Splunk Reports Fiscal Third Quarter 2017 Financial Results 

Nov. 30 -- Splunk Inc. (NASDAQ: SPLK), provider of the leading software platform for real-time Operational Intelligence, has announced results for its fiscal third quarter ended October 31, 2016.

Third Quarter 2017 Financial Highlights

• Total revenues were $245 million, up 40% year-over-year.
• License revenues were $140 million, up 34% year-over-year.
• GAAP operating loss was $91.0 million; GAAP operating margin was negative 37.2%.
• Non-GAAP operating income was $16.7 million; non-GAAP operating margin was 6.8%.
• GAAP loss per share was $0.69; non-GAAP earnings per share was $0.12.
• Operating cash flow was $45.3 million with free cash flow of $32.3 million.

“Our market opportunity is tremendous,” said Doug Merritt, President and CEO. “Splunk provides the market leading platform that powers Operational Intelligence to enable customers to cost effectively get value from machine data. We want to make it easier to collect and analyze even larger volumes and varieties of data to help our customers gain more insights and value from Splunk solutions. Our passionate customers and their innovations with the Splunk platform are at the core of our success.”

Third Quarter 2017 and Recent Business Highlights:

Customers:

• Signed nearly 500 new enterprise customers.
• New and Expansion Customers Include: BMW (Germany), Cequint, Dow Jones, Educational Testing Services, Emirates Airlines, Exostar, Florida State University, Garanti Bank (Turkey), Monash University (Australia), Progressive Insurance, Rackspace, State of Maine, University Health System, University of Illinois, University of Miami, U.S. Department of Homeland Security, U.S. Department of State, Yahoo Japan and Zendesk.

Products:

• Announced the newest versions of Splunk solutions leverage machine learning to empower IT, security and business teams to make better data decisions and maximize the value machine data can deliver to organizations.
• Announced the general availability (GA) of the new versions of Splunk Cloud and Splunk Enterprise to expand the Splunk platform with machine learning and simplified data analysis.
• Announced the GA of Splunk IT Service Intelligence 2.5 (ITSI) to simplify service operations with machine learning and deliver business and service context to help prioritize incident investigation.
• Announced the GA of Splunk Enterprise Security 4.5 (ES), which includes Adaptive Response to extend the security architecture beyond legacy preventative technologies and expand its visual analytics capabilities with Glass Tables.
• Announced the GA of Splunk User Behavior Analytics 3.0 (UBA) to provide customers with the ability to update detection footprint with zero downtime and without hassle.
• Introduced the Talk to Splunk with Amazon Alexa App, enabling Splunk instances to interface with Amazon Alexa by way of a custom Alexa skill and thereby provisioning a Natural Language interface for Splunk.
• Released Splunk AppInspect, the first static and dynamic analysis tool for Splunk apps, making it possible for developers to get their work done faster, with fewer errors and less debugging.

Corporate:

• Unveiled Splunk Pledge, a new philanthropic program through the Splunk4Good initiative, which commits to donate a minimum of $100 million in software licenses, training, support, education and volunteerism over a 10-year period to nonprofit organizations and educational institutions in order to support academic research and generate social impact.
• Announced investments in two companies – Acalvio and Insight Engines – to further drive innovation and extend the power and reach of the Splunk platform.

Strategic and Channel Partners:

• Announced the expansion of the Splunk-led Adaptive Response Initiative to strengthen enterprise security, with 11 new members including Acalvio, Anomali, Cisco, CrowdStrike, DomainTools, ForeScout, Okta, Proofpoint, Qualys, Recorded Future and Symantec.
• Cisco and Splunk joined forces at .conf2016 to highlight the companies’ eight-year partnership, together delivering integrated solutions for thousands of organizations around the globe.
• Highlighted the strong partnership between Amazon Web Services (AWS) and Splunk at .conf2016, focused on driving customer success in the cloud.
• Ansible by Red Hat introduced the Ansible Tower App for Splunk, a new app developed to ingest all data associated with Ansible deployments, inventories and jobs and deliver this visibility to teams involved in app delivery.

Recognition:

• Splunk received three Cisco Partner Summit awards – one Global award and two country awards in the U.S. Splunk was recognized as Global ISV Partner of the Year, as well as a U.S. (West) Outstanding Solutions Partner and U.S. Public Sector ISV and Consultant Partner of the Year.
• Splunk was named by Glassdoor as one of the top-rated public cloud company employers.
• Splunk Cloud was named the 2016 Best Big Data Analytics Solution in the fourth Cloud & DevOps World Awards, which honor excellence and innovation in cloud computing.
• Splunk was named to Database Trends and Applications’ annual Big Data 50 awards.
• Splunk was ranked 18th on the San Francisco Business Times’ list of the 75 Largest Software Companies in the Greater Bay Area.

Events:

• Hosted .conf2016, the 7th annual Splunk Worldwide Users’ Conference in Orlando, drawing more than 4,500 Splunk enthusiasts, partners and experts in machine learning, data analytics, security, IT operations, cloud, DevOps, SaaS, business analytics, Internet of Things and more.
• Hosted SplunkLive! events in cities worldwide, including Auckland, Santa Clara, Denver, Nashville, Shanghai and Stockholm. Presentations can be found on the SplunkLive! website.

Appointments:

• Appointed Brian Goldfarb as Chief Marketing Officer.
• Appointed Richard Campione as Chief Product Officer.

Financial Outlook

The company is providing the following guidance for its fiscal fourth quarter 2017 (ending January 31, 2017):

• Total revenues are expected to be between $286 and $288 million.
• Non-GAAP operating margin is expected to be between 8% and 9%.

The company is updating its previous guidance for its fiscal year 2017 (ending January 31, 2017):

• Total revenues are expected to be between $930 and $932 million (was between $910 and $914 million per prior guidance provided on August 25, 2016).
• Non-GAAP operating margin is expected to be between 5% and 6% (was approximately 5% per prior guidance provided on August 25, 2016).

All forward-looking non-GAAP financial measures contained in this section “Financial Outlook” exclude estimates for stock-based compensation expenses, employer payroll tax expense related to employee stock plans, amortization of acquired intangible assets, acquisition-related costs and adjustments related to a financing lease obligation.

A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, many of these costs and expenses that may be incurred in the future.  For example, stock-based compensation expense is impacted by a number of factors, such as Splunk’s future hiring and retention, as well as the future fair market value of Splunk’s common stock, all of which are difficult to predict and subject to constant change.  The company has provided a reconciliation of GAAP to non-GAAP financial measures in the financial statement tables for its fiscal third quarter 2017 non-GAAP results included in this press release. The exclusion of these costs and expenses will have a significant impact on Splunk’s non-GAAP operating margin.

About Splunk Inc.

Splunk Inc. (NASDAQ: SPLK) is the market-leading platform that powers Operational Intelligence. We pioneer innovative, disruptive solutions that make machine data accessible, usable and valuable to everyone. More than 12,000 customers in over 110 countries use Splunk software and cloud services to make business, government and education more efficient, secure and profitable. Join hundreds of thousands of passionate users by trying Splunk solutions for free: http://www.splunk.com/free-trials.

Source: Splunk