Splunk (SPLK) 26 Aug 212022 Q2 Earnings call transcript

Hello, thank you for standing by. And welcome to the Splunk Inc.

Second Quarter 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. advised conference be [Operator being Please Instructions]. Instructions] that is today's recorded [Operator like conference hand speaker would to I now the Tinsley. today, over Ken your to Please go ahead.

call we expectations And expectations With today Great. and with on our available statements, closed supplemental our the website flow, audio including forecast call business from update posted today, of our or reviewed in during website. made and those accurate today, documents duration, after may release to RPO revenue following refer filed statements call, as the statements events cause presented which press reflect growth, Please including the conference our products, Jason demand this good financial customers, and that with statements. on operator, are as and of third a this be call disclaim differ trends Thank our to being assumptions markets. actual market today our X-K is markets contain afternoon. XXXX is statements. or such or material. replay and judgment mix, issued based risks gross On contained to cash environment materially. quarter renewals, live expectations, we today's any regarding operating we best which information. you, Child. making After our This These cloud the Form Doug not via results file are those with margin and and an differ for today's forward-looking to known being documents these fiscal along If release be contain as our current macroeconomic factors call we results based forward-looking growth, technology, Merritt will us our and future and on currently the Relations webcast. our These me as to guidance call, bookings, will may information as press be strategy, as and may revise other broadcast forward-looking will in is well the our year the in as are obligation we operating and well Investor SEC, and factors acquisitions, on on our actual

GAAP discuss financial prepared non-GAAP also the provided in accounting which accepted in is results on will not website. release generally press We of accordance our are and measures, principles. A with non-GAAP reconciliation and

let Doug. with over me turn to So that, it

and Ken, everyone. afternoon, Thanks, good

delivered Cloud of our Our strong very with team another quarter, ARR growth. quarter plus XX% XXth growing XX% consecutive

results the These the And largest last and million. most of XXX%. we've ARR rate our by customers remains the speak delivered than organizations. the high strategic retention best-in-class dynamic year, to number doubled value we at more Cloud also $X net Cloud dollar-based to with Over world's

most comprehensive each market-leading Our Splunk in our validating Splunk powering and teams. our offers IT globally data today, customer data QX and broad-based, DevOps market plan, on platform geographic platform cloud-based exceeding the regions was relying are also outperformance customers and major with and that capabilities. our the security, of

and cloud; deployments, combination and Microsoft we're platform well any the them enabling teams helping own clouds. the organizations our supporting to on this, and as customers. Azure securely cloud effectively while also XXX% Cloud, visibility migrate and We're in their customer-facing AWS, cloud, to and experts brought Splunk's serve any log, act sense data talk more serve them. trace across about and customers best to do and our are native as to make worlds. public on to When focused the their multi-cloud sticking others most together deep hybrid evolving achieve market of We we Google that those of multi-class enabling metric rapidly matters We to the outcomes

to hybrid have helping transition effectively serve for customers and cloud, of when on level we deployment, on-prem at can securely. our And of predominantly to they're their any visibility customers as is priority the talk referring absolutely supporting stage or we're somewhere Our across or whether the highest any all-in cloud customers about data the own their still their to organization's between. they

pricing. transformation That's pricing and more of X on allowing any needs the customers of without skyrocket, our introduced have workload-based their more for our data accelerates ingestion cloud nearly that why years take on As data that ago, customers asked gates ingestion even we to action flexible data.

our This quarter's pricing increasingly this are results customers favoring that option. showed

workload-based QX, workload-based pricing. And new our from from pricing, net Xx customers more up ago. than And of cloud cloud from of our a During more more ARR are total utilizing than than year the XX% was is benefits. ARR reaping now XX% customers

technological requirements a And be of customers. the Cloud's By to India's a on to model decided their efficiency to strategy. expected ability big leading to QX. workload-based North industry all-in risk services feature next in a refresh major making Splunk finance infrastructure, top to their for For costly the of visibility overall improving of planned velocity services and it have pricing the provider and reduce drive advantage that Cloud competitor better transformation shift taking of begin central from making This are leveraging Splunk and Cloud on-prem displacements in expects to digital during workload-based security driven of customer five this while meet example, years, five delivering to management was factor XX%, on operations, to accelerate Also workload strict QX, able savings to pricing. a Splunk banks of and help to Splunk American-based their the Splunk in was their the their scalability and using hardware QX. Cloud after infrastructure pricing compliance and go forgo shift one several world-class to Splunk year. They're one transformation. pricing cloud efficiency been decided capability and for to experience They of versatility increased our across entire

a major example, single surprises clouds. predictable and every have grown the embracing a pricing to existing are This services to them our monitor Both financial firm and competitor tired transparent billing Splunk customer For workloads flat, and multiple turn American month. dropped appreciated customers Splunk cloud. of new on across their North

also benefits, of tech and Splunk pensions purchased and regulations. national distribution and of and one help quarter of to systems one secure Norway's example, amount public on NAV. organization government one Labor relies optimize the the new Platform NAV, was that past For the is Administration, Splunk of as to Welfare trusted Norway's compliant partner digital to to third as entities more rapid the and to NAV on-premise largest Cloud Norwegian from known a the Splunk unemployment to Norway's citizens their flexible, central budget. in with trusted transformation tech on cloud scalable the that's accelerate partner journey way their this

our specific to In clouds, applying Observability, portfolio. our product customers' turn and QX, cloud to Splunk launched we our our IT pricing platform needs. let's Now evolved and security

user synthetic solutions earnings Cloud, which hybrid for of IT some last I Observability real monitoring, log now our multi-faceted our environment. together best-in-class powerful of delivery monitoring, across investigation performance Splunk monitoring, response, or During world's brings infrastructure for full the This multi-cloud news and our monitoring, customers. comes application launch shared enables stack giving DevOps visibility capabilities and teams incident and integrated any and context call,

IT the XXX% to power Observability service the For and Cloud, maintain next-generation year. AI-ops incident earned about our and and previous are leader provider. turning minutes us for Splunk validation it through as event and a of through were was XX and Lenovo, end-to-end Splunk which and allowing operations was analysis virtual we're most by example, you the than customers. solution to with Action, generation, visibility to monitoring comes in some with our number the X, their for delivering IT time market Friday preferred performance MBIA mean We a named ITOM operations, in which Black infrastructure spot reduced of uptime to the robust customers combines cloud, to IT customer that Research traffic, We from stream-based higher our in increasingly Splunk Gartner's monitoring broad When modernize XXXX. dashboard resolution services And in XXX% on-call X IT recently distribution response to advanced capabilities. we're automation also and management looking to market through value independent delivering the giving recognized analytics

complexity. to from in to the grow cyber to and so frequency innovating new we ever-evolving Ransomware attack and remain QX attack security. Kaseya protect helping like agile our Turning customers are REvil spent And threats. better We customers adapt rapidly landscape more. to threat themselves threats continues The

gives predictable In Institute, their that SIEM Chemistry is technical platform a operations security like security comprehensive out that intelligence in existing IT they operations automated platform. modern deliver. next-gen model a a Cloud, the security our advanced Security invested one from that pricing new Splunk as requirements our and Cloud customer, Real leading looking integrated Soriana for Their launched ops QX, and common company analytics, and care metric. benefiting also Environmental threat the We and customer health using a security services Systems couldn't could built existing clap cloud set. our already Research Security are on customers Companies and security meet

pricing perpetual license, our it team with our While cloud for this to expand that owns their workload-based security Splunk. customer ops ops from Splunk is IT help offer a security into IT ability

at a Latin won America. one of banks eight-figure largest X deal also in We significant the

and year for for offerings the for cohesive single offerings evolving leader advanced the Metric for With investigation, threats. and competitors learning and continued as X analysis in cases security including security X use it logging for short this Here, Splunk, looking solution month, cyberspace breadth protect in data. customer matching and last of machine is XXXX XXXX. on of of large IT SIEM market Basic Splunk collecting a confidential of one And our Gartner SIEM data assets the Splunk's eight fell Gartner their of a full Quadrant. financial row, all now Splunk once performance and mission-critical in platform. using to the delivered and in also a is enterprise number machine their from be a data, depth to rapidly validates

analytics the market Tier Additionally, SoC and intelligent we shares. spot number orchestration in analytics, X retained cyber IDC's response X

partner the well. front, seeing progress as On terrific we're

For over are managed product Cloud XX/X And that XX,XXX celebrate customers Voyant partners, updated annual example, centric and for threat and the centralized user Announced partners at our who protection, leverages features model. provider new investment XX/X capabilities Voyant, innovative, on environments, have doing. partners for capabilities, them managed X in host Splunk delivering customers response proud you. analytics offering it inspiring I simplified behalf Blue for quarter. to Voyant over fantastic These AWS customers experience Splunk Splunk to for roll to more provide When we're October, the data ways security it day. Jason security workshops, to who AWS out our detection of I'm service for Blue the visibility have the entire our for is in maximize decades, designed cloud QX, Also, serve AWS ecosystem staff. platform. into incredible deep a we quarter. services for one customers never so and has turn us preferred fewer better accelerating long-term designed solution onboarding thank map of security response customers another SoC conference customers to our such in teams. new Splunk their Security to Cloud glove Thank to data to And rest. is in platform where offerings team nearly a of through over and finally, modern Splunk white Splunk excited further and we'll work Analytics more want to road to teams powered technical And recently such our in of our Blue training for investigation I'll curated our AWS lean and an comes rapid continued by release on and adoption features the new with every Splunk of Cloud announced SoC. The the managed the empower launch

for Thanks, good everyone. afternoon, Doug, us. and Thanks joining

XX% Our with up with ARR We overall $X up XX% in customers XXX than XXX with with quarter ARR the of XX%. ended we And customers greater last above year. $X $X.XX was million, up year total very ARR plan. million cloud the billion, ago these well was execution had ARR total double period. million, over strong, bookings of Cloud $XXX ended year-over-year. QX over

on as ARR focus our that cloud related was bookings overall $XXX adoption million. cloud compensation in RPO continued ARR prior pandemic by in change the skewed drove shorter as customer total of well million new net Our periods, Recall new and duration plans. nearly net to field contract in $XXX

mostly total up RPO a XX% factors RPO better bookings of bookings year. QX, And is these indicator in now, $XXX bookings With normalized last million, over becoming momentum. was

coming As half this I of of total said base the in to continue will in conversions a to rates renewal expect QX. term up quarter, with growth second RPO last year, QX previous substantial perp we for and accelerate

Cloud and the year, of million, and P&L. year due quarter. exit XX% gross year-over-year slightly from $XXX cloud education the due was in contribution reflecting slightly revenue expected from as customer from realize line outperformance. significantly are our XX% which next towards non-GAAP. progress X% this the the was cloud. year basis XX% scale of up the platform. On proportion leverage XX% On to elasticity a accounted we with last up to to normalized Total from planned last margin contract top Total in rate $XXX was QX, greater up total than more platform. in and continued acceleration down year-over-year revenues adoption were year average XX%, benefiting margins, better a Operating to and improving negative margin our XX% Professional cloud on services of of bookings all revenues for QX in margin revenue gross over are coming approaching was QX, XX% XX% million QX, of our of term durations.

million Lake ended convertible the investments balance in the sheet, issuance. $XXX cash from billion reflecting note we On QX $X.X with proceeds and Silver net of

we As $XXX.XX. for plan proceeds the at of we that And previously shares million an will into price repurchased common be And stock quarter, X.XX announced, from repurchases. has utilized continued average during QX. the placement

Turning to guidance.

demand excellent, existing robust a deployments. see environment and their is customers to customer engagement hybrid continue We planning especially for

acceleration, surpass to to expect billion. QX total reaching of $X.X We as $X between of in and billion our continue $X.X ARR $X.XXX cloud billion billion billion and we ARR $X.XX

the and cloud ARR strength we to billion. $X.XXX and Looking with continue and expect the the towards of $X.XX $X.XXX end and between demand of total to end billion bookings ARR billion billion year, and year $X.XXX

we positive billings Full non-GAAP margin year between billion we $X.XX negative we a and second XX% XX%. our Non-GAAP million. billion revenue results. continue and with to and half, margin cash flow, income variability to lapping statement, million will in to of On to be cloud cloud $X.X depending to total nearing expect programs between should promote margin the will drive operating full revenues range $XXX will revenues change total should be the the On $XXX XX%. million $XXX drive operating negative of the new transition a XX% on cloud our and operating annual In in QX, year expect cash adoption. mix success of return to flow which

let's fiscal enter driving closing, increase and normalized a adoption With year. year fully outperformed open questions. strong half annual billings to And up cloud are to and demand year. set nicely In the significant back for geared cash with service our customer and growth. it next push product continued The that, a collections expect year-to-date our with expect we've base for OCF in We of high robust. we the environment next overall faster, up remains with innovations

Instructions] Thank question from Thill with Brent [Operator first comes Jefferies. you. Our

your with question. may proceed You

are good and cloud? little asking you type. you we harder a had And by when if the even a just had and follow-up. about And there, the can term. to upside start on Thanks. looks It many license inflection see quick I'll expect bit on Doug, maybe like talk a consumption I

with We net workload-based were really XX% ARR new workload, ARR excited now workload-based. Brent. Thanks, about Cloud of XX% was progress continued the plus is pricing. cloud all

customers that pricing sorry, when -- abandoned infrastructure. talk you index-based and moved think to cloud that and -- moved to infrastructure-based program I to So have have

big remains stronger If And honored help than craziness is we from quarter thought. are more really with manage a same. of it and in was because more to enthusiasm transformation, a duration on But the hear comes piece. term definitely and going base metric. to of that back an We're of a And of pricing customers. and aligned we a focused trajectory stay they for overall, more And I'm term got It the you'll multiyear ARR including workloads/infrastructure-based overall continue strong the through you're quarter. everything them. such But they QX growth, cloud the term deals the hearing, lot themselves whether the we base on we overall QX to some skewed going up why we important TCV beyond. that thrilled Super this or term and manage bit, the were contracts. ratable, customer, that it that more super

real Jason, expect on that, you pickup or Should that help we way us quarters, an kind picking how buyback, going obviously the up. in quickly to good And of progress? throughout can see is understand to the just any even that's buyback

I quarter. buyers of we And advantage the share we took were the aggressive just would last in price. say,

Don't As going to million bought that really say an I back There think, so of the more have in what, quarter. were indicated, update ongoing finalize. or purchases, when we $XXX I'd in about QX. we're

tuned. So I'd just stay say

Thanks. Great.

Thanks, Brent.

Thanks, Brent.

Thank you.

question from Lenschow next Raimo comes Barclays. with Our

proceed may You question. with your

Just a start Seeing of Jason, as while on about right obviously, gives transformation. very back I'll a that little extra for like to at out like that very it's guidance. Hey, kind of talking Jason the since me, other way it? to confidence with for a annual that what visibility to Doug. of Is kind you been coming that maybe thank bit, signal least the end think one strong started talk about coming that now? a kind one you. you're the and to you is increasing --

Yeah.

So had we terms of you maybe a we being, only in plus thanks, planned QX CRPO in lag of quarter. and GAAP this last I the year from of think as quarter to at was RPO year's Raimo. to of And last of cloud, RPO cloud bookings last I a would roughly show numbers saw and rebound. think always to negative all mean, going kind of it year's XX% the we takes kind this was I of And metrics. -- kind There's terms first, knew various early kind year. a seeing with this every say, derivative in quarter some transformation. bookings quarter it's move was maybe take it I think, I of it X% after up positive

So the start momentum strong environment, have got with pretty more I see some expect, all of a of lot metrics, as other I on do scripted I place which we along talk think about in certainly, quarter. That did call. the great a of as said portion to purchasing I programs really this a in the We've the put we that good. indicators we cloud look those pipeline.

So is what factors those combination the I half. more into us confidence the going second of think gives

within renewal, comes you, that I have need think it in installed you try that they will that will then perfect. Okay, it for do that. is Are push the through Thank to client How for put think do intra-renewal? you feed going base? up like I into about to Do to you. customers that about Doug. I How time you someone base? of do the evolution by kind every And to now. one think the think about pricing so like consumption that If

Raimo. Good question,

force really workflow-based the net cloud focused for news, a So default company on on for default. stay Any new We it's Customer customers, that. pricing. to net is number X success focus sales priority.

makes we into big point have data, customer, of So the data workload-based play the we've about them. for we ounce got a with people aperture to now data a solutions that's continues don't a want more worrying to of better them body customer collected, too every volume strong our that but and on for to these wider of the brings palatable significantly without overall more platform, gives data pricing,

this tuned. the of Shawn of Teresa on bringing play to stay and been of listening and model. volume lot to additional on, year sure for things making that make right board are of the There's the combination we've this ingest interesting a focused away choice the customers and have for people So and some in the we course that the from keep of switching customers increasing that data

you. Thank Congratulations. Perfect.

Thank you.

Thanks, Raimo.

you. Thank

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

may your with proceed You question.

a investment. my all. months of It's been for Congrats questions. start the to Lake I the you. thesis? Thanks what guys. on of results where few Doug, a sort Silver benefits how in Hi, talk want I'm cloud And you're taking just transition? kind the curious little this since to And first with strategy? investment could But the means you really that of bit the at if about that

Sure, Matt.

out had it's actually where board great we been the of participated. first as Ken to So our interim meeting Board. And

overall that companies They've invest in. few watched get think these the large They've got broad-based tech-oriented a in past. of I Silver transformations from the we perspective they that a Lake.

just at very I I due had returns bar savvy that investment, the limited. themselves They're are think measurements. rest getting -- are go and we end high perspective, on on stats. through and there's We're we insider, another of of about in they're bar that transformation on the deep for metrics and light. guidance, adding plus get through and this effective north in Splunk, tough. areas diligence Silver's on through we $X.X was who billion $X the community think very how there an is So that was continued positive of of year, growth lot effective the transformation, part the the as and the enviable our a someone it's business the an compares felt us is billion ARR transformation There's support we of investor top part. we And how The light From focused we're tunnel approaching Cloud lot going at now at as collapsing a team, investor of good out that -- was that our pretty opinions really for our for by to helping some end and of me top are purposeful definitely this is and of to that rate. some was that core talked it on of the for Lake And a that tier. ARR

So of Ken excited the Wittlinger, who forward continue Silver help assisting and about support Lake to and Ken is on and and transformation. providing momentum looking this Lee and

just this sales The great that transpire. leverage on great. is you feels your of opportunity perspective, one To to think for ARR leaning Jason. how coming get That's we're do And the thoughts and year? kind in force? progress just you when then there's it more leverage a of quick So a billion might more the we're more how guess I from cloud, $X great. there transition out see me, to even we like as through target

Yeah.

absolutely think measured The the I moving profit right. XXX cloud. in is operating because of certainly of model now to at is, leverage from as term by least impacts right that's the negative

the leverage recover. to In cash will near We in term, see see flow. going you're those the

to And cash we have invoicing, this which X collections upfront And of now lapping were then million ago. flow said, we'll $XXX year. invoicing of year a next annual so that we'll years full as approximately since year, we did have we

cash you'll year, return strong full a next of flow. year see so And

do to expect to I the come year. leverage back start next So see cash really

longer. treatment. operating on really think basis, And dependent margin it I will take that's revenue a just an recognition little on

think That we're and one have indicators ARR sales, DBNRR less of the really, go rate. do reps increase. hiring leverage. strong than DBNRR at really double-digit Certainly, that look to to we're rate of certainly, I you have do the really we're going best of seeing that's a that the we the per from XXX%. growth. sales is And kind team, where dollar strong Specifically at cloud I expect to if actually in

that leverage the So forward. obviously turn into going will

Thanks guys. a lot,

Matt. Thanks,

Thank you.

Our Stanley. next question Keith from Morgan with comes Weiss

You may proceed questions. with your

Wilson any transition, which on annual roughly XX% little from Weiss. FY there this Matt gains. been flat my dig you Can could the willingness cloud question. couple the of for change I in was kind Thank taking it's to a total cloud? into 'XX, on software was more If the a after Hi, of what's years Keith for Has quarter, percentage bookings you would to help cloud going color here? move helpful. Or of understand be solid customers' any of us bit there

I more the ARR cloud XX% cloud, term performance saw cloud-related. think overall quarter, for We it this anything at revenue than was of in grow XX%.

mentioned to place that could So benefits years programs, of put cloud. view understand had really, our as his Jason said, a really especially some of the and understand teams to the cloud with That those in of use of business enviable help customers to ARR and rates. And couple now, remarks, continue partners XX-plus given AWS. in as of some through people internally-facing, size and the customer-facing unique to the benefits getting our growth Teresa experience begun her

will we do year the XX% we happens. are anything focused So making a end XX% that plus cloud or accelerate we're confident And on mix. we that, sure very that at still to

That Great. And was I helpful. if may. one more,

You're seeing the upmarket generally progress million. over talk in deals seeing you're about and of the really you kind that $X customers large there? great success progress just Can and

XXX those cloud overall. That -- of proud year XXX really near $X almost customers million-plus we're numbers. Getting and a at

skills, different that management, but way they've if comprehensive love to. we different different progress really unified actually only DevOps teams, got of are different high want that work and digital is, I we They're all security to solutions together really, teams, platform and IT backgrounds, we that always continue chunk a ApDev the set with features teams. wanted of think and and to infrastructure They ties other, They're hug groups. the this metrics. to each transformation together don't capability

the think transformation, and between as groups. those workload understanding continues and is important And of to by we've talked the far data I then expand. increasing seeing so as So we're about cross-sell as volume

in results volume, that's different of numbers. more and we're around cloud moving needles means in predict we're a think that DBNRR expansion more very within volume in those all accounts, to and Now why more monitor on to for But bits from opportunities we've great. data XXX, XXX that those which been opportunities on find away cloud, consistent is I compare XXX, apples-to-apples haystack,

you very Thank much. Great.

Thank you,

Thank you.

comes Brad with of next America. Our Bank question from Sills

You question. proceed may your with

on mission release of use a terms a customers has other made known ask questions. for? successful guys for Thanks you quarter. of there logging lot wanted expand and about that of willingness on Observability those to nice into integration taking and so Great. in I for are my core that early from that progress seeing the congratulations to to into latest And What cases SignalFx suite. Splunk's from reception

Really good and question. important

about excitement my this also of super is becoming term So overloaded Observability term. kind a with countered

in server incident infrastructure think response. topic almost I Within monitoring, got such because we've client synthetic or it's user performance monitoring, area. log where broad Durability becomes next a application of monitoring, suite, a the AI it's our monitoring, or danger being it meaningless investigation, real

cloud-based based a customers. their broad bringing highly across really we going suite generation apps. depth the generation, a last where static to a a offering. is what is capability and apps set to comprehensive vary But that they they on it's of femoral is next seen fluid, of want to important So really from have What are movement on

and and can we've a across it belief infrastructure is So more a where nature and so monitoring-oriented. in the AppDev. really ultimately the of than they bit and is Right need comprehensive APM eventually all bit use our IT, little of oriented DevOps a suite now, bulk capabilities strongly those that AppDev, that's it's IT more little and security why invested

both Our generation, strength is the last we within as what's play visibility in going monitoring these both guys camps, and as cloud deployments on that the have. well

Great. if may, And Thanks Doug. much, so please. more, I one

in. bring could if it's it Thank friction confidence retention volumes XXX? it much. long you're cloud that's to to of less net dollar-based your doing workload-based more bringing seeing pricing that that already? With is level do, be data and a sustain that which runway very with in so the seem supposed the Very that seeing strong data that the place that pricing and would success ability enabling you're velocity what levels, in workload-based data you trend What's is in more in

that that part Really of not our something behalf workload play. has factor. the on big and are vehicles, with it's want indexing our data, what -- you where driver our that's think directly go the into is of finding, relying And been I've love ever pay that's to come with [ph] complaints don't the data? other data, to factor. and the with customers, And Netflow and play of, that if are data, that, so data a factor, on couple it's moving a huge. I are volume is I least We've neutralizes curation is the cost play shift driver. it's calls said the in at not to that big day. to good terabytes it's of can it's of is but on, but going cube the I that -- storage queries important a but to hundreds cost. hitting data it's search whether for interrogation heard The do The interesting observation. It's -- heterogeneous stream, to why it have I so SX increasingly solutions available our But whether I've of whether workload index the after allowing of continuously it's within data And or got it. per hey, want I'd

a in pricing, very rewind will the cheap then need there to you go some or opportunity, down something haystack work Because type happened. need that these of able need so to when SX. ultimately, likely what to. it, systems you investigate face it's will in you get understand and like that every breach, that index into our all push you either you that one of be can time, workload-based and needle And to the with Now do

been I think with what really customers it have more asking aligns So much clearly for.

hear. Doug. Thanks to much, so great That’s

you. Thank

question Kierstead UBS. Karl next Our from comes with

You questions. may proceed with your

target just miss off X beyond think way ask, 'XX? you'd your let's by, can to billion your say position assume And slow end I relatively at $X.X the be so original arrive do Maybe of ARR quarters. Jason. If billion, when is take a XQ number ARR high $X.X I that Thanks, I for ARR to view I decel only billion. scales. offer a a $X.X wanted going you the And to fiscal on X actually that mark? Splunk as in number Hey, much. the Jason. visibility you're

about, to this leaders trying just I about earliest, have is think the couple in programs near cloud of X to sometime this The And think I from been and in your would yet. yeah, of bunch say released. and products got be have And we bunch place it's that been year then a late or I a put either new got a And that's First, bunch of -- It's figure targets think when future. year. next -- new of got finalized we're out I here sometime maybe position cloud a haven't we've are that reasonable. that as talk we quarter. it we're great -- things months. at early in services I that the a obviously new talked long-term -- reasonable. We've we've would math AWS

time. us the of on so of to with you're will look fundamental growth. what hopefully things a really is little view come few high what years able And and of a like to strong But fidelity kind be take all really up a distill kind those next bit seeing

our point. not you targets long-term as far some at that you But out, were. view where off so we'll really old a definitely from give pointed better And

trying The full be step on future. was And that's with near guidance, we've now. and targets give to done the long-term certainly working first what year in firm sometime I'll to come some up

sense, Yeah, Jason. that makes

think that. appreciate all I we

your quarters. the And you. base good the feel XX% also I that in you a in Do that Thank So, And be want of is can on thank in does bookings you from last should think follow-up increase. RPO just CRPO several still to said clarify, if XQ-XQ. acceleration any my that? clarify I assume comment then duration that accelerate you. about next call you that the low-XXs should then just you just did, on

nothing CRPO, think changed that's in is has and On XXs and reasonable range certainly reasonable. certainly I the something a

Just remember our CRPO, it does get distorted if around. cloud mix bounces

percentage, to it's a term RPO change the of RPO high, -- book may while revenue. is example, For because bookings revenue, not and RPO have be be. if may of in years you may our be you current shows it up And higher that -- RPO going part all in will X current current

really mix. on So around that RPO only Total metric still bookings it affected by duration. cloud can was bounce based

can up fact, our the you XX% X.X if was you see this at quarter, down actually look duration months In put that we that year-on-year.

And XX%. it, to closer be so you'd if adjust something you duration

So RPO we we -- help quarter are assuming a tough are in QX year. not the to duration future. with was Instead, extension lapping a bookings last

the second strong And certainly year. for the easier so fundamental guidance as as, well we that of implies, an a makes half as for the see do comp

Appreciate Splunk Thanks Excellent. good coming much. it a to a It's back nice quarter. very see lot. with

Appreciate you. a that lot. Thank

Thank you.

with Evercore Kirk Our Materne comes next ISI. from question

proceed may with question. your You

Are was very sort sort not of know congrats cloud year. to in year buying to that to on what about very I want front or of thanks renewal is you're little one whether going look you you take the going in sort much. bit of the deals of of sort deal they're the of the -- upbeat into just were how half Yeah, the wondering half quarter. what back pack was in you buying a confidence just you the back bit you're a this. the terms nice the itself, normalization about just this are both you sound or some capacity obviously if Jason of a -- think go don't or And Can buy I heading of pipeline people to be -- knowing maybe of based seeing upbeat Doug, in as both if very the of going into more your it's challenges But we the upon? talk re-up? earlier kind of little year. of more front next capacity and construction -- as patterns? level going and what Thanks. I sound to of

forecast of from when included possible lot help about, bit least the we've certainly of as steps we unexpected away process something dramatically with the that year. wherever at ever last and took pieces a talked qualification, surprises some in higher or scrutiny and of get midyear has That, pretty a more and other can is the us not. lessons So confidence highlight think level in impacted I little visibility

the that. I think around theme

within past seen height So internally the people the what's happen going to is and on with really the going headlights statements? what's the that leaders time, reported all understand consistently happen my from going and not income companies pandemic, us, virtually housekeeping is and heard from online, is a to with Splunk. to QX unique were we've in economy? trying it pandemic were a There's you're not and if it in think every Externally, good in is think very what going leader anytime the digest you're company taken in moment I I to impact back with with the very soon. quarters, online to if a to over. balance of unique strong -- X to including you're this trouble. What's sheet, where happen normal go what's QX, no of likelihood going that's was my going I've life And and be that

digital you've to an So got have effective presence.

But movement. And base, of forecast macro the forward cloud interrogation is health guesstimates our on and we less the QX-QX. the customer to the quarters. helps few We're the on stock some continued confidence and radically to very about certainly the consistent change over inspection of that with more over set our capital had I access forecast, ways, has a purchasing more environment, in think, market think microenvironment. the put expecting I our of all past that the and quality us in behavior, not buoyancy of assumptions really or based non-cloud

our that's more bit of of little set a bottoms-up a outlook. So QX-QX activity driving

the year continue -- going at QX peak I I second, renewal size to really say always that that in thing expected to our been definitely we in retention add then high only hold grow would QX. would is pipeline is And that second XXX, provide that, certainly into And of it's those continues obviously and to it's DBNR something does feel about. the at to That then The steady hold. which good confidence. half is the continues rates, always because

guys. Thanks helpful. super That’s

Thank you.

Your comes question next from BMO. with Keith Bachman

You may proceed with question. your

I'd I very Maybe for talk if could Doug you Two the but last much. some question part Jason, months. questions. one months see the the losing customer XX over churn. way the the about is And Hi, frame to there first you wanted or is about share. versus investor reason out churn still customer And an the question, the XX previous there perception Splunk I'm of thank asking

I to And have in a so ask the please. it I then follow-up, customer churn? wanted of And context

not that's of Despite guys what here, you experiencing. reading we're

to overall just very of corporate TTM higher that get rates with impacts in factored of because stance, straight we in cloud, And some we If the than on is cloud-based term renewal a want DBNRR. does take continue consistent, consistent consideration of cloud uplift from the it's both We and number. that obviously that very that out. Again, the term. the and

an have we'd apples-to-apples comparison. So

accounts, number health or We intent XXX close to eight within overall right, than one become still of XXX for with company. within That's are accounts. confuse customers. the million, sure The consistent, close the there's customers customers but them. our customers the as customers, well. reasons making I'm $X XX top I'd talking -- not, while, for the of last XXX Splunk a to cloud greater whether about each of on really have XXX been Fortune XX those are

action see what your and are we customers driving some and you up. of So, from that firms get different different of and others is I hear what peers from than the we definitely some analyst

than Jason, Okay. follow-up call it cloud I quarters, gross X you total wanted gross the last Relatively lower flat with margins. on margin. to

FY margins quarters? look how think look the movement cloud if cloud of the margins we of in you. think the about couple out over ability excuse we me, we gross as operating gross impact or next as Thank we as think total 'XX? gross about should expand us total into the what's And you margins to So -- margins make your that

Sure.

to my heard margin And to you XX%. year through approaching exit went comments in then with prepared cloud in If remarks, rate we're back improvement next expect half to XX% we of actually, the be XX%. the gross year an continued expecting that this say on

There's in the steadily X So by increasing, past offering, some and offset been been the reason acquisitions things integrate some stuck the we together. past over but of why it's core few there's quarters lower margin different it's kind Splunk the Splunk kind of on of margin kind really aspects. the couple is of kind has Observability cloud the of gross to for where been of Suite worked pull the quarters which cloud gross

make complete need you'll to year. improving so largely our year And over that start back you that means elasticity, when will see work that that allows you allow for into sure And was need the now gross -- us us which on May. on focus And we're half margins it. in overall paying and basically to us next this really what of

thanks, Perfect. Jason. Okay. Many

bet. You

you. Thank

you. Thank

comes question from Owens Piper with next Rob Our Sandler.

You may proceed question. with your

my you for Thank taking Great. question.

competition security they're the hold on players particularly Just one share that from from take from to and to XDR the curious SIEMs. the was SIEM starting market, in that me, front relative

So your offering Thanks. you're picture? and the seeing relative curious demand what there, to

rest as the did from in expansion we of overall with market, QX activity security uptick seen see an activity purchasing as we've QX. the far security like think I to

XDR really get From the to to right infancy SIEM. a given Again, So kind what's don't I we'd a healthy SIEM now. is quarter expect an intensity all very security, given capture the work logical perspective, for of how relative SIEM lot of as now they the sets it's that. data and that happening EDR of I right of even it. a offerings know there. But than say their different is a that's relative limited replacing

and important of are we very a what progression got had Security platform for that. a Needs conference our lot we're -- stock focused that lot user the X-X intelligence And focused that is of of offering, velocity was months. a full our we right SIEM. October. really on now cloud-based more We stay add thrilled on analytics, So focused now. stay in Security have feature suite delivered big analytics, teams pretty suite. We've SOAR, threat to a the We're it's on

the for Thanks Wonderful. color.

You bet. Rob. Thanks,

last our question you. from comes Suppiger Erik JMP with And Securities. Thank

with proceed question. your You may

Yeah, question. the thanks for taking

pulling comment Observability Lake I'm On been Any for And when any change you the the was Silver there? update the timing investment? on you front? if there's the competitive did? just What front, the can trigger the then curious of on nature secondly,

Sure.

in and durability and we that versus comparative rates there that the have in a to in Security consistent we and And Observability, very work we had win competitors. IT are loss the entrant uptick a lot So quarter. do actually slight we newer last there's this Durability our quarter develop strength have to the overall, versus performance recognize a We of the ops.

our super, opportunity. of understanding for So compete and area super differentiations us And is to really strong far and a remains exciting the as that unique how as our effectively. focus

put time things. you lake, really Silver can For these never

both interested. that and are You've got parties open to have

can for the Silver the excited make And waters same Lee, we on these and we're that and of the thrilled that others was adding has already Super lined to us in transformation help value only a seen -- have focused we stay that Adobes And Ken tangible. up appropriate they think through about have firm on. that's how we we've Lake and been tight that moon successfully they and partnership And upside I process seen Autodesks the this. how handful come that navigated it the were we is the conversation were as stars that the developing the have the end. we've are focused and to they interested. sure that consider continue other where

you. Thank good. Very

Thanks, Erik.

the back call would further any Meritt for Doug to now remarks. Thank like turn to over I you.

the Splunk resilience know together And to I'll grit back really dealing that to was right. our today. leaders really, reiterate delivery of of with market. step for just the to joining lots Thanks, just new a has how earnings nice team. across proud there's comprehensive and at that passion, under All theater one region. It in result. we The drove execution us come to variables. capable our leaders, thank that I announcements we're every most been to want platform coming I entire the through am leadership I impressive of months challenging key deliver company the out theater time more data we're everyone today. and lot the as want end I Josh. see of calls absolutely reaffirm XX all the a really

range Our solutions capabilities from as customers platform the of well benefiting are top. from rich the the underlying on as

to us in and able how capture sure growing make than confident services, is our capture pricing And we oxygen be to They're tech more updating at cloud them options is I in companies and the excited to position hire to they're massive adopting in on and that the momentum and It and the I'm bringing oil. we to our customers with strong our are to help staring highlight continue cloud continue also see the to migrating We attract talent opportunity this best we're to there hard to front we're to and want that putting market right of help and expertise outlook. effectively. Data these the be working planet. how that. are that ever the growth them. that we're need, now,

to evening. again. forward you a So thank look in all And you quarter. to another I great Have talking

call. Thank you. This concludes participating. Thank conference for you today's

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