Splunk Inc. Announces Fiscal First Quarter 2014 Financial Results

Splunk Inc. Announces Fiscal First Quarter 2014 Financial Results

Total Revenue Grows 54%; Company Raises Full Year Revenue Guidance

SAN FRANCISCO--(BUSINESS WIRE)-- Splunk Inc. (NAS: SPLK) , the leading software platform for real-time operational intelligence, today announced results for its fiscal first quarter ended April 30, 2013.

  • Total revenue was $57.2 million, up 54% year-over-year.

  • License revenue was $36.2 million, up 48% year-over-year.

  • GAAP operating loss was $15.7 million or negative 27.4% of revenues.

  • Non-GAAP operating loss was $5.3 million or negative 9.2% of revenues.

  • GAAP loss per share was $0.16; non-GAAP loss per share was $0.06.

  • Operating cash flow was $19.9 million with free cash flow of $18.6 million.


"We are off to a strong start in the first quarter and I'm pleased with our new customer acquisition and financial performance," said Godfrey Sullivan, Chairman and CEO. "Years of investment and product innovation have resulted in recognition that Splunk is disrupting the enterprise software space. In the security market, Splunk was recognized as a leader in the 2013 Gartner Security Information and Event Management (SIEM) Magic Quadrant and SC Magazine named Splunk Enterprise Best SIEM solution in North America and Best Enterprise Security Solution for Europe. In IT operations management, Gartner recognized Splunk as one of the fastest growing vendors in the category. And Fast Company named Splunk one of the world's most innovative companies and ranked Splunk as the number one innovator in big data. We will continue to invest heavily in our data platform, content and SaaS offerings to deliver customer success."

First Quarter 2014 and Recent Business Highlights

Customers:

  • Signed more than 350 new enterprise customers, ending the quarter with approximately 5,600 customers worldwide. Signed more than 70 new Splunk Storm® customers, ending the quarter with more than 200 Splunk Storm customers worldwide.

  • New license customers include: Allconnect, Altstoff Recycling Austria AG, Arizona Department of Transportation, The Bank of New York Mellon Corporation, Baylor University, Department of Energy, Idaho State Tax Commission, Genesis Energy (ANZ), Kordia (ANZ), Level 3 Communications, Inc., Ministry of Presidential Affairs (UAE), Mission Australia, Mitsui Bussan Secure Directions, Inc. (APAC), NBNCo Limited (APAC), Nomura Securities CO LTD (APAC), Oregon State Lottery, The Qatar Computer Emergency Response Team (QCERT), Transaction Solutions (ANZ), VicTrack (APAC), Winn-Dixie.

  • Expansion customers include: Arizona State University, Bank of New Zealand, Box, Inc., Blackrock Inc., Comcast Corporation, D. Swarovski & Co., Major League Baseball, Nanyang Technological University, NASA Johnson Space Center, Nordstrom, Novagalicia (NCG) Banco (Spain),Oregon Army National Guard, Orange France, Penn State Hershey Medical Center, Riverbed Technology, ServiceNow, State of Texas - Health and Human Services, University of California Irvine, U.S. Department of Health and Human Services, U.S. Army.

Product:

  • Announced the general availability (GA) of version 2.4 of the Splunk App for Enterprise Security. Splunk® Enterprise and the Splunk App for Enterprise Security are a security intelligence platform that helps organizations discover unknown threats in real time with out-of-the-box content, including searches, dashboards and visualizations that enable rich statistical analysis of machine data.

  • Announced the GA of the Splunk App for Palo Alto Networks 3.0 to enable users to leverage their machine-generated big data to analyze risk, improve security posture and compliance and address a number of additional operational and regulatory concerns.

  • Released the GA version of Splunk DB Connect to deliver real-time integration between Splunk Enterprise and relational databases.

  • Released version 5.0 of the Splunk App for Windows, which delivers enterprise-class monitoring for Microsoft® Windows Server.

  • Released the latest version of the Splunk App for HadoopOps to improve the ability to collect Hadoop metrics.

  • Released the Splunk App for NetApp ONTAP to enable users to gain visibility into the NetApp storage system with Splunk.

  • Released a new Splunk App for Symantec allowing users of Splunk Enterprise and Symantec to better monitor, investigate and eliminate endpoint threats as reported by Symantec Endpoint Protection (SEP). This app contains real-time dashboards, panels and search fields to easily view and investigate SEP data.

  • Released an update to the Splunk App for Blue Coat ProxySG which enables users of Splunk Enterprise and Blue Coat to better monitor, investigate and secure their Internet traffic as reported by Blue Coat ProxySG. This app contains real-time dashboards, panels and search fields to easily view and investigate ProxySG data.

Recognition:

Appointments

  • Named Patricia B. Morrison to the company's Board of Directors. Ms. Morrison has been Executive Vice President of Customer Care Shared Services and Chief Information Officer for Cardinal Health since 2009.

  • Named Declan Morris as vice president of IT and cloud operations and Dejan Deklich as vice president of cloud engineering.

Financial Outlook

The company is providing the following guidance for its fiscal second quarter 2014 (ending July 31, 2013):

  • Total revenue is expected to be between $61 million and $63 million.

  • Non-GAAP operating margin is expected to be between negative 4% and negative 6%.

The company is updating its previous guidance for its fiscal year 2014 (ending January 31, 2014):

  • Total revenue is expected to be between $266 million and $274 million (was previously expected to be between $260 million and $270 million as of Feb. 28, 2013).

  • Non-GAAP operating margin is expected to be approximately zero (unchanged from Feb. 28, 2013).

All forward-looking non-GAAP financial measures contained in this section "Financial Outlook" exclude estimates for stock-based compensation expenses and employer payroll tax expense related to employee stock plans.

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 first quarter 2014 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 June 6, 2013 by dialing (855) 859-2056 and referencing Conference ID# 57800854.

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 second quarter and fiscal year 2014 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, expansion of Splunk software use cases and product investments and developments. 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 relatively 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 Annual Report on Form 10-K for the year ended January 31, 2013, 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. (NAS: 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, sensors 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. 5,600 enterprises, universities, government agencies and service providers in over 90 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 and running 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.Windows is a registered trademark of Microsoft Corporation in the United States and other countries.© 2013 Splunk Inc. All rights reserved.

SPLUNK INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

Three Months Ended

April 30,

April 30,

2013

2012

Revenues

License

$

36,172

$

24,386

Maintenance and services

21,035

12,805

Total revenues

57,207

37,191

Cost of revenues

License

69

129

Maintenance and services

6,612

4,136

Total cost of revenues 1, 2

6,681

4,265

Gross profit

50,526

32,926

Operating expenses

Research and development 1, 2

14,464

8,103

Sales and marketing 1, 2

41,313

24,166

General and administrative 1, 2

10,446

6,846

Total operating expenses

66,223

39,115

Operating loss

(15,697

)

(6,189

)

Interest and other income (expense), net

Interest income (expense), net

61

(19

)

Other income (expense), net

(94

)

2

Change in fair value of preferred stock warrants

-

(14,087

)

Total interest and other income (expense), net

(33

)

(14,104

)

Loss before income taxes

(15,730

)

(20,293

)

Provision for income taxes

404

177

Net loss

$

(16,134

)

$

(20,470

)

Basic and diluted net loss per share

$

(0.16

)

$

(0.71

)

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

102,015

28,679

1 Includes stock-based compensation expense as follows:

Cost of revenues

$

705

$

108

Research and development

3,043

895

Sales and marketing

4,322

858

General and administrative

1,765

811

$

9,835

$

2,672

2 Includes employer payroll tax on employee stock plans as follows:

Cost of revenues

$

22

$

-

Research and development

142

-

Sales and marketing

278

-

General and administrative

138

-

$

580

$

-

SPLUNK INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

April 30,

January 31,

2013

2013

ASSETS

Current assets

Cash and cash equivalents

$

331,252

$

305,939

Accounts receivable, net

37,916

63,948

Prepaid expenses and other current assets

7,191

6,861

Total current assets

376,359

376,748

Property and equipment, net

12,695

13,205

Other assets

460

492

Total assets

$

389,514

$

390,445

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Accounts payable

$

2,533

$

1,632

Accrued payroll and compensation

21,191

28,123

Accrued expenses and other liabilities

9,421

7,636

Deferred revenue, current portion

84,933

79,568

Total current liabilities

118,078

116,959

Deferred revenue, non-current

32,404

35,144

Other liabilities, non-current

1,055

798

Total non-current liabilities

33,459

35,942

Total liabilities

151,537

152,901

Stockholders' equity:

Common stock

103

101

Accumulated other comprehensive loss

(149

)

(135

)

Additional paid-in capital

344,856

328,277

Accumulated deficit

(106,833

)

(90,699

)

Total stockholders' equity

237,977

237,544

Total liabilities and stockholders' equity

$

389,514

$

390,445

SPLUNK INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

Three Months Ended

April 30,

April 30,

2013

2012

Cash Flows From Operating Activities

Net loss

$

(16,134

)

$

(20,470

)

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

Depreciation and amortization

1,425

931

Change in fair value of preferred stock warrants

-

14,087

Stock-based compensation

9,835

2,672