Splunk : Announces Fiscal Fourth Quarter and Full Year 2016 Financial Results

SAN FRANCISCO - February 25, 2016 - Splunk Inc. (NASDAQ: SPLK), provider of the leading software platform for real-time Operational Intelligence, today announced results for its fiscal fourth quarter and full year ended January 31, 2016.

Fourth Quarter 2016 Financial Highlights

• Total revenues were $220.0 million, up 49% year-over-year.
• License revenues were $141.4 million, up 44% year-over-year.
• GAAP operating loss was $79.0 million; GAAP operating margin was negative 35.9%.
• Non-GAAP operating income was $14.7 million; non-GAAP operating margin was 6.7%.
• GAAP loss per share was $0.61; non-GAAP income per share was $0.11.
• Operating cash flow was $77.0 million with free cash flow of $50.2 million.

Full Year 2016 Financial Highlights

• Total revenues were $668.4 million, up 48% year-over-year.
• License revenues were $405.4 million, up 43% year-over-year.
• GAAP operating margin was negative 43.1%; non-GAAP operating margin was 3.8%.
• Operating cash flow was $155.6 million with free cash flow of $104.3 million.

'Our record results, customer adoption and expansions reaffirm that we are truly differentiated in the market,' said Doug Merritt, President and CEO, Splunk. 'We ended the year with over 11,000 customers who recognize that the more data they put into Splunk, the more value they realize. We are confident in our future growth and long-term strategy and are raising our outlook for FY17.'

Fourth Quarter 2016 and Recent Business Highlights:

Customers:

• Signed more than 600 new enterprise customers and ended the year with more than 11,000 customers worldwide.
• New and Expansion Customers Include: Bloomberg, Boston Scientific, Cardinal Health, eBay, EchoStar, Expedia, Experian, Fairfax County (Virginia), Fanatics, Federal Reserve, Fox News, GEICO, GoDaddy, IAC/InterActiveCorp, Iluka Resources (Australia), Los Angeles Department of Water and Power, Mr Green (Malta), Neustar, NASDAQ, Northwestern Mutual, PagerDuty, Queensland Department of Education and Training (Australia), Shell, Skandiabanken (Sweden), Softbank Corp. (Japan), Sporting Index (UK), State of Delaware, U.S. Army, Veterans Affairs, Voya Financial and William Hill (UK).

Products:

• Released the new version of the Splunk App for AWS, which delivers operational, security and economic insights in Amazon Web Services environments.
• Released the Splunk App for Akamai to help Splunk Cloud customers gain end-to-end visibility and operational insight into the performance, availability and security of cloud applications.
• Released the new version of Splunk App for ServiceNow, which provides insights into incident, change and event management processes in ServiceNow instances.

Strategic and Channel Partners:

Recognition:

Financial Outlook

The company is providing the following guidance for its fiscal first quarter 2017 (ending April 30, 2016):

• Total revenues are expected to be between $172 million and $174 million.
• Non-GAAP operating margin is expected to be between negative 1% and 2%.

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

• Total revenues are expected to be approximately $880 million (was approximately $850 million per prior guidance provided on November 19, 2015).

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

• Non-GAAP operating margin is expected to be approximately 5%.

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, ground lease expense related to a build-to-suit lease obligation and acquisition-related costs.

While a reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis 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 2016 and fiscal year 2016 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 March 3, 2016 by dialing (855) 859-2056 and referencing Conference ID 42319003.

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 first quarter and fiscal year 2017 in the paragraphs under 'Financial Outlook' above and other statements regarding customer demand and penetration, market opportunity, expected success from product and service investments and innovations, adoption across all market groups and growth strategies. 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 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 October 31, 2015, 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.