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Exhibit 99.1

 

P R E S S  R E L E A S E

 

For Immediate Release

 

Splunk Inc. Announces Fiscal Third Quarter 2013 Financial Results

Company Achieves Record Revenues, License Revenue Grows 56 Percent

 

SAN FRANCISCO — November 29, 2012 — Splunk Inc. (NASDAQ: SPLK), the leading software platform for real-time operational intelligence, today announced results for its fiscal third quarter ended October 31, 2012.

 

We are pleased to welcome more than 350 new Enterprise customers to the Splunk family and also want to recognize the many customers who expanded their use of Splunk software during the quarter,” said Godfrey Sullivan, Chairman and CEO. “Our license revenues were the result of broad adoption by our customers in financial services, technology, telecommunications and government sectors.”

 

Third Quarter 2013 Financial Highlights

 

·                  Total revenue was $52.0 million, up 67% year-over-year.

 

·                  License revenue was $34.6 million, up 56% year-over-year.

 

·                  GAAP operating loss was $5.4 million; GAAP operating margin was negative 10.3%. Non-GAAP operating loss was $0.7 million; non-GAAP operating margin was negative 1.3%.

 

·                  GAAP net loss was $5.5 million and included $4.7 million in non-cash, stock-based compensation expenses; non-GAAP net loss was $0.8 million.

 

·                  GAAP loss per share was $0.06 based on a 96.7 million weighted-average share count; non-GAAP loss per share was $0.01.

 

·                  Operating cash flow was $6.5 million with free cash flow of $4.2 million.

 

A reconciliation of GAAP to non-GAAP results is provided in the accompanying table.

 

Third Quarter 2013 and Recent Business Highlights

 

Customers:

New license customers include: Bureau of Alcohol, Tobacco, Firearms and Explosives, China Mobile,

 

Splunk Inc. www.splunk.com

 



 

Churchill Downs, Daimler AG, Eldorado (Russia), Getty Images, Hyundai Kia (Korea), Kohl’s Department Stores, Newell Rubbermaid, PCCW Now (Hong Kong), South Australia Police, TCS Bank (Russia), U.S. Department of Agriculture, U.S. Department of Education and Vodafone Australia.

 

Expansion customers include: Adobe, Ceryx Inc., Cisco, Comcast, Commercial Bank of Qatar, Defense Information Systems Agency (DISA), Interactive Data, Major League Baseball, Moody’s, Purdue University, UniCredit Business Integrated Solutions (UBIS — Italy), University of Connecticut, U.S. Department of Energy and Vattenfall Europe Information Services GmbH.

 

Product:

 

·                  Announced the general availability (GA) of Splunk® Enterprise 5, the fastest, most resilient version of the company’s flagship product. The latest release also includes additional developer tools for building big data applications.

 

·                  Released the GA version of Splunk Storm™, a cloud service for organizations that develop and run applications in the public cloud.

 

Developers and Content:

 

·                  Announced the GA of Splunk Hadoop Connect and the Splunk App for HadoopOps to address the common challenges of deploying and running Hadoop.

 

·                  Announced the GA of the Splunk App for PCI Compliance 2.0 for organizations looking for a simple, intuitive reporting and analysis solution that satisfies the requirements for Payment Card Industry (PCI) compliance.

 

·                  Released the Splunk App for Server Virtualization which supports Microsoft Hyper-V and Citrix XenServer.

 

·                  Upgraded the Splunk App for Microsoft Windows Server Active Directory and the Splunk App for Microsoft Exchange to support Windows Server 2012 and Exchange Server 2013.

 

·                  Released the GA version of the JavaScript SDK, which includes full JSON support and API versioning, in Splunk Enterprise 5.

 

Channel Partners:

 

·                  Signed a global reseller agreement with Wipro Technologies, the global information technology, consulting and outsourcing business of Wipro Ltd (NYSE:WIT).

 

·                  Announced a strategic alliance under which Carahsoft Technology Corp., a government IT

 



 

solution provider, will proactively market, sell and distribute Splunk software to federal, state and local government agencies and the Splunk reseller partner ecosystem.

 

Awards:

 

·                  Recognized as the Best IT Security Product of 2012 by Sweden’s Protection and Safety Newspaper in its third annual security awards.

 

·                  Named the IT Performance Technology winner at the 2012 Ventana Research Technology Innovation Awards.

 

·                  Selected as one of the “40 Vendors We’re Watching: 2012” by Information Management.

 

Financial Outlook

 

The company is providing the following guidance for its fiscal 2013 fourth quarter (ending January 31, 2013):

 

·                  Total revenue is expected to be between $58 million and $60 million.

·                  Non-GAAP operating margin is expected to be between 3% and 4%.

 

The company is updating its previous guidance for its 2013 full fiscal year (ending January 31, 2013):

 

·                  Total revenue is now expected to be between $192 million and $194 million (was previously $183 million to $186 million as of August 30, 2012).

·                  Non-GAAP operating margin is expected to be between negative 1% and negative 2% (was previously negative 2% to negative 3% as of August 30, 2012).

 

All forward-looking non-GAAP financial measures contained in this section “Financial Outlook” exclude estimates for stock-based compensation expenses.  A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis.

 

Conference Call and Webcast

 

Splunk’s executive management team will host a conference call today beginning at 2:00 p.m. PT (5:00 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 December 6, 2012 by dialing (855) 859-2056 and referencing Conference ID# 59977778.

 

Safe Harbor Statement

 

This press release contains forward-looking statements that involve risks and uncertainties, including statements regarding Splunk’s revenue and non-GAAP operating margin targets for the company’s fiscal

 



 

fourth quarter and fiscal year 2013 in the paragraphs under “Financial Outlook” above, and other statements regarding momentum in the company’s business, growth in the number of new customers, existing customer usage and expansion of Splunk software, Splunk Storm and Splunk Enterprise 5.  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, particularly as a new public company; risks associated with Splunk’s rapid growth, particularly outside of the U.S.; 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 July 31, 2012 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 engine for machine data™. Splunk® software collects, indexes and harnesses the machine-generated big data coming from the websites, applications, servers, networks and mobile devices that power business. Splunk software enables organizations to monitor, search, analyze, visualize and act on massive streams of real-time and historical machine data. More than 4,800 enterprises, universities, government agencies and service providers in over 80 countries use Splunk Enterprise to gain Operational Intelligence that deepens business and customer understanding, improves service and uptime, reduces cost and mitigates cyber-security risk. Splunk Storm, a cloud-based subscription service, is used by organizations developing applications in the cloud.

 

To learn more, please visit www.splunk.com/company.

 

Splunk, Splunk Storm and the engine for machine data are registered trademarks or trademarks of Splunk Inc., and/or its subsidiaries and/or affiliates in the United States and/or other jurisdictions. All other brand names, product names or trademarks belong to their respective holders.  © 2012 Splunk Inc. All rights reserved.

 

For more information, please contact:

 

Sherry Lowe
Splunk Inc.
415-852-5529

slowe@splunk.com

 

Jade Wilkinson

LEWIS PR

415-432-2459

jadew@lewispr.com

 

Investor Contact

Ken Tinsley

Splunk Inc.

415.848.8476

ktinsley@splunk.com

 



 

SPLUNK INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

October 31,

 

October 31,

 

October 31,

 

October 31,

 

 

 

2012

 

2011

 

2012

 

2011

 

Revenues

 

 

 

 

 

 

 

 

 

License

 

$

34,557

 

$

22,182

 

$

89,146

 

$

55,494

 

Maintenance and services

 

17,488

 

8,991

 

44,573

 

22,267

 

Total revenues

 

52,045

 

31,173

 

133,719

 

77,761

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

 

 

 

 

 

 

 

 

License

 

62

 

153

 

283

 

712

 

Maintenance and services

 

5,817

 

3,040

 

14,506

 

7,458

 

Total cost of revenues(1)

 

5,879

 

3,193

 

14,789

 

8,170

 

Gross profit

 

46,166

 

27,980

 

118,930

 

69,591

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

Research and development(1)

 

11,074

 

6,475

 

28,568

 

16,227

 

Sales and marketing(1)

 

32,847

 

19,179

 

84,753

 

48,337

 

General and administrative(1)

 

7,625

 

5,370

 

21,718

 

13,108

 

Total operating expenses

 

51,546

 

31,024

 

135,039

 

77,672

 

Operating loss

 

(5,380

)

(3,044

)

(16,109

)

(8,081

)

 

 

 

 

 

 

 

 

 

 

Other income (expense), net

 

 

 

 

 

 

 

 

 

Interest income (expense), net

 

31

 

(27

)

115

 

(70

)

Change in fair value of preferred stock warrants

 

 

(439

)

(14,087

)

(1,515

)

Total other income (expense), net

 

31

 

(466

)

(13,972

)

(1,585

)

Loss before income taxes

 

(5,349

)

(3,510

)

(30,081

)

(9,666

)

Provision for income taxes

 

125

 

50

 

438

 

50

 

Net loss

 

$

(5,474

)

$

(3,560

)

$

(30,519

)

$

(9,716

)

 

 

 

 

 

 

 

 

 

 

Basic and diluted net loss per share

 

$

(0.06

)

$

(0.17

)

$

(0.41

)

$

(0.48

)

 

 

 

 

 

 

 

 

 

 

Weighted-average shares used in computing basic and diluted net loss per share

 

96,671

 

21,220

 

73,951

 

20,069

 

 

 

 

 

 

 

 

 

 

 


(1) Includes stock-based compensation expense as follows:

 

 

 

 

 

 

 

 

 

Cost of revenues

 

$

322

 

$

37

 

$

697

 

$

83

 

Research and development

 

1,560

 

229

 

3,722

 

531

 

Sales and marketing

 

2,093

 

405

 

4,456

 

829

 

General and administrative

 

710

 

370

 

2,348

 

824

 

 

 

$

4,685

 

$

1,041

 

$

11,223

 

$

2,267

 

 



 

SPLUNK INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

 

 

 

October 31,

 

January 31,

 

 

 

2012

 

2012

 

 

 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

Cash and cash equivalents

 

$

273,324

 

$

31,599

 

Accounts receivable, net

 

40,178

 

34,495

 

Prepaid expenses and other current assets

 

5,694

 

4,261

 

Total current assets

 

319,196

 

70,355

 

 

 

 

 

 

 

Restricted cash

 

 

514

 

Property and equipment, net

 

10,758

 

8,919

 

Other assets

 

281

 

2,435

 

Total assets

 

$

330,235

 

$

82,223

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

Accounts payable

 

$

1,195

 

$

1,455

 

Accrued payroll and compensation

 

25,715

 

16,142

 

Accrued expenses and other liabilities

 

4,672

 

7,711

 

Deferred revenue, current portion

 

61,964

 

42,923

 

Term debt, current portion

 

 

982

 

Total current liabilities

 

93,546

 

69,213

 

 

 

 

 

 

 

Deferred revenue, non-current

 

12,002

 

9,742

 

Preferred stock warrant liability

 

 

2,133

 

Other liabilities, non-current

 

322

 

561

 

Term debt, non-current

 

 

1,307

 

Total non-current liabilities

 

12,324

 

13,743

 

Total liabilities

 

105,870

 

82,956

 

 

 

 

 

 

 

 

 

 

 

 

 

Convertible preferred stock

 

 

40,913

 

 

 

 

 

 

 

Stockholders’ equity (deficit):

 

 

 

 

 

Common stock

 

97

 

23

 

Accumulated other comprehensive loss

 

(15

)

(24

)

Additional paid-in capital

 

308,820

 

12,373

 

Accumulated deficit

 

(84,537

)

(54,018

)

Total stockholders’ equity (deficit)

 

224,365

 

(41,646

)

Total liabilities and stockholders’ equity

 

$

330,235

 

$

82,223

 

 



 

SPLUNK INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

October 31,

 

October 31,

 

October 31,

 

October 31,

 

 

 

2012

 

2011

 

2012

 

2011

 

 

 

 

 

 

 

 

 

 

 

Cash Flows From Operating Activities

 

 

 

 

 

 

 

 

 

Net loss

 

$

(5,474

)

$

(3,560

)

$

(30,519

)

$

(9,716

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

1,208

 

584

 

3,357

 

1,429

 

Change in fair value of preferred stock warrants

 

 

439

 

14,087

 

1,515

 

Stock-based compensation

 

4,685

 

1,041

 

11,223

 

2,267

 

Changes in operating assets and liabilities

 

 

 

 

 

 

 

 

 

Accounts receivable, net

 

(6,497

)

699

 

(5,683

)

(7,379

)

Prepaid expenses, other current and non-current assets

 

(108

)

390

 

(1,280

)

(2,230

)

Accounts payable

 

(568

)

(2,052

)

(268

)

(289

)

Accrued payroll and compensation

 

7,010

 

2,141

 

9,573

 

2,749

 

Accrued expenses and other liabilities

 

(74

)

733

 

81

 

2,006

 

Deferred revenue

 

6,298

 

6,286

 

21,301

 

14,263

 

Net cash provided by operating activities

 

6,480

 

6,701

 

21,872

 

4,615

 

 

 

 

 

 

 

 

 

 

 

Cash Flow From Investing Activities

 

 

 

 

 

 

 

 

 

Change in restricted cash

 

514

 

 

514

 

 

Purchases of property and equipment

 

(2,246

)

(2,186

)

(5,720

)

(6,096

)

Net cash used in investing activities

 

(1,732

)

(2,186

)

(5,206

)

(6,096

)

 

 

 

 

 

 

 

 

 

 

Cash Flow From Financing Activities

 

 

 

 

 

 

 

 

 

Repayments of financing obligation under sale leaseback

 

 

(50

)

 

(142

)

Repayments of term debt

 

 

(234

)

(2,289

)

(475

)

Proceeds from term debt

 

 

 

 

3,000

 

Proceeds from initial public offering, net of offering costs

 

 

 

225,225

 

 

Proceeds from early exercise of employee stock options

 

 

 

 

735

 

Issuance of common stock from exercise of stock options

 

298

 

983

 

2,123

 

1,623

 

Net cash provided by financing activities

 

298

 

699

 

225,059

 

4,741

 

 

 

 

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

5,046

 

5,214

 

241,725

 

3,260

 

Cash and cash equivalents at beginning of period

 

268,278

 

17,783

 

31,599

 

19,737

 

Cash and cash equivalents at end of period

 

$

273,324

 

$

22,997

 

$

273,324

 

$

22,997

 

 



 

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 operating loss, non-GAAP net loss, non-GAAP operating margin, and non-GAAP loss per share (collectively the “non-GAAP financial measures”). These non-GAAP financial measures exclude stock-based compensation expense and the change in fair value of certain preferred stock warrants previously issued by Splunk. 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 from its non-GAAP operating loss, non-GAAP net loss, non-GAAP operating margin and non-GAAP loss per share because such expense is non-cash in nature. 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 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 Splunk’s business, making strategic acquisitions, and strengthening Splunk’s 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

 

Nine Months Ended

 

 

 

October 31,

 

October 31,

 

October 31,

 

October 31,

 

 

 

2012

 

2011

 

2012

 

2011

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of cash provided by operating activities to free cash flow:

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

 

$

6,480

 

$

6,701

 

$

21,872

 

$

4,615

 

Less purchases of property and equipment

 

(2,246

)

(2,186

)

(5,720

)

(6,096

)

Free cash flow (Non-GAAP)

 

$

4,234

 

$

4,515

 

$

16,152

 

$

(1,481

)

Net cash used in investing activities

 

$

(1,732

)

$

(2,186

)

$

(5,206

)

$

(6,096

)

Net cash provided by financing activities

 

$

298

 

$

699

 

$

225,059

 

$

4,741

 

 

 

 

 

 

 

 

 

 

 

Operating loss reconciliation:

 

 

 

 

 

 

 

 

 

GAAP operating loss

 

$

(5,380

)

$

(3,044

)

$

(16,109

)

$

(8,081

)

Stock-based compensation expense (A)

 

4,685

 

1,041

 

11,223

 

2,267

 

Non-GAAP operating loss

 

$

(695

)

$

(2,003

)

$

(4,886

)

$

(5,814

)

 

 

 

 

 

 

 

 

 

 

Operating margin reconciliation:

 

 

 

 

 

 

 

 

 

GAAP operating margin

 

(10.3

)%

(9.8

)%

(12.0

)%

(10.4

)%

Stock-based compensation expense (A)

 

9.0

 

3.3

 

8.4

 

2.9

 

Non-GAAP operating margin

 

(1.3

)%

(6.5

)%

(3.6

)%

(7.5

)%

 

 

 

 

 

 

 

 

 

 

Net loss reconciliation:

 

 

 

 

 

 

 

 

 

GAAP net loss

 

$

(5,474

)

$

(3,560

)

$

(30,519

)

$

(9,716

)

Stock-based compensation expense (A)

 

4,685

 

1,041

 

11,223

 

2,267

 

Change in fair value of preferred stock warrants (B)

 

 

439

 

14,087

 

1,515

 

Non-GAAP net loss

 

$

(789

)

$

(2,080

)

$

(5,209

)

$

(5,934

)

 

 

 

 

 

 

 

 

 

 

Net loss per share reconciliation:

 

 

 

 

 

 

 

 

 

GAAP net loss per share

 

$

(0.06

)

$

(0.17

)

$

(0.41

)

$

(0.48

)

Stock-based compensation expense (A)

 

0.05

 

0.05

 

0.15

 

0.11

 

Change in fair value of preferred stock warrants (B)

 

 

0.02

 

0.19

 

0.07

 

Non-GAAP basic and diluted loss per share

 

$

(0.01

)

$

(0.10

)

$

(0.07

)

$

(0.30

)

 

 

 

 

 

 

 

 

 

 

Weighted-average shares used in computing basic and diluted net loss per share

 

96,671

 

21,220

 

73,951

 

20,069

 

 


Notes:

 

(A)       To eliminate stock-based compensation expense.

 

(B)       To eliminate warrant expense related to the change in the fair value of our outstanding preferred stock warrants. The final measurement of the warrants was recorded upon the closing of Splunk’s initial public offering during the three months ended April 30, 2012.