
|
|
|
|
|
754
|
|
|
|
225
|
|
Other income (expense), net
|
|
|
|
542
|
|
|
|
(461
|
)
|
|
|
|
216
|
|
|
|
(920
|
)
|
Total interest and other income (expense), net
|
|
|
|
804
|
|
|
|
(410
|
)
|
|
|
|
970
|
|
|
|
(695
|
)
|
Loss before income taxes
|
|
|
|
(56,295
|
)
|
|
|
(32,894
|
)
|
|
|
|
(214,840
|
)
|
|
|
(79,002
|
)
|
Income tax provision (benefit) 7
|
|
|
|
733
|
|
|
|
(263
|
)
|
|
|
|
2,276
|
|
|
|
6
|
|
Net loss
|
|
|
$
|
(57,028
|
)
|
|
$
|
(32,631
|
)
|
|
|
$
|
(217,116
|
)
|
|
$
|
(79,008
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per share
|
|
|
$
|
(0.47
|
)
|
|
$
|
(0.30
|
)
|
|
|
$
|
(1.81
|
)
|
|
$
|
(0.75
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares used in computing basic and diluted net
loss per share
|
|
|
|
122,385
|
|
|
|
108,047
|
|
|
|
|
119,775
|
|
|
|
105,067
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
|
1 Includes amortization of acquired intangible assets as
follows:
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues
|
|
|
$
|
911
|
|
|
$
|
566
|
|
|
|
$
|
3,004
|
|
|
$
|
648
|
|
Research and development
|
|
|
|
69
|
|
|
|
58
|
|
|
|
|
776
|
|
|
|
70
|
|
Sales and marketing
|
|
|
|
150
|
|
|
|
146
|
|
|
|
|
597
|
|
|
|
188
|
|
|
|
|
|
|
|
|
|
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|
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2 Includes stock-based compensation expense as follows:
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues
|
|
|
$
|
5,536
|
|
|
$
|
2,548
|
|
|
|
$
|
17,189
|
|
|
$
|
5,283
|
|
Research and development
|
|
|
|
19,260
|
|
|
|
9,834
|
|
|
|
|
60,777
|
|
|
|
20,829
|
|
Sales and marketing
|
|
|
|
28,606
|
|
|
|
14,587
|
|
|
|
|
90,064
|
|
|
|
30,012
|
|
General and administrative
|
|
|
|
9,792
|
|
|
|
6,275
|
|
|
|
|
46,149
|
|
|
|
13,244
|
|
|
|
|
|
|
|
|
|
|
|
|
3 Includes employer payroll tax on employee stock plans
as follows:
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues
|
|
|
$
|
295
|
|
|
$
|
74
|
|
|
|
$
|
639
|
|
|
$
|
171
|
|
Research and development
|
|
|
|
1,570
|
|
|
|
874
|
|
|
|
|
3,219
|
|
|
|
1,151
|
|
Sales and marketing
|
|
|
|
1,182
|
|
|
|
781
|
|
|
|
|
2,850
|
|
|
|
1,688
|
|
General and administrative
|
|
|
|
1,000
|
|
|
|
385
|
|
|
|
|
2,160
|
|
|
|
961
|
|
|
|
|
|
|
|
|
|
|
|
|
4 Includes ground lease expense related to build-to-suit
lease obligation
|
|
|
$
|
222
|
|
|
$
|
-
|
|
|
|
$
|
666
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
5 Includes charge related to impairment of long-lived
asset
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
$
|
2,128
|
|
|
|
|
|
|
|
|
|
|
|
|
6 Includes acquisition-related costs as follows:
|
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
$
|
408
|
|
General and administrative
|
|
|
|
-
|
|
|
|
314
|
|
|
|
|
-
|
|
|
|
314
|
|
|
|
|
|
|
|
|
|
|
|
|
7 Includes a partial release of the valuation allowance
due to acquisition
|
|
|
$
|
-
|
|
|
$
|
(427
|
)
|
|
|
$
|
-
|
|
|
$
|
(1,174
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SPLUNK INC.
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(In thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 31,
|
|
January 31,
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
387,315
|
|
|
$
|
897,453
|
|
Investments, current portion
|
|
|
|
462,849
|
|
|
|
-
|
|
Accounts receivable, net
|
|
|
|
128,413
|
|
|
|
83,348
|
|
Prepaid expenses and other current assets
|
|
|
|
21,256
|
|
|
|
12,019
|
|
Total current assets
|
|
|
|
999,833
|
|
|
|
992,820
|
|
|
|
|
|
|
|
Investments, non-current
|
|
|
|
165,082
|
|
|
|
-
|
|
Property and equipment, net
|
|
|
|
50,374
|
|
|
|
15,505
|
|
Intangible assets, net
|
|
|
|
10,416
|
|
|
|
12,294
|
|
Goodwill
|
|
|
|
19,070
|
|
|
|
19,070
|
|
Other assets
|
|
|
|
3,016
|
|
|
|
642
|
|
Total assets
|
|
|
$
|
1,247,791
|
|
|
$
|
1,040,331
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
Accounts payable
|
|
|
$
|
3,726
|
|
|
$
|
2,079
|
|
Accrued payroll and compensation
|
|
|
|
65,220
|
|
|
|
43,876
|
|
Accrued expenses and other liabilities
|
|
|
|
27,819
|
|
|
|
12,743
|
|
Deferred revenue, current portion
|
|
|
|
249,883
|
|
|
|
149,156
|
|
Total current liabilities
|
|
|
|
346,648
|
|
|
|
207,854
|
|
|
|
|
|
|
|
Deferred revenue, non-current
|
|
|
|
54,202
|
|
|
|
43,165
|
|
Other liabilities, non-current
|
|
|
|
33,620
|
|
|
|
4,404
|
|
Total non-current liabilities
|
|
|
|
87,822
|
|
|
|
47,569
|
|
Total liabilities
|
|
|
|
434,470
|
|
|
|
255,423
|
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
|
|
|
Common stock
|
|
|
|
123
|
|
|
|
116
|
|
Accumulated other comprehensive income (loss)
|
|
|
|
(837
|
)
|
|
|
58
|
|
Additional paid-in capital
|
|
|
|
1,200,858
|
|
|
|
954,441
|
|
Accumulated deficit
|
|
|
|
(386,823
|
)
|
|
|
(169,707
|
)
|
Total stockholders' equity
|
|
|
|
813,321
|
|
|
|
784,908
|
|
Total liabilities and stockholders' equity
|
|
|
$
|
1,247,791
|
|
|
$
|
1,040,331
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SPLUNK INC.
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Fiscal Year Ended
|
|
|
|
January 31,
|
|
January 31,
|
|
|
January 31,
|
|
January 31,
|
|
|
|
2015
|
|
2014
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows From Operating Activities
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
$
|
(57,028
|
)
|
|
$
|
(32,631
|
)
|
|
|
$
|
(217,116
|
)
|
|
$
|
(79,008
|
)
|
Adjustments to reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
3,526
|
|
|
|
2,192
|
|
|
|
|
12,494
|
|
|
|
6,692
|
|
Amortization of investment premiums
|
|
|
|
323
|
|
|
|
-
|
|
|
|
|
775
|
|
|
|
-
|
|
Stock-based compensation
|
|
|
|
63,194
|
|
|
|
33,244
|
|
|
|
|
214,179
|
|
|
|
69,368
|
|
Deferred income taxes
|
|
|
|
466
|
|
|
|
(186
|
)
|
|
|
|
(327
|
)
|
|
|
(1,374
|
)
|
Excess tax benefits from employee stock plans
|
|
|
|
261
|
|
|
|
188
|
|
|
|
|
(847
|
)
|
|
|
(351
|
)
|
Impairment of long-lived asset
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
2,128
|
|
Changes in operating assets and liabilities
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable, net
|
|
|
|
(45,863
|
)
|
|
|
(29,353
|
)
|
|
|
|
(45,065
|
)
|
|
|
(19,400
|
)
|
Prepaid expenses, other current and non-current assets
|
|
|
|
(9,243
|
)
|
|
|
(372
|
)
|
|
|
|
(11,284
|
)
|
|
|
(6
|
)
|
Accounts payable
|
|
|
|
721
|
|
|
|
(96
|
)
|
|
|
|
1,766
|
|
|
|
171
|
|
Accrued payroll and compensation
|
|
|
|
16,739
|
|
|
|
13,221
|
|
|
|
|
21,344
|
|
|
|
15,753
|
|
Accrued expenses and other liabilities
|
|
|
|
3,624
|
|
|
|
(2,766
|
)
|
|
|
|
16,297
|
|
|
|
2,454
|
|
Deferred revenue
|
|
|
|
74,808
|
|
|
|
50,988
|
|
|
|
|
111,764
|
|
|
|
77,421
|
|
Net cash provided by operating activities
|
|
|
|
51,528
|
|
|
|
34,429
|
|
|
|
|
103,980
|
|
|
|
73,848
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flow From Investing Activities
|
|
|
|
|
|
|
|
|
|
|
Purchases of investments
|
|
|
|
(129,433
|
)
|
|
|
-
|
|
|
|
|
(820,710
|
)
|
|
|
-
|
|
Maturities of investments
|
|
|
|
129,000
|
|
|
|
-
|
|
|
|
|
192,000
|
|
|
|
-
|
|
Acquisitions, net of cash acquired
|
|
|
|
-
|
|
|
|
(20,780
|
)
|
|
|
|
(2,500
|
)
|
|
|
(29,738
|
)
|
Purchases of property and equipment
|
|
|
|
(2,750
|
)
|
|
|
(2,043
|
)
|
|
|
|
(13,950
|
)
|
|
|
(9,308
|
)
|
Net cash used in investing activities
|
|
|
|
(3,183
|
)
|
|
|
(22,823
|
)
|
|
|
|
(645,160
|
)
|
|
|
(39,046
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flow From Financing Activities
|
|
|
|
|
|
|
|
|
|
|
Proceeds from the exercise of stock options
|
|
|
|
3,987
|
|
|
|
4,866
|
|
|
|
|
16,792
|
|
|
|
23,731
|
|
Excess tax benefits from employee stock plans
|
|
|
|
(261
|
)
|
|
|
(188
|
)
|
|
|
|
847
|
|
|
|
351
|
|
Proceeds from employee stock purchase plan
|
|
|
|
6,139
|
|
|
|
5,358
|
|
|
|
|
14,494
|
|
|
|
11,434
|
|
Taxes paid related to net share settlement of equity awards
|
|
|
|
-
|
|
|
|
(15,404
|
)
|
|
|
|
-
|
|
|
|
(18,156
|
)
|
Payment related to build-to-suit lease obligation
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
(523
|
)
|
|
|
-
|
|
Proceeds from follow-on offering, net of offering costs
|
|
|
|
-
|
|
|
|
539,339
|
|
|
|
|
-
|
|
|
|
539,339
|
|
Net cash provided by financing activities
|
|
|
|
9,865
|
|
|
|
533,971
|
|
|
|
|
31,610
|
|
|
|
556,699
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
|
(448
|
)
|
|
|
(19
|
)
|
|
|
|
(568
|
)
|
|
|
13
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
|
57,762
|
|
|
|
545,558
|
|
|
|
|
(510,138
|
)
|
|
|
591,514
|
|
Cash and cash equivalents at beginning of period
|
|
|
|
329,553
|
|
|
|
351,895
|
|
|
|
|
897,453
|
|
|
|
305,939
|
|
Cash and cash equivalents at end of period
|
|
|
$
|
387,315
|
|
|
$
|
897,453
|
|
|
|
$
|
387,315
|
|
|
$
|
897,453
|
|
|
|
|
|
|
|
|
|
|
|
|
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 operating margin, non-GAAP
net income (loss) 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, ground lease expense related
to a build-to-suit lease obligation, impairment of a long-lived asset,
acquisition-related costs and the partial release of the valuation
allowance due to acquisition. 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
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, amortization of acquired intangible assets
and ground lease expense related to its build-to-suit lease obligation
from its non-GAAP financial measures because these 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
acquisition 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,
|
|
January 31,
|
|
|
January 31,
|
|
January 31,
|
|
|
|
2015
|
|
2014
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of cash provided by
operating activities to free cash flow:
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
$
|
51,528
|
|
|
$
|
34,429
|
|
|
|
$
|
103,980
|
|
|
$
|
73,848
|
|
Less purchases of property and equipment
|
|
|
|
(2,750
|
)
|
|
|
(2,043
|
)
|
|
|
|
(13,950
|
)
|
|
|
(9,308
|
)
|
Free cash flow (Non-GAAP)
|
|
|
$
|
48,778
|
|
|
$
|
32,386
|
|
|
|
$
|
90,030
|
|
|
$
|
64,540
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
$
|
(3,183
|
)
|
|
$
|
(22,823
|
)
|
|
|
$
|
(645,160
|
)
|
|
$
|
(39,046
|
)
|
Net cash provided by financing activities
|
|
|
$
|
9,865
|
|
|
$
|
533,971
|
|
|
|
$
|
31,610
|
|
|
$
|
556,699
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin reconciliation:
|
|
|
|
|
|
|
|
|
|
|
GAAP gross margin
|
|
|
|
85.4
|
|
%
|
|
88.8
|
|
%
|
|
|
84.8
|
|
%
|
|
88.2
|
%
|
Stock-based compensation expense
|
|
|
|
3.8
|
|
|
|
2.6
|
|
|
|
|
3.9
|
|
|
|
1.7
|
|
Employer payroll tax on employee stock plans
|
|
|
|
0.2
|
|
|
|
0.1
|
|
|
|
|
0.1
|
|
|
|
0.1
|
|
Amortization of acquired intangible assets
|
|
|
|
0.6
|
|
|
|
0.6
|
|
|
|
|
0.7
|
|
|
|
0.2
|
|
Impairment of long-lived asset
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
0.7
|
|
Non-GAAP gross margin
|
|
|
|
90.0
|
|
%
|
|
92.1
|
|
%
|
|
|
89.5
|
|
%
|
|
90.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) reconciliation:
|
|
|
|
|
|
|
|
|
|
|
GAAP operating loss
|
|
|
$
|
(57,099
|
)
|
|
$
|
(32,484
|
)
|
|
|
$
|
(215,810
|
)
|
|
$
|
(78,307
|
)
|
Stock-based compensation expense
|
|
|
|
63,194
|
|
|
|
33,244
|
|
|
|
|
214,179
|
|
|
|
69,368
|
|
Employer payroll tax on employee stock plans
|
|
|
|
4,047
|
|
|
|
2,114
|
|
|
|
|
8,868
|
|
|
|
3,971
|
|
Amortization of acquired intangible assets
|
|
|
|
1,130
|
|
|
|
770
|
|
|
|
|
4,377
|
|
|
|
906
|
|
Impairment of long-lived asset
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
2,128
|
|
Acquisition-related costs
|
|
|
|
-
|
|
|
|
314
|
|
|
|
|
-
|
|
|
|
722
|
|
Ground lease expense related to build-to-suit lease obligation
|
|
|
|
222
|
|
|
|
-
|
|
|
|
|
666
|
|
|
|
-
|
|
Non-GAAP operating income (loss)
|
|
|
$
|
11,494
|
|
|
$
|
3,958
|
|
|
|
$
|
12,280
|
|
|
$
|
(1,212
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin reconciliation:
|
|
|
|
|
|
|
|
|
|
|
GAAP operating margin
|
|
|
|
(38.7
|
)
|
%
|
|
(32.5
|
)
|
%
|
|
|
(47.9
|
)
|
%
|
|
(25.9
|
)%
|
Stock-based compensation expense
|
|
|
|
42.8
|
|
|
|
33.3
|
|
|
|
|
47.5
|
|
|
|
22.9
|
|
Employer payroll tax on employee stock plans
|
|
|
|
2.7
|
|
|
|
2.1
|
|
|
|
|
2.0
|
|
|
|
1.3
|
|
Amortization of acquired intangible assets
|
|
|
|
0.8
|
|
|
|
0.8
|
|
|
|
|
1.0
|
|
|
|
0.3
|
|
Impairment of long-lived asset
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
0.7
|
|
Acquisition-related costs
|
|
|
|
-
|
|
|
|
0.3
|
|
|
|
|
-
|
|
|
|
0.3
|
|
Ground lease expense related to build-to-suit lease obligation
|
|
|
|
0.2
|
|
|
|
-
|
|
|
|
|
0.1
|
|
|
|
-
|
|
Non-GAAP operating margin
|
|
|
|
7.8
|
|
%
|
|
4.0
|
|
%
|
|
|
2.7
|
|
%
|
|
(0.4
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) reconciliation:
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss
|
|
|
$
|
(57,028
|
)
|
|
$
|
(32,631
|
)
|
|
|
$
|
(217,116
|
)
|
|
$
|
(79,008
|
)
|
Stock-based compensation expense
|
|
|
|
63,194
|
|
|
|
33,244
|
|
|
|
|
214,179
|
|
|
|
69,368
|
|
Employer payroll tax on employee stock plans
|
|
|
|
4,047
|
|
|
|
2,114
|
|
|
|
|
8,868
|
|
|
|
3,971
|
|
Amortization of acquired intangible assets
|
|
|
|
1,130
|
|
|
|
770
|
|
|
|
|
4,377
|
|
|
|
906
|
|
Impairment of long-lived asset
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
2,128
|
|
Acquisition-related costs
|
|
|
|
-
|
|
|
|
314
|
|
|
|
|
-
|
|
|
|
722
|
|
Ground lease expense related to build-to-suit lease obligation
|
|
|
|
222
|
|
|
|
-
|
|
|
|
|
666
|
|
|
|
-
|
|
Partial release of the valuation allowance due to acquisition
|
|
|
|
-
|
|
|
|
(427
|
)
|
|
|
|
-
|
|
|
|
(1,174
|
)
|
Non-GAAP net income (loss)
|
|
|
$
|
11,565
|
|
|
$
|
3,384
|
|
|
|
$
|
10,974
|
|
|
$
|
(3,087
|
)
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
122,385
|
|
|
|
108,047
|
|
|
|
|
119,775
|
|
|
|
105,067
|
|
Effect of dilutive securities: Employee stock awards
|
|
|
|
6,216
|
|
|
|
10,685
|
|
|
|
|
7,364
|
|
|
|
-
|
|
Weighted-average shares used in computing Non-GAAP basic and diluted
net income (loss) per share
|
|
|
|
128,601
|
|
|
|
118,732
|
|
|
|
|
127,139
|
|
|
|
105,067
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP basic and diluted net loss per share
|
|
|
$
|
(0.47
|
)
|
|
$
|
(0.30
|
)
|
|
|
$
|
(1.81
|
)
|
|
$
|
(0.75
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP basic and diluted net income (loss) per share
|
|
|
$
|
0.09
|
|
|
$
|
0.03
|
|
|
|
$
|
0.09
|
|
|
$
|
(0.03
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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