Splunk (SPLK) 4 Mar 212021 Q4 Earnings call transcript

Ladies and gentlemen, thank you for standing by, and welcome to the Splunk Inc. Fourth Quarter 2021 Financial Results Conference Call. At this time, all participant lines are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. now today, hand Ken would to conference I speaker your Tinsley. Instructions] like the to over [Operator Thank you. Please go ahead, sir.

renewals, After acquisitions, forward-looking Merritt Great. environment expectations With margin, our Thank which and the statements, our as that Jason is Doug and macroeconomic business Also, expectations our press markets. and we our or me are including to to or reviewed our afternoon. may may Please today, Child. the and and trends results well or well rapidly, including high certain us, we contain expectations events with and note customers on pandemic such best of revise for the posted results broadcast information financial issued you, mix, statements cause of current to replay call today growth and judgment statements release, future particularly the differ environment. Investor economic and well. after our reflect as regarding a and today's markets of the other first market closed good delay have the This documents website. the filed we any and uncertainty, assumptions on this spending are cloud our and be refer actual not contained are These and dollar have is to from being as supplemental demand which call, on duration future made this our of based are as as documents conference that in cloud may following gross And audio page commitments in our that material as matters and relate live those Relations COVID-XX on website. and webcast. web call, will known be the and contracts. to quarter our available technology, on contain we beyond Those an information. via in obligation making guidance SEC, These these call On factors be overall customer impact business will forecast and risks Many today's long-term our currently call call to decrease may will based our as strategy, in and operating for press revenue including customers, is to assumptions factors update our which as continue differ statements. the of products, or certain Related release. on today, X-K the on changing file our Form materially. we forward-looking being this with disclaim accurate we forward-looking today, the these during presented statements. If to actual posted control

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

everyone over our months and and ARR a to the years, with XX the company rate transition one as well million, to last Driving of results pleased our continued joining past to our was FYXXXX. billion, dedication Even over $X.XX I annual cloud. progress finish us. that’s to of remain last our ended continuing for up delivery and strong $XXX We a cloud accelerating Splunk priority call year tenacity memorable our into initiative the up has we on cloud-first continued and in grateful and our been thanks trust our Ken, team Thank number growth saw importantly, these and XX% our am customers over of And year, very recurring past overall revenue of impressive as more QX. so during to am cloud our year-end. XX% partners. particularly year. commitment the I for results and with you, of both transition with of Splunk. three for proud year in very the the from QX

revenue time $XXX ago, end about Looking delivering representing just of revenue, back volume an million, was in daily Today, XX% XX% cloud million four the software XX than per was less day. our allowable upper in $XX data bookings, stands years cloud at CAGR. of terabytes and

a transactions the a continued hearing the closer them. business, over to the I investment belief seeing am the we they them we plus pricing represents commitments the Despite experienced Splunk were several and and their I’m QX. expands what we customer the their macro resourcing about with that and critical deals continued strong make them innovations, our volatility machine our to also footprints interactions XX% had high of the of Throughout year. taking uncertainty procurement as In allowing the most ingest XXX-plus QX. had cloud that were to our to of slipped to utilize and when of And patterns QX, finish workload able Splunk to data a rapidly past environment, our with of and we velocity expand cloud, deploying that several the technology bookings customers accounts value in in saw close terabytes many to their and months, coming time move are of ultimately XXX result. seen of in to I’ve in and QX We from our what’s with up majority reorient the they versus now QX. cloud customers cloud advantage software features of as free focus learning, We’ve in

their years, especially XXXX more comes than the similar, signs and Over be the year, peers. and The have data XX organizations data benefits. technology. past achieve it there the economic outpacing world companies strategic will and to use has are strategy Already, significant experienced that business of their and the we of are will with digital when seeing past all a to prioritized strong operationalization change

SolarWinds at key and the of some working governance unprecedented comparative. with unsettling, to are Splunk digital our The optimization has broad also organizations hack likely levels seeing them get a around security the become reality of customers is Digital home point. all change, magnitude these help side-by-side and We cybersecurity scale. hacked resiliency the era ever-present but that hammered trends. both drive of at attacks has and critical are to

to the As not Splunk an been by impacted. impacted had the took to Splunk they whether at SolarWinds enable attack of and itself onset confirm been immediate example, both to hack, customers investigate had the action the

to on capabilities. Our us detection not customers did count timely We deliver disappoint.

evidence the Our to our Sunburst on published customers materials our Backdoor. of security strategy to use to guide find products team how

and and their released and the teams professional research remote help timely to Splunk on-demand own Enterprise security services From update security in services customer to content, Our our deployed product this risk. using teams help capability our customers customers success implement understand there, dynamic guidance. Security Splunk

Observability the journey important. As and and Data-to-Everything to our across has all customers richness by solutions and among never on deliver DevOps. focused age, Splunk. value organizations the remove a rapidly depth been value modern bring our action for IT development. to of transformations digital application dramatically and more security responded that our shifting customers our the their we our FYXXXX, and whole, customers between in The the the breadth and standouts of operations, fueled a mission accelerating business are in best-in-class data community data know Platform from that barriers everyone to We thrives was and enhances Data-to-Everything so to expect within our own

Our customers market about capabilities clearly too. is observability are and excited our the

Just analyst only last Splunk observability outperformer, the space. has and naming knowing firm of as observability leaders published evaluation GigaOM, as market, in of the week, Splunk industry’s emerged industry one cloud the the first-ever the that

services their personal Enterprise well their quarter, in and retailer transforms past Here cloud on British Nationwide third transformation, speed. to APM, fastest on Security time Shopify platform. received most world Society, largest cost examples a building do fraudulent just of retailer, brought the more COVID-XX in together company XX expanded activity. and the as financial organizations will in expanded more seamless their XX% Splunk Splunk response integral delivery leveraging enables Building to teams bring customers Observability of is all some observability of society Splunk action with terms customer the better largest mutual ensure already data. omnichannel and and few our their Tesco by common experience as of use innovative commerce revenue. an and Enterprise their customers, an of of to take a significant Suite Splunk the in of the recently a the a the their Management By platform, run-up online long sales, to grocery seen to expand Application the institution Leading in increase a Splunk Splunk and equipped where to against million has part support use Splunk data, be data provide reduction Tesco their members or Relying Cloud Security in their their as and accounts on Christmas. Splunk Performance their online on Tesco their world continues across Enterprise largest use shopping in financial as the safeguard the and protection this to gross their strategy. British on better improved can world,

customer scale cloud, a at year-over-year. of our growing we and the to one XX% for QX from first just underline to with their business many the in observability across we to plays application scale, provide bookings year X online we are cloud Fortune’s the their is selling to importance time and customer serve response multi-pronged an Longtime ARR reasons Most better delivering as the solutions, best-in-class them monitoring and included at Cloud, majority deliver growing organization. which came on continue also data With experience customer again, capabilities. our serves Companies customers In as just merchants e-commerce them growing expanded Okta at With as billion With to XX%, COVID-XX, continue usage increase well tracing million enabling to With with can Shopify Splunk products and the our providing X,XXX-plus address leverages scale and monitoring over their Splunk patterns, purchases Splunk customer, use support our demands, brought their times of and by fewer across entire their error Data-to-Everything and which as upgraded understand across by visibility faster driven of Once for overall online Shopify was Admired execute able the software Cloud, ever. Platform $X.XX enhance is among Okta rates. Splunk Splunk better their delivered as business. organizations our entire summary, customers to growth our Okta, virtual These transition. our finish in online. by the environments. wins strong

customers We and to cloud-first Jason? and on hand year are about to offerings, rich the our industry-leading Jason excited our and I’ll quarter opportunity over portfolio, the ahead more the incredibly technology our with customer our success year and support now for serve results. footing. fiscal

report the pleased slipped close Doug, total which up ARR we saw in with the million, of persistent that good largest of year. to to we up for XX%. QX and uncertain. not were from all the joining weeks accounts taking ARR XXX to QX, strong over for ARR pointed to COVID call, many last and other in QX. volatile up orders million, everyone. we strong of did rates fiscal said closing cloud repeat transactions to but slower in we high stemming On year, I customers Thanks spending the $X that close Thanks, that did the We We $X.XX rates us. QX, last some a reevaluate of billion, year-over-year, the We of our finish with uncertainty a indicators close described value I a final afternoon, from ended than deals customers of not XX% delayed of had timing only demand with attributed our to and confident specific was overall, $XXX in XX% several factors. commitments. transactions, the macro pause was greater slowdown were a timing in degree QX but eventual of but Today, am several see XXXX

we RPO, nearly just to of results. growth total rates the both XX% bookings yet booked and with expect $X.X $X QX substantial didn’t to XX% multiyear We from year of billion, year to renewal over on from next of was year. contracts. and of important Now revenue as up over previously were last RPO portion the last RPO pool billion, over ended up of note total we period XX a as last the muted benefit which have months It’s recognize that current the

Day, renewal we As next conversions contribute rates initially the expect base renewals we this convergence term meaningfully should growth booked These months. that that to drive year, to sizable the three we begin at of bookings to and bookings to prep ARR overall will two Analyst XX highlighted over of growth of the and years a RPO to growth FYXXXX. XX ago

On for slightly reflecting as mix, from the average contracts. the in and Total higher a revenues last QX sharp were P&L. substantially decline million billion in year full-year, duration down $XXX as both term cloud $X.XX for well

our up both the million, pandemic. start XX% will platform. last normalize cloud in duration On to XX% $XXX our we is in year, negative the contract cloud outperformance, and impacted continued operating op shorter term substantially to adoption which QX and contribution year all was margin XX%. year-over-year in from full-year basis XX% up at QX, margin of average lower on margin XX% XX% revenue continued and last first Total over due Cloud revenue to of lap million, the margin higher in acceleration as revenue coming planned Operating to was are was contract duration of $XXX anniversary towards gross was topline cloud XX%, target QX long-term proportion of QX average least significant margin X%. QX was with margins, our the by non-GAAP. mix. greater reflecting expect than cloud. customer a growing was due full-year Again, We from compared gross progress down of

$XXX negative better invoicing for about was XXXX. flow line annual expectation to our last following our year, and $XXX million million year, fiscal cash operating with the in Finally, shift in than

guidance. to Turning

recovery continuing uncertainty, then, the clear Until be of on keeping remain environment will we horizon signs we growth demand and While the given short. is cautious specific market expectations are market there strong, until guidance our stabilization.

total $X.XX As such, ARR of with billion we expect to QX billion. end the and $X.XX between

income variability transition operating results. the continues cloud in revenue the drive On and margin to our statement,

their the pandemic, in the total non-GAAP revenues in pattern. very saw on of strong during finish transition reflecting the business When year very outperformed We between was the of close predominantly deal look and during customers $XXX the cloud to year. are and the $XXX commitments, length whole, become then in been minus depending with million QX weeks our a of especially of a and progress plans size and long-term normal margin of expect measured of cloud as In they facing the targets with business the contemplate are seasonal their half expansion XX% cloud our make with to the we our are a unusual particular. final for that Splunk. in the pandemic. million clear mix, substantial pleased first QX lower-than-usual more contracts QX. being on operating large we term a our We also onset headwinds the term of the customers approximately It’s and in with back strength have cautious On-prem year rates the from closed are as execution strong we closing, as

growth will business quickly. cloud continue as overall and revenue expectations likely our in outperform ARR very While environment to remain see The remains strong demand you high to expect the we rates. cloud can the will business our volatile, term ramp and continues

questions. future for continued progress business up you on look planning updated on open and strength that, it in With calls. keeping our for let’s our We cloud to are forward

comes from first question Goldman Kash Sachs. Our Rangan line the from Instructions] of [Operator

is now line Your open.

a much QX. Doug. Jason. the on this very for congratulations for team One you show to Jason question putting Thank Splunk and up good One one really in for and

As you at I ARR certainly scale, cloud mean, you're numbers, look significant. cloud truly at the seeing is which accelerate

transition out, to from that this subscription, play license subscription company is from a cloud. going went then there you As to the

outlook of this not if worldwide for competition, Doug, and had crosscurrents, the a your if departure of might change the do how as conceivable team the As your certainly become you've there's improved. are What Field are three-year although Operations and you, and think in the a you given greater three lot might a your again you given to target for model? revenue, of noise environment. given out this Head how leadership you with making and outlook one so, that of once business Thank do And cloud Splunk with call the looks company. so can, that us, much – or the time increasing hires discussed? majority implications cloud years also that competitive do a a perception all out, it a Splunk, being And confidence two-year is for your what or sit congratulations. don't the have of becomes you today overall, you that the be is the not for out, what you you crosscurrents play business in you and has actually the And the pans us is about it about for horizon execution executive Splunk like of

piece, which much, Kash. I then you I very agree. Jason prescient follow-up you, the I'll very Thank and think start with cloud Kash. of is

well learning, machine I to collaboration about sets feathering marketplace lot capabilities, data continued security, will industry observability, material continue just and very and position are orchestration and streaming of become expansion the the across The as am or importantly, solutions more think in from Splunk ever and I of very, us technical are excited time. portion a that think positioned good the and a much enhancements our to Platform, our where that buyers buyers continued position, position better enhancements services, those and between stream the in cases competitive, feel having Data-to-Everything services, use continued I been. up to and be a that a So point with pivot. the Data-to-Everything continues on and processing as a get non-based of in I doubt. right suites like of this are repurposing and we strong we a really And focus competitive importantly cross-fertilization more at we've ITOps no than three

our we the calling it is all or in problem, expect people that data to participate. $X.XXX absolutely $XX all have we're problem TAM. small provider. of billion to market I that’s after, a probably do of a I ARR a a million that prime the can should think woken of and importance simple importance were $XXX areas. were the continue of the total of buyers we But that as We just we the as data billion – of and up, ARR a to company up areas. as billion as example math, always estimate $XX proud And key that's in to going of – percentage Security our people very early not transaction and worth think we wake target addressable cloud more across

the continue, will we to they of look lot that should will awesome chasing for continue a team any can company. I every it people So bring and into and as and my be, talent

billion, billion years, $XX do. lot the we've made There's While over are to billion, $X about mark. $XX big we have progress past TAM and a we the for shooting we're five the excited a

Jason, impact really, do have as our be we're to folks, to So marketing to the to to team want people executive teams whether and as we any the shifts we overall? these key business its sales be be what crucial making to and the development do at that or continue lion's best-in-class cloud I'm to augment chime be that strengthen need markets. the competitive That's share to impressed and so bring ranks. very in of and continued we'll you of adding capture to on the able really majority in and it's

Yes.

yes. business, cloud on So the

year. pointed So seen we've as throughout strong you ARR really the out, growth

We've We clearly point on in year where we the to is the in so XX% a to sometime we could the few said that time, I And get last over years. be past, will that forecast to the basis, you saw grow. cloud. over first XX% time for continue next it software number think to expect bookings XX%

mean, And to this the expect revenue, to the XX% quarters. kind business over to of most that of should so the for can XX% in you cloud next see That likely year. model, steady you the likely you related eight cloud pretty I the half been how back, should has range be going revenue the business not said, now probably see think, year, I last can

at XX% trying where you – do as that's to if as back, the ARR transition – think And that a partly some pandemic little much year-on-year. If the customers they has at the moving want make due they term that's impacts from out been. capacity their volatility the to last either trying the figure of buy to the well grew before how of assess to cloud. kind XX% can see bit business look to grew around you That's of you step about I quarter term this where business, basically kind and math

their number the plans It's move health of about have more indication want an though volatile, own an of what that customers of they indicated. flexibility to is can even the of so vast continue what not And on towards to it's which kind preserve is indication cloud, make to really customers so majority business. the

Congratulations. Thanks. Truly exciting.

Thanks, Kash.

Thanks, Kash.

Thank you.

line Our Credit from Brad comes the from Zelnick Suisse. of question next

line Your now is open.

a to in kind Splunk performance see Excellent. And cloud. quarter. from it's of we nice Kash’s return the expect QX especially so Thank echo you in much. congrats. Great And I'll to

guys. curious and guys. quickly. you're sense deals some the on happening But appetite So much Susan's things beyond unfolding? picked I specific environment about had what don't to QX just the think asked. large and obviously and just what I get would want be we then the to I’d to It's you leadership as follow-up dwell for too recent from how out in How selling seeing a past, And America very Kash North changes you the sales characterize are departure. there,

to the productivity field about in thinking organization North on in of stability check wanted how the Just and specifically you're America?

I'll Thank off. start you, Doug. It's Brad.

environment on we consistently that that consistent, with talked be think the thing both it that all I a think, I've the even the one that And to the other macro CEOs, and about quarters, seen scrutiny volatility we're all number the dollar impressive same stock of appears specifically have thing ones is market or economy. other earnings a whether is transactions. much about more which something with We in CEO all QX. the impacts and I and not, So venues they're lot pandemic high in with my seeing. on pretty calls value on saw it's very the after, one in talking – QX so and the potential And circles

teams macro and course we think If or the And it hopefully we mitigate I for can the to be in behavior environmental in validating work the we and we've We'll buyer North helped on got economic staying of way to been to progress really when come the to quarter. that happens locked year different within about rein. bit can the see and In Americas budget that QX But excited us case, America, not our our because and grow scrutiny free factors dramatically what pretty to very unforeseen on the vaccines to we are America, superstars flush risks very economic we the get on this I'm potentially of is some what come one we the game that control, have that how out were blockers eager our to talked say. our and of even states the in focused can't. the that up up range should doing it the to across the back we excited I trying proud and fully stimulus doing similar has in keep theaters have for about over prepared range down. triply factors and QX. outside continues the think the a in opening I into North see and we'll budgets us been see operational on promote QX passes, then focused they've and over were he I And approved think this QX role. lead of what down help buyer

next can the you growth cloud As XXs, business and into becomes a all in this a guys rates rates and you're growing very excess ARR number XX%, overall of when the ago three that high in number imagine the years year XX%, year. different number going was

as keep in of And we change as front to in stay additional opportunity to there's or this folks always be scale front and continue So we're it's bring able people talent job and and our to can skills side-by-side can. different in trying work groom to continuously TAM just make we possibly so that to over sure the us. have right that's that around got fulfilling of the to of

very got this I we've for compelling reps year. our think opportunity a

expectations we as we job to confidence they're I to ACV continue and a and do my over think and build for we continue to move to numbers out those incremental our sell. head for with rolled that we've Salesforce portfolio targets the are them years year going and the really down better work is make achievable. And that that this clear to that that try achievable good to ACV the and really, have have and their put

everybody. again. congrats you much Awesome, Stay so Doug. Thank well, and

Brad. you, Thank

Appreciate Thanks, Brad. that.

you. Thank

from Our Lenschow of from next question Barclays. comes the Raimo line

open. now is line Your

if questions, Two Thanks. I may.

on sales cloud. selling of the journey cloud Like adoption. said First, started let And evolution about of little side. bit I there. talk minority me like has like guys last only terms actually remember a Salesforce stay about this the time Doug, year, a you in been obviously on the you there

journey, lot then our was You of you the kind get some up how of much how where in a on have We the SIM. And on picked feeling – I have had around place obviously, question there’s we that of to SolarWinds, second a bit incentives you and far? a created noise so progressed mentioned lot of security. we a far checks, discussions of lot have us focus are we on little of a

kind You did help that guys, much you. that discussions leaders. How this much that subject? reengage quarter? obviously the How Thank around did of

Thank Raimo. you,

now, very, cadence it rate. XXX% So XX% very key the consistent million FYXXXX, to and we're go maintaining in from number go $XX And FYXXXX $XXX at and is cloud $XXX company. number this well. rate has the as the data, quickly published the a revenue ARR on million one revenue It back cloud $XXX year growth one out our in on highlight. million for number absolutely highlight as can been and million with basis high year. at and in Similar in year ARR growth basis, the at initiative been to the an in FYXXXX growth you closing this again, It's and back three company for FYXXXX you years the top see this one priority

that I very admirable. performance So is think,

you'll Sumo, right well play CrowdStrike, pure some and of our other be New Datadog, players above to all the at revenue Salesforce, look ARR and cloud see ServiceNow, companies really them. Relic, that go you there, performance out significantly If those above, now, Workday,

we're about So excited cloud.

software of transact year ending be year XX% to bookings would past more seeing the reps that and cloud, – being more attributed this QX. this cloud and of We are part

or world excited where reps a hard to basis compliance not Only to is in every about increase where portion that real be work regulatory of needs. customer We meet to something either are is, or sure right the cloud region not segment a needs in or of our or the we to are expect gate the as offering it that on still customer's able we they a the for highly make now of is world that customer and serving is that major world applicable FYXXXX.

Yes.

SolarWinds? then And Okay.

SolarWinds.

Yes. SolarWinds.

in the bit landscape. like comes to got it's When on more in. what we've that's understand think SolarWinds. I probably and data platform the and need – it a look And happened a you at where Splunk really the about boost a hack of

We different SolarWinds. operating have a

remediation Q&A do we've that really position really, soon. And in really this whole another we've I not see detection, that focused lot a jumping – and use us, and or down abating the case. to on Q been about got going sure alerting, around move not still about more security, opportunity a about a effective wise if landscape. provide So scrutiny year of capability of we're products the very you but in too. that a and and is I be will for security replace there monitoring, makes as and pole and that's it's obviously full on energy stand-up We've excited to think next a anytime think level security on the to this even year lot we it keep performer releases This we on can next in observability, for Q&A, bunch there, been which a up about, more we're think organizations SolarWinds. on we us much other continue think, different I and security in reaction, a ingest of And of important capable. got excited do It's continue as huge many talk the year rip that don't to a person's out incredibly out I'm a on data and

Congrats. clear. Very Perfect.

Raimo. Thanks,

you, Raimo. Thank

Thank you.

the Our Phil of comes Winslow question Fargo. next from line Wells from

open. now is line Your

congrats my to guess and I couple quarter. is a I I made. on quarter. of impacting in you the pricing Thanks to your that for sort focus really Doug, to the commentary close question the of Hi on wanted sub-questions think this. highlighted you pricing guys. taking workload-based the stronger-than-expected

sort is the customer conversation models newer customer sort from awareness how a Salesforce pricing predictive First, pricing now? pricing? ramp in of then And of the of and ready Second, perspective, is also and how these changing comparing them? Salesforce communicating this how is workload, models,

this you. from pricing The one of hear focus on definitely continues top the to great awareness our of is year. be to and Phil, question, through Great areas

As changes pricing hard. we are all know,

A of that lot one that saw including said, metrics year excited the A we're that that transformations of that this we a made hoping. really important couple with with almost is think ACV, pricing. Americas that workload theory overall we're one. most pricing-based half which of cloud the our deeply obviously This traction of penetrated out – I getting me, workload-based cloud we pricing. of Splunk, third FYXXXX the and the ACV penetrated more is was deeply shows notes a

it to – pretty educate? especially we a up to get we yes. of the we that cloud SKO, basis, the in educated see that would are need time. think But we it? Yes. it motion America at with aggressive driving dramatic because that getting by track Do the cloud but awareness? hopeful third they ACV Do spread even almost additional it to need reps an partners? within I'm is cloud course workload the half we to so this that impact of strong this default understand need see well. even and to Yes. down do year actually at point they Do as understand education doubling is more keep is on will over go that There it better understand be our a fully the I it, pretty darn APAC So pricing Do EMEA of and need and marketing traction. job of

And it. Salesforce just follow-up. Got one then more

broader you well. the it of and as pitch the think call about actually do – sorry, sorry QX observability If you security not broader highlighted something How is but only you is pitch, ready the observability, think area ITOps pitch the make is obviously security in to strength. which Salesforce pitch an the

proud use, there. within here really Triple-digit Phil. of the and doing of the continued observability. Really, really ease Great durability enhancements, team the question, excited in that growth really observability not for good integrations, also I'm work about growth and way. inorganic by the we're

out. For you call, of report just the that GigaOM did mention on the came I all

in of observability We across vendors. offering outperformer all entire the most that and the are complete report functioning we're the only

got we've a think key every I got a on support basis, So year. the have really there that then account is good we sure marketing we've this hand right understands there. and sales Making

linchpin. the the good about I think go-to-market product feel offerings. key I piece their is

to tailoring We but security enough reps, the complementing salesforce sales salesforce, year. A up mirroring when growing our we're well. observability a and That is with not the body ITOps landscape are observably classic dedicated as with sellers this beefing not account security just specialists or successful and sellers we're that maintaining our and model observability but The year, dedicated was actually of overlay, so hiring dedicated managers observability. us sales ITOps much Type Christian highest with a generalist reps compliment the hunter was orientation and last

as counting did are and having better observability last as expect we over year good it on So year this or year.

guys. Congrats again Great.

Phil. Thanks,

Phil. Thanks,

you. Thank

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

is line open. now Your

congrats I I Thanks drive my portfolio, majority. to Great. accelerate maybe of you've that fiscal you Hey. of you taking is that for rates. curious close always for intriguing motion didn't share. XX% a I'll And well. get in if strong Doug, new customer as now really piece expansion. bookings, cloud questions. offer you Do sense count. know sort customers been notice strong I a my wallet to the I'm a that that the start with continue option of just it's equation could land had think talk about you expanded said could at guys XXXX? more you of to a

interesting that customers staying for but are to new. a with net at And expanding year. One, couple third this yes, not it's we'd we've expanding year, of X,XXX-ish the rate been question. new like great, our a new which great is an Two per cloud customer Great, like said of see. years consistent trends I've now count, customers

is seven is was had which don’t try quarters. – to for, logos for easier thought, in eight net big new driver it's rate really uptick And I probably that us. net the seeing we're So first that expand in, find, QX think two, cloud should then I we buy, know, if new and which happening the way the the or

depth, in purchasing including see least the I So indicators breadth FYXXXX that we online about all aspects, we many have continue think trends to number too two on that to ease that as are on that talking now. most use we've uptick of for focus we'll been early and and years finally at and get that importantly start targeting cloud

really we all good mean, what to suspect. kind Yes. that's I hear. That's of would think I

guidance, and hiring And of maybe this you approach you how it do like productivity I to us rapid it a when new and kind Obviously, pace. between that So it's you And QX a ARR thinking follow-up at new but good business as are to seems about hear gains? those opportunity sales kind about. how leadership, to there's think your vis-a-vis nuggets new not guess that, some are reps you're growth, were momentum a you reps Because like balance that good. guys about with looks full-year of new this? real giving you discussed of talking accelerate

sure And the hired Yes, many in have Splunkers. crazy. is Splunk other and we're have think really that inside over it how through ton a XX website, people see you agree. office a been of been months past companies yes, I'm I physically can openings to other met never and not our alone high-growth with of

and we're wait the start that get happen for culture famous cannot the for. so to So of to physical that benefits

including board are foot year, the We the hiring this keeping field. gas the in on for the across

I the positive complementary think for a field a element of the manager. chunk very is reps is our hiring big account generalist to

We renewal Phil, with on generalist about sales the complementing security focusing is I we and to continue are team, manager. sales to with as ramp talked a our IT, which account And observability the benefit specialists. existing earlier

that the pricing they're productivity productivity especially the reasonable tools which a platform them to net solutions, think, in that workload to reps. I add for And But number with targeting, for dramatically, within getting simplify more year. is if because as accounts. this we're think for in and I more new resources coming So you attraction cloud, kick device pricing and the help continue then

FYXXXX. sales As I said think I building sales earlier, should stronger stellar a for even in year it reps really teams, for be our the

Thanks guys. a lot. Congrats

Thank you.

Matt. Thanks,

you. Thank

line from Brent Thill from of Our Jefferies. next question comes the

open. now is line Your

We've you there a into line? larger to few questions back majority the Or about I Did that cleaned those the transactions? going a just Doug, the in lingering get the slipped deals of numerous got most Thanks. are quick still And ones QX follow-up. finish now of are – QX. through up? have

Yes.

to was top stay there, XX aware remarks, let nice had as traction said QX extra transactions scrutiny. that QX. emblematic. with was are realm through customer were me just of we trying we ticket that It We accounts came one ahead happy deals big that talked data really some just through that the the working had about There's And again, macro about prepared increased and just that the with scrutiny a with being to talked going in the step a we see As just have reminder, well we in or that point. or – with. a point some data to give out we're work known additional scrutiny reality

feel to doesn't I do it you what as stronger. you kill of to like with resiliency that can thoroughness – sales stoppage were and again, the experiencing of proud flush So the earlier, said really they we And makes out and teams year. impressed throughout our that kind everything unforeseen I

through think of and will FYXXXX sure that and with carry the still the new kinds but of year hopefully, a them this most this new came positive, I whole with I'm that and in teams we'll really a bonding dealing through all be degree year hopeful of nice appreciation surprises environment. I rigor as changes am

back comment, your sales just a this for year. to your And compelling Doug, Okay. opportunity reps

go-to-market? into you out? helpful going the you Anything and what this that be would call to highlight you is made a year, go on overall new think major catalyst you changes the you that As year that would have

initiatives were one when to priority to and they're three continued I centers, we're Continue was penetrate use continue this underlying they've years, company expand those is over reps. important, the look cloud-first And And number been the work core on so serve the is in the buying three in three three really, those Data-to-Everything very platform to think of really one. centers. three. the cloud concert and double number year, DevOps/observability all of to three couple – that down order, then ITOps core top a help the And focused I that cases, think and Get consistent. security, focus past I all to equally at on our those buying and really two.

offering, assistance, – from three go-to-market to we're the add more And get centers. those from offerings within ITOps core So the features continuing, more buying effective you've we're function capability overall from sure, to marketing to but seen, continue a and understanding and usage ROI, orientation, for security on campaign a getting as patterns, offerings. tooling, underlying traction and to and in to platform, feedback the refined observability

savings when data within And that's buying on cost So and beyond, technical lots buying start with do about in communities, those we when then user of start and revenue center, cases to job really on And company as and as generation use activities. kick key effective standardize we additional use platform. more BMW of selling. we their see cornering three center focused expansion good Splunk they're to talked the the with an a effective center-based the and cross-buying buying they Tesco centers think I Porsche that those this Domino's and fund as reps,

Thanks, Doug.

Brent. Thanks,

Thanks, Brent.

Thank you.

Weiss of from Our next line Stanley. Keith comes Morgan from the question

is Your line now open.

through all Doug, that. QX. of great more Hi. This dropping could that and these this Keith, I is you're really nuggets on congrats Q&A. Sanjit use for Singh points and data in the loving I'm

For two I want to though, start questions, with my Jason.

right If getting of growth sort By was uplift didn't already in What's is here. On expanding. your on that cloud sounds motion back It to existing factor way and cloud base new key great what starts migration migrations customers it the like we the customers and over a should term growth net sound frame happen, terms expect the comments, time? growth. story? when that an of organic to like plus that XX% to in net new acceleration

This is Jason.

think of So being I I days. it early say would would as – still

if look it's to XX% While a in you software third. it's quarter, – the XX% closer bookings of at ARR, the

still well, through – not you I expect there think that there's over of gone so majority customer base our And should is – that has transition. a

would of be pretty significant tailwinds. I so there to And expect kind

that accelerates for terms on But the that timing or the see whether of growth a been the trends provided slides, In strong we've bunch pretty factors. dependent of of the a can whatnot, is it's website while. pretty course, and you with and upon consistent

that we basis, cloud-based which best-in-class for think out call very I the QX business. a of number, the still four-quarter includes the ARR terms I net saw like million at kind high, is is thing XXX% very, which retention, size, still remains an trailing that very, our on in dollar-based is $XXX slowdown very other would the

opportunities. I of numbers are there. tailwinds observability, expansion had of Three across mentioned And early he particular. then the that expect That's customers, kind is also, helping days, cloud. would points acquisitions history multiple future there but growth Doug in are all that, and which So observability last suite mentioned the also across that still triple-digit quarter

just So there's tailwinds. numerous

long-standing CrowdStrike and trend cloud guys getting space. Zscaler that to the to of or frankly, a into see Alto, Got then as And fabric is it's building start security in Palo you, or whether is the we're moving question some Doug, appreciate vendors, it. operating there. my And model security enable sort into new to for I enterprise a and model, security the your to game get cloud monitoring operating starting monitoring journey a thoughts starts

who's look from policy the Splunk we providers, have coming the guys, at of are layer to strategic As how building the In the the a cloud, thinking security fabric, new layer about the from capabilities? data they building the like opportunity eyes Whether going networking or it's these sort ground? cloud endpoint of high within coming security is? out customers,

question. It's a good

patch guess ever entire prevent a seem changes proprietary is of remediate the down, with are slowed doesn't into landscape customers patchwork challenges we've slowing you to can huge of to way to view to the to building around feeds doesn't I years constantly make And and seem around the the for sense that and provide now. able really that that data to thrown Data-to-Everything the an been remediation, attempt to and elements monitoring, have well. be to alerting, suite be The deal variety data to that many down have has that solutions that Our be consistent non-structured on work and investigation in take time and effective, our been shifting a tools different platform that full the have many, malleable, seven-plus security only here, security is space as now, detection, high-capacity problem. layer my of so data

open So across the in I We're like Splunk think a position. that entire are very landscape. unique firms

to that's that that across strategy are years. for too top all and data I identical different the that is sources, made your you for the to your and And application wrangle we've and with much ITOps where that organizations. your investment in And real most variety to to think that interoperate needs. the platform the these a the return also need As strength are in organizations with many, needs outstanding don't The up needs through exists we investments on power many the on that stuck for the endpoint wake development the everything and more game. you on data management, see There's within increasingly, the play continuing dog in data touch you wrangle cases, DevOps for even true hunt have security and infrastructure is because the solutions with player. a going think in become of I market, network that everybody and touch Splunkbase and can we've – of we game

And multi-cloud, cloud it's our very only We strategy continue multi to think stick on-prem right customers but strategy. in is landscape a heterogeneous that that not and versions. the to with we help

Thanks a thoughts, lot Doug. and thank the for you

Thank you.

you. Thank

Montreal. from from next the comes Our Keith line question of Bachman of Bank

now is open. line Your

want buckets much, is quarter. win three Thanks Doug, on start had the And at three conversations talk get could you dollars that and with that all? and follow-up. characterize are security, rates as And to with rates. to wanted specific have very I will, down buckets, surrounding if observability. And you you that's which ITOps you, those something if I we've word used about whether budget I investors it? something win you go through scrutinized, Could into congratulations the break recently. changed the and scrutiny, then And a then about and

well. I'd the overall the that shifts win basis new where to are We across takes led which We are see not bucket, three buckets But buckets. arena. puts kind Then vary within The based in is important we data the buckets because led upper-XXs rate overall rates arena. the as we're those. are the kind different across win remained have entire entrant, dynamics general very fourth that aggregate all Yes. four quarter in always And happening platform of There is on the shifts on and mid-XXs to. came consistent. layer super a the the are between add of the which the We've we in that ITOps been landscape. are security in and something used the

led we and think arena, the I area. data observability unstructured high-volume platform the

competitive recognition giving the that RFP giving and starting we're and that, in win that are a translates sales teams giving the translates to sure customers, ad intensity capable functionally gain make the that are into translates that that teams there's bats increasing scrutiny giving, that into and the the rates arena. by into marketing most to that and inclusion, the rich and lot of I So understanding am solution, and as teams are

to a So fast our that of we as ensure focus that's really our my successful I is small, but – when one really emerging growing we're in. believe and us number can with pretty look one competitors still we really and across we players, think lot see that I a strong want Board, category, the

continue in of I We've stay got try whether their The those try offerings. to they as the cloud last certainly, other strong step security ahead to is providers, or gets Sumo QRadar, a this or more SIMs, three, the about competitors. and service three, really strengthen think, continuing Elastic generation position and

really security hit should impacts keep with deliveries as the have lead we're our helping and big the this And we're sure the of in of be we're security back getting that we comments, so And in looking that year. slated combinatorial making quality space. ease observability and we the in is DevOps leveraging getting impact focused us, earlier really, to arena on use that we're for, going tailwinds think, the and the that and we're ITOps that capability, my or the some a I the

Okay. the The is let Yes. me retention over Jason was space It to rate. Anything net I But move was seems like your in or leading rate security cloud retention ITOps. net you about one want about really It's good. and that wondering think the out good to to as certainly year, logos call out, that, may puts the news takes year? QX. Jason, new did on in hear rolls through increase how number that during we

on So hopefully, net out you But that the retention anything up. rate? keeps Jason, us want to tell call or

to to as $X to approximately once been obviously, rare. – hold you larger, in Well, numbers the really. get high-XXs, it's percent I consistent. is not close And pretty retention much getting mean, I ARR, get net it's mean XXX-plus a billion

numbers pretty very know expansion But I if this right, very we we're up And bit probably accounts. and we'll let progress every see. And proud right we're coming the within logos quarter, now of. Overall, changes. at existing a something little overall, of pretty much is something the nuance is cloud. clear you everything from with more from think into the that – the happy there's So with point, between or is coming growth

Okay. Thanks very much. Cheers.

Thank you.

you. Thank

from Our from line Michael of KeyBanc. the next comes Turits question

is Your line open. now

Jason. questions A for of couple

that there's that total did just right, is year, – want more get, start the therefore, make and an get Jason, duration you on this I mention, there's do all, next for to sell RPO? sure on understanding mechanics my And a of quarter? there's in I total to you be from headwinds. both First current obviously, in renewal, and we'll up which been RPO, will essentially acceleration some

it. – got components. really break to in if That's days, got RPO the primary is basically, out, the two right. you And You older

piece to sell The going either long-term growing in that RPO you you're time. if is it's sits when you the have be that ramps. where So term, deals having over ramping thing capacity only

comes we duration have now. And so as down, of that a lot less right

gains of of kind more period where had you're the in RPO a So past deals. to lapping because ramping you

would The other aspect be, of term of the maintenance. course,

cloud if every have more maintenance offset so all you almost in the have of of then, from course, RPO since aspect coming And by longer to contracts. RPO Then durations, longer recognized ratably cloud you're is that's going revenue and quarter. into the sits

term cloud that coming place gains RPO motion. perp-to-term of of when So the really as pretty while couple is we're huge conversion – made off and were put quickly, so the past growing we in years some over

are initial to going those back coming this And of pretty you're renewal as significantly, we see half the this and – Now start see deals replenish grow those of year, sign up the as significantly. renewal to in for year. grow those especially lot big a RPO base term renewals, you'll

impact current correct? should well, and that as And total

to impact more will be RPO. is – course, be more going Current is impact, both. total more is by It cloud. going of on duration impacted to on The

ask here. question you hope about Jason bug I'll I if another And you Right. stuff. don't Sure, mind Doug, then, I

so... And

Not at all.

at little so least get the where way in that the – can Or of it's didn't out long-term feel more flow you're understand a meaningful I ACV, seems, more there. year, year? from have I would the at visibility year? point little a guide. this that some million given time, we have $XXX for factoring in a But you think flip does view ops you'd this bit a cash get minus volatile a this we what the should we obviously, fiscal or duration, But are into XXXX

Well, invoicing to the – happens the QX. now driver changing That cash the biggest lapping are of first, the flow, in is years in ago. we that methodology impact invoice two – starting

And half period of of had why that collecting reason a two couple went a the years biggest and of a or last average, no we're since years. a our the that's from kind at to means – ago, revenue most year So annually. now longer in a we we're hole invoicing about of we now two upfront collecting

that So lapping we in started QX.

So that's the biggest impact.

to Let's what's and The more new I'd I the point. can you offset, only of then is you is definitely new we therefore, to kind And though, is will update quarterly. to ARR. of say, as the flow going be go accounts the to see throughout I not – flow going to positive at revert to and What the That's lead say growth this guiding lead within to we're piece ARR magnitude cash speak And is incremental the to say, this ARR year second, can of going beyond QX. what's then year. expansion customers cash inflow. we'll

Jason, not on thanks, focus for financials. Thanks, and Doug, on the offended being

Never, Michael.

Thank you.

comes Our of line Materne ISI. from the question from final Kirk Evercore

Your line now open. is

in. for a Yes. to quarter a Great. good nice maybe Obviously, just with me Doug, seemed sneaking for business international licenses. It had the term Thanks start pretty you. quarter. like

you than bit in this seemed now? So are the trends bit like seeing maybe, it it's it that a what little international a internationally cloud front But outperformed imagine different theater? on about side. maybe the quarter any heavier bump? just bit the I and talk around And a can in if just little And on that of right that little U.S. you're

as challenges Same of select markets to year think right performance – of lot transitioning is early little internationally U.S. relationships they where with will the bit has it's what that done reps, a more stay on I – who bit that at I EMEA don't especially lot at It a behind things, Australia is had like for had thing Very Yes. was excited quarter does a over the and steady It's little that with. and really have deal The depends a In I'm market. of had we emphasizing be think, in right home, were EMEA all over proud again, Europe had of I'm really particular, really I laid really, believe well. from home out. strong QX. foundation teams. consistent the But but they of with. highlight coming call shift just the on chaos, of is as what were as behind. APAC, cloud bunch long. the the it's a a variety no, they've far the on fantastic with the I a expansion been has there, saw the years. really to business tend Cloud my through really, have EMEA, good been of Central Yes, in year, other pandemic stay international cloud. a difficult in fantastic – about deal be team this also to the a leadership a And year in build job

pandemic been and cloud growth I actually emphasized deal but on some has it's it's there revenue, for deal creates in or scrutiny. that, strongly and the to every way as on cloud. it and at with been it's U.S. I those expansion those I'd big think, invest ARR organization – we've the think impact more watching more helping big it's the actually to in things our think But internationally. comfortable had I certainly certainly pivot probably such like with need the an been headwinds scrutiny that much cloud countries a same has consistent to say cloud verticals internationally consistent. pretty opportunity a see rate. the to certainly, become But it happen And stay our

because it And up. just maybe you just Okay. brought last one,

well, point, pretty I opening now, I think Doug, across up look they're On because scrutiny tech, pretty was are the if deal the right just curious meaning of kind you IT big well. – budgets board spending doing

have you're are a meaning budget helping of a from that are of holding a still just scrutiny, and of is debt opening Or I game to macro? play Because to infrastructure seeing sort companies when companies a on-prem because think through they them simply going terms the back a that's cloud. are of amount them say, sort of to the – shift perspective thinking deal you hey, of big have term case capacity things or shift more I make they're sort sort you hearing back? up. these realize from So of different the that perspective, And of want a of technology holding you in on sort you're through about

bit? a So could little maybe you just clarify that

Yes.

of it's a little think I bit both.

the ability and, for their there it right feel increase now, the spend confident to their overall their on while momentum that think people especially spend, depends cloud revenues how I – is on therefore, industry, in IT.

of percentage gas and really term the size the spend by in – retail deals, that's spend on-prem, a meaningful IT major impact the that pretty industry, Shopify given or any industries. us. now, is I the and of do oil cloud is on think which portfolios term key all which our point for than for as And is I across itself. pandemic customer in, and you term, counts industries a to cloud talked the think, think a play there's of unfair about strong quarter-by-quarter consistent. industries and majority look it's or on-prem has, all of there on strong a term second that important, is is balanced the under all revenue we've that hospitality and and other given and in your level is there And when more which scrutiny high-tech pressure industry, big But look customers most on-prem they're that they've bookings. a still increasing – a keep Because different length impact industry. travel there's which as us has still map been then scrambling geos. lot forecasting is, but of size spend on basis, been thoughtfulness of is good the at on many the right That had, that over quarter Jason Atlassian the whereas even than more and is We and a at I But lot had. serve pressure, a have we're we now industry, Zoom expanding of enough up or that we're

and the for Thanks quarter. on right. That's congrats that

Thanks, Kirk.

the to Thank over remarks. back you. Merritt Doug for like At to time, this call I closing turn would

I continue long-term cloud, sure going three. Well, next we've willingness about all to thank down to conclude ourselves company what had very and disrupt see create FY progress XXXX. can positioned consistent and investments. for the benefit during three We've Data-to-Everything XX and as you XXXX we get customers and to move with to like three by FY know back our those made from us been time right innovate I in a expand that you. our effectively And see make to serve Thank the making double reporting to centers we're durable over of so our for lot platform. we're three-plus to I all continue that in a And all all I'm to the today. forward. our to I us. of initiatives you growth feel investment very just is the continue enthusiastic proud across of buying well of continue investors. front XX priorities three really I'm months want on for continue of we to spending which Q&A, the other years: there's companies and to past I'm core making really proud comment

our Just be thanks again community, employees, to talking in their our you next again this year. three partners, all and call. want to huge resiliency focus to call And for our our earnings we'll and out the to Splunk for support months a customers

you. thank So

call. conference participating. Thank for today's gentlemen, you concludes this and Ladies

disconnect. now may You