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August 27, 2015 4:06 PM EDT


 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

____________________________________________________

FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported)

August 27, 2015
____________________________________________________
  
Splunk Inc.
(Exact name of registrant as specified in its charter)
 
Delaware
 
001-35498
 
86-1106510
(State or other jurisdiction of
incorporation)
 
(Commission File Number)
 
(IRS Employer
Identification No.)
 
250 Brannan Street
San Francisco, California 94107
(Address of principal executive offices, including zip code)
 
(415) 848-8400
(Registrant’s telephone number, including area code)
 
 
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))




 



Item 2.02    Results of Operations and Financial Condition.
 
On August 27, 2015, Splunk Inc. issued a press release announcing its financial results for the fiscal second quarter ended July 31, 2015.  A copy of the press release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
 
The information contained herein and in the accompanying exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or incorporated by reference in any filing under the Securities Act of 1933, as amended, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference in such filing.
 
Item 9.01    Financial Statements and Exhibits.
 
(d)                                 Exhibits
 
Exhibit
Number
 
Description
 
 
 
99.1
 
Press release issued by Splunk Inc. dated August 27, 2015.




2


SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
SPLUNK INC.
 
 
 
 
 
 
 
By:
/s/ David F. Conte
 
 
David F. Conte
 
 
Senior Vice President and Chief Financial Officer
 
Date:  August 27, 2015


3


EXHIBIT INDEX
 
Exhibit
Number
 
Description
 
 
 
99.1
 
Press release issued by Splunk Inc. dated August 27, 2015.


4


Exhibit 99.1
P R E S S   R E L E A S E 

Splunk Inc. Announces Fiscal Second Quarter 2016 Financial Results
Total Revenues Grew 46%; Surpasses 10,000 Customer Mark

SAN FRANCISCO - August 27, 2015 - Splunk Inc. (NASDAQ: SPLK), provider of the leading software platform for real-time Operational Intelligence, today announced results for its fiscal second quarter ended July 31, 2015.

Second Quarter 2016 Financial Highlights
•
Total revenues were $148.3 million, up 46% year-over-year.
•
License revenues were $88.0 million, up 42% year-over-year.
•
GAAP operating loss was $65.6 million; GAAP operating margin was negative 44.2%.
•
Non-GAAP operating income was $4.8 million; non-GAAP operating margin was 3.2%. 
•
GAAP loss per share was $0.44; non-GAAP earnings per share were $0.03.
•
Operating cash flow was $13.6 million with free cash flow of $10.8 million.

“We are pleased with our quarterly results and thrilled to cross the 10,000 customer mark worldwide,” said Godfrey Sullivan, Chairman and CEO. “We have extended our position as the leading platform for machine data with two acquisitions focused on machine learning. With Metafor, we added world-class IT anomaly detection, and with Caspida we will provide data science-driven behavioral analytics for security. Our continuing investments in product innovation will help our customers realize even greater value from our solutions across a wide range of use cases.”
 
Second Quarter 2016 and Recent Business Highlights
Customers:
•
Signed more than 500 new customers, ending the quarter with more than 10,000 customers worldwide.
•
New and Expansion Customers Include: AFLAC, Barnes & Noble, Blue Coat Systems Inc., City of San Diego, Covered California, Deutsche Bahn (Germany), Experian (United Kingdom), Gatwick Airport (United Kingdom), GEICO, Infospace, Materialise NV (Belgium), Maxim’s Caterers (Hong Kong), Pernod Ricard (France), Samsung Semiconductor (South Korea), Sharp Healthcare, Staples, State of Missouri, Texas Roadhouse, Unify Solutions (Australia), United States Marine Corp, U.S. Securities and Exchange Commission and Yelp.

Product:
•
Released the new version of the Splunk App for Stream, with functionality that simplifies configuration while increasing administration flexibility.
•
Announced the winners of Splunk Apptitude App Contest.
◦
Fraud / Insider Threat app winner: Hyperthreat
◦
Social Impact app winner: Energy Scan
◦
Innovation app winner: PRI Capacity

Acquisitions:
•
Announced the acquisition of Caspida, extending Splunk’s security analytics leadership by adding Behavioral Analytics and machine learning to better detect advanced and insider threats.
•
Acquired Metafor Software, an anomaly detection and machine learning company.

Strategic and Channel Partners:
•
Splunk technology partner, Kepware Technologies, awarded the 2015 IoT Evolution Product of the Year Award, from IoT Evolution Magazine, for its Industrial Data Forwarder for Splunk plug-in.

Recognition:
•
Splunk named a Leader in the 2015 Gartner Magic Quadrant for Security Information and Event Management and is the only company to improve on completeness of vision.
•
Splunk won first prize at the Deutsche Bahn Internet of Things Hackathon.
•
Splunk won Computing’s Vendor Excellence Award for “Big Data Innovation”, referencing Splunk’s work to democratize big data.

Splunk Inc. | www.splunk.com




Events:
•
Hosted SplunkLive! events in cities around the world, including: Boston, Chicago, Hamburg, London, New York, Osaka, Philadelphia, San Francisco, Singapore, Sydney, Tokyo, Toronto and Vienna. Presentations can be found on the SplunkLive! website.

Financial Outlook
The company is providing the following guidance for its fiscal third quarter 2016 (ending October 31, 2015):
•
Total revenues are expected to be between $158 million and $160 million.
•
Non-GAAP operating margin is expected to be between 1% and 2%.

The company is updating its previous guidance for its fiscal year 2016 (ending January 31, 2016):
•
Total revenues are expected to be between $628 million and $632 million (was $610 million to $614 million per prior guidance provided on May 28, 2015).
•
Non-GAAP operating margin is expected to be between 2% and 3%.

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 ground lease expense related to a build-to-suit lease obligation.

While a reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis, the company has provided a reconciliation of GAAP to non-GAAP financial measures in the financial statement tables for its fiscal second quarter 2016 and fiscal first half 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 Sept. 3, 2015 by dialing (855) 859-2056 and referencing Conference ID 89826862.

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 third quarter and fiscal year 2016 in the paragraphs under “Financial Outlook” above and other statements regarding momentum in the company’s business, customer growth, customer adoption of and value using our existing and acquired products, product innovations and planned investments. 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 and services; including its cloud offerings; risks associated with Splunk’s rapid growth, particularly outside of the U.S.; Splunk’s inability to realize value from its significant investments in its business, including through acquisitions and product and service innovations; Splunk’s transition to a multi-product software and services solutions oriented business; Splunk’s inability to successfully integrate acquired businesses, products 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 April 30, 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.

About Splunk Inc.
Splunk Inc. (NASDAQ: SPLK) provides the leading software platform for real-time Operational Intelligence. Splunk® software and cloud services enable organizations to search, monitor, analyze and visualize machine-generated big data coming from websites, applications, servers, networks, sensors and mobile devices. More than 10,000 enterprises, government agencies, universities and service providers in more than 100 countries use Splunk software to deepen business and customer understanding, mitigate cybersecurity risk, prevent fraud, improve service performance and reduce cost. Splunk products include Splunk® Enterprise, Splunk Cloud™, Hunk®, Splunk Light™, Splunk MINT and premium Splunk Apps. To learn more, please visit http://www.splunk.com/company.

Social Media: Twitter | LinkedIn | YouTube | Facebook

Splunk Inc. | www.splunk.com




Splunk, Splunk>, Listen to Your Data, The Engine for Machine Data, Hunk, Splunk Cloud, Splunk Light, SPL and Splunk MINT 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. © 2015 Splunk Inc. All rights reserved.

For more information, please contact:
Sherry Lowe
Splunk Inc.
415-852-5529

Investor Contact
Ken Tinsley
Splunk Inc.
415-848-8476






Splunk Inc. | www.splunk.com




 SPLUNK INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
 
 
 
Three Months Ended
 
Six Months Ended
 
 
July 31,
 
July 31,
 
July 31,
 
July 31,
 
 
2015
 
2014
 
2015
 
2014
Revenues
 
 
 
 
 
 
 
 
License
 
$
87,960

 
$
62,081

 
$
159,832

 
$
113,355

Maintenance and services
 
60,366

 
39,466

 
114,159

 
74,099

Total revenues
 
148,326

 
101,547

 
273,991

 
187,454

Cost of revenues
 
 
 
 
 
 
 
 
License
 
1,813

 
72

 
2,974

 
150

Maintenance and services
 
23,227

 
14,999

 
45,151

 
29,108

Total cost of revenues 1,2,3
 
25,040

 
15,071

 
48,125

 
29,258

Gross profit
 
123,286

 
86,476

 
225,866

 
158,196

Operating expenses
 
 
 
 
 
 
 
 
Research and development
 
48,308

 
34,179

 
93,006

 
63,921

Sales and marketing
 
111,786

 
79,978

 
213,775

 
151,056

General and administrative 4,5
 
28,760

 
32,676

 
55,632

 
53,679

Total operating expenses 1,2,3
 
188,854

 
146,833

 
362,413

 
268,656

Operating loss
 
(65,568
)
 
(60,357
)
 
(136,547
)
 
(110,460
)
Interest and other income (expense), net
 
 
 
 
 
 
 
 
Interest income, net
 
425

 
163

 
785

 
293

Other income (expense), net
 
(295
)
 
(54
)
 
(206
)
 
(274
)
Total interest and other income (expense), net
 
130

 
109

 
579

 
19

Loss before income taxes
 
(65,438
)
 
(60,248
)
 
(135,968
)
 
(110,441
)
Income tax provision (benefit) 6
 
(10,149
)
 
534

 
(9,493
)
 
1,096

Net loss
 
$
(55,289
)
 
$
(60,782
)
 
$
(126,475
)
 
$
(111,537
)
 
 
 
 
 
 
 
 
 
Basic and diluted net loss per share
 
$
(0.44
)
 
$
(0.51
)
 
$
(1.01
)
 
$
(0.94
)
 
 
 
 
 
 
 
 
 
Weighted-average shares used in computing basic and diluted net loss per share
 
126,621

 
119,012

 
125,602

 
118,165

______________________________________
1 Includes amortization of acquired intangible assets as follows:
 
 
 
 
 
 
 
 
Cost of revenues
 
$
1,572

 
$
703

 
$
2,483

 
$
1,390

Research and development
 
79

 
69

 
148

 
138

Sales and marketing
 
155

 
150

 
305

 
297

 
 
 
 
 
 
 
 
 
2 Includes stock-based compensation expense as follows:
 
 
 
 
 
 
 
 
Cost of revenues
 
$
5,662

 
$
3,808

 
$
12,194

 
$
7,614

Research and development
 
19,301

 
13,578

 
39,376

 
26,165

Sales and marketing
 
28,210

 
21,263

 
57,820

 
40,383

General and administrative
 
10,436

 
20,861

 
20,328

 
28,587

 
 
 
 
 
 
 
 
 
3 Includes employer payroll tax on employee stock plans as follows:
 
 
 
 
 
 
 
 
Cost of revenues
 
$
398

 
$
97

 
$
661

 
$
233

Research and development
 
732

 
515

 
1,635

 
1,322

Sales and marketing
 
985

 
401

 
2,061

 
1,281

General and administrative
 
602

 
328

 
1,182

 
893

 
 
 
 
 
 
 
 
 
4 Includes ground lease expense related to build-to-suit obligation
 
$
222

 
$
222

 
$
444

 
$
222

 
 
 
 
 
 
 
 
 
5 Includes acquisition-related costs
 
$
1,993

 
$
—

 
$
1,993

 
$
—

 
 
 
 
 
 
 
 
 
6 Includes a partial release of the valuation allowance due to acquisition
 
$
(10,924
)
 
$
—

 
$
(10,924
)
 
$
—



Splunk Inc. | www.splunk.com



SPLUNK INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
 
 
 
July 31, 2015
 
January 31, 2015
ASSETS
 
 

 
 

Current assets
 
 
 
 
Cash and cash equivalents
 
$
326,200

 
$
387,315

   Investments, current portion
 
529,174

 
462,849

Accounts receivable, net
 
99,694

 
128,413

Prepaid expenses and other current assets
 
22,312

 
21,256

Total current assets
 
977,380

 
999,833

Investments, non-current
 
71,685

 
165,082

Property and equipment, net
 
77,013

 
50,374

Intangible assets, net
 
55,842

 
10,416

Goodwill
 
124,321

 
19,070

Other assets
 
6,899

 
3,016

Total assets
 
$
1,313,140

 
$
1,247,791

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
Current liabilities
 
 
 
 
Accounts payable
 
$
4,116

 
$
3,726

Accrued payroll and compensation
 
57,174

 
65,220

Accrued expenses and other liabilities
 
33,702

 
27,819

Deferred revenue, current portion
 
263,157

 
249,883

Total current liabilities
 
358,149

 
346,648

Deferred revenue, non-current
 
58,093

 
54,202

Other liabilities, non-current
 
59,311

 
33,620

Total non-current liabilities
 
117,404

 
87,822

Total liabilities
 
475,553

 
434,470

Stockholders’ equity
 
 
 
 
Common stock
 
128

 
123

Accumulated other comprehensive loss
 
(2,164
)
 
(837
)
Additional paid-in capital
 
1,352,921

 
1,200,858

Accumulated deficit
 
(513,298
)
 
(386,823
)
Total stockholders’ equity
 
837,587

 
813,321

Total liabilities and stockholders’ equity
 
$
1,313,140

 
$
1,247,791



Splunk Inc. | www.splunk.com



SPLUNK INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
 
 
Three Months Ended
 
Six Months Ended
 
 
July 31,
 
July 31,
 
July 31,
 
July 31,
 
 
2015
 
2014
 
2015
 
2014
Cash Flows From Operating Activities
 
 

 
 
 
 
 
 
Net loss
 
$
(55,289
)
 
$
(60,782
)
 
$
(126,475
)
 
$
(111,537
)
Adjustments to reconcile net loss to net cash provided by operating activities:
 
 
 
 
 
 
 
 
Depreciation and amortization
 
4,310

 
2,887

 
7,776

 
5,538

Amortization of investment premiums
 
361

 
136

 
722

 
136

Stock-based compensation
 
63,609

 
59,510

 
129,718

 
102,749

Deferred income taxes
 
(10,986
)
 
(228
)
 
(11,305
)
 
(513
)
Excess tax benefits from employee stock plans
 
(186
)
 
(389
)
 
(652
)
 
(868
)
Changes in operating assets and liabilities
 
 
 
 
 
 
 
 
Accounts receivable, net
 
(18,353
)
 
(17,725
)
 
28,719

 
13,510

Prepaid expenses, other current and non-current assets
 
12,795

 
968

 
12,468

 
1,492

Accounts payable
 
(502
)
 
5

 
(100
)
 
391

Accrued payroll and compensation
 
9,657

 
7,093

 
(8,698
)
 
(6,664
)
Accrued expenses and other liabilities
 
(7,725
)
 
4,878

 
(7,085
)
 
9,339

Deferred revenue
 
15,947

 
12,983

 
17,165

 
14,674

Net cash provided by operating activities
 
13,638

 
9,336

 
42,253

 
28,247

Cash Flow From Investing Activities
 
 
 
 
 
 
 
 
Purchases of investments
 
(58,681
)
 
(53,070
)
 
(219,195
)
 
(303,953
)
Maturities of investments
 
87,000

 
15,000

 
247,000

 
15,000

Acquisitions, net of cash acquired
 
(142,693
)
 
(2,500
)
 
(142,693
)
 
(2,500
)
Purchases of property and equipment
 
(2,809
)
 
(2,908
)
 
(9,224
)
 
(7,146
)
Other investment activities
 
—

 
—

 
(1,500
)
 
—

Net cash used in investing activities
 
(117,183
)
 
(43,478
)
 
(125,612
)
 
(298,599
)
Cash Flow From Financing Activities
 
 
 
 
 
 
 
 
Proceeds from the exercise of stock options
 
5,370

 
3,582

 
10,736

 
9,418

Excess tax benefits from employee stock plans
 
186

 
389

 
652

 
868

Proceeds from employee stock purchase plan
 
10,906

 
8,355

 
10,906

 
8,355

Payment related to build-to-suit lease obligation
 
—

 
(523
)
 
—

 
(523
)
Net cash provided by financing activities
 
16,462

 
11,803

 
22,294

 
18,118

Effect of exchange rate changes on cash and cash equivalents
 
(224
)
 
(10
)
 
(50
)
 
179

Net decrease in cash and cash equivalents
 
(87,307
)
 
(22,349
)
 
(61,115
)
 
(252,055
)
Cash and cash equivalents at beginning of period
 
413,507

 
667,747

 
387,315

 
897,453

Cash and cash equivalents at end of period
 
$
326,200

 
$
645,398

 
$
326,200

 
$
645,398



Splunk Inc. | www.splunk.com



SPLUNK INC.
Non-GAAP financial measures and reconciliations

To supplement Splunk’s condensed consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in the United States (“GAAP”), Splunk provides investors with certain non-GAAP financial measures, including non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP net income (loss) and non-GAAP net income (loss) per share (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 table): stock-based compensation expense, employer payroll tax expense related to employee stock plans, amortization of acquired intangible assets, acquisition-related costs, ground lease expense related to a build-to-suit lease obligation and the partial release of the valuation allowance due to acquisition. In addition, non-GAAP financial measures include free cash flow, which represents cash from operations less purchases of property and equipment. 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.

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. In particular, because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies can use under FASB ASC Topic 718, Splunk believes that providing non-GAAP financial measures that exclude this expense 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. These expenses are 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 acquired intangible assets, acquisition-related costs, ground lease expense related to its build-to-suit lease obligation and the partial release of the valuation allowance due to acquisition from its non-GAAP financial measures because these are considered by management to be outside of Splunk’s core operating results. Accordingly, Splunk believes that excluding these expenses provides investors and management with greater visibility to the underlying performance of its business operations, facilitates comparison of its results with other periods and may also facilitate comparison with the results of other companies in its industry. Splunk considers free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that can be used for strategic opportunities, including investing in its business, making strategic acquisitions and strengthening its balance sheet.

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 non-GAAP financial measures are meant to supplement and be viewed in conjunction with GAAP financial measures.

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




Splunk Inc. | www.splunk.com



SPLUNK INC.
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)
(Unaudited)

 
 
Three Months Ended
 
Six Months Ended
 
 
July 31,
 
July 31,
 
July 31,
 
July 31,
 
 
2015
 
2014
 
2015
 
2014
Reconciliation of cash provided by operating activities to free cash flow:
 
 
 
 
 
 
 
 
Net cash provided by operating activities
 
$
13,638

 
$
9,336

 
$
42,253

 
$
28,247

Less purchases of property and equipment
 
(2,809
)
 
(2,908
)
 
(9,224
)
 
(7,146
)
Free cash flow (Non-GAAP)
 
$
10,829

 
$
6,428

 
$
33,029

 
$
21,101

Net cash used in investing activities
 
$
(117,183
)
 
$
(43,478
)
 
$
(125,612
)
 
$
(298,599
)
Net cash provided by financing activities
 
$
16,462

 
$
11,803

 
$
22,294

 
$
18,118

Gross margin reconciliation:
 
 
 
 
 
 
 
 
GAAP gross margin
 
83.1
 %
 
85.2
 %
 
82.4
 %
 
84.4
 %
Stock-based compensation expense
 
3.8

 
3.7

 
4.5

 
4.1

Employer payroll tax on employee stock plans
 
0.3

 
0.1

 
0.2

 
0.1

Amortization of acquired intangible assets
 
1.1

 
0.7

 
0.9

 
0.7

Non-GAAP gross margin
 
88.3
 %
 
89.7
 %
 
88.0
 %
 
89.3
 %
Operating income (loss) reconciliation:
 
 
 
 
 
 
 
 
GAAP operating loss
 
$
(65,568
)
 
$
(60,357
)
 
$
(136,547
)
 
$
(110,460
)
Stock-based compensation expense
 
63,609

 
59,510

 
129,718

 
102,749

Employer payroll tax on employee stock plans
 
2,717

 
1,341

 
5,539

 
3,729

Amortization of acquired intangible assets
 
1,806

 
922

 
2,936

 
1,825

Acquisition-related costs
 
1,993

 
—

 
1,993

 
—

Ground lease expense related to build-to-suit lease obligation
 
222

 
222

 
444

 
222

Non-GAAP operating income (loss)
 
$
4,779

 
$
1,638

 
$
4,083

 
$
(1,935
)
Operating margin reconciliation:
 
 
 
 
 
 
 
 
GAAP operating margin
 
(44.2
)%
 
(59.4
)%
 
(49.8
)%
 
(58.9
)%
Stock-based compensation expense
 
43.0

 
58.6

 
47.3

 
54.8

Employer payroll tax on employee stock plans
 
1.8

 
1.3

 
2.0

 
2.0

Amortization of acquired intangible assets
 
1.2

 
0.9

 
1.1

 
1.0

Acquisition-related costs
 
1.3

 
—

 
0.7

 
—

Ground lease expense related to build-to-suit lease obligation
 
0.1

 
0.2

 
0.2

 
0.1

Non-GAAP operating margin
 
3.2
 %
 
1.6
 %
 
1.5
 %
 
(1.0
)%
Net income (loss) reconciliation:
 
 
 
 
 
 
 
 
GAAP net loss
 
$
(55,289
)
 
$
(60,782
)
 
$
(126,475
)
 
$
(111,537
)
Stock-based compensation expense
 
63,609

 
59,510

 
129,718

 
102,749

Employer payroll tax on employee stock plans
 
2,717

 
1,341

 
5,539

 
3,729

Amortization of acquired intangible assets
 
1,806

 
922

 
2,936

 
1,825

Acquisition-related costs
 
1,993

 
—

 
1,993

 
—

Ground lease expense related to build-to-suit lease obligation
 
222

 
222

 
444

 
222

Partial release of the valuation allowance due to acquisition
 
(10,924
)
 
—

 
(10,924
)
 
—

Non-GAAP net income (loss)
 
$
4,134

 
$
1,213

 
$
3,231

 
$
(3,012
)
Reconciliation of shares used in computing basic and diluted net income (loss) per share:
 
 
 
 
 
 
 
 
Weighted-average shares used in computing GAAP basic net loss per share
 
126,621

 
119,012

 
125,602

 
118,165

Effect of dilutive securities: Employee stock awards
 
5,380

 
6,606

 
5,551

 
—

Weighted-average shares used in computing Non-GAAP basic and diluted net income (loss) per share
 
132,001

 
125,618

 
131,153

 
118,165

GAAP basic and diluted net loss per share
 
$
(0.44
)
 
$
(0.51
)
 
$
(1.01
)
 
$
(0.94
)
Non-GAAP basic and diluted net income (loss) per share
 
$
0.03

 
$
0.01

 
$
0.02

 
$
(0.03
)


Splunk Inc. | www.splunk.com


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