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
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), Kohls 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, Moodys, Purdue University, UniCredit Business Integrated Solutions (UBIS Italy), University of Connecticut, U.S. Department of Energy and Vattenfall Europe Information Services GmbH.
· Announced the general availability (GA) of Splunk® Enterprise 5, the fastest, most resilient version of the companys 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.
· 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.
· Recognized as the Best IT Security Product of 2012 by Swedens 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 Were Watching: 2012 by Information Management.
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
Splunks executive management team will host a conference call today beginning at 2:00 p.m. PT (5:00 p.m. ET) to discuss the companys 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 Splunks 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 Splunks revenue and non-GAAP operating margin targets for the companys fiscal
fourth quarter and fiscal year 2013 in the paragraphs under Financial Outlook above, and other statements regarding momentum in the companys 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: Splunks limited operating history, particularly as a new public company; risks associated with Splunks rapid growth, particularly outside of the U.S.; and general market, political, economic and business conditions.
Additional information on potential factors that could affect Splunks financial results is included in the companys 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:
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
CONDENSED CONSOLIDATED BALANCE SHEETS
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Non-GAAP financial measures and reconciliations
To supplement Splunks 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 Splunks 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 Splunks business, making strategic acquisitions, and strengthening Splunks 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 Splunks competitors, and exclude expenses that may have a material impact upon Splunks reported financial results. Further, stock-based compensation expense has been and will continue to be for the foreseeable future a significant recurring expense in Splunks business and an important part of the compensation provided to Splunks employees. The non-GAAP financial measures are meant to supplement, and be viewed in conjunction with, GAAP financial measures.
The following table reconciles Splunks non-GAAP results to Splunks GAAP results included in this press release.
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)
(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 Splunks initial public offering during the three months ended April 30, 2012.