Splunk (SPLK) 23 Aug 182019 Q2 Earnings call transcript

Good day, ladies and gentlemen, and welcome to the Splunk Incorporated Second Quarter 2019 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. [Operator Instructions] As a reminder, today’s conference is being recorded. I would now like to turn the call over to Ken Tinsley, Corporate Treasurer and Vice President of Investor Relations.

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the our CFO, turn let’s over call Dave to Conte. Now,

start than that renewable for the to mostly quarter globally. strong Doug. that our report planned. everyone. afternoon, along pleased the Thanks performance the Thanks year of right. call. or I’m continued Good a subscription the into to pass is second to model I'm faster joining momentum with transition equally from accelerating All our pleased

in minute. last Now XX% million that On were over year. a in more revenues total about increase $XXX QX, results, a

totaling contributed which XXX of professional revenues Software seven Cloud international XX% revenues total from $XX XX% new over of customers we XX% over services XX represented and the up orders X% was recorded cloud and year, during of $XXX last total and added total operations last quarter. figure year. million revenues, Educational were licensing revenues of the up QX and million. is QX

performance. purchase non-GAAP. $XX.X $XX.X cash the cash count of ended weighted shares. QX and was the cash representing share topline income than while on better Net Now income which gross our share period basis. using or about was turning Operating positive a QX in reflecting free a $XX cash average other comparable to X% were XXX profitability solid $XX VictorOps in Operating margin $X.XX was with all a million, overall quarter. and flow paid driven and was the was plan, during the million investments year-over-year million per consideration $XXX million, results, by flow for million we margin XX% million, of our

relates our to XXXX, term it a we’ve between renewable our renewable we of bookings software the and year, or cloud predominantly go-to-market, and the since realized beginning subscription fiscal of Prior XX% to from continued As to our model. shift XX% or contracts.

As and XX% to field you move targeting adjustments renewable patterns buying next by customer programs. year, GTM fiscal XX% driven and been the we have know, year our this in and incentive

first we’d have expected. more Our the the than year through of half efforts been successful

Our year-to-date of nearing next ahead target is year mix is target. and full fact already our year's in

our the and bookings. for cloud XX% mix renewable Specifically, term year, transactions of half total first of for this was software

our are achieve versus of early. renewable XXXX annually customers the expect the continue transactions, expectations for of second with looking we Now as flows the our a perpetual cash first invoiced our I through target prior consistent composition for on expect half calls. year forecast, year at will will typically that and this success renewable XX% we note upfront to under FY discussed have contract our our Important half

contracts, key as a build rapid predictability you a higher is know, mix renewable cloud going term benefit which Now of pool forward. of a more of and provides overachievement

by to their these us and around ramp Splunk priority manner. on contract success one to corporate predictable importantly, enable efficient deliver of our an in another structures customers customer use More enabling

a and Performance So, momentum. best under period than cloud backlog, total includes traditional the the Remaining the business with moving Because provide billings to XXX? revenue, bookings or of before, I’ve estimate combo in the plus all As mentioned parts, best RPO software the evaluate way execution license are revenue, i.e. Obligation, and change revenue should of indicators our better of of RPO calculation. the RPO, what’s in the

Now for million, total QX ended million on the up from $XXX RPO $XXX of RPO of last year. front, with QX we

To million, half the respectively. comparability, the fiscal XXXX And million. sheet, million QX was in of year, we for this RPO last XX% XXXX it. statement, current and as can and For XXX. all recast which way by detail filed to cash think last higher total quarter about than you second the provide good year, move RPO $XXX is earlier of flow which which XXX balance full on we income QX balance revenue, with $XXX a about as for year, of QX an ROP week additional year, under of last and into see of XXXX FY contains fiscal deferred been $XXX XK, comparability, sheet all totaled has

enough Okay, of XXX.

are million Turning between of revenues to expect operating non-GAAP $XXX we guidance, XX%. $XXX million and QX margin and approximately

closing, for share our year, margin expecting are we the of XX.X%. up should quarters revenues from weighted average to and total move of non-GAAP the the on solid and year expect fully full Since predictable, the Susan field billion, highly the company the For transformational, of terms million we In full year. $X.XXX our you in XXX in approximately to $X.XXX in now be half year, model from XXX renewable maintain a remaining the counts of was non-GAAP we profitable first QX the million the billion full XXX back and QX, of million target overall. and execution use for and for of

upcoming our product Tim Thanks to the work. forward your it Doug time questions. have we and having up open you we’ll interest. showcase innovations. that, all been their where As corporate product working on of aggressively I’m for for will and attend much looking With mentioned, teams much team

Michael comes from Raymond And our of line Instructions] question of Turits the [Operator James. first

now is open. line Your

other adds. are did What starting in go-to-market increase doing the in of Hey strong number slight Among now? terms afternoon, net -- you the to you of increase guys, things work good quarter.

Hey for question. Michael the thanks

on what talked strong, over As of within we've I customers over been tough continues the the said and is and effectively. to three and been coverage, at contribution out free those And and to we've or existing out. also one news. Susan of this that past QX if carve focused in moving framework me on and from And coverage for after coverage over over year doing focused got definitively net that segment was start net half, completely, that this year, want coverage to news the keeps so day a can to is we true we we've commercial the said, number year that a maintain QX day predominantly, as we have we a not the be cycle. whole more tension of customers I net has and and think call, as up go And over, thing about but in news

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the product tested actually got So productivity I enhancements to development up teams, market spring coverage. framework something come was, takes takes teams, we know and immediate, three field up to time think and it field the for but the to can they've curve. And whole come shift commercial That's business to that year you time is and to it be adopted. be not

as those, tune. those continue fine light ideally we'll saw learn momentum here of we make both and that of first and quarter think the that see I So to continued we this and investments

mix about about and/or What the numerical shift be And we excuse thing talk we And at [ph] impact a – happening cash on Doug. you and billings? flow, that talk anymore all talked on don't faster up cautious Dave, the thanks, you I should David. expected. got than follow me, about Thanks, did obviously

started of is we year versus to annually a we a Again, perpetual billed when objective our thought be cash which level getting Well, because contracts we said fiscal think are a mix higher billed a upfront. XX%, around the contract, typically XXXX about and result. as expressly we the to multiyear trough

the months Now, on ultimate have we the yes, us we're still the year be, that we the delivery the getting business year fiscal XXXX and half flow first the of to that's higher feel rate will cash the the for rest we way support But knowing but the what yield to based objective. think six cash of our still flow same mix Susan about go. and gave full of year

very thanks much Dave. Okay,

thanks Michael. right, All

Thanks, Michael.

And our Raimo next of question comes line Lenschow of from the Barclays.

line now open. is Your

Doug, for Hey year. thanks taking [ph] last to Dave really that’s Raimo thanks for questions. for the It’s RPO, on to our David disclosure comp on Also today. against actually going helpful

and mentioned in that the you competitors even hearing from though You Splunk maybe early customers Insights download wondering had saying just to new here? this you what more already response XXK call precisely days. are price it’s lower earlier I’m to the from guys Insights

recipes platform more on. of importantly and case are set used helping narrow leaders, center departmental an Splunk said, the So our value hops rip that robust we the kind Doug. I to whole hardware of allow way Essentials I operation combo have they account for across use half. We free targeted It and organization a is the This a server more IT board to understand dash or simplify and a there aperture them to be and out few how apps. little infrastructure components, at and a conceptualize now box about categories, is know that Y, dev the within and or that and again, or of of now end-to-end and me to rolled Insights. was are are – of which that, given the cases and me detecting for that with the a managers Essentials targeted really with about downloads our Insights can app use we experiences ITOps broad Essentials broader while Splunk that, over at journey the network the and be of [Indiscernible] cases. time-to-value. for of and hearing right been Splunk focused to thousands XX,XXX providing services huge example, interface is app because tend thanks, Splunk David. end that They monitoring, software past will between year, for platform the me quickly are end and IT some recipes reduce that Insights which quarter right users Insights Enterprise was, X a app based as prove around help Essentials infrastructure, services XXX of and of download that, they our premium helping cookbooks intelligence use you’re Essentials are to problems now for bit got think we’ve our we and that more And expects. premium the user because my security cases across customers. for should, ITSI, cover subset initially smaller like Insights volume is that and entire a what is a bought is multitude underlying out but a just of for out reminder multiple for these for have a complicate really come. a And out is across operations that a or and of sometimes customers usually I of really use actually what new And clarity, all hundreds and just And here set just things it more

number is Splunk success that but that customer use we as do rapidly journey? their one How whole we cases, our possible.. do cover more sure to data success as on more that humanly customers So help into getting make priority. of point I’m

stands anything just pointing clarification. of geographies out that's verticals, the at quick That out that follow-up, makes sense. when quarter, for for that worth here? maybe in looking Thanks overall the And bookings the terms you're

a we move don’t verticals. saw international verticals we horizontal we such and of to see was that broadly I that are the over, part team perform that said we're really well technology as once pleased As distributed I And in talking as gain the about a number specifically strong to of talking and Richard of leadership strength EMEA I really strength, and sub-theater Timperlake, lean team that we that consistency from add continues leadership head capability. quarters, acquired and think over were to go. across any about. continue think again as meaningful And segment we're

I right would a call that So as standout now.

All right. Thank again. you, congrats

David. Thanks

Thank you. the Wells question our comes from next line of Winslow Fargo of And Phil

thanks question my to to out Hey really great of the deal One things here. year congrats and tasking guys a for was stood me that the metrics. on large start [Indiscernible] again the

there. us obviously I the big think deals kind talked think momentum seven-figure through continued here. Help David XX deals, of just

You've deals year. the million talked last about $XX

deals? it sort negotiation talked out You've in large year. Is schema these the you perspective. the the get year, last into for half deal dollar just customers. What Have this deals volume growth experiences so driving million momentum how you pricing figure is year of there second from and you're in versus larger the the this Kind the curated more us think these of and cases? that faster thinking up particularly about use running and can of through and mega help

it’s Phil, response now brief I’ll hey and Dave. over turn give to a Yes, it Doug.

of customer size the order. the not model is driven Our by

ultimately because to done much we’re lots those are it and can time success metric adoption, value how the reported all of are things. There and a indicative having we around of we that around deliver pricing it as customer. we think EAA's over and the we've initiatives So actually

terms renewable their on in success way. us product the beneficial the the in for a of and customer aiding is to offer journey deployment think desire contracts I really of predictable

that into a Doug So work a -- many perspective, product you Phil. there lot portfolio again from think of lot are Doug has but a on maybe I and of comment for the it, can mentioned that things going the

Absolutely. Yeah.

to element Insights, doing -- a Tim with contracts of think ML organizations and and [ph] platform-oriented in investigative doing with combine predictability. easier are really, respond, and when really and add you monitoring what are I out help we're wrestling folks of ample Phantom as of especially with reasonable been predictability core that VictorOps. we've think more when them term be usage swath able of consume and new I And these some this we coming the and and what really some capabilities, capabilities that capabilities you make will it the detection enhance stuff to the to characteristics predictive the and to give

of expansive the I ownership cost to to is effective simple use investment. the and value monitoring, rapid very integrated, that power broad more value illustrate the is the that complete use, put a and companies all including out to the that those they that back combine covers more and really total And think based, to they is of they that that the investigation, platform, from that solution the get to a very, account. platform, data more analysis,

guys. thanks Awesome,

Thanks.

the Fatima line question of Boolani And from next our comes UBS. of

now open. is Your line

afternoon, Good for question. for thank question you. Doug, the you a taking

the of like in a very Phantom sounds implementation they a prepared around implementation remarks strategic Just it Accenture, have at your you comment made there.

formalized a give may. and pricing So I’m you settling sort are of if motions around up models out sort and of that Phantom us to what sort business follow curious, for I if and you the go-to-market contribution a David of can sense of

of the of those get that aha Insights customers to to Insights take, they and aspect But -- other store, the find, then capabilities. are when correlations strongest they or category Where to groups. security seeing we let's enhance on do that and a across was. and they're to that number what interrogate, action gathered are think can is front. the much the take and by is security and play the trying but this data type VictorOps activity how in the And that ITOps was group aspects the get. journey, within broker’s have our they brain you put nerve those far partners activity give would on when play Yes, within which And that action. based acquisitions. then Phantom action concept so have boost market Splunk of about been to of One making and understands that goal Phantom, and in immediate think efficient Phantom different platform is, that integrated I some the have same areas difficult integrated a and as the we've about dev an we're across the capability, say. and now take overall And journey There transform, having really two data. through as ultimate signal action and the VictorOps and think app take with activity I sure they is data what I the Phantom, how customers many moments evangelizing of center for effective is But

a important backbone it characteristics. Accenture adds to strategic capability and that I at think that as think partnerships was and health here added understand and see that effectiveness. of the many to to people add to partner team the a capability – For Splunk machine and you'll like being that I our already to Phantom acting Phantom that you'll the action And fold, pace is of to see statement -- benefit their partnership

implies of That's year lower the question really helpful. full up. the half last in felt actually just a Dave, in business back business year. than we and appreciate you on the seasonality guidance what seasonality The on the that's And ratability for

and type the takes help the into understand business? respect me. more doing sort and some great appreciating you puts it mix year the So and of term with of of you from can seasonality you. half us as And back EAA that's of Thank ratable with walk and the

bet. Sure, Fatima, you

at our this momentum execution has last least the year. see year, been business nice about and best I if of second again we either own But we QX half. at half we're had field. feathered it's earlier, Europe, and as been first half, QX, pretty our expectations terms top under with the We of that were on very the in Our where the look And half. strong really XXX certainly and first quite or to and mentioned of consistent And performance of pleased we last in the the QX in results. we're XXX, in Doug year, you to a our for strength think think second was to really year standard know pleased

Now last we've half. numbers back some from got the big year in

I terms of think our the fourth lot got a in of do. and we've got QX. indicative pretty forecast we both guide third and quarter work for It's the for to quarter a strong

did we three forward So, what print outlook talking QX. for we're on guys how see to and looking bottom-up the you is and in months

Thank you.

Fatima. Thanks,

the line Difucci And question John of our next from comes of Jefferies.

is Your line open. now

XX% under and helpful still that's The quarters for under XXX, really grew year been the Thank follow-up here. listen, trying for you this XXX. we're to you've way. grew License the right, figure on year and out, and strong questions. then taking Doug. very so really question for I results Dave, Dave and much the two my had last for a the XX% last look license

regardless and understand just going I'm sure the the on of point quarters because is more for I company? to here, a two momentum last So positive Or inflection it reflection numbers trying simply make what's where effect I XXX? on-prime versus what XXX happened? make accounting license upfront that on trying these I but the I'm good, to sure just of look mean understand really you're recognizing

question. a good It’s No.

day had bounce QX half it's of last back the the in months momentum we're certainly execution field first spots, momentum body stronger like at we first course the by this for that year for end in the of liking strong feels and good the work -- year the last the at We transparent the of in the the were very so Europe look QX terms of is year. a had really year. this not much And than business inconsistent half think we I orders of and about reflected results closing. six in where large the some we in and in

revenue that faster materially order And And perpetual percentage okay. than of the gone on that order look, renewable duration. the there now oh, last has a with same recognize we tailwinds, size moving up larger a of a and of the and tends tailwind, the terms the thing of business did our year. and bit the has is number be pace. to of you're upfront. contracts headwind your terms all you and absolute to comparability perpetual is down a term that In The Well, that is headwinds

duration. our So has reference that everybody, be XX for just a a as a contract transaction to to perpetual equal months of benchmark is term for in the value transaction same

between represents that is year, about comparative the cloud were moving of but on XX for half basis. and term the Now months headwind We a been first fiscal up. our still a duration

of So it headwind. XX but it be renewables it would great up, percentage ultimately if was is, create it all as a does the goes month, until

like and sense it it versus like really years that right. about do, made is sounds though, could like just activity, conclusion. it a market, sense as think detail area is we been you term disparate anyway Thank or Fatima's you really ever right. Doug, also do with like a a area across hard today guess, successful why for heard today? will like about seems that makes Phantom, I really for in sense, strength. talk And why ready but it Like I three senses now ton I already -- been It improving, Dave. of one’s follow-up will or no both of think are the tough and respond its ago, but This momentum the an an it? brain Okay, topline question like it this always ideally work are vendors, the pronounced The And I to if orchestration. you that's part, to SIM progression made for SIM it’s because ways, that me but nature on

Phantom. think the are because Yes. One, and those front, analytics, are almost build-out our different, automation broad business segments four capability security IT, usages, across the content continue technology. And again, -- ultimately is dimensions two core is underline on to have but the different, identical some but IoT UIs I there needs of is that patterns, continue of build orchestration the in similarities to

different entire type is third-party set instruction understand helps metadata so it with the a side. the that integration and of Oliver service in clear degree lower firewall type nice technology problem the the the they've well and to of phantom one tell really the pallet Splunk see on hooks there's programming addressability a process those to has very overall, the what silicon the of movement -- given could effort the I APIs of to as that I that a team, helping across product level the components. architected. IT the is have automation set layers the you done and make business continues think receive both way a that general that firewall is underlying There's job And you do or information of the orchestration side Phantom of you increase of that think on and what they are Sourabh each effective technology to and demand. and really, and to And if be make from standards sure be some got more side isolation did today I for the amount of APIs been think thoughtfulness well approach and to has and the the inform of able pallet to

our So underlying orchestration of time is play. for out. just you what done and in getting machine that sure components is until the and response there's phases that's really where I break put the there's need that, you it everything addressable, everyone where at it’s now And that industry next they involved much framework be. then take as better action, quickly, making when automation and because humans all aspects you hold-up solutions humans getting an you should think step still comes we're better that got clear response to evaluate in that's to with confidence at communications and a want and the wait incredibly to And in decide many layering

logical breakthrough helpful it's to it and really That's this will when come Great. all and together. starts be

So thank you.

John. Thanks

coming need Splunk more the what for respond, all core as world and with of data Splunk others. capability me, we're and really of back and and sparse real really need time think happened much evaluation need historical processes more and that's much doing and in they and data become to the digital, of Splunk in it better being going foundation, instantaneous this of I to from to have the that the we then and understanding a sit solutions. a a goes set a manual for processes action lot largely processes and the that's at sense is where of driving thesis with to the of we're with need more processing, of world pull type set lot what's out, data now we based of a flood get of like And

Thanks guys. Great.

John. Thanks,

Thanks, John.

question Monness, next comes of of our the And Crespi. Brian White from line

now is line open. Your

this touch Thank like also? way week if cloud Splunk maybe the integrate that to Doug, data cloud, It government deal So I on done. are the and also And new you. noticed a plans is could Enterprise fabric that its sounds quarter. elaborate last you on don't you know machine deals your if this BAE could you solution? announced announced Great. Amazon bit into systems little maybe and I being came out in

Enterprise the to bit basis, seeing they the many us few their And Thanks for possible think that the little were of they build pockets good engineering with the past as question. parts success I other willingness are really versus see Amazon. more to least Yes, been really working years. success, agreement good on the at we of of pieces told thrilled We've different honored to company but company, and different we're they us AWS with piecemeal seen Amazon organization and competent buy. lean wherever know over to in of and the choose forward

fact across I understand the lot to very be would the of fore more really proposition, AWS they value Splunk proud sure that we thought value cloud environment leaders, think, see they to Amazon, why security examples Splunk helping the that as and I'm and that as the leaders, complexity a on others to BAE systems those expect or most environment, environment are to where well that the set prospects Amazons the we've found helping that but -- tool or think understood organizations in like well, all better I of given visibility to our they can they these really usable those so years complex across aspect joint the seen try meet been customers and those we've So Accentures, partners partnership of so and together effective manage. large effective speak where providers to in visibility their early landscapes. are get SLAs And customers the that really value joint the SaaS noncyber and Splunk number that of cyber of have of are a

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Doug us it I talked just as ensure portfolio. we in innovation term to adds, in the coverage it right as we're the Brian, got continue us think product that that terms to as working the critical hard it relates extremely importantly about the philosophy and all of investment customer for in field our opportunity to for the early on the of well

at look of and TAM about the you for think we large how revenue us. when So type is delivery this

the investing think off. we're going pay really way long benefit to I term is from the

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Brian. you, Thank

Bank question of of next comes America Rangan Lynch. from our And line Kash Merrill of the

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chatter. like needle Looks zone is red turning the the towards guys. red on bar Hey, finally the

in Kash. one, hair in wind this Yes. That my

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your So how with your expansion. a attainment congrats it be later goals stabilizing couple to be and business earlier. you're the is the game? growth faster model for early achieving XX% one but going And sales seem to of quarters, are you One capacity, capacity still guys. year you sales Doug, of Are at is what better in growing Conte,

that's is mix thought way looks the to because this So, real is you in better to evolving, start show mix to is a than it you next would what operating shouldn't start year, be the business stable earlier but going leverage see like we down in this had year. mix the year anticipated to the be next up still going settle

and margin you the goal? end to So about cash is relative so and Thank that the earnings implications us that reaching talk given flow to previous for much. model your expectation

Hey, it's Dave.

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product and beginning we our both most the at give headcount, budgeting trying and absorption And to margin rate overall on levels year then based to our sales. are and on that we guidance always productivity can whole approach, the of the and

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Kash. Thanks, go we Hope question next please. to

Hedberg our line And next of from RBC Markets. Matt the of question comes Capital

now is line open. Your

again quarter my the Swanson on Thanks. I especially eco adds. new Matt actually the This for on is Matt. customer strong congratulations

under still opportunity opportunity the to base, though penetrated. the like more of seems that kind significant within Looking it being there's

EAA. might it accelerate overlay? lot this vertical maybe done a sales on doing a could And that there add make one expansion betters be sense side? to on the Is You're anything to

Matt. I great, And statements. It's agree with your complete

tend expansion larger – to are broad going Splunk I are account trying numeric that said that figure numeric in the still numbers I to am by out with those weighted customers the about all still Splunk. how go As versus We with customers. the smaller account of to within

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for Thanks time the

Thanks Matt.

Wedbush comes And line from our of the next question of Koenig Steve Securities.

now Your is line open.

taking Thanks question. it. I appreciate my gentlemen. Hi, for

And internally, try continuous product driving So, the of waves. about I talked introduction. and ask do Doug, want -- disrupting comes different about do to want would area of willing what and terms from things. Susan I what can to curious, area, way, stepping do aside, about, let in improve the Day, to you area in integration the want first me The one Analyst here be things a make maybe anyway, product Kash and by at outdo how improvement being to marketing? two do Splunk you second it say, in you the acquisitions better? really to new And of, here, disrupt you when things I'm back ask reference that change how you to But permanent to the and

it' Steve, Hey, Dave.

I natural you, all the really we're it’s Before to science Doug key I'll trying answer, let tell what just do. around

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up product a really for innovation be us more As a right thing has introduction to now, with. cranked and team driving product of important effective and it's new becomes ton more

And and talk that quality really we that's non-standard orientation customer knew the make both us T-Shirts, really Lives effective think area of for and and a and principally aggressive gen was consciously that an augment Tim really NPI that and success we're that was what team marketing new that but understandable competencies We we're brand and we've terminology famous that that the a demand presence, much lot competence transformation strong where and It very new product. coordinate those thing hear different and that with to enhancements really events assure down. are innovation strides X.X you'll that of a that some in is quarter to continuous even trend. this is the growing driving, with to it’s set about orchestrate beginning people I diving more standard Susan tick-up the to of volume Splunk maintain that online bar releases, more in high start like ties sure we're to us this that filling focus and their branding within orientation more and these datas attracting hopefully marketing areas. there. coming with needs. much And Then marketing, of funnel. is the And And better have teams of next pricing, lands get our ITSI and to of seeing. a customers same have SKUs in been limited is the how through we learned and sizes as a made is we packaging, explicitly we and continue there's externally a lot to on good availability and back effectively lot excited effectively. I'm helping internally funnel of that can on tracking news of top generation good to small top bunch positioning really but saw a net been in and got making of some we've about then both high-level We've we promoting folks of transformation

product there orientation, marketing also I are a part Insights the Essentials, and the think contributing as think help which were has some had I well. big of of and

a lot Doug. Thanks Great.

Thanks, Steve.

And our of Zukin Jaffray. next of question comes line Piper Alex the from

line now Your is open.

for question. my thanks taking guys, Hey,

two ones for, just quick So Dave. maybe

first being from months curious follow-up. about half And that You of then how the a was on what year, tailwind as maybe durations the year. mentioned average much XX term and first contract last got I'm RPO. are I've the for through a durations half you seeing

renewable that even to of probably The replaced RPO, about elongating. fully And time first It actually the XX% for about contracts in year. isn't there's while from seem loss a XX%, it's was being still tailwind though drag. renewable all last like for It's with months this at months perpetual XX half. duration XX move our is a the might Yep.

apples there it's XX not it but it'll if months, to gets to apples yet. be quite So,

about about maybe thinking Got free for talk maybe the cash for just operating and year? Dave, then balance guide you it. That's how helpful. flow can this And you're of

context? We I Well, in half are performance. certainly guess, with our first what pleased

the the hiring. as QX, rate think guide. made of of I to and to rate Doug the the about we ensure that's add disciplined very we're about all Kash certainly question look do to to think, the guide. so primarily, coverage reflected the we that resources back strength We're also I look that invest but deliberate is quite continuing when I of to I to and that think asked comment that in in in both product, built the

will the renewable cash back we'll still our think cash fiscal started target. the billed be flow would I We're which, case. be that contracts primarily year when work trough. tend of shift in the to on to there's be renewable we annually. I expectations much with to be full-year identified think XXXX And we over-delivering a obviously hit done working And the still yield, on cash half the that's how we flow year, that but think when you're our

of means and pleased full-year, a year that in So But be. flow we're do what success with have will invoicing we're we really to getting of the XX%, we yield that what terms in having to expect, what cash navigate terms early.

in of just this EAA you on your asked I'm the Perfect. already could been and -- activity? sneak guys -- just categorize pace apologize if I activity on for it. to Maybe on Got EAA one you Doug the how expectations. expectations. your have Clearly, would I curious more if has term, outperformed

it's think expecting I line -- of that's in with term primarily we because because the above, think orientation. what were I for. Maybe hoping slightly and and

not ready about EAAs. I they're yet -- One free. if why the to value questions these can't think big, understand just the to is you that And elements There's got there lots expansive for it. are be just two of don't customer has been you pieces. give everyone

really and use there's be value cases, a that and got And to it's enough enough other drive with So they usually correlated multidepartment that try value. means broad-based And for payment that the is a willingness the end lean and an the they want to users, why enough there's EAA get platform. EAA. and would rep's end-to-end type more forward piece really and

the point as the at keeps about that there's for early adding with reason term to know has back renewal an a move talk about think always in to go reps comfort customers and coming, as more renewal. long a approach and/or these product term to some and time contract there's to engine the EAAs, given their thinking I because a they lot the

of of still with favor we and still How day. more well. what data helping we go And How make people that. Splunk? big it little product issues. issue issue that understand it? I to I it? our How the ecosystem people single naturally are cases is data portfolio over where, get a will So and in do get so and Given be customer the continue to and get I bit with the with value started that's every think data has I we that is do more out rep I read dealing with, important. of applications? think, It's that, important. about with do I that's of one that wrestle do getting as it also, kind But again, biggest the their participation always to do easier better is time, I still know value it so growing. But use

guys. Thanks Great.

Thanks Alex.

from Jesse of comes question final the line our Sachs. And of Hulsing Goldman

now Your line open. is

Yeah. customers, as that Yes. guys. Dave, in you're you getting a early, any the has guess seeing And of types conversations have that XX% been you there and I you're or but had I time? there there revised XX% of barrier you've Thanks is over Is kind a friction? reason year go guess, haven't XX% know there with any to I that that that why can't discussions?? these XX%

necessarily a rates know, high with on-prem and install adoption perpetual go you have to bit born as a base, licensing the you more from a when change you're it's work don't coming Jesse, composition the company that I very But in barrier. there's forward.

happy to fairness how do back fiscal of details, do So of Yes. I that In again, early. next into of in should and going and -- performance some really to and it's be I higher? want think there Am do out through this get thinking No. the our half in setting we're year to think, to summary, there should I But of need everybody today? we're that to expectation about what get year, proud could terms the everybody rate set get that I expectation before year. any believe next about go we

That's you. totally Thank fair.

appreciate Thanks, Jess, that.

time. remarks. turn Ken now I'm I And Tinsley to for closing this back call would questions like further no to at showing the

conf. a good Mark. today night Perfect. thanks Thank and see we'll participation. and you, you everybody's Appreciate Have your for at help

for and have participating in program the gentlemen, thank great conference. and you does Everyone a may This today's all disconnect. Ladies conclude day. you