Splunk Announces Fiscal Fourth Quarter and Full Year 2023 Financial Results

Revenues Grew 39% in Q4; Quarterly Revenues Exceed $1B for the First Time

Full Year Cloud Revenue Up 54%

Quarterly GAAP Net Income of $269M

SAN FRANCISCO--()--Splunk Inc. (NASDAQ: SPLK), the cybersecurity and observability leader, today announced results for its fiscal fourth quarter and full year ended January 31, 2023.

Fourth Quarter 2023 Financial Highlights

  • Total revenues were $1.251 billion, an increase of 39% year-over-year.
  • GAAP operating margin was 21.3%; Non-GAAP operating margin was 37.9%.
  • GAAP net income was $269 million; GAAP EPS was $1.44.
  • Operating cash flow was $276 million; Free cash flow was $269 million.
  • 790 customers with total ARR greater than $1 million, an increase of 115 year-over-year.

Full Year 2023 Financial Highlights

  • Total revenues were $3.654 billion, up 37% year-over-year.
  • Total ARR was $3.674 billion, up 18% year-over-year.
  • Cloud revenue was $1.457 billion, up 54% year-over-year.
  • GAAP operating margin was (6.4)%; Non-GAAP operating margin was 17.6%.
  • Operating cash flow was $450 million; Free cash flow was $427 million.

“Our team delivered a solid finish to an important transitional year for Splunk, positioning us well for our next chapter,” said Gary Steele, President and CEO of Splunk. “More than ever, Splunk plays a critical role in helping our customers ensure their digital systems are resilient, secure and able to adapt to constant change. As we begin our new fiscal year, we remain committed to delivering durable growth and substantially increasing free cash flow.”

“Total ARR grew by 18% to $3.674 billion and annual free cash flow nearly quadrupled as the team continued its focus on driving results and improving operating efficiency,” said Brian Roberts, CFO of Splunk. “In a time of economic uncertainty, we are pleased with our strategic, competitive and financial position to deliver significant value to our customers and substantially increase free cash flow margins in FY24 through expected growth and continued operating efficiencies.”

Q4 2023 Business Highlights

  • Splunk Names New Chief Financial Officer: Splunk appointed Brian Roberts as the company’s Chief Financial Officer (CFO).
  • Splunk Connects with Hundreds of Public Sector Customers and Partners: Splunk welcomed hundreds of government, public institutional and higher education customers and partners to Washington D.C. for its annual public sector event, GovSummit.
  • Splunk Recognized as a Security Analytics Leader: Industry analyst firm Forrester Research recognized Splunk as a leader in The Forrester Wave™: Security Analytics Platforms, Q4 2022. The company received the highest possible scores in the product vision, planned enhancements, market approach and partner ecosystem criteria. Splunk was also named a leader in the 2022 IDC MarketScape: Worldwide SIEM 2022 Vendor Assessment.*
  • Splunk Security Innovation: Splunk Enterprise Security 7.1 is now available and features three new capabilities to help security teams detect suspicious behavior in real time, quickly discover the scope of an incident to respond accurately, and improve security workflow efficiencies using embedded frameworks.
  • Splunk Releases 2022 Global Impact Report: Splunk’s second annual Global Impact Report details the company’s progress across four areas: social impact, ethical and inclusive growth, data responsibility, and environmental sustainability.
  • Best Place to Work: Splunk was recognized as one of Great Place to Work’s 2022 Best Workplaces for Parents in the U.S. for a fourth consecutive year.

Financial Outlook

The company is providing the following guidance for its fiscal first quarter 2024 (ending April 30, 2023):

  • Total ARR is expected to be approximately $3.7 billion.
  • Total revenues are expected to be between $710 million and $725 million.
  • Non-GAAP operating margin is expected to be between negative 3% and negative 5%.
  • Free cash flow is expected to be approximately $475 million.

The company is providing the following guidance for its fiscal year 2024 (ending January 31, 2024):

  • Total ARR is expected to be between $4.125 billion and $4.175 billion.
  • Total revenues are expected to be between $3.85 billion and $3.9 billion.
  • Non-GAAP operating margin is expected to be between 16.5% and 17.5%.
  • Free cash flow is expected to be between $775 million and $795 million.

A reconciliation of non-GAAP guidance measures to corresponding GAAP guidance measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, expenses that may be incurred in the future. For example, stock-based compensation-related charges, including related employer payroll tax-related items, are impacted by the timing of employee stock transactions, the future fair market value of our common stock, and our future hiring and retention needs, all of which are difficult to predict and subject to constant change. We have provided a reconciliation of GAAP to non-GAAP financial measures in the financial statement tables for our historical non-GAAP financial results included in this release.

Conference Call and Webcast

Splunk’s executive management team will host a conference call beginning at 1:30 p.m. PT (4:30 p.m. ET) today to discuss financial results and business highlights. Interested parties may access the call by dialing (800) 715-9871 in the U.S. or (646) 307-1963 from international locations and referencing conference ID 5884905. A live audio webcast and replay of the conference call will also be available on Splunk’s Investor Relations website at https://investors.splunk.com/events-presentations. An audio webcast replay of the call will be available for the next 12 months.

Safe Harbor Statement

This press release contains forward-looking statements that involve risks and uncertainties, including statements regarding Splunk’s long-term prospects, including Splunk’s guidance for total ARR, total revenues, non-GAAP operating margin and free cash flow targets for the company’s fiscal first quarter 2024 and fiscal year 2024; our global presence and trends in customer demand and engagement; statements regarding our operating efficiency, growth and profitability; statements regarding our products, projects, technology and ongoing product development; statements regarding our market opportunity; the market for data-related products and the importance of data and our ability to leverage these trends; expectations for our industry, business and products, such as our business model, customer demand and trust, our partner relationships, customer success and feedback, expanding use of Splunk by customers, and expected benefits and scale of our products. There are a significant number of factors that could cause actual results to differ materially from statements made in this press release, including: the macroeconomic environment, including inflationary pressures, economic uncertainty and impacts on information technology spending; risks associated with Splunk’s growth, particularly outside of the United States; Splunk’s inability to realize value from its significant investments in the company’s business, including product and service innovations and through acquisitions; Splunk’s shift from sales of licenses to sales of cloud services which impacts the timing of revenue and margins; Splunk’s transition to a multi-product software and services business; Splunk’s inability to successfully integrate acquired businesses and technologies; Splunk’s inability to service its debt obligations or other adverse effects related to the company’s convertible notes; COVID-19 and related public health measures on our business and the business of our customers, as well as the impact of new variants on the overall economic environment, including customer buying capacity, urgency and patterns; and general market, political, economic, business and competitive market 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 fiscal quarter ended October 31, 2022, which is on file with the U.S. Securities and Exchange Commission (“SEC”) and Splunk’s other filings with the SEC, including its Annual Report on Form 10-K that will be filed within 60 days of Splunk’s fiscal year end. 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.

*2022 IDC MarketScape: Worldwide SIEM 2022 Vendor Assessment (doc #US49029922, November 2022)

About Splunk Inc.

Splunk Inc. (NASDAQ: SPLK) helps build a safer and more resilient digital world. Organizations trust Splunk to prevent security, infrastructure, and application issues from becoming major incidents, absorb shocks from digital disruptions, and accelerate digital transformation.

Splunk, Splunk>, and Turn Data Into Doing 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. © 2023 Splunk Inc. All rights reserved.

Splunk Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
 
Three Months Ended January 31, Fiscal Year Ended January 31,

 

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Revenues
Cloud services

$

413,934

 

$

289,363

 

$

1,457,295

 

$

943,785

 

License

 

670,005

 

 

444,579

 

 

1,521,116

 

 

1,056,481

 

Maintenance and services

 

167,166

 

 

167,177

 

 

675,297

 

 

673,398

 

Total revenues

 

1,251,105

 

 

901,119

 

 

3,653,708

 

 

2,673,664

 

Cost of revenues
Cloud services

 

128,360

 

 

111,963

 

 

490,299

 

 

398,274

 

License

 

1,253

 

 

1,237

 

 

5,312

 

 

9,215

 

Maintenance and services

 

75,670

 

 

77,166

 

 

320,384

 

 

326,480

 

Total cost of revenues

 

205,283

 

 

190,366

 

 

815,995

 

 

733,969

 

Gross profit

 

1,045,822

 

 

710,753

 

 

2,837,713

 

 

1,939,695

 

Operating expenses
Research and development

 

243,027

 

 

257,522

 

 

997,170

 

 

1,029,574

 

Sales and marketing

 

427,589

 

 

409,431

 

 

1,621,518

 

 

1,534,600

 

General and administrative

 

109,135

 

 

122,486

 

 

454,531

 

 

522,350

 

Total operating expenses

 

779,751

 

 

789,439

 

 

3,073,219

 

 

3,086,524

 

Operating income (loss)

 

266,071

 

 

(78,686

)

 

(235,506

)

 

(1,146,829

)

Interest and other income (expense), net
Interest income

 

12,482

 

 

809

 

 

25,401

 

 

2,583

 

Interest expense

 

(11,230

)

 

(51,272

)

 

(46,026

)

 

(174,598

)

Other income (expense), net

 

(1,772

)

 

(2,273

)

 

(9,320

)

 

(1,939

)

Total interest and other income (expense), net

 

(520

)

 

(52,736

)

 

(29,945

)

 

(173,954

)

Income (loss) before income taxes

 

265,551

 

 

(131,422

)

 

(265,451

)

 

(1,320,783

)

Income tax provision (benefit)

 

(3,241

)

 

9,401

 

 

12,411

 

 

18,314

 

Net income (loss)

$

268,792

 

$

(140,823

)

$

(277,862

)

$

(1,339,097

)

 
Net income (loss) per share - basic

$

1.64

 

$

(0.88

)

$

(1.71

)

$

(8.29

)

Net income (loss) per share - diluted

$

1.44

 

$

(0.88

)

$

(1.71

)

$

(8.29

)

 
Weighted-average shares used in computing basic net income (loss) per share

 

164,262

 

 

159,217

 

 

162,376

 

 

161,628

 

Weighted-average shares used in computing diluted net income (loss) per share

 

187,002

 

 

159,217

 

 

162,376

 

 

161,628

 

 
Splunk Inc.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
 
January 31, 2023 January 31, 2022
Assets
Current assets
Cash and cash equivalents

$

690,587

 

$

1,428,691

 

Investments, current

 

1,316,347

 

 

286,337

 

Accounts receivable, net

 

1,600,591

 

 

1,306,666

 

Prepaid expenses and other current assets

 

174,388

 

 

152,871

 

Deferred commissions, current

 

116,758

 

 

102,322

 

Total current assets

 

3,898,671

 

 

3,276,887

 

Investments, non-current

 

41,700

 

 

46,431

 

Accounts receivable, non-current

 

286,299

 

 

242,689

 

Operating lease right-of-use assets

 

186,981

 

 

229,198

 

Property and equipment, net

 

108,540

 

 

124,900

 

Intangible assets, net

 

119,588

 

 

164,769

 

Goodwill

 

1,416,920

 

 

1,401,628

 

Deferred commissions, non-current

 

242,731

 

 

200,876

 

Other assets

 

42,493

 

 

103,497

 

Total assets

$

6,343,923

 

$

5,790,875

 

Liabilities and Stockholders' Equity
Current liabilities
Accounts payable

$

15,299

 

$

59,206

 

Accrued compensation

 

357,550

 

 

396,952

 

Accrued expenses and other liabilities

 

229,480

 

 

257,979

 

Deferred revenue, current

 

1,657,685

 

 

1,384,605

 

Debt, current

 

775,656

 

 

-

 

Total current liabilities

 

3,035,670

 

 

2,098,742

 

Debt, non-current

 

3,099,289

 

 

3,137,731

 

Operating lease liabilities

 

202,268

 

 

225,556

 

Deferred revenue, non-current

 

91,102

 

 

86,584

 

Other liabilities, non-current

 

26,107

 

 

19,491

 

Total non-current liabilities

 

3,418,766

 

 

3,469,362

 

Total liabilities

 

6,454,436

 

 

5,568,104

 

Stockholders' equity
Common stock

 

171

 

 

167

 

Accumulated other comprehensive loss

 

(6,363

)

 

(1,199

)

Additional paid-in capital

 

4,682,414

 

 

5,032,351

 

Treasury stock

 

(1,000,000

)

 

(1,000,000

)

Accumulated deficit

 

(3,786,735

)

 

(3,808,548

)

Total stockholders' equity

 

(110,513

)

 

222,771

 

Total liabilities and stockholders' equity

$

6,343,923

 

$

5,790,875

 

 
Splunk Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
 
Three Months Ended January 31, Fiscal Year Ended January 31,

 

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Cash flows from operating activities
Net income (loss)

$

268,792

 

$

(140,823

)

$

(277,862

)

$

(1,339,097

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization

 

26,024

 

 

24,520

 

 

99,470

 

 

99,145

 

Amortization of deferred commissions

 

29,796

 

 

34,745

 

 

111,205

 

 

144,850

 

Amortization of investment premiums (accretion of discounts), net

 

(2,590

)

 

653

 

 

(4,652

)

 

1,741

 

Amortization of debt discount and issuance costs

 

2,401

 

 

41,889

 

 

10,279

 

 

140,847

 

Loses on facility exits

 

-

 

 

-

 

 

10,000

 

 

47,124

 

Non-cash operating lease costs

 

3,403

 

 

9,446

 

 

324

 

 

9,191

 

Stock-based compensation

 

187,393

 

 

203,861

 

 

789,138

 

 

794,818

 

Deferred income taxes

 

(1,261

)

 

1,089

 

 

(2,695

)

 

(579

)

Other

 

782

 

 

752

 

 

879

 

 

785

 

Changes in operating assets and liabilities, net of acquisition:
Accounts receivable, net

 

(745,160

)

 

(513,226

)

 

(337,177

)

 

(87,491

)

Prepaid expenses and other assets

 

(54,633

)

 

(25,155

)

 

42,075

 

 

(8,215

)

Deferred commissions

 

(65,130

)

 

(105,233

)

 

(167,496

)

 

(242,080

)

Accounts payable

 

(3,134

)

 

23,589

 

 

(43,907

)

 

33,115

 

Accrued compensation

 

109,392

 

 

99,219

 

 

(39,402

)

 

114,966

 

Accrued expenses and other liabilities

 

30,887

 

 

19,795

 

 

(15,337

)

 

90,079

 

Deferred revenue

 

489,026

 

 

457,568

 

 

274,788

 

 

328,849

 

Net cash provided by operating activities

 

275,988

 

 

132,689

 

 

449,630

 

 

128,048

 

Cash flows from investing activities
Purchases of property and equipment

 

(4,391

)

 

(841

)

 

(13,620

)

 

(10,671

)

Capitalized software development costs

 

(2,976

)

 

(3,518

)

 

(8,782

)

 

(9,361

)

Purchases of marketable securities

 

(547,654

)

 

(29,992

)

 

(1,536,558

)

 

(388,741

)

Maturities of marketable securities

 

163,086

 

 

53,670

 

 

515,950

 

 

178,124

 

Purchases of strategic investments

 

(375

)

 

(8,300

)

 

(6,734

)

 

(23,750

)

Acquisitions, net of cash acquired

 

(21,950

)

 

-

 

 

(21,950

)

 

(80,333

)

Other investment activities

 

-

 

 

33

 

 

1,534

 

 

980

 

Net cash provided by (used in) investing activities

 

(414,260

)

 

11,052

 

 

(1,070,160

)

 

(333,752

)

Cash flows from financing activities
Proceeds from the exercise of stock options

 

59

 

 

564

 

 

1,457

 

 

2,430

 

Proceeds from employee stock purchase plan

 

29,722

 

 

31,692

 

 

78,318

 

 

79,938

 

Proceeds from the issuance of convertible senior notes, net of issuance costs

 

-

 

 

(290

)

 

-

 

 

981,920

 

Repurchases of common stock

 

-

 

 

-

 

 

-

 

 

(1,000,000

)

Taxes paid related to net share settlement of equity awards

 

(33,851

)

 

(51,397

)

 

(197,349

)

 

(200,957

)

Net cash used in financing activities

 

(4,070

)

 

(19,431

)

 

(117,574

)

 

(136,669

)

Net increase (decrease) in cash and cash equivalents

 

(142,342

)

 

124,310

 

 

(738,104

)

 

(342,373

)

Cash and cash equivalents at beginning of period

 

832,929

 

 

1,304,381

 

 

1,428,691

 

 

1,771,064

 

Cash and cash equivalents at end of period

$

690,587

 

$

1,428,691

 

$

690,587

 

$

1,428,691

 

 

Splunk Inc.
Operating Metrics

Total Annual Recurring Revenue (“Total ARR”) represents the annualized revenue run-rate of active cloud services, term license and maintenance contracts at the end of a reporting period. Cloud Annual Recurring Revenue (“Cloud ARR”) represents the annualized revenue run-rate of active cloud services contracts at the end of a reporting period. Each contract is annualized by dividing the contract value by the number of days in the contract term and then multiplying by 365. We calculate cloud dollar-based net retention rate (“Cloud DBNRR”) by dividing the Cloud ARR at the end of a period (“Cloud Current Period ARR”) by the Cloud ARR of the same group of customers at the beginning of that 12-month period. Cloud Current Period ARR includes existing customer renewals and expansion, is net of existing customer contraction and churn, and excludes new customers. For the trailing 12-month Cloud DBNRR, we take the dollar-weighted average of the Cloud DBNRR over the trailing 12 months.

Non-GAAP Financial Measures and Reconciliations

To supplement Splunk’s condensed consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in the United States (“GAAP”), Splunk provides investors with the following non-GAAP financial measures: cloud services cost of revenues, cloud services gross margin, cost of revenues, gross margin, research and development expense, sales and marketing expense, general and administrative expense, operating expense, operating income (loss), operating margin, income tax provision (benefit), net income (loss), net income (loss) per share and free cash flow (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 tables): expenses related to stock-based compensation and related employer payroll tax, amortization of intangible assets, acquisition-related adjustments, restructuring and facility exit charges, capitalized software development costs, non-cash interest expense related to convertible senior notes and a net loss on strategic investments. The non-GAAP financial measures are also adjusted for Splunk's current and deferred tax rate on non-GAAP income (loss). Splunk uses a long-term projected non-GAAP tax rate to provide consistency across interim reporting periods. We base our rate on non-GAAP financial projections. In determining our tax rate, we exclude the impact of nonrecurring items, and we make assumptions including those about tax legislation and our tax positions. We applied a 20% non-GAAP tax rate to the three and twelve months ended January 31, 2023 and 2022. In addition, non-GAAP financial measures include free cash flow, which represents operating cash flow less purchases of property and equipment and capitalized software development costs. Splunk considers free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated or used by the business.

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 and 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 amortization of intangible assets, acquisition-related adjustments, restructuring and facility exit charges, capitalized software development costs, non-cash interest expense related to convertible senior notes and a net loss on strategic investments from the applicable non-GAAP financial measures because these adjustments are considered by management to be outside of Splunk’s core operating results.

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 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. The non-GAAP financial measures are meant to supplement and be viewed in conjunction with GAAP financial measures.

The following tables reconcile Splunk’s GAAP results to Splunk’s non-GAAP results included in this press release.

Splunk Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)
(Unaudited)
 
Reconciliation of Cash Provided By Operating Activities to Free Cash Flow
Three Months Ended January 31, Fiscal Year Ended January 31,

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net cash provided by operating activities

$

275,988

 

$

132,689

 

$

449,630

 

$

128,048

 

Less purchases of property and equipment

 

(4,391

)

 

(841

)

 

(13,620

)

 

(10,671

)

Less capitalized software development costs

 

(2,976

)

 

(3,518

)

 

(8,782

)

 

(9,361

)

Free cash flow (non-GAAP)

$

268,621

 

$

128,330

 

$

427,228

 

$

108,016

 

Net cash provided by (used in) investing activities

$

(414,260

)

$

11,052

 

$

(1,070,160

)

$

(333,752

)

Net cash used in financing activities

$

(4,070

)

$

(19,431

)

$

(117,574

)

$

(136,669

)

Reconciliation of GAAP to Non-GAAP Financial Measures
Three Months Ended January 31, 2023

 

GAAP

 

Stock-based

compensation and

related employer

payroll tax

 

Amortization of

intangible assets

 

Restructuring

and facility exit

charges

 

Capitalized

software

development

costs

 

Non-cash interest

expense related to

convertible senior

notes

 

Income tax

adjustment (2)

 

Non-GAAP

Cloud services cost of revenues

$

128,360

 

$

(6,226

)

$

(8,209

)

$

-

 

$

(3,788

)

$

-

 

$

-

 

$

110,137

 

Cloud services gross margin

 

69.0

%

 

1.5

%

 

2.0

%

 

-

%

 

0.9

%

 

-

%

 

-

%

 

73.4

%

Cost of revenues

 

205,283

 

 

(21,775

)

 

(9,438

)

 

-

 

 

(3,788

)

 

-

 

 

-

 

 

170,282

 

Gross margin

 

83.6

%

 

1.7

%

 

0.8

%

 

-

%

 

0.3

%

 

-

%

 

-

%

 

86.4

%

Research and development

 

243,027

 

 

(88,741

)

 

-

 

 

-

 

 

2,976

 

 

-

 

 

-

 

 

157,262

 

Sales and marketing

 

427,589

 

 

(61,690

)

 

(4,908

)

 

(3,968

)

 

-

 

 

-

 

 

-

 

 

357,023

 

General and administrative

 

109,135

 

 

(16,850

)

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

92,285

 

Operating expense

 

779,751

 

 

(167,281

)

 

(4,908

)

 

(3,968

)

 

2,976

 

 

-

 

 

-

 

 

606,570

 

Operating income

 

266,071

 

 

189,056

 

 

14,346

 

 

3,968

 

 

812

 

 

-

 

 

-

 

 

474,253

 

Operating margin

 

21.3

%

 

15.1

%

 

1.1

%

 

0.3

%

 

0.1

%

 

-

%

 

-

%

 

37.9

%

Income tax provision (benefit)

 

(3,241

)

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

98,468

 

 

95,227

 

Net income

$

268,792

 

$

189,056

 

$

14,346

 

$

3,968

 

$

812

 

$

2,401

 

$

(98,468

)

$

380,907

 

Basic net income per share (1)

$

1.64

 

$

1.15

 

$

0.10

 

$

0.02

 

 

-

 

$

0.01

 

$

(0.60

)

$

2.32

 

Diluted net income per share (1)

$

1.44

 

$

2.04

 

 

(1)

GAAP basic net income per share and Non-GAAP basic net income per share is calculated based on 164,262 weighted-average shares of common stock. GAAP diluted net income per share and Non-GAAP diluted net income per share is calculated based on 187,002 diluted weighted-average shares of common stock, which includes 22,740 potentially dilutive shares related to convertible notes and employee stock awards. GAAP to non-GAAP diluted net income per share is not reconciled due to the difference in the number of weighted-average shares used to calculate GAAP and non-GAAP diluted net income per share.

(2)

Represents the income tax adjustment using our estimated non-GAAP tax rate of 20%.
Reconciliation of GAAP to Non-GAAP Financial Measures
Three Months Ended January 31, 2022

 

GAAP

Stock-based

compensation and

related employer

payroll tax

Amortization of

intangible assets

Restructuring

and facility

exit charges

Capitalized

software

development

costs

Non-cash interest

expense related to

convertible senior

notes

Income tax

adjustment (2)

Non-GAAP

Cloud services cost of revenues

$

111,963

 

$

(4,739

)

$

(7,578

)

$

-

 

$

(2,747

)

$

-

 

$

-

 

$

96,899

 

Cloud services gross margin

 

61.3

%

 

1.6

%

 

2.7

%

 

-

%

 

0.9

%

 

-

%

 

-

%

 

66.5

%

Cost of revenues

 

190,366

 

 

(19,500

)

 

(8,806

)

 

-

 

 

(2,747

)

 

-

 

 

-

 

 

159,313

 

Gross margin

 

78.9

%

 

2.1

%

 

1.0

%

 

-

%

 

0.3

%

 

-

%

 

-

%

 

82.3

%

Research and development

 

257,522

 

 

(84,817

)

 

-

 

 

-

 

 

3,518

 

 

-

 

 

-

 

 

176,223

 

Sales and marketing

 

409,431

 

 

(65,884

)

 

(5,242

)

 

-

 

 

-

 

 

-

 

 

-

 

 

338,305

 

General and administrative

 

122,486

 

 

(36,159

)

 

-

 

 

(3,268

)

 

-

 

 

-

 

 

-

 

 

83,059

 

Operating expense

 

789,439

 

 

(186,860

)

 

(5,242

)

 

(3,268

)

 

3,518

 

 

-

 

 

-

 

 

597,587

 

Operating income (loss)

 

(78,686

)

 

206,360

 

 

14,048

 

 

3,268

 

 

(771

)

 

-

 

 

-

 

 

144,219

 

Operating margin

 

(8.7

)%

 

22.8

%

 

1.6

%

 

0.4

%

 

(0.1

)%

 

-

%

 

-

%

 

16.0

%

Income tax provision

 

9,401

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

17,273

 

 

26,674

 

Net income (loss)

$

(140,823

)

$

206,360

 

$

14,048

 

$

3,268

 

$

(771

)

$

41,889

 

$

(17,273

)

$

106,698

 

Basic net income (loss) per share (1)

$

(0.88

)

$

1.29

 

$

0.09

 

$

0.02

 

$

-

 

$

0.26

 

$

(0.11

)

$

0.67

 

Diluted net income (loss) per share (1)

$

(0.88

)

$

0.66

 

 

(1)

GAAP basic and diluted net loss per share and non-GAAP basic net loss per share calculated based on 159,217 weighted-average shares of common stock. Non-GAAP net income per share calculated based on 160,765 diluted weighted-average shares of common stock, which includes 1,548 potentially dilutive shares related to convertible notes and employee stock awards. GAAP to non-GAAP diluted net income (loss) per share is not reconciled due to the difference in the number of weighted-average shares used to calculate GAAP and non-GAAP diluted net income (loss) per share.

(2)

Represents the income tax adjustment using our estimated non-GAAP tax rate of 20%.
Reconciliation of GAAP to Non-GAAP Financial Measures
Fiscal Year Ended January 31, 2023

 

GAAP

 

Stock-based

compensation and

related employer

payroll tax

 

Amortization of

intangible

assets

 

Acquisition-

related

adjustments

 

Restructuring

and facility exit

charges

 

Capitalized

software

development

costs

 

Non-cash interest

expense related to

convertible senior

notes

 

Loss on

strategic

investments,

net

 

Income tax

adjustment (2)

 

Non-GAAP

Cloud services cost of revenues

$

490,299

 

$

(23,082

)

$

(30,943

)

$

-

 

$

-

 

$

(12,777

)

$

-

 

$

-

 

$

-

 

$

423,497

 

Cloud services gross margin

 

66.4

%

 

1.6

%

 

2.0

%

 

-

%

 

-

%

 

0.9

%

 

-

%

 

-

%

 

-

%

 

70.9

%

Cost of revenues

 

815,995

 

 

(87,837

)

 

(35,859

)

 

-

 

 

-

 

 

(12,777

)

 

-

 

 

-

 

 

-

 

 

679,522

 

Gross margin

 

77.7

%

 

2.4

%

 

1.0

%

 

-

%

 

-

%

 

0.3

%

 

-

%

 

-

%

 

-

%

 

81.4

%

Research and development

 

997,170

 

 

(345,679

)

 

-

 

 

-

 

 

-

 

 

8,782

 

 

-

 

 

-

 

 

-

 

 

660,273

 

Sales and marketing

 

1,621,518

 

 

(252,952

)

 

(20,522

)

 

-

 

 

(3,968

)

 

-

 

 

-

 

 

-

 

 

-

 

 

1,344,076

 

General and administrative

 

454,531

 

 

(118,066

)

 

-

 

 

(692

)

 

(10,000

)

 

-

 

 

-

 

 

-

 

 

-

 

 

325,773

 

Operating expense

 

3,073,219

 

 

(716,697

)

 

(20,522

)

 

(692

)

 

(13,968

)

 

8,782

 

 

-

 

 

-

 

 

-

 

 

2,330,122

 

Operating income (loss)

 

(235,506

)

 

804,534

 

 

56,381

 

 

692

 

 

13,968

 

 

3,995

 

 

-

 

 

-

 

 

-

 

 

644,064

 

Operating margin

 

(6.4

)%

 

22.0

%

 

1.5

%

 

0.0

%

 

0.4

%

 

0.1

%

 

-

%

 

-

%

 

-

%

 

17.6

%

Income tax provision

 

12,411

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

112,488

 

 

124,899

 

Net income (loss)

$

(277,862

)

$

804,534

 

$

56,381

 

$

692

 

$

13,968

 

$

3,995

 

$

10,279

 

$

97

 

$

(112,488

)

$

499,596

 

Basic net income (loss) per share (1)

$

(1.71

)

$

4.95

 

$

0.36

 

$

-

 

$

0.09

 

$

0.02

 

$

0.06

 

$

-

 

$

(0.69

)

$

3.08

 

Diluted net income (loss) per share (1)

$

(1.71

)

$

2.69

 

 

(1)

  GAAP basic and diluted net loss per share and non-GAAP basic net loss per share calculated based on 162,376 weighted-average shares of common stock. Non-GAAP net income per share calculated based on 185,791 diluted weighted-average shares of common stock, which includes 23,415 potentially dilutive shares related to convertible notes and employee stock awards. GAAP to non-GAAP diluted net income (loss) per share is not reconciled due to the difference in the number of weighted-average shares used to calculate GAAP and non-GAAP diluted net income (loss) per share.

(2)

  Represents the income tax adjustment using our estimated non-GAAP tax rate of 20%.
Reconciliation of GAAP to Non-GAAP Financial Measures
Fiscal Year Ended January 31, 2022

 

GAAP

 

Stock-based

compensation and

related employer

payroll tax

 

Amortization

of intangible

assets

 

Acquisition-

related

adjustments

 

Restructuring

and facility

exit charges

 

Capitalized

software

development

costs

 

Non-cash interest

expense related to

convertible senior

notes

 

Income tax

adjustment (2)

 

Non-GAAP

Cloud services cost of revenues

$

398,274

 

$

(17,554

)

$

(29,197

)

$

-

 

$

-

 

$

(6,432

)

$

-

 

$

-

 

$

345,091

 

Cloud services gross margin

 

57.8

%

 

1.9

%

 

3.0

%

 

-

%

 

-

%

 

0.7

%

 

-

%

 

-

%

 

63.4

%

Cost of revenues

 

733,969

 

 

(81,835

)

 

(37,438

)

 

-

 

 

-

 

 

(6,432

)

 

-

 

 

-

 

 

608,264

 

Gross margin

 

72.5

%

 

3.1

%

 

1.4

%

 

-

%

 

-

%

 

0.2

%

 

-

%

 

-

%

 

77.2

%

Research and development

 

1,029,574

 

 

(333,178

)

 

(26

)

 

-

 

 

-

 

 

8,649

 

 

-

 

 

-

 

 

705,019

 

Sales and marketing

 

1,534,600

 

 

(252,180

)

 

(20,368

)

 

-

 

 

(613

)

 

-

 

 

-

 

 

-

 

 

1,261,439

 

General and administrative

 

522,350

 

 

(143,762

)

 

-

 

 

(957

)

 

(58,496

)

 

-

 

 

-

 

 

-

 

 

319,135

 

Operating expense

 

3,086,524

 

 

(729,120

)

 

(20,394

)

 

(957

)

 

(59,109

)

 

8,649

 

 

-

 

 

-

 

 

2,285,593

 

Operating loss

 

(1,146,829

)

 

810,955

 

 

57,832

 

 

957

 

 

59,109

 

 

(2,217

)

 

-

 

 

-

 

 

(220,193

)

Operating margin

 

(42.9

)%

 

30.4

%

 

2.2

%

 

-

%

 

2.2

%

 

(0.1

)%

 

-

%

 

-

%

 

(8.2

)%

Income tax provision (benefit)

 

18,314

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(68,975

)

 

(50,661

)

Net loss

$

(1,339,097

)

$

810,955

 

$

57,832

 

$

957

 

$

59,109

 

$

(2,217

)

$

140,847

 

$

68,975

 

$

(202,639

)

Basic and diluted net loss per share (1)

$

(8.29

)

$

5.01

 

$

0.36

 

$

0.01

 

$

0.37

 

$

(0.01

)

$

0.87

 

$

0.43

 

$

(1.25

)

 

(1)

  Calculated based on 161,628 weighted-average shares of common stock.

(2)

  Represents the income tax adjustment using our estimated non-GAAP tax rate of 20%.

 

Contacts

For more information, please contact:
Media Contact
Mara Mort
Splunk Inc.
press@splunk.com

Investor Contact
Ken Tinsley
Splunk Inc.
ir@splunk.com

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Contacts

For more information, please contact:
Media Contact
Mara Mort
Splunk Inc.
press@splunk.com

Investor Contact
Ken Tinsley
Splunk Inc.
ir@splunk.com