Splunk, Inc. (NASDAQ:SPLK) Q2 2020 Earnings Conference Call Transcript

Aug 21, 2019 • 04:30 pm ET

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Splunk, Inc. (NASDAQ:SPLK) Q2 2020 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen, and welcome to the Splunk Inc. Second Quarter 2020 Financial Results Conference call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded.

I would now like to introduce your host for today's conference, Mr Ken Tinsley, Corporate Treasurer and Vice President of Investor Relations, Mr. Tinsley, you may begin.

Executive
Ken Tinsley

Great. Thank you, Josh and good afternoon. With me on the call today are Doug Merritt and Jason Child. After market close today we issued a press release, which is also posted on our website. This conference call is being webcast live via webcast and following the call an audio replay will be available on the website. We also note that supplemental materials have been posted on our Investor Relations page.

On today's call we will be making forward-looking statements including financial guidance and expectations, including our forecast for third quarter and full-year of fiscal 2020, trends and expectations regarding revenue mix, Operating cash flow, operating efficiencies, and margin improvements, statements and benefits regarding our recently announced acquisition of SignalFx, which we expect to close in the second half of fiscal 2020. So subject to customary closing conditions and regulatory approval and our expectations regarding our products technology strategy, customers, market and industry. These statements reflect our best judgment based on facts currently known to us and actual events or results may differ materially. Please refer to documents we file with the SEC, including the Form 8-K filed with today's press release, those documents contain risks and other factors that may cause our actual results to differ from those contained in our forward-looking statements. These forward-looking statements are being made as of today, and we disclaim any obligation to update or revise these statements. If this call is reviewed after today this information presented during the call may not be current or accurate. We will also discuss non-GAAP financial measures, which are not prepared in accordance with Generally Accepted Accounting Principles. A reconciliation of historical GAAP and non-GAAP results is provided in the press release and on our website.

So with that let me turn it over to Doug.

Executive
Doug Merritt

Thank you, Ken. Hello, everyone, and welcome. We are extremely proud of our Q2 results and our continued hyper growth at scale, particularly our 46% software revenue growth, 33% overall revenue growth and 80% cloud growth. In fact 25% of our business was cloud this quarter and we expect it will grow to 50% over the next few years. I'm also eager to tell you about the acquisition of SignalFx that we announced today. As you know, there are two kinds of M&A transactions, consolidation deals in troubled market categories and acceleration deals in growth categories. Make no mistake, we are proactively positioning Splunk for growth and long-term value creation. Splunk is on a mission to become nothing short of the strategic