Splunk Inc. Announces Fiscal Second Quarter 2014 Financial Results

Splunk Inc. Announces Fiscal Second Quarter 2014 Financial Results

Company Crosses 6,000 Customer Mark; Total Revenues Grow 50%

SAN FRANCISCO--(BUSINESS WIRE)-- Splunk Inc. (NAS: SPLK) , the leading software platform for real-time operational intelligence, today announced results for its fiscal second quarter ended July 31, 2013.

  • Total revenues were $66.9 million, up 50% year-over-year.
  • License revenues were $43.2 million, up 43% year-over-year.
  • GAAP operating loss was $13.3 million or 19.9% of revenues.
  • Non-GAAP operating loss was $0.8 million or 1.1% of revenues.
  • GAAP loss per share was $0.13; non-GAAP loss per share was $0.01.
  • Operating cash flow was $6.3 million with free cash flow of $4.3 million.

"This past quarter marked a milestone for Splunk as we expanded the breadth of our product offerings beyond core Splunk Enterprise and premium apps by adding the beta version of Hunk: Splunk Analytics for Hadoop," said Godfrey Sullivan, Chairman and CEO. "We are pleased to welcome more than 400 new customers who are joining the Splunk family at an exciting time as we transition to a multi-product company."

Second Quarter 2014 and Recent Business Highlights

Customers:

  • Signed more than 400 new customers, ending the quarter with more than 6,000 customers worldwide.
  • New license customers include: Bank of the West, Bombardier (Germany), Commercial Bank of Dubai, GitHub, Inc., Hyundai Heavy Industries Co., Ltd. (HHI) (Korea), Middle Tennessee State University, Panasonic Corporation, POLITICO, Shaw Communications Inc., Softbank Telecom Corp., Sony Corporation, South Carolina Department of Health and Human Services, SunTrust Banks, Westdeutsche Lotterie GmbH & Co.
  • Expansion customers include: Adobe, Bloomberg, CalPERS, Cisco Systems, Inc., Comcast Corporation, Duke Medicine, Florida Department of Financial Services, Highmark Blue Cross Blue Shield, Korea Securities Depository, Moody's Corporation, Otto GmbH & Co KG (Germany), Pearson Education, Rally Software, Symantec Corporation, Telstra, TONGYANG Insurance (Korea), U.S. Air Force, U.S. Department of the Interior, U.S. Department of Justice, The Washington Post Company.

Product:

  • Announced the beta version of Hunk: Splunk Analytics for Hadoop. Hunk (beta) is a new software product from Splunk that enables exploration, analysis and visualization of data in Hadoop.
  • Announced the general availability (GA) of the latest version of the Splunk App for VMware to provide accelerated operational visibility into virtualized environments. Customers rely on the Splunk App for VMware to enable proactive monitoring, comprehensive operational analytics and data correlation with all technology tiers beyond virtualization, including applications, operating systems and hardware infrastructure such as servers, storage and network devices.
  • Announced the GA of Splunk Software Developer Kits (SDKs) for C#, PHP and Ruby. These SDKs, along with the SDKs for Java, JavaScript and Python that shipped in December, enable developers to customize and extend the power of Splunk software, further establishing Splunk Enterprise as the platform for machine data.

Recognition:

  • Won two top awards in the Asia Pacific region. CeBIT.AU, a leading business technology conference in Australia, honored Splunk with its top industry prize, the CeBIT.AU ICT Excellence Award and the CeBIT.AU Business Award for Top Business Solution.
  • Named "Best in Big Data Analytics" at the 2013 Information Management Awards by NetworkWorld Asia, an enterprise IT magazine read by more than 16,000 IT professionals.

Financial Outlook

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

  • Total revenues are expected to be between $69 million and $71 million.
  • Non-GAAP operating margin is expected to be between zero and negative 2%.

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

  • Total revenues are expected to be between $275 million and $281 million (were previously expected to be between $266 million and $274 million as of May 30, 2013).
  • Non-GAAP operating margin is expected to be approximately zero (unchanged from May 30, 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 second quarter 2014 and fiscal first half 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 September 5, 2013 by dialing (855) 859-2056 and referencing Conference ID# 25448696.

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 third 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, new product offerings, expansion of existing customer usage, 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.; Splunk's inability to realize value from its significant investments in its business; 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 April 30, 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. More than 6,000 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 applications in the cloud.

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

Splunk, Splunk>, Splunk Storm, Listen to Your Data, SPL and The Engine for Machine Data 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.© 2013 Splunk Inc. All rights reserved.

SPLUNK INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
    
 
Three Months EndedSix Months Ended
July 31,July 31,July 31,July 31,
2013201220132012
Revenues
License$43,185$30,203$79,357$54,589
Maintenance and services 23,688  14,280  44,723  27,085 
Total revenues 66,873  44,483  124,080  81,674 
 
Cost of revenues
License7692145221
Maintenance and services 7,345  4,553  13,957  8,689 
Total cost of revenues 1, 2 7,421  4,645  14,102  8,910 
Gross profit 59,452  39,838  109,978  72,764 
 
Operating expenses
Research and development 1, 216,2109,39130,67417,494
Sales and marketing 1, 244,63427,74085,94751,906
General and administrative 1, 2 11,912  7,247  22,358  14,093 
Total operating expenses 72,756  44,378  138,979  83,493 
Operating loss (13,304) (4,540) (29,001) (10,729)
 
Interest and other income (expense), net
Interest income, net5810111982
Other income (expense), net(82)-(176)2
Change in fair value of preferred stock warrants -  -  -  (14,087)
Total interest and other income (expense), net (24) 101  (57) (14,003)
Loss before income taxes(13,328)(4,439)(29,058)(24,732)
Provision for income taxes 365  136  769  313 
Net loss$(13,693)$(4,575)$(29,827)$(25,045)
 
 
Basic and diluted net loss per share$(0.13)$(0.05)$(0.29)$(0.40)
 

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

 104,100  95,518  103,075  62,466 
 
1 Includes stock-based compensation expense as follows:
Cost of revenues$865$267$1,570$375
Research and development3,5471,2676,5902,162
Sales and marketing5,1561,5059,4782,363
General and administrative 2,389  827  4,154  1,638 
$11,957 $3,866 $21,792 $6,538 
 
2 Includes employer payroll tax on employee stock plans as follows:
Cost of revenues$22$-$44$-
Research and development49-191-
Sales and marketing3144859248
General and administrative 201  214  339  214 
$586 $262 $1,166 $262 
 
SPLUNK INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
  
 
July 31,January 31,
20132013
 
ASSETS
 
Current assets
Cash and cash equivalents$347,114$305,939
Accounts receivable, net40,74663,948
Prepaid expenses and other current assets 10,547  6,861 
Total current assets 398,407  376,748 
 
Property and equipment, net13,85513,205
Other assets 403  492 
Total assets$412,665 $390,445 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
Current liabilities
Accounts payable$1,805$1,632
Accrued payroll and compensation21,88828,123
Accrued expenses and other liabilities12,2247,636
Deferred revenue, current portion 96,908  79,568 
Total current liabilities 132,825  116,959 
 
Deferred revenue, non-current30,72735,144
Other liabilities, non-current 1,302  798 
Total non-current liabilities 32,029  35,942 
Total liabilities 164,854  152,901 
 
 
Stockholders' equity:
Common stock105101
Accumulated other comprehensive loss(243)(135)
Additional paid-in capital368,475328,277
Accumulated deficit (120,526) (90,699)
Total stockholders' equity 247,811  237,544 
Total liabilities and stockholders' equity$412,665 $390,445 Read Full Story

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