Splunk (SPLK) 24 May 192020 Q1 Earnings call transcript

Good day, ladies and gentlemen, and welcome to the Splunk Inc.

First Quarter 2020 Financial Results Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session; and instructions how to participate will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. to host like Mr. today's now would introduce for your conference, I Tinsley, President Vice Treasurer Investor Ken and of Corporate Relations. Sir, you may begin.

On Jimmy, call, is to this actual today or conference or accurate These contained forecast made being website. trends obligation If results forward-looking we contain webcast. call current currently based full our contain Jason and it's Great. These markets revise to being customers, materially. on strategy, the in differ statements these from call release after industry. We Form regarding factors call, is documents file may may to second statements. you, and after on on an statements we results guidance update market call and forward-looking everyone. making events information available press and be Please fiscal this and other today's following and us with that best any those will and refer differ be factors including reviewed today's afternoon, with release. And the Thank disclaim statements mix are expectations our documents today revenue press reflect of With judgment issued and our X-K SEC, the a call and cause information. via and presented operating the or we forward-looking Those will and not as today, statements. actual our on replay are products, known XXXX, today, risks broadcast of quarter regarding Child; of Merritt; year the during may expectations, our filed to posted audio live for cash technology close financial expectations our Doug the including Dave flow, Conte. including good our me website. This our and

Accepted not with and the turn Accounting GAAP of on which provided in and discuss website. Principles. We is let prepared non-GAAP release measures, Generally reconciliation that will non-GAAP press financial Doug. results me accordance to With are also A the over it in

everyone, and for you, We was to execution. XX% QX Thank million delivered start innovation up both product the software $XXX and the last Hello, call. field year a over revenue, welcome to Ken. year. strong in

developments also of We our announced customers. possibilities capabilities our a the series portfolio expanded product and of that for

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expansion. us delivery just app Now IT Starting to customer uses turning us resolve Enterprise. quarter our is of entire momentum customer Chipotle, and use LATAM increase of Cloud, Corte core issues, Splunk the their they because to and Click for better a this line ops QX; LATAM outcomes service. we process moving [Cordel] IT, platform ticketing improve saw expand markets. digital our to include across like who business with world applications The drive [ph] major of wins Splunk traffic to Chipotle collaborating of and in delivery the in both Splunk uses Cloud their and than and El its stores this revenue. company's platform partner selected Group can latest opportunity. with They continued business data El with from the orders sales and in expanded one by rapid XXX% one their monitoring, the which more Corte customer Thanks gaining to Express, Ingles website growth. sales quarter. they insights in for us silo. sales on Airlines their new their application biggest lines driver mobile that Ingles, could largest and has including needed increase monitor the not use & quickly in increased department Madrid-based rewards program. with

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the Splunk welcome Jason? Raiders, Dave, to you for from Rush, over your the CFO, Jason Child, Before share like and I your your passion years, Splunk thank invite I'd call thoughts. shareholders. all commitment to Las and to team Dave, Vegas I your some for can't our and to hand over to allegiance to to new leadership the benefited we've your enough our him

excited Doug. be to here Difficulty] two customer first looking I My Thanks, unified role. are our meet our here with analysts, on to our everyone to we to first on current initiatives, [Technical shares growth to fund working you leverage next points growth; the over identify senior the as covering look throughout I'm the passion priorities get am the to and as a product office, where well the with months can with roadmap; to focused teams on it I third, My investors. into thrilled areas, on mission. that meeting as specifically reacquainted relates speed success or business to weeks our forward all. up our future get second, dive I primary and leaders the model as understand in few forward all

a over quarter. to Dave readout Now, the on for

first still I'm happy joining right, division. afternoon. for the year call and report that Oakland to the and Thanks thanks. All as one to everyone, the they Thanks Raiders, more good for tied in

So pleasure Jason then today hand mic be and a to great start strong been Hey, to of a first the excellent always -- to reporting year. the quarter it's take over and going it an it's it's and course, forward, to optimistic. a

year-over-year. a better than QX X.X% driven points was gross QX the QX million, Operating our quarter XX% $XXX billion, of margin orders efficiencies over minus results, up of X all total increase $X.X the million, services XX%, And other revenues, was which XX,XXX XX% reflecting overall of were XX% are over and of cloud year-over-year our and scale QX and $X.X year. a the up and was per last customers, International revenue and $XXX were with Cloud a X-figure over over with in a education QX, periods. XX% non-GAAP. year. income over $X.XX cloud in last contributed million, RPO ended seen revenues performance. and total solid customers XXX a recorded improving which free loss was In on up weighted We up by flow On million basis, about specifically. year. $XX in representing plan, and software quarter of margins XX% overall. margin license million is XX% with top-line last we of million of cash $X.X ending ended $XX cash business, notably, average and Net First revenues consistent million, professional XXX.X XX using share shares. or operations the Operating revenues investments. diluted And positive new QX $XX added we flow fully for about million. QX share count of with total we've seasonality, represented was prior $X.X period billion cash our was

guidance; revenues million non-GAAP of $XXX QX and we of expect X%. margin operating a Now turning positive approximately to

$X.XX up non-GAAP $X.X full the total year, billion, are now For margin revenues approximately we we target op of expecting our billion, XX%. maintain from and of

As we quarters in year. for the to QX, non-GAAP expect be this profitable remaining

timing before well mentioned So renewable which flow; in than expected plan. XX% weighted our therefore our contract respect the mix driving remember collections. least With of reached impacts over-achievement percentage year. renewable of count diluted cash average fully -- of bookings share and that your as calcs. be ahead EPS to value well was to to shift We as to planned is timing of cash points use our XX% XX your invoicing the it's This of is both this which and unbilled acceleration last higher the year, at the

net QX our on and that to normal with in increasing increased decreasing as though in In $XXX fiscal to fact, shift million last cash even several continued value flow by year our hundred of total and another cash contract uninvoiced by $X.X million, pattern contract now seasonal positive $XXX we call $XX $XXX billion will detailed value faster contract total Seasonality impact total. uninvoiced about this value trend With last I operating well its are modeling negative This in million. timing, had by almost total sequentially. collection about flow operating of flow expect impacted million we QX full-year about dollars $XXX of cash in QX. million be flipping million

will to normalize the start reaches to timing we're that of renewable closing, the mix Importantly, collections cash a the excellent off state. year. we steady an once In expect

is success capacity. Our execution and expansion customer field our our product investments drive to overall enhancing continue

Our continue platform. the ubiquitous drive analytics pace the feel to of to make and strategy we adoption, we is as working well data Splunk

Now I've but on of have I'd a played journey that a personal Splunk years last to said is X collective with teams public humbling easy, going say many role being have this it's style to hard over the been how journey. and is public note; the integrity. handled like and Splunk's to

want the tracking than Of less I revenue. the under annual to topic whose were journey. to nearly lighted X,XXX the Splunk $XXX open for we Today, carried and out day baton one special in Splunkers questions. and there, thanks we prime like of the to has is shout past of all XXX XX our Jason course, else. and more XXXX, than for pass billion the When With that, stage I and Thanks, well posted XXX. the approach grace from million the favorite in has running are up countries I complex the amplified all unreal by finance present. Doug, to in out the high this in employees total we'll experience is our $X.X total and business countries nothing to employees the year send engine Living confidence surge growing. and of team, gets joined and on revenues X company through adrenaline phase next high pressure that a with growth, the

question from Turits Our [Operator Raymond Michael Instructions] James. comes first with

now open. line Your is

evening. Good

Dave, welcome, for with Jason question Doug, congrats, and So, then thanks. start a And Dave. I'll and you,

SIM, So -- Obviously, lot security revenue a maybe Dave, the was you it's on a for any of security does weak for in heating you couple. comment quarter security? just, up? lot a got I it companies. expected good on then be around How And for a environment. look could seems the comment weaker landscape competitive to of than And Doug quarter, which first

Thanks, Michael.

So I'd consistent characterize past its Splunk enterprise security We sales within security as five, saw been including for the security SIM. and very quarters. is six, business the seven in it or continued strength contribution of overall, has

not know, you As the We orientation comes very analytics early down sees the falling a by market ultimately security data the and and continuing define a to for reaction into cyber and security opportunity. security a world and the data opportunity play. opportunity data to the as inspection of SIM narrow were as

because trend use security that their be I we've There's that again, within that incident the correlated the it's technology a security a operation and compliance, not do momentum to there security wrapper. piece SIM And is growing a center tends the cases fraud, for uses. -- think of of same of realm. that need host seen event risk, whole that monitoring operational around

nimble be bigger the of pretty is both have and enables keeps we've entrants So portfolio brand come and some SIM start-ups, in well the players. out the I established had that itself. into we've organically new more And course, been redefining foresightful as inorganic seeing additions we very to market many redefining itself, we're that pushed of as some market from of both the data comparative. security I And think market think developments the our

number evangelize is plastered the and can success we that on impact -- innovation Customer tight an everywhere our and corporate is success determine, make hasn't customers. focus really had out they and expect engine the strong in our corporation. quick also one keep that efficiencies focus maintain priority Our is our cases across really, strong, so us, that have that the benefit ROI of collected rate non-security about that we our to they of get sure intensity adoption use whole data across CSOs but value that of the and and they running to the use host get our bring to

sides months. into you've year, any Dave, -- Doug. two flat been the One year Thanks, duration guiding there And XX to the question. to last duration this was

where is to So that really from software revenue growth duration see up boost were good want were we there? any there's if and XX%-ish. contract And only had billings we conversely just then extra because I

excuse affected have to So to me, duration is there shortening that billings? invoice any contract, would

we Hey, prepared because we've year. that XX-XX perspective Yes. Michael, in the expected we're been all was that most we what I when mentioned relative of duration we're and invoicing increase contract way renewable it contracts amount of expect was the to and consistent what the remarks, range last million didn't in I modeling of through From that value month saw of part an uninvoiced in it's terms invoice timing doing $XX now. the the sending in

acute progress and going So And the then calls, of the the be the is in on in of accelerated renewable stabilize mentioned pleased demonstrating after and model. with terms to as most field prior shift year Company this I'm I cash this really is a collections, that. timing the to that

deferred And hit revenue? primarily opposed so an to as on will that invoice

Yes.

ours know, been of So particular, about like I've quite And deferred. beating comprehensive value for more you much billings. being RPO in the a our flow a while model drum through contract a guys doesn't than for metric

calculation that So as and comprehensive the terms in billings the dynamic. see of not billings calculation, is can the you as RPO, historic

as look we scale capture to the from QX business, of growth the Now, it, it's it the -- breadth calculation. consistent of even I rate forward, metric full terms think of was doesn't QX. But a going though billings again, at in the right the the of course, don't does really RPO

from with comes our Fargo. And Winslow you. question Phil next Thank Wells

line is open. now Your

to the year. question, my start great Thanks congrats on a guys taking for and

two here. Just the items to on wanted focus

metric. new quarter at is, so with starting adds just this good XXX, again the up First customer

up-sell, what new about and you think quarter Just feeling where year-over-year. strong year between of up full context again of, you and this think plus obviously, how comp sort had also sort year million you about a kind in of $X balancing the you're customers how this of about field started the you

it I some land, call be that versus guess more color expansion So would great.

Good Phil. question,

So expanding we tool to many having said effective hundreds a making there's through acceptable that have not ambitions big focus continue sizable that and task we right. with data know net of set would don't or our need say seeding long-term people accounts but news. within expansion of We've within what and this certainly accounts I are an globe, corporations quarter sure of on have, around news, our in decisions future calls interfaces. that it so was NOC don't make SOC them any different to of thousands don't of better or I net the

side, XX,XXX well work be work And sales is both doing bigger make we're in even that the work customers, point target that. set at there a the you create as think years customers. for Splunk all should time, the that I three those we and marketing across that more as had product sure aperture ago. But some to in So importantly we fulfill that doing we're

is when up got you news expansion did spending of expansion we big this and there's because huge as which -- a and day. really go And healthy XX saw we'd account rep, love that, that within base the cohort you think our good to QX, a adoption hours time on lot the in we quarter a opportunity right. as a continue into to see up wind I

but resting not we companies satisfied customers we our satisfied are within So with or -- quotient the resting or -- either. are with adoption not net we also new, are our

strategic of a about now something strategic Just was there we X-figure we something started the order field to we this the was the of that evidence was with value how time of and that and we X-figure our not -- here, that can from it's gaining the terms very -- they're talk what making and us and give -- talk but and be. some many really not significant a we a they're partner. a deliver around that every feel performance in and execution impressive I difficult, where by anchored of customers it's quarter, of orders really idea event we exciting, in about quite adoption see anecdotes, that that got when this pride And kind quite that we

when a think our good like we start do in we what customers certainly about with then the success the of terms of of we X sales, with scale We kind yes, you entire And customers, inside customers, is it's expands the success just But that now impressive. the say success year but number. years the more, XXX that's ago, years really existing versus So X to really village customer what that i.e. product, leading like the team, X field, ago, obviously, in It's we of vernacular. customer ago, post stuff. impressive. hey, did company of all to years that your the

again, And luck thanks insights all guys. Dave the years and the over in And best of the thanks, for future.

Thanks. All right, Phil.

Thank you.

Hedberg from with Our Capital RBC Matt question Markets. next comes

line Your open. is now

my to at sometime the relative RPO especially Well future. paths done to as and even looking growth sure, and I'll offer I'm QX. strong XX% the we'll growth really in year last it was was in congrats and Dave well. cross

comp know, I but good way strength really and and sort of the RPO sort success of Is of for progression the of I the certainly we over and -- there that the well, year you lot then I the of about the improve guide think the think a as the business. about a growth. wondering reasons the of business. talked of call, how health kind think there indicator -- of true just, on that should guess, a should is underlying sort we to, about there the you of don't I'm

for at knowing for say, what is we've for percentile at one $X.X to is would trajectory look terms and you around at X.XX% thank quarter, X-plus and kicking you. billion that steady that. you're here interesting of sustainable been XX has the question an -- been sure [ph] upper about talking our RPO well, and it's Matt, duration When that that take. expect pretty revenue an then or It we at in how

percentages. and all the we by Now how are the TAM. bigger expands these numbers, since step our in the and these in because the context, think the you it's I game in took the you as are lightly large because public. got back orders, very how We and evidenced I penetrated the doubled guys know, the existing say hate Company has TAM in percentage penetrated we then to customers and that we we if by effectively large harder penetrated particular, But believe early think

expect growth the So growth on just continued growth because value customer. I what's add opportunity to opportunity go for in the expect P&L there's to so continued RPO. RPO. much continued in the I

Now, what it's I sustainable we XX% you're not be the should continue me percentage but not expect into going is the is, say right. to certainly to are consistent, like guiding yes, to oh, hear RPO, up

sort Splunk? I'm over of of journey And that. No, how sort here. it sort I'm EAAs of and is early, talked wall in follow-up the to of where sort of are to guess more as I you indicative to we've wall more that guys the a maybe curious to terms right. of structured you of more becoming That's I for think all focus years customer about curious, the really of we drive -- of a the sort Splunk in there to in convert sort getting your customers adoption. that like are of on Is program

years is -- ago, buckets two And like new success that years okay the adoption initial up to. other been ago, we whole formed founding of customer go-to-market -- relatively the of side. as talked they There's from focused couple companies group, X.X years, SaaS X initiatives on on probably small built sure. there we've much a for and we've net many Yes, get up about

then they're approaches costs? How big more that some our organization is that -- a and they Company innovative save function the that's the of they a one in lot and are phone It be cloud the additional every maturity offering, could Splunk, ago, of chunk of shares. the a both think on success a team that host to plus telemetry could the customers think interfaces for with they enabled the and are wakes investment the where capability number instrumented and up the overall success And successful? that of awards group customer combination they to the build to driving. in that growing on very body allow the telemetry with a give successful I has team, whole sizable customers of I industry we won onsite for be work lot but across different how a years of cloud But on products X guidance day -- has that years of something to in to being deep we've customer gained definitely help to Splunk delivered success ton -- to delivered customers happen are for released everybody it customer of a X.X everything. addition the focuses phoning home doing our home, priority ago, customers that to to how

you. Thank of from Kash question comes our Rangan with Bank And America. next

is line now Your open.

moving cohort making your you on heard I I Thank although you Xx Dave. that's Splunk. years $XX message Two very had song give all you Dave, an by a think over impact value said update you this X and on cash first With comments are signals you, for where implications analysis million, level. for the year. value by that behind you, high dollars the transmitted sustaining us that? Can you. picture several value contract me. the uninvoiced very patterns, of what flow years One The years not. for quick the that us is shared explain continue you to invisibly value Xx looking up the X And by by received questions. Day, way, mechanics Rush. just to respect years. years the And the sequentially. reaction from million to at how going Xx to seasonal Doug you you grow over over forward or grow, expanding Congratulations, Can very Doug, volume with Jason you. X one working uninvoiced or And at are at exactly trend with as that Analyst what back, data couple Xx or of question X a much. bookings total have guess, next a for it for Look this us contract welcome decreased for to makes hundred I

in did In to Kash, I some honor, your Dave. direct craft it's prepared Splunk. remarks references actually

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Yes.

guys you let on -- word on the there. the out I'll So go

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comes from question next DiFucci with our And John Jefferies. you. Thank

open. is Your line now

ask -- made first hard Orchestrations is question it's too do.. I My about to for has, really Doug, question a Thanks. it's always to it act I been in but just sense, Doug. want the Phantom. last pillar mean

this people Just Phantom -- quarter it a why was is this mentioned there have a people curious, mean, sort can't an is type convince work do there now but is like still buying think X-figure you concept, this I out having it's be much how why that evangelist deal Do how should I you today? and really like, not sale. it think is how happening market. this it curious it just I'm you it, evolves? to of new And really, they -- new what's --

back the I for orchestration and that category 'XXs think, I The BPM years. XX mean XX has of the idea been on XXXXs. whole in years, focused around is

them doesn't that level complementary being ensures does. platform the the all one, it's heterogeneous before they difference I we with work. very landscape to something the Two, work. are are that and they direct dependent drives really thoughtful and effective completes that really the is like high highly the had engine an It the think of Splunk I then actually partnership the intelligence integration upon that orchestration, the orchestration the Phantom do automation think we layer. bought It because highly Phantom difference generally

in. the on two, users security overall of get people one, of incorporate continue and to the collaboration own loop together ecosystem help increasingly which non-security loop react to capabilities to supposed to, luckily the platform. they a more that platforms were act that security they or big increase and underlying we've and aspects on they But for crafted and by they're or Phantom also that first both way with focus with. results of with time our volumes gotten ensure depth within the Splunk, they're skills customers data way alerting the these started with saying way have three practical IT are that the participation the insights functions makes firewalls actual but landscape. some and the Phantom yes, way these that as working shortage playbooks; really with into then very the into they're automatically know of a they cyber security on any automation companies advantage wrestling orchestration, the data the activities. to more the play, the comfortable invested supposed tight data of got that realize through especially drive and of it think what the weaves and integrations And There's that the the one make lot within Phantom industry actually the automation It up types the Splunk, that ability IT they've capabilities can of by drive and orchestration of we've and the oriented of pieces endpoints Well, and the security happen we So to I playbooks close that has two the close the VictorOps, for been pillar.

I'd the a think to feel perfect and right X something they more deploy level they're only that. more going [indiscernible] buyers X and to way market the get the say, and a, now, to the This straight automate in is so is level people pull security. especially of is has tier Tier to Phantom X, for more -- And more well like like ability of is a seeing category landing something need I from we're of that security

to that to that that a that it hey people for -- was it sounds convince can you're it's But more accomplish really that them, that hard you explanation. it's a it's -- helpful. like I convince you getting But thanks have of idea, not not and actually -- good okay. that's detailed and -- was it's pull, but like

more with that in say to think I still cases their And a still other, I'd pretty non-security, is influence use platforms -- each has digitize these well mean, I other. they I'd work so sale still probably trying non-IT a those landscape. each we're they're wrestle tight evangelical with and IT, to guys their but pull. specific say little trying security bit are

probably the something that's them. digitization that having platform future a big requires So automation in data orchestration and for is

benefit. But the like to Is in and like doesn't -- well, Jason that give not sort to look is? didn't it sense have [ph]. I and if I I deferred really now is I and Dave as I look cloud. question subscription mean what you subscription, believe the actually But getting with which and Jason a feels -- diligence I he's going well great and Again revenue, talk seeing really billings I -- I the is want that's you it I'd around did and -- -- and is here, believe the want momentum to just if momentum I know, at say supposed the and XXX -- towards and just And out leaving great love when to told about, And the model it. it's didn't have short-term questions are he of I everybody you're believe I because to take at -- might that a plus revenue. a he's look to me you about And that with new for go people guy the want ASC is plus take you Dave good to things wanted Jason. know a of a just Dave look business talk, is hybrid -- look a way Splunk it. was at but a a that Dave business, knows Jason, license he at RPO of talking if and at didn't lot not of due of change you're going there's your maintenance to to

that I and to little bit. a So maybe adjust the try theoretical of revenue, part the

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the date XX, -- Thanks XX. actually date XX no, on for question

it's So a question. great

the plus. We transformation about for been now guys -- year talking are have a in you

to So correlates we're trying I with term is that figure what the metric out. find understand, long and all to what trying true growth true right value is

the when one the RPO value of that's above XX% at pretty the theoretically right around ARR those I and value of I of growth XX% cloud what say, number think revenue been back I sense. at XX% is that lot think, think as But now, makes year-on-year, will that we're be to is probably I growth, step year-on-year, And that size is one kind just and think a that forward, most indicative we of and growth have, for long at credible our think up look ARR -- creating. a are overall as the the I I company -- we that of for year-on-year. But numbers. the if were where do see to software I be going the at do going is growth

about how days And helps, I the -- that about much don't my think I next it. more. or I going on refined But more know XX that's that's I'm -- so thoughts get how over don't know it. to but I think

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will time, on as Dave, people if think a stop of it maybe business quarter, just it can really guys like but like maybe, I'll there's be some some the But was the in at look at -- in quarter, you doesn't look Matt just I this strong. this time what of momentum the that every as you same -- was and talking. feels all weigh metrics the the to Thanks. strong quarter and that, awesome gauge information new However, we report want

And and really about you words it And use just pointed quarter. was know we when Look the year. start growth press our out, because to in scale it was quarter you in a quarter at Jason been thoughtful we us, compare a the even growth yes. table pounding plus QX good great tough are rate about the about long the we software John, characterize we've XX% a as and yes. think a rate. our was this time is a software last I can't, [ph] QX release, for a

a think be. are not proud are it's quarter, great nor we we we But So ever start. will satisfied of the I

a Okay, thanks guys. lot

Jaffray. And our with Zukin next Piper you. question Alex from Thank comes

line Your open. is now

question. Thanks my taking for

RPO at change or if the curious of at I more for revenue, just the at I we diving rate and about and look grounded. a actually billion RPO XX%. bookings in look risk change I is maybe add RPO be if If metrics, that of in RPO exact into get that if $X.X take the number RPO the I So growth the

better of up at billings. follow then quickly on So I or to a guess, the metric of maybe RPO standalone the the federal is to the the business, first that And look or question overall space. then kind just growth momentum

think plus calculation disclosure, Yes, hey, in to the calculation would not difference. be you're in it's the is you the so billings the but Darn it's doing Dave. that deferred. The era, that And gosh revenue close it's is it's it's [ph], $X.X change of in new revenue not X,XXX,XXX Diggity never I billion, plus change notice RPO going

proxy. in growth that plus I metric, So XX% good a is think

I follow-up federal a on [Technical just And Perfect. guess the Difficulty].

breaking were of up most you through sorry, Alex, that.

work rest if what federal year, impacted have [ph], shutdown on, the government before of just about by commentary pipeline looks generally. was about asking and if you any pipeline like question the it broader the the your for just was I the macro

the the with in Got we're Yes, really that heads downs. ups all for deeply XX that group. been sector way team organizations the months down the keep past performance thing through it's and found persevere right bumpy satisfied doing employees and a their ride their to for of Federal and am and and public appreciative I our a Federal really for it. for QX. the public team sector the that's in of And Yes, keep the citizens

getting I helping those of I a buyers. budget to probably of said then resolution September, of having till been slate helping and us that -- we final a and up little the clean -- think think aligned the and that buyers all our bit helping have we is tightly had

the hopefully landscape end as we'll work the I'm the a well. So of have and about to September group Fed to run post excited the good up year with

could move Jim, please. Okay, on, thanks, Alex. if we

Certainly.

Morgan Next comes from Keith question with Weiss Stanley.

Your line is open. now

wanted in Doug, Thanks, this security Keith. calling is for just to follow I with [ph] you business. Melissa up the on

You said it's guys. you been consistent, good relatively it's consistently for but been

customer but from base, vendors. also the So expanding you're your both benefiting legacy SIEM within displacing

on are technology. how the just to we looking displace piece the are I'm more much change the if seeing of legacy you later so any is wondering And And left forward, displacements? driver, in

orchestration keeps folks to well. those. were piece now, the incident the automation the that have many, a for a event a besides of the sort really now, myriad changing think is a there there been that's different broad-based just category of analytics market There -- was gone security year focus and well. as as of it's strict still It's with now -- the QRadar, lot definition tried it from half much blend management and No, probably security far There as but a of out. drumbeat ArcSight in is And of consistent other pace. implementations landscape a as are in and augmentation quite quite SIEM play broad that analytics SIEM other more many And behavioral ways I go. and vendors to

last the customers continue generation and that we done we're So with are even SIEM that product that, offerings new coming and replacing for SIEMs, offering. have still already to while landscape functionality extend additional in that

one Dave. follow-up for Okay, helpful. And that's then just

guidance full on the looking flow, up the again, sorry for XX% of renewable terms In to cash that follow still you're mix for but for year.

increase what's driving in guided a headwind drive understand quarter what's I a can and to contract in-invoice value you cash in how the just on increase guess point but that changed a flow, maybe relative finer ago, uninvoiced? when put could so to I you And

Yes.

the our in particular composition and to in of quarter invoicing in estimates that relative first terms -- our far renewable the the in model. Specifically, characteristics the changed exceeded timing. billing mix, to slow And

you. Thank

Fatima Thank our from with question you. And Boolani comes next UBS.

open. now is line Your

stance in prepared Good Doug vertical sense, initiatives in questions. a remarks, perspective. I'm the have pretty afternoon. about deliberate getting versus of past. Doug And you're the for your more your taking I the and go-to-market were of is the Thank place you you in one approach for one certainly Dave. from deliberate putting for a some this solutions

maybe as wanted year to And to a initiative new operating I solutions? with the what to was. So catalyst into David incremental to if then is think around this extension question the guidance the is that about anything how that understand business do behind should And full-year unchanged. that have I vertical given this might investment margin the

and margin about obviously our the year when line, it's results, which QX that and we margin. set plan line The bottom of to that had QX was for we we hey, we relative year. also And Fatima, strong was of the Yes, to out a talk the at the Dave. vertical really of a the flowed basis margin the initiative looked maintaining at part full top at just second. for op contribution I'll our margin contribution look for that the weighting XX% beginning

in in that of is in to reason the insight the it's of the terms a wasn't portfolio. moving specific that's year unchanged. everything investment started plan we terms So new the with context There initiative, the

complementary -- verticals, Splunk year. patterns last segment recipes the are investments the repeated craft to a or years there in find patterns uptake, like then get and the out has product into put aspects whole we services, to areas making the we analyze out and our and detail manufacturing in to security all portion I have new we've well contributing more specific set to innovation that R&D really financial including way in future delivery the those have new been been days, peel as the that those in Splunk. in a are but launched or on around of services act, trying past our are the that that customers the IT published overall. portion past and financial on expansion we that opportunity was footprint, many got allow within ebook that strength groups segments non-security Splunk and either comprehensive, further been the off, budget monetization Enterprise investments to starts people talking after X new a to the how essentials net Splunk of in a Essentials arena XX hire a outside data to be And as of them, cookbooks specific some And that could past, monitor, a are start opportunities those be orbs. call and area the significant we working And partners against IT, to where strength And both additional in we expertise people was security we complement around. that years. the we've the whole seen with deep always call the We of IT for for alert, deliveries existing in what because vertical and and the And of IoT we've some about security and fabric to gone for Splunk

Thank Makes much. you sense. a so of ton

And [ph] comes you. Mizuho. with Thank our question next from Gregg

Your now open. line is

been much. limelight particular very maybe thanks you an it's journey. but Dave, exiting this Okay, incredible

add you, Doug. my Jason. welcome, Question and I'll congrats for So

longer for So you connected like experiences. XX platform announced might months, It flow enhancements sounds of now past and store, X insights infrastructure natural DFS, over lot to business and you've the Smart DSP, language and think these to or the greater do a collectively I'm is, that you to sales in take 'XX DSP excited the fiscal most needle and can What translate be velocity? on into about growth it wondering DFS. for will move

customers I course in you time think those contributions products But you material that results there of revenue will take need the when introduction, a this And over this forecast I contribution, and door same usage is generation availability have like some incredibly will but are it to billion on into and at most that any they get them general of sources for how positive. getting, X.X $XXX availability find basis. from have our the line to -- the the usage, of as complex feedback level that $X.XX million $X.X the for billion product for thorniest limited do we're a some gone across limited other, there's with a to be year.

to understand So share they with used? sure I use those got to make I'm a all are we products, push lot the wild for that to them on excited community in ready that value the cases differently and from they how seen use power quick user life how more Dotcom fall upcoming the we no being get really truly they're and Splunk, guardrails what cases conference always and they continue think, in from our than them you've with at XXXX. how What power to and

confident logos the in that a a matter. rounding. the quarter a appear XX,XXX would few then anyway, that lowest still quick you still years net that have it eclipse seen customers follow-up of level guys or QXs that's Are great. year-end? by And just can total was few for you on But new -- this is function this Okay, because fairly the you we that surface maybe on a

the number and numbers. confident Still round down did on remain we that Yes.

procuring make achieve. overall quarterly of tug our butt be I'll it's constant focus and that easier kind the real including getting reporting said between the pull footprint on easier from Splunk. dependency there and and is again on the across -- the given on had, involvement are our the is we this and but all make So in side. of what -- early aspects still you metric successful pain what net sales number customers it lot now we've Right are doing of doing releases And less what products new side human to satisfied company, to is cloud and versus on that to adoption the when product doing adopters those there's a really that

Doug. Perfect, thanks,

Gregg. Thanks, it. Appreciate

our comes Deutsche from Karl Thank question with And Bank. next [ph] you.

line now is open. Your

Dave. I'll XX% super in of us? bit a did Dave, license is calling the in element quarter then second Was one or two growth, worth that question, ask little or Doug, while. to Doug, business contributed the the for one a the time-ish Maybe the that Thanks. areas out there for to now. one highest one any feel And strong, that

little you it operating apparent your think I I you did ratable comfortable fiscal know really that cash be metric, into metric say quarter, flow in more get about that did disclosing if mix might don't get could maybe QX? a 'XX. XX% guide was flow to angst, that of just everybody given lower landed that bit the in give accelerate just you, you beyond guide habit cash Thank creating but color with the where can any some each want

it's pretty full-year which our is not not a typical, which to Karl, objective close typical for QX. is

love Okay, that's hear color. you. Doug And helpful. Thank yes, to little a

of quarterly dollars QX that's our took QX see for off get months you us of reflected much and uninvoiced but materially not terms exceeded thank for in asking Karl expectations contract to $XX sequentially smaller much, that, to And value. in of from. pool XX the renewable we draw mix, increase to Again in yes, million

So the performance really was by great field. it

it. Got

relatively over that's marks And of that X EIA, on focused to accounts it the in we are bigger us most The number a handful leaned really We really and then much of in, is think company. mature. performance. I important the figure that the take I ELAs, really, as a which for was, is helps. number on Americas ELA had of to balanced customers few up think, motion a EIA arena performance a really And quarter, that always the

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Thank from And Steve comes question with next you. Wedbush our Securities. Koenig

now Your line is open.

Great, thank you. Thanks guys.

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How are you?

-- Dave you For thank you.

So Alex's question. building on

but to on a I kind kind metric metric you could and 'XXs metric low help those two bookings for XX%. every a follow-up year-on-year, match got expect reconcile exactly of don't the mid software yes every to bit Doug. quarter, of maybe So little then I've

been and specifically. talk cloud conscious business but I cloud come the away moving of maintenance. having can from in greater of doesn't component perpetual with a We've about a be term Sure. second,

year the cloud plus now. number services for report XX% in a line, our we for license. growth, i.e. on-prem sure, seeing our over software we're we and doing that number it's but been when So software That's have

at is the the actually number delta. strong, software of you do reconcile is is calculated how composition the look and delta non-software the The the quite RPO bookings asking you when So in biggest components. like component me you're

I Got it, work on okay, that. then And for will Doug. the one

IT in at -- like in next innovate value -- security look to age to and want the want So some been have It generation do seems of Doug, innovation, both when of some there new interesting that some ops. vendors I kind the kind -- competitive companies just are of out do management. and with and And to ahead? stay of and the wondering regards to your to these those are newer sense then in spaces how I'm doing, players there back log plans Splunk dynamic what's going trying the some of them of added

Sure.

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the lens, serve in ops those that dev start with As outside that then it's these IT coming dilemma the focused departments want gathering an similar actually to But security platform. user is data you're or for vendors very user, it data. different use as to are is a between the high not two winds constituencies ops or with very overlap you to And up well. that on security IT the go bad a to user very way being those or data

But variety users is, make reuse, leadership these tailored specific you how for can it's why now and the with data get framework, across Splunk guess, then you it use to the audience. that the do cast all much we And all -- structure you you complex data continue position company, to solve across DFS DSP like trying of dilemma the set. I and robust repository very not including a making that's been security there of are and the data that I ability you've If never different that we've got I over I say feel is that these how in organizations because infinite XX the to broad past part on think cases products in have, to year set users how data problems I'm think beyond examples a use is structures like of starting and for allows do to you our you to products apartments. and of and and that to the a unique IT. a There's just over set got a of extend that. multiple four to three we've or very build And platform past deliver capability years the years gives investments us announced means and value finite customers across data half, robust create

I guys. it. Thanks appreciate

Evercore. comes from question Thank our with Kirk next you. And [ph]

Your now is line open.

been so partners on really all, for me wondering in, about guess a kind for of another only you of my for create next it I I'm this direct at what billion sort do I'm partners best forward. model Thanks flywheel a but of Thanks. distribution XX,XXX start, what's for years? for you of couple had very a with is I you over low really because much. that's effect a I SIs you going seems and been to of time so all take for Thanks customers sort think luck and you while product the Doug. relative you one rate. leverage for from a have wondering, just approach fitting is bigger go-to-market the the -- just to And the -- it of of Dave yours VARs what's of and wondering sort taking is out, going of $X things, get Doug, in the a bit jumping like can create way of with sales more question to bigger the some to have to get more just slugging perspective the run the little jump potential. over to just way all, sort

And Kirk. we've think Sure, long pretty -- is ecosystem. way been the it's very need for that over go. the No, robust still the remarkable. past a I partner notable I have improvements to made obviously years been and on have consistent a There five

a You're partner not tech global new make satisfied. our as partner bunch We but this proud, just summit portal and to never infrastructure of easier out done. and their and had our a We're better. rolled to well help enhancements lives as programs, quarter partner

it five as not other rather seeing amount thing is theaters underlying which usually a us to gone involvement a on a more and top are It's over think over Splunk Splunk -- do. partner think work right Splunk's lot we so to made The for but is the keep solutions talking we of -- still sell. on has of go now, or co-sell across Splunk platform is base to they work dilemma up all and us easier thing. Splunk platform, past on of that I -- and of that the traction, easier Company. our involvement we base is and what think and -- about, to And continuing I XX% partners our volume are back of making I is the there independent of build years. capabilities goes contributions to items their the up top up and Splunk up And platform more, that well the with customer the partner this actually on thing than

just certain any to pushing going is a the sort I points be lot heading there curious, kind you I I'm right the next or put guess, trying like see something, it. just it's data direction. moving Okay. see -- iterative of it's know can to but it of process, the needle just see a sort inflection it of a of you coming timeline degree? year. Is up you on maybe to the an boulder Is this just kind curious, seems of hill

examples. I OEMing we're for have different we had those and is, -- Accenture different is and seeing accounts. mean, partners of cases. the where some Symantec, Splunk announcements prioritized I Cisco use We've they are what think one interesting with

need leading and back a that that that they're be do is marketplace. a that enablement there do those And which what Accenture well. then been thing within years, think that really cases partners discrete probably accounts. and use partner hopefully, think make enablement I own all guys initiative. tier was solid have fewer we're buying with partner of with productivity what the capacity technology is, that we've you sure one program around their on are those pick and deep for in to in the some for we're they consistent with the as addition of from really that, -- is referencing or the overall going will we'll top the not of customers their So series partner they benefits to that to whole we how and the centers co-development we're seeing continue that out focus three that I successful increase different you most to sales doing and accounts, with in And getting I those to seeing our that that, point see But as really, tipping see the go capability

quarter. on good. for sounds Thanks the congrats and answer, It the

Thanks, Kirk.

Thank for question. we And final have you. time one

Citi. comes with Pritchard Walter question from Our last

now is open. line Your

question guess, maintenance. was final you. a Hi, question I thanks. on I a… on There Dave final guess, for call

Walter, last. the for I best save

Certainly.

I Doug? it's we have wondering, So but and think for trajectory about that a it's come I looking on about we on the I'm rates And guess how a staying perspective? quite guess maybe that from adjacent, should number think a growth or that maintenance, -- question forward down a should had bit. positive then

growth maintenance rates. the that Meaning

Yes, is -- right the a stays this comes growth? into down growth [ph] rate. think Yes, was I now. level think was kind XXs it the ago in XXs you Is a that of or -- range year it and it think XX% terms maybe it's of it further you

percentage term It grow probably as fast a cloud but is as a total. term continue -- really is offset a of -- gets it's the Obviously, going it's decline little, to to how well, the the maintenance. bigger a maintenance. biggest equation It's a it's chunk But put is a percentage math cloud of in versus gets big the thing perpetual. different when as perpetual swing into then that's

services all. professional through not piece, times at more RPO flow other than don't The

think on of about when the I get that. timing them on book based gross question that into about talk the the business maintenance field all the put payment occasion components we earlier other all of maintenance. to and is that all we software But You delivery and in do deferred services components the recomp that -- the pool. all and generating, biggest biggest components, component the when relates again, But

you're to be? starting there it material -- that contribute that is us a there, you're looking on like this update you it. the And year on customers new -- feel will higher looking that where to number got that where stand this of Could needs to and then, where are on year Okay, milestones update Doug, at model be that to sort of that things velocity -- drive.

that the are So a include month worse, Splunk past for is better monthly contracts or net talked I've VictorOps customer count. in which as true our don't Enterprise new arena those, don't, about ARR And for month in [indiscernible] contracts, for we the we calls really cloud to numbers. count

over we've So maintained the so consistency we years. many --

number. how been that define have on reporting that We we'll

sizable volume looks Company, of trajectory and going that lot model, of get want to of total there, Cloud systems in more face what because marketing support around the lower our not portion the teams cetera. and a investment R&D elements the the we more that's trapped just of more on we that how becoming not well like traction So have and Splunk that and velocity is Splunk lot et to that what decision a touch the And programs, sales everything as with are platform -- the as update customers, you et number. to the offered as Enterprise customers and that we're cetera, point more guys to higher

any incremental we And it year, [indiscernible]? a is there sort be it there anything or is focused -- should milestones this -- is of on is

-- that visible you that making we have -- to something It's -- have not not we not we're guys.

milestones are breaking right internal is is reporting but that that we have, now. and there externally there nothing no, So we

Thanks. great. Okay,

Ken at remarks. for this any Tinsley to be call you. the back And Thank closing turning time, I'll

you. a Great. help an Thank honor. night. you, a your good Hope Dave, been has welcome, It's Appreciate Jimmy. and thank and today. pleasure everybody Jason,

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