Splunk Inc. Announces Fiscal Fourth Quarter and Full Year 2021 Financial Results

Rhea-AI Summary

Splunk Inc. (SPLK) reported its fiscal Q4 and full-year results for 2021, highlighting a Cloud ARR growth of 83% to $810 million and a total ARR increase of 41% to $2.36 billion. While total revenues declined 6% year-over-year to $745 million, the company achieved cloud revenue of $171 million, up 72%. Despite GAAP operating loss of $780 million and negative operating margins, Splunk aims to leverage its Data-to-Everything Platform for future growth. Guidance for Q1 2022 includes total ARR between $2.42 billion and $2.44 billion and revenues between $480 million and $500 million.

Positive

• Cloud ARR grew 83% year-over-year to $810 million.
• Total ARR increased 41% year-over-year to $2.36 billion.
• Cloud revenue reached $171 million, a 72% increase year-over-year.
• 510 customers now have ARR over $1 million, a 44% rise year-over-year.

Negative

• Total revenues decreased 6% year-over-year to $745 million.
• GAAP operating loss was $780 million, with a negative margin of 35%.
• Operating cash flow was negative $191 million.

Splunk Inc. (NASDAQ: SPLK), provider of the Data-to-Everything Platform, today announced results for its fiscal fourth quarter and full year ended January 31, 2021.

Fourth Quarter 2021 Financial Highlights

• Cloud ARR was $810 million, up 83% year-over-year.
• Total ARR was $2.36 billion, up 41% year-over-year.
• Cloud revenue was $171 million, up 72% year-over-year.
• Total revenues were $745 million, down 6% year-over-year.
• 510 customers with ARR greater than $1 million, up 44% year-over-year.

Full Year 2021 Financial Highlights

• Cloud revenue was $554 million, up 77% year-over-year.
• Total revenues were $2.23 billion, down 5% year-over-year.
• GAAP operating loss was $780 million; GAAP operating margin was negative 35%.
• Non-GAAP operating loss was $85 million; non-GAAP operating margin was negative 3.8%.
• GAAP loss per share was $5.68; non-GAAP loss per share was $0.55.
• Operating cash flow was negative $191 million with free cash flow of negative $228 million.

“Just three years ago, we set out to radically transform Splunk to better help our customers put data at the heart of their own organizations and strategy,” said Doug Merritt, President and CEO, Splunk. “I’ve been incredibly proud of our progress through our transformation, and this quarter’s performance is no exception.”

“The market’s demand for data-driven solutions that enable digital and cloud transformation has never been higher,” Merritt continued. “We now have more than 500 customers investing over $1 million annually in our platform and solutions. At our size, Splunk is one of the fastest growing companies in the history of enterprise software.”

“With Total ARR growing 41% year-over-year and $810M of Cloud ARR accelerating to 83% growth, we are extremely proud of the team’s execution and the company’s business fundamentals, both of which remain strong,” said Jason Child, chief financial officer, Splunk. “As organizations continue to reinvent towards the cloud, I’m confident that our ability to support them across IT, Security and Developer operations positions Splunk for long-term success.”

Fiscal Year 2021 & Recent Business Highlights:

New and Expansion Customers Include: California Pizza Kitchen, Cornerstone OnDemand, Europcar (France), Ghana International Bank, Lockheed Martin Space, Nationwide Building Society (United Kingdom), NATO Communications and Information Agency (Belgium), The New York City Fire Department (FDNY), Nvidia, Okta, Shopify, Strava, Tesco (United Kingdom), Tide, United States Census Bureau

• Splunk’s Data-to-Everything Platform Helps Customers Thrive in the Data Age: New enhancements to Splunk Cloud and Splunk Enterprise power Splunk’s Data-to-Everything Platform, allowing customers to bring data to every decision, question and action across IT, Security and Observability. With updates to Splunk Data Stream Processor, Splunk Connected Experiences and Splunk’s Machine Learning Environment (SMLE), organizations around the world can improve the speed, scale and flexibility of Splunk, with new search and mobile capabilities that enable faster cloud transformation.
• Splunk’s Industry-Leading IT & Security Platforms Accelerate the Cloud Journey: Splunk announced a series of cloud-centric updates to its market-shaping IT and Security offerings, Splunk IT Service Intelligence (ITSI) and Splunk Enterprise Security. New updates to Splunk Mission Control helps security teams unify and modernize security operations in the cloud; while the latest version of Splunk IT Service Intelligence gives teams end-to-end visibility, operational efficiency and business intelligence so organizations can predict incidents before they impact customers.
• Splunk Customers Go All-In On Cloud: Parallel to Splunk’s significant Cloud products transformation, businesses using Splunk around the world are embracing Splunk Cloud to modernize their data strategies and embrace The Data Age. Across 2020, Splunk’s cloud business represented nearly half of the company’s software bookings, enabling organizations to migrate workloads and applications to the cloud, manage colossal spikes in data volume or increase visibility into cloud security risks.
• Splunk Launches the World’s Most Comprehensive Observability Suite: Announced at .conf20, Splunk’s Observability Suite combines the power of Splunk’s Data-to-Everything Platform with acquired technologies including SignalFx, Ominition, Streamlio, Plumbr, Rigor and Flowmill. By aligning best-in-class solutions for infrastructure monitoring, application performance monitoring, digital experience monitoring, log investigation and incident response into a single, tightly integrated suite of products, Splunk’s Observability Suite helps IT and DevOps teams tackle new monitoring challenges that other tools simply can’t effectively address.
• Splunk’s World-Renowned Partners Help Fuel Digital Transformation Initiatives: Spawned by the world’s rapidly accelerating shift to the cloud, Splunk’s Splunk Partner+ ecosystem continued to expand, helping customers bring data to everything. This year, Splunk Cloud launched on Google Cloud, helping organizations achieve actionable insights from their data that enable fast decisions and real-time visibility across the enterprise. Splunk also built on its strong partnership and demonstrated increased mutual investment and resourcing with AWS by signing a new 3-year strategic collaboration agreement.
• Splunk Recognized Globally as a Career-Defining, Destination Workplace: In spite of the ongoing COVID-19 pandemic, Splunk continued to grow its global workforce to over 6,000 Splunkers, united in one mission to turn data into doing. Throughout the year, the company was recognized as a leader in corporate culture, being named by Fortune as a Most Admired Company, Future 50 Company, Best Workplace for Women and Best Workplace for Millennials, amongst other technology and workplace awards.

Financial Outlook

The company is providing the following guidance for its fiscal first quarter 2022 (ending April 30, 2021):

• Total ARR is expected to be between $2.42 billion and $2.44 billion.
• Total revenues are expected to be between $480 million and $500 million.
• Non-GAAP operating margin is expected to be approximately negative 30%.

All forward-looking non-GAAP financial measures contained in this section “Financial Outlook” exclude estimates for stock-based compensation and related employer payroll tax, acquisition-related adjustments, amortization of intangible assets and capitalized software costs.

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. The company has provided a reconciliation of GAAP to non-GAAP financial measures in the financial statement tables for its fiscal fourth quarter and full year 2021 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-presentations. A replay of the call will be available through March 10, 2021 by dialing (855) 859-2056 and referencing Conference ID 1086748.

Safe Harbor Statement

This press release contains forward-looking statements that involve risks and uncertainties, including statements regarding Splunk’s total ARR, revenue and non-GAAP operating margin targets for the company’s fiscal first quarter in the paragraphs under “Financial Outlook” above and other statements regarding our market opportunity, including the impact of the COVID-19 pandemic on the business environment, such as the pace of customer digital and cloud transformation and the importance of data; the growth of our cloud business; the market for data-related products and trends in this market, future growth and related targets, including trends in our cloud software business mix, customer renewals, momentum, growth rate, strategy, technology and product innovation; expectations for our industry and business, such as our business model, customer demand, 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: risks associated with Splunk’s rapid growth, particularly outside of the United States; Splunk’s inability to realize value from its significant investments in its business, including product and service innovations and through acquisitions; Splunk’s shift from sales of perpetual licenses in favor of sales of term licenses and subscription agreements for our cloud services which impact the timing of revenue, cash collections and margins; a shift from sales of term licenses in favor of sales of subscription agreements for our cloud services which impact 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, such as Plumbr, Rigor and Flowmill; Splunk’s inability to service its debt obligations or other adverse effects related to our convertible notes; the impact of the COVID-19 pandemic and related public health measures on our business, as well as the impact of the COVID-19 pandemic 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, 2020, 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) turns data into doing with the Data-to-Everything Platform. Splunk technology is designed to investigate, monitor, analyze and act on data at any scale.

Splunk, Splunk>, Data-to-Everything, D2E 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. © 2021 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,
			2021				2020				2021				2020
Revenues
License		$	405,954			$	517,542			$	971,378			$	1,373,367
Cloud services			171,396				99,413				554,132				312,358
Maintenance and services			167,728				174,227				703,875				673,201
Total revenues			745,078				791,182				2,229,385				2,358,926
Cost of revenues
License			4,315				6,702				20,864				24,116
Cloud services			75,718				52,985				252,290				161,510
Maintenance and services			69,863				68,151				274,191				244,162
Total cost of revenues			149,896				127,838				547,345				429,788
Gross profit			595,182				663,344				1,682,040				1,929,138
Operating expenses
Research and development			211,383				197,513				791,026				619,800
Sales and marketing			369,999				367,116				1,336,056				1,263,873
General and administrative			100,398				106,484				335,144				332,602
Total operating expenses			681,780				671,113				2,462,226				2,216,275
Operating loss			(86,598	)			(7,769	)			(780,186	)			(287,137	)
Interest and other income (expense), net
Interest income			1,412				8,769				13,850				54,142
Interest expense			(34,519	)			(24,722	)			(123,076	)			(96,249	)
Other income (expense), net			(16,169	)			(999	)			(11,636	)			(2,407	)
Total interest and other income (expense), net			(49,276	)			(16,952	)			(120,862	)			(44,514	)
Loss before income taxes			(135,874	)			(24,721	)			(901,048	)			(331,651	)
Income tax provision (benefit)			3,674				(1,993	)			6,932				5,017
Net loss		$	(139,548	)		$	(22,728	)		$	(907,980	)		$	(336,668	)
Basic and diluted net loss per share		$	(0.86	)		$	(0.15	)		$	(5.68	)		$	(2.22	)
Weighted-average shares used in computing basic and diluted net loss per share			162,009				155,915				159,744				151,949

Splunk Inc.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
		January 31, 2021				January 31, 2020
Assets
Current assets
Cash and cash equivalents		$	1,771,064			$	778,653
Investments, current			87,847				976,508
Accounts receivable, net			1,114,199				838,743
Prepaid expenses and other current assets			162,939				129,839
Deferred commissions, current			136,331				99,072
Total current assets			3,272,380				2,822,815
Investments, non-current			13,728				35,370
Accounts receivable, non-current			347,202				468,934
Operating lease right-of-use assets			356,296				267,086
Property and equipment, net			182,780				156,928
Intangible assets, net			206,153				238,415
Goodwill			1,334,888				1,292,840
Deferred commissions, non-current			69,637				88,990
Other assets			85,422				68,093
Total assets		$	5,868,486			$	5,439,471
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable		$	9,319			$	18,938
Accrued compensation			281,986				286,159
Accrued expenses and other liabilities			202,959				177,822
Deferred revenue, current			1,030,484				829,377
Total current liabilities			1,524,748				1,312,296
Convertible senior notes, net			2,302,635				1,714,630
Operating lease liabilities			330,970				235,631
Deferred revenue, non-current			110,418				176,832
Other liabilities, non-current			5,710				653
Total non-current liabilities			2,749,733				2,127,746
Total liabilities			4,274,481				3,440,042
Stockholders' equity
Common stock			163				157
Accumulated other comprehensive loss			(592	)			(5,312	)
Additional paid-in capital			4,063,885				3,566,055
Accumulated deficit			(2,469,451	)			(1,561,471	)
Total stockholders' equity			1,594,005				1,999,429
Total liabilities and stockholders' equity		$	5,868,486			$	5,439,471

Splunk Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
		Three Months Ended January 31,								Fiscal Year Ended January 31,
			2021				2020				2021				2020
Cash flows from operating activities
Net loss		$	(139,548	)		$	(22,728	)		$	(907,980	)		$	(336,668	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			26,397				21,582				93,666				67,661
Amortization of deferred commissions			42,878				29,275				142,095				104,353
Amortization of investment premiums (accretion of discounts), net			223				(1,584	)			(667	)			(9,553	)
Loss on strategic investment			4,500				-				4,500				-
Amortization of debt discount and issuance costs			27,322				20,679				98,977				80,156
Gain on extinguishment of convertible senior notes			-				-				(6,952	)			-
Repurchase of convertible senior notes attributable to the accreted interest related to debt discount			-				-				(22,149	)			-
Non-cash operating lease costs			9,627				(6,313	)			25,410				1,198
Stock-based compensation			166,174				166,496				618,655				545,424
Disposal of property and equipment			64				1,974				1,045				1,974
Deferred income taxes			(1,581	)			(5,722	)			(3,590	)			(6,120	)
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable, net			(344,617	)			(365,503	)			(153,724	)			(679,891	)
Prepaid expenses and other assets			(31,020	)			(37,027	)			(45,476	)			(69,575	)
Deferred commissions			(60,230	)			(64,965	)			(160,001	)			(149,426	)
Accounts payable			(3,903	)			(4,312	)			(9,082	)			(5,441	)
Accrued compensation			(4,115	)			71,719				(3,805	)			58,898
Accrued expenses and other liabilities			17,311				(13,011	)			3,814				(10,392	)
Deferred revenue			266,752				150,609				134,402				119,766
Net cash used in operating activities			(23,766	)			(58,831	)			(190,862	)			(287,636	)
Cash flows from investing activities
Purchases of investments			-				(270,632	)			(87,135	)			(1,086,317	)
Maturities of investments			252,558				274,841				995,878				1,080,812
Acquisitions, net of cash acquired			(44,625	)			(18,574	)			(56,383	)			(594,870	)
Purchases of property and equipment			(8,800	)			(47,595	)			(37,107	)			(101,119	)
Capitalized software development costs			(3,899	)			(2,589	)			(14,602	)			(2,589	)
Other investment activities			-				(148	)			(3,461	)			(3,898	)
Net cash provided by (used in) investing activities			195,234				(64,697	)			797,190	{ "@context": "https://schema.org", "@type": "FAQPage", "name": "Splunk Inc. Announces Fiscal Fourth Quarter and Full Year 2021 Financial Results FAQs", "mainEntity": [ { "@type": "Question", "name": "What were Splunk's Q4 2021 financial highlights?", "acceptedAnswer": { "@type": "Answer", "text": "Splunk reported a Cloud ARR of $810 million, up 83% year-over-year, with total revenues at $745 million, down 6% year-over-year." } }, { "@type": "Question", "name": "What is the guidance for Splunk's fiscal Q1 2022?", "acceptedAnswer": { "@type": "Answer", "text": "Splunk expects total ARR between $2.42 billion and $2.44 billion and total revenues between $480 million and $500 million." } }, { "@type": "Question", "name": "How has Splunk's cloud revenue performed in 2021?", "acceptedAnswer": { "@type": "Answer", "text": "Splunk's cloud revenue was $171 million for Q4 2021, marking a 72% increase year-over-year." } }, { "@type": "Question", "name": "What were the overall results for Splunk in fiscal year 2021?", "acceptedAnswer": { "@type": "Answer", "text": "For fiscal year 2021, Splunk's total revenues were $2.23 billion, down 5% year-over-year, while cloud revenue reached $554 million, up 77%." } } ] } FAQ What were Splunk's Q4 2021 financial highlights? Splunk reported a Cloud ARR of $810 million, up 83% year-over-year, with total revenues at $745 million, down 6% year-over-year. What is the guidance for Splunk's fiscal Q1 2022? Splunk expects total ARR between $2.42 billion and $2.44 billion and total revenues between $480 million and $500 million. How has Splunk's cloud revenue performed in 2021? Splunk's cloud revenue was $171 million for Q4 2021, marking a 72% increase year-over-year. What were the overall results for Splunk in fiscal year 2021? For fiscal year 2021, Splunk's total revenues were $2.23 billion, down 5% year-over-year, while cloud revenue reached $554 million, up 77%. Splunk Inc. NASDAQ:SPLK SPLK Rankings N/A Ranked by Market Cap N/A Ranked by Dividends SPLK Latest News Feb 27, 2024 Splunk Announces Fiscal Fourth Quarter and Full Year 2024 Financial Results Feb 6, 2024 Splunk to Announce Fiscal 2024 Fourth Quarter and Full Year Results on February 27, 2024 Dec 14, 2023 Survey: AI Adoption Among Federal Agencies Is Up But Trust Continues to Be An Obstacle to Future Adoption and Use Dec 5, 2023 Media Alert: Splunk GovSummit 2023 - Delivering on the Nation’s Cyber Strategy Together Nov 28, 2023 Splunk Announces Fiscal Third Quarter 2024 Financial Results SPLK Stock Data Market Cap 26.44B Float 155.17M Insiders Ownership 0.45% Institutions Ownership 87.96% Short Percent 2.88% Industry Software - Infrastructure Sector Technology Website Link Country United States City San Francisco Explore About Rhea-AI Sitemap Legal Terms of Use Cookie Notice Privacy Policy Links RSS feed Patreon Discord Server Facebook Reddit Google News © 2020-2024 StockTitan.net