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Splunk Announces Fiscal Fourth Quarter and Full Year 2024 Financial Results

Increased Annual Recurring Revenue 15% to $4.2 Billion

Achieved Q4 GAAP Net Income of $427 Million

Generated over $1 Billion in Annual Operating Cash Flow and Adjusted Free Cash Flow

Splunk Inc. (NASDAQ: SPLK), the cybersecurity and observability leader, today announced results for its fiscal fourth quarter and full year ended January 31, 2024, as compared to the corresponding period of the last fiscal year:

Fourth Quarter 2024 Financial Highlights

  • Total ARR was $4.208 billion, up 15%; Cloud ARR was $2.186 billion, up 23%.
  • Total revenues were $1.486 billion, up 19%; Cloud revenue was $503 million, up 22%.
  • GAAP operating expenses increased 6.5%; non-GAAP operating expenses decreased 3.1%.
  • GAAP operating margin was 29.1%; non-GAAP operating margin was 47.8%.
  • GAAP net income was $427 million; non-GAAP net income was $579 million.
  • Operating cash flow was $421 million, up 53%; adjusted free cash flow was $418 million, up 56%.
  • 899 customers with Total ARR greater than $1 million, an increase of 109 customers.

Full Year 2024 Financial Highlights

  • Total revenues were $4.216 billion, up 15%; Cloud revenue was $1.837 billion, up 26%.
  • GAAP operating expenses increased 1.6%; non-GAAP operating expenses decreased 1.8%.
  • GAAP operating margin was 5.7%; non-GAAP operating margin was 28.9%.
  • GAAP net income was $264 million; non-GAAP net income was $1.032 billion.
  • Operating cash flow was $1.008 billion, up 124%; adjusted free cash flow was $1.007 billion, up 136%.

"We delivered a solid finish to FY24 as our team doubled down on helping organizations worldwide keep their digital systems resilient," said Gary Steele, President and CEO of Splunk. "In Q4, we grew Total ARR to $4.2 billion, and we finished FY24 with nearly 900 customers each generating more than $1 million in ARR. We’re pleased to bring this momentum to Cisco, and we believe there is an incredible opportunity to meet the ever-increasing security and observability needs of the world’s largest and most complex enterprises."

“Q4 was a capstone to a strong year of execution, with ARR growing 15% while we reduced quarterly non-GAAP operating expenses 3% year-over-year. This progress helped drive $427 million of quarterly GAAP net income and over $1 billion of annual adjusted free cash flow, up 136% year-over-year,” said Brian Roberts, CFO of Splunk.

Fourth Quarter Investor Presentation and Stockholder Letter

Visit the Splunk investor relations website to download the company’s quarterly investor presentation, which includes Splunk President and CEO Gary Steele’s letter to stockholders.

Pending Acquisition by Cisco

In light of the pending transaction with Cisco, Splunk will not be hosting an earnings conference call to review the fourth quarter or providing a financial outlook. While the closing of the acquisition by Cisco remains subject to regulatory approvals and conditions, given the positive regulatory approvals to date, the transaction is now expected to close in late Q1 or early Q2 of calendar year 2024.

Recent Business Highlights

  • Splunk Security Innovations Strengthen Digital Resilience: Splunk delivered Splunk Enterprise Security 7.3 to provide an enhanced security analyst experience as well as enrich risk context for seamless security incident triage. In addition, Splunk SOAR 6.2 (Security Orchestration Automation and Response) allows users to configure logic loops directly in the Visual Playbook Editor and leverage a new set of firewall management apps.
  • Splunk Observability Enhancements Simplify Telemetry Data Collection: Splunk’s latest observability innovation, Splunk Add-On for OpenTelemetry Collector, simplifies getting started with Splunk Observability Cloud and enables additional consistency in how customers manage data collection at scale.
  • Hundreds of Public Sector Leaders Attend Splunk’s Annual GovSummit Conference: Public sector partners and customers connected on U.S. national cyber strategy and digital resilience during Splunk’s largest public sector event. A recent Splunk and Foundry survey of cybersecurity professionals revealed 80% of all decision makers said their organizations are using AI to address cybersecurity, and almost half of public sector respondents said they plan to use AI to increase productivity.

Safe Harbor Statement

This press release contains forward-looking statements that involve risks and uncertainties, including statements regarding Splunk’s opportunities; Splunk’s proposed acquisition by Cisco and expected timing of the completion of the acquisition and receipt of regulatory approvals, as well as the benefits of the acquisition; trends in customer demand and engagement as well as Splunk’s operating and financial performance; statements regarding our operating efficiency, growth, profitability and cash flows; statements regarding our products, projects, technology and ongoing product development, including recently announced products; statements regarding our partnerships; statements regarding our market opportunity as well as our ability to meet customer needs; and trends in the markets for our products, including the security and observability markets. There are a significant number of factors that could cause actual results to differ materially from statements made in this press release, including: the risk that the proposed transaction with Cisco is not completed on the anticipated terms or in the time anticipated, including risks related to obtaining regulatory approvals, anticipated tax treatment, unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, future prospects, business and management strategies for the management, expansion and growth of Splunk’s business and other conditions to the completion of the transaction; significant transaction costs associated with the proposed transaction; potential litigation relating to the proposed transaction; the risk that disruptions from the proposed transaction will harm Splunk’s business, including current plans and operations; the ability of Splunk to implement its business strategy; the impact of the macroeconomic environment, including inflationary pressures, economic uncertainty and impacts on information technology spending; risks associated with Splunk’s growth; the impact of Splunk’s restructuring plans; risks associated with Splunk’s ability to successfully introduce and gain market acceptance for new products and technologies; 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; 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, 2023, which is on file with the U.S. Securities and Exchange Commission (“SEC”) and Splunk’s other filings with the SEC. 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) helps build a safer and more resilient digital world. Organizations trust Splunk to prevent security, infrastructure and application incidents from becoming major issues, absorb shocks from digital disruptions, and accelerate digital transformation.

Splunk and Splunk> 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. © 2024 Splunk Inc. All rights reserved.

 
Splunk Inc.
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
 

Three Months Ended January 31,

 

Fiscal Year Ended January 31,

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Revenues
Cloud services

$

503,375

 

$

413,934

 

$

1,837,418

 

$

1,457,295

 

License

 

810,133

 

 

670,005

 

 

1,706,358

 

 

1,521,116

 

Maintenance and services

 

172,639

 

 

167,166

 

 

671,819

 

 

675,297

 

Total revenues

 

1,486,147

 

 

1,251,105

 

 

4,215,595

 

 

3,653,708

 

Cost of revenues
Cloud services

 

144,219

 

 

128,360

 

 

544,807

 

 

490,299

 

License

 

2,137

 

 

1,253

 

 

7,623

 

 

5,312

 

Maintenance and services

 

77,196

 

 

75,670

 

 

300,233

 

 

320,384

 

Total cost of revenues

 

223,552

 

 

205,283

 

 

852,663

 

 

815,995

 

Gross profit

 

1,262,595

 

 

1,045,822

 

 

3,362,932

 

 

2,837,713

 

Operating expenses
Research and development

 

235,341

 

 

243,027

 

 

943,933

 

 

997,170

 

Sales and marketing

 

439,378

 

 

427,589

 

 

1,671,102

 

 

1,621,518

 

General and administrative

 

156,062

 

 

109,135

 

 

508,393

 

 

454,531

 

Total operating expenses

 

830,781

 

 

779,751

 

 

3,123,428

 

 

3,073,219

 

Operating income (loss)

 

431,814

 

 

266,071

 

 

239,504

 

 

(235,506

)

Interest and other income (expense), net
Interest income

 

23,912

 

 

12,482

 

 

103,255

 

 

25,401

 

Interest expense

 

(9,860

)

 

(11,230

)

 

(42,505

)

 

(46,026

)

Other income (expense), net

 

(3,683

)

 

(1,772

)

 

(3,083

)

 

(9,320

)

Total interest and other income (expense), net

 

10,369

 

 

(520

)

 

57,667

 

 

(29,945

)

Income (loss) before income taxes

 

442,183

 

 

265,551

 

 

297,171

 

 

(265,451

)

Income tax provision (benefit)

 

15,634

 

 

(3,241

)

 

33,437

 

 

12,411

 

Net income (loss)

$

426,549

 

$

268,792

 

$

263,734

 

$

(277,862

)

 
Basic net income (loss) per share

$

2.52

 

$

1.64

 

$

1.58

 

$

(1.71

)

Diluted net income (loss) per share

$

2.28

 

$

1.44

 

$

1.52

 

$

(1.71

)

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

 

169,092

 

 

164,262

 

 

167,136

 

 

162,376

 

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

 

191,452

 

 

187,002

 

 

175,363

 

 

162,376

 

Splunk Inc.
Consolidated Balance Sheets
(In thousands)
(Unaudited)
 
January 31, 2024 January 31, 2023
Assets
Current assets
Cash and cash equivalents

$

1,643,141

 

$

690,587

 

Investments, current

 

360,412

 

 

1,316,347

 

Accounts receivable, net

 

1,840,928

 

 

1,572,604

 

Prepaid expenses and other current assets

 

162,472

 

 

174,388

 

Deferred commissions, current

 

145,339

 

 

116,758

 

Total current assets

 

4,152,292

 

 

3,870,684

 

Investments, non-current

 

37,529

 

 

41,700

 

Accounts receivable, non-current

 

493,312

 

 

314,286

 

Operating lease right-of-use assets

 

132,016

 

 

186,981

 

Property and equipment, net

 

84,279

 

 

108,540

 

Intangible assets, net

 

66,963

 

 

119,588

 

Goodwill

 

1,416,920

 

 

1,416,920

 

Deferred commissions, non-current

 

268,568

 

 

242,731

 

Other assets

 

35,477

 

 

42,493

 

Total assets

$

6,687,356

 

$

6,343,923

 

Liabilities and Stockholders' Equity
Current liabilities
Accounts payable

$

34,715

 

$

15,299

 

Accrued compensation

 

363,959

 

 

357,550

 

Accrued expenses and other liabilities

 

178,604

 

 

229,480

 

Deferred revenue, current

 

1,980,616

 

 

1,657,685

 

Debt, current

 

-

 

 

775,656

 

Total current liabilities

 

2,557,894

 

 

3,035,670

 

Debt, non-current

 

3,106,928

 

 

3,099,289

 

Operating lease liabilities

 

154,644

 

 

202,268

 

Deferred revenue, non-current

 

98,609

 

 

91,102

 

Other liabilities, non-current

 

28,672

 

 

26,107

 

Total non-current liabilities

 

3,388,853

 

 

3,418,766

 

Total liabilities

 

5,946,747

 

 

6,454,436

 

Stockholders' equity
Common stock

 

177

 

 

171

 

Accumulated other comprehensive loss

 

(1,203

)

 

(6,363

)

Additional paid-in capital

 

5,245,088

 

 

4,671,776

 

Treasury stock

 

(980,452

)

 

(989,362

)

Accumulated deficit

 

(3,523,001

)

 

(3,786,735

)

Total stockholders' equity (deficit)

 

740,609

 

 

(110,513

)

Total liabilities and stockholders' equity

$

6,687,356

 

$

6,343,923

 

 
Splunk Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

 

 

 

 

 

 

 

Three Months Ended January 31,

 

Fiscal Year Ended January 31,

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Cash flows from operating activities
Net income (loss)

$

426,549

 

$

268,792

 

$

263,734

 

$

(277,862

)

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

 

19,665

 

 

26,024

 

 

88,675

 

 

99,470

 

Amortization of deferred commissions

 

29,914

 

 

29,796

 

 

127,007

 

 

111,205

 

Amortization of investment premiums (accretion of discounts), net

 

7,634

 

 

(2,590

)

 

2,725

 

 

(4,652

)

Loss on strategic equity investments, net

 

1,000

 

 

-

 

 

4,414

 

 

97

 

Amortization of debt issuance costs

 

2,002

 

 

2,401

 

 

8,644

 

 

10,279

 

Loss on facility exits

 

23,354

 

 

-

 

 

29,085

 

 

10,000

 

Non-cash operating lease costs

 

(1,058

)

 

3,403

 

 

(6,086

)

 

324

 

Stock-based compensation

 

209,360

 

 

187,393

 

 

786,824

 

 

789,138

 

Deferred income taxes

 

2,572

 

 

(1,261

)

 

2,079

 

 

(2,695

)

Loss on disposal of assets

 

224

 

 

782

 

 

253

 

 

782

 

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

 

(959,065

)

 

(745,160

)

 

(447,212

)

 

(337,177

)

Prepaid expenses and other assets

 

(31,037

)

 

(54,633

)

 

22,884

 

 

42,075

 

Deferred commissions

 

(63,250

)

 

(65,130

)

 

(181,425

)

 

(167,496

)

Accounts payable

 

29,488

 

 

(3,134

)

 

19,416

 

 

(43,907

)

Accrued compensation

 

81,352

 

 

109,392

 

 

6,409

 

 

(39,402

)

Accrued expenses and other liabilities

 

30,726

 

 

30,887

 

 

(49,501

)

 

(15,337

)

Deferred revenue

 

611,917

 

 

489,026

 

 

330,438

 

 

274,788

 

Net cash provided by operating activities

 

421,347

 

 

275,988

 

 

1,008,363

 

 

449,630

 

Cash flows from investing activities
Purchases of property and equipment

 

(1,440

)

 

(4,391

)

 

(10,626

)

 

(13,620

)

Capitalized software development costs

 

(3,130

)

 

(2,976

)

 

(12,091

)

 

(8,782

)

Purchases of marketable securities

 

(358,176

)

 

(547,654

)

 

(1,681,651

)

 

(1,536,558

)

Maturities of marketable securities

 

752,034

 

 

163,086

 

 

2,640,278

 

 

515,950

 

Purchases of strategic investments

 

(150

)

 

(375

)

 

(3,493

)

 

(6,734

)

Sale of strategic investments

 

3,000

 

 

-

 

 

3,000

 

 

-

 

Acquisition, net of cash acquired

 

-

 

 

(21,950

)

 

-

 

 

(21,950

)

Other investment activities

 

251

 

 

-

 

 

251

 

 

1,534

 

Net cash provided by (used in) investing activities

 

392,389

 

 

(414,260

)

 

935,668

 

 

(1,070,160

)

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

 

110

 

 

59

 

 

523

 

 

1,457

 

Proceeds from employee stock purchase plan

 

30,534

 

 

29,722

 

 

81,735

 

 

78,318

 

Repayment of 2023 Notes

 

-

 

 

-

 

 

(776,661

)

 

-

 

Taxes paid related to net share settlement of equity awards

 

(126,750

)

 

(33,851

)

 

(294,623

)

 

(197,349

)

Net cash used in financing activities

 

(96,106

)

 

(4,070

)

 

(989,026

)

 

(117,574

)

Net increase (decrease) in cash, cash equivalents, and restricted cash

 

717,630

 

 

(142,342

)

 

955,005

 

 

(738,104

)

Cash, cash equivalents, and restricted cash at beginning of period

 

927,962

 

 

832,929

 

 

690,587

 

 

1,428,691

 

Cash, cash equivalents, and restricted cash at end of period

$

1,645,592

 

$

690,587

 

$

1,645,592

 

$

690,587

 

Splunk Inc.

Operating Metrics

Total Annual Recurring Revenue (“Total ARR”) represents the annualized value of active cloud services, term licenses and maintenance contracts at the end of a reporting period. Cloud Annual Recurring Revenue (“Cloud ARR”) represents the annualized value of active cloud services contracts at the end of a reporting period.

Non-GAAP Financial Measures and Reconciliations

To supplement Splunk’s consolidated financial statements, which have been prepared 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 expenses, operating income (loss), operating margin, income tax provision (benefit), net income (loss), free cash flow and adjusted 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, merger-related expenses, capitalized software development costs, non-cash interest expense related to convertible senior notes and a net loss on strategic equity 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, 2024 and 2023. In addition, non-GAAP financial measures include free cash flow and adjusted free cash flow. Free cash flow represents net cash provided by operating activities, less purchases of property and equipment and capitalized software development costs. Adjusted free cash flow is a non-GAAP measure that additionally excludes from free cash flow the impact of cash paid for costs incurred as a result of the proposed Cisco merger. Splunk believes that free cash flow and adjusted free cash flow provide investors useful information to better understand the factors and trends affecting the Company’s performance and liquidity. Both of these free cash flow measures have limitations as they omit certain components of the overall cash flow statement and do not represent the residual cash flow available for discretionary expenditures.

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. Employer payroll tax expense is 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, merger-related expenses, capitalized software development costs, non-cash interest expense related to convertible senior notes and a net loss on strategic equity investments from the applicable non-GAAP financial measures because these adjustments are considered by management to be outside of Splunk’s core operating results. 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.

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.

 
Splunk Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands)
(Unaudited)
 
Reconciliation of Cash Provided By Operating Activities to Adjusted Free Cash Flow
 

Three Months Ended January 31,

 

Fiscal Year Ended January 31,

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Net cash provided by operating activities

$

421,347

 

$

275,988

 

$

1,008,363

 

$

449,630

 

Less purchases of property and equipment

 

(1,440

)

 

(4,391

)

 

(10,626

)

 

(13,620

)

Less capitalized software development costs

 

(3,130

)

 

(2,976

)

 

(12,091

)

 

(8,782

)

Free cash flow (non-GAAP)

$

416,777

 

$

268,621

 

$

985,646

 

$

427,228

 

Cash paid for merger-related expenses

 

1,132

 

 

-

 

 

21,057

 

 

-

 

Adjusted free cash flow (non-GAAP)

$

417,909

 

$

268,621

 

$

1,006,703

 

$

427,228

 

Net cash provided by (used in) investing activities

$

392,389

 

$

(414,260

)

$

935,668

 

$

(1,070,160

)

Net cash used in financing activities

$

(96,106

)

$

(4,070

)

$

(989,026

)

$

(117,574

)

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

Reconciliation of GAAP to Non-GAAP Financial Measures
Three Months Ended January 31, 2024
GAAP Stock-based compensation and related employer payroll tax Amortization of intangible assets Restructuring and facility exit charges (2) Merger-related expenses Capitalized software development costs Non-cash interest expense related to convertible senior notes Loss on strategic equity investments, net Income tax adjustment (1) Non-GAAP
 
Cloud services cost of revenues

$

144,219

 

$

(5,055

)

$

(6,647

)

$

(558

)

$

-

 

$

(3,395

)

$

-

 

$

-

 

$

-

 

$

128,564

 

Cloud services gross margin

 

71.4

%

 

1.0

%

 

1.3

%

 

0.10

%

 

-

%

 

0.7

%

 

-

%

 

-

%

 

-

%

 

74.5

%

Cost of revenues

 

223,552

 

 

(22,686

)

 

(7,875

)

 

(2,097

)

 

-

 

 

(3,395

)

 

-

 

 

-

 

 

-

 

 

187,499

 

Gross margin

 

85.0

%

 

1.5

%

 

0.5

%

 

0.1

%

 

-

%

 

0.2

%

 

-

%

 

-

%

 

-

%

 

87.4

%

Research and development

 

235,341

 

 

(77,695

)

 

-

 

 

(8,458

)

 

-

 

 

3,130

 

 

-

 

 

-

 

 

-

 

 

152,318

 

Sales and marketing

 

439,378

 

 

(65,770

)

 

(3,578

)

 

(15,112

)

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

354,918

 

General and administrative

 

156,062

 

 

(47,720

)

 

-

 

 

(26,254

)

 

(1,352

)

 

-

 

 

-

 

 

-

 

 

-

 

 

80,736

 

Operating expenses

 

830,781

 

 

(191,185

)

 

(3,578

)

 

(49,824

)

 

(1,352

)

 

3,130

 

 

-

 

 

-

 

 

-

 

 

587,972

 

Operating income

 

431,814

 

 

213,871

 

 

11,453

 

 

51,921

 

 

1,352

 

 

265

 

 

-

 

 

-

 

 

-

 

 

710,676

 

Operating margin

 

29.1

%

 

14.4

%

 

0.8

%

 

3.5

%

 

0.1

%

 

-

%

 

-

%

 

-

%

 

-

%

 

47.8

%

Income tax provision

 

15,634

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

129,176

 

 

144,810

 

Net income

$

426,549

 

$

213,871

 

$

11,453

 

$

51,921

 

$

1,352

 

$

265

 

$

2,003

 

$

1,000

 

$

(129,176

)

$

579,238

 

_______________________
(1) Represents the income tax adjustment using our estimated non-GAAP tax rate of 20%.
(2) Excludes $2,807 of total stock-based compensation restructuring charges, which are included under Stock-based compensation and related employer payroll tax.
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 (1) 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 expenses

 

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

 

_______________________
(1) 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, 2024
GAAP Stock-based compensation and related employer payroll tax Amortization of intangible assets Restructuring and facility exit charges (2) Merger-related expenses Capitalized software development costs Non-cash interest expense related to convertible senior notes Loss on strategic equity investments, net Income tax adjustment (1) Non-GAAP
 
Cloud services cost of revenues

$

544,807

 

$

(22,970

)

$

(31,165

)

$

(1,065

)

$

-

 

$

(14,216

)

$

-

 

$

-

 

$

-

 

$

475,391

 

Cloud services gross margin

 

70.4

%

 

1.3

%

 

1.7

%

 

0.1

%

 

-

%

 

0.8

%

 

-

%

 

-

%

 

-

%

 

74.1

%

Cost of revenues

 

852,663

 

 

(89,166

)

 

(36,080

)

 

(3,701

)

 

-

 

 

(14,216

)

 

-

 

 

-

 

 

-

 

 

709,500

 

Gross margin

 

79.8

%

 

2.1

%

 

0.9

%

 

0.1

%

 

-

%

 

0.3

%

 

-

%

 

-

%

 

-

%

 

83.2

%

Research and development

 

943,933

 

 

(327,036

)

 

-

 

 

(25,099

)

 

-

 

 

12,091

 

 

-

 

 

-

 

 

-

 

 

603,889

 

Sales and marketing

 

1,671,102

 

 

(253,216

)

 

(16,545

)

 

(19,475

)

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

1,381,866

 

General and administrative

 

508,393

 

 

(138,034

)

 

-

 

 

(45,274

)

 

(23,571

)

 

-

 

 

-

 

 

-

 

 

-

 

 

301,514

 

Operating expenses

 

3,123,428

 

 

(718,286

)

 

(16,545

)

 

(89,848

)

 

(23,571

)

 

12,091

 

 

-

 

 

-

 

 

-

 

 

2,287,269

 

Operating income

 

239,504

 

 

807,452

 

 

52,625

 

 

93,549

 

 

23,571

 

 

2,125

 

 

-

 

 

-

 

 

-

 

 

1,218,826

 

Operating margin

 

5.7

%

 

19.2

%

 

1.3

%

 

2.2

%

 

0.6

%

 

0.1

%

 

-

%

 

-

%

 

-

%

 

28.9

%

Income tax provision

 

33,437

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

224,473

 

 

257,910

 

Net income

$

263,734

 

$

807,452

 

$

52,625

 

$

93,549

 

$

23,571

 

$

2,125

 

$

8,644

 

$

4,414

 

$

(224,473

)

$

1,031,641

 

_______________________
(1) Represents the income tax adjustment using our estimated non-GAAP tax rate of 20%.
(2) Excludes $6,544 of total stock-based compensation restructuring charges, which are included under Stock-based compensation and related employer payroll tax.
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 equity investments, net Income tax adjustment (1) 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 expenses

 

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

%

 

-

%

 

0.4

%

 

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

 

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

 

Contacts

For more information, please contact:

Media Contact

Patricia Hogan

Splunk Inc.

press@splunk.com

Investor Contact

Katie White

Splunk Inc.

ir@splunk.com

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