Splunk : Announces Fiscal First Quarter 2018 Financial Results

SAN FRANCISCO - May 25, 2017 - Splunk Inc. (NASDAQ: SPLK), provider of the leading software platform for real-time Operational Intelligence, today announced results for its fiscal first quarter ended April 30, 2017.

First Quarter 2018 Financial Highlights

• Total revenues were $242.4 million, up 30% year-over-year.
• Total billings were $242.8 million, up 30% year-over-year.
• GAAP operating loss was $97.5 million; GAAP operating margin was negative 40.2%.
• Non-GAAP operating loss was $2.8 million; non-GAAP operating margin was negative 1.2%.
• GAAP loss per share was $0.73; non-GAAP loss per share was $0.01.
• Operating cash flow was $41.4 million with free cash flow of $35.8 million.

'Organizations everywhere are at the center of a data-driven world and Splunk enables success by turning massive data into answers and action,' said Doug Merritt, President and CEO, Splunk. 'We are pleased that organizations continue to adopt the Splunk platform on-premises, in the cloud and in a hybrid environment. This continued adoption, flexible deployment and our strong app ecosystem is helping us deliver on our goal of increasing customer success.'

First Quarter 2018 and Recent Business Highlights:

Customers:

• Signed nearly 500 new enterprise customers.
• New and expansion customers include: Alabama Department of Transportation, Airport Authority Hong Kong, Black Box Corporation, California Department of Social Services, Cerner Corporation, Experian Consumer Services, Jefferson County Public Schools, Lockheed Martin, Lloyd's Bank (UK), Merck KGaA (Germany), Monash University, Party City, Practice Fusion, STARTEK, State of Kansas, Tata Consultancy Services (India), Take-Two, Trustpower Limited (NZ), Wirecard Technologies (Germany), UK Ministry of Defence, University of New Mexico, University of North Carolina at Chapel Hill and U.S. Navy.

Products:

• Announced support for SaaS Contracts in AWS Marketplace to enable seamless procurement and deployment of Splunk Cloud, ensuring fast time-to-value for customers leveraging Splunk solutions across their Amazon Web Services (AWS) and hybrid environments.
• Announced Splunk DB Connect 3.0, which enables powerful connections between Splunk and the structured data world of SQL and JDBC.

Corporate:

Strategic and Channel Partners:

Recognition:

• Announced Splunk's position as a Leader in The Forrester Wave™: Security Analytics Platforms, Q1 2017 report. Forrester awarded Splunk Enterprise Security (ES) with the highest possible scores for real-time monitoring, scalability and detection technologies.
• Splunk ES received a 5-Star review from SC Magazine, which noted Splunk as an analytics-driven SIEM with straightforward functionality at a very reasonable price.
• Splunk won three awards in TechWorld's techies 2017 : Best Security Technology of the Year, Best Cloud Technology of the Year and the Grand Prix Award.
• Splunk was named a 2016-17 winner in The Cloud Awards in the category of Best Hybrid Cloud Solution.

Events:

• Splunk's Women in Technology (WiT) group hosted over 200 women at the Bay Area Girl Geek Dinner for an evening of networking, education and empowerment.

Financial Outlook
The company is providing the following guidance for its fiscal second quarter 2018 (ending July 31, 2017):

• Total revenues are expected to be between $267 million and $269 million.
• Non-GAAP operating margin is expected to be approximately 4%.

The company is updating its previous guidance for its fiscal year 2018 (ending January 31, 2018):

• Total billings are expected to be approximately $1.425 billion (was approximately $1.4 billion per prior guidance provided on January 12, 2017).
• Total revenues are expected to be approximately $1.195 billion (was approximately $1.185 billion per prior guidance provided on February 23, 2017).
• Non-GAAP operating margin is expected to be approximately 8% (unchanged from prior guidance).

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 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. The company has provided a reconciliation of GAAP to non-GAAP financial measures in the financial statement tables for its fiscal first quarter 2018 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 1, 2017 by dialing (855) 859-2056 and referencing Conference ID 17978057.

Safe Harbor Statement
This press release contains forward-looking statements that involve risks and uncertainties, including statements regarding Splunk's revenue, billings and non-GAAP operating margin targets for the company's fiscal second quarter and fiscal year 2018 in the paragraphs under 'Financial Outlook' above and other statements regarding future growth, strategy, subscription business, cloud adoption, customer demand and penetration, app ecosystem, and expected benefits of new products. 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 and experience developing and introducing new products, including its cloud offerings; 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; Splunk's transition to a multi-product software and services business; Splunk's inability to successfully integrate acquired businesses and technologies; 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 Annual Report on Form 10-K for the fiscal year ended January 31, 2017, 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.