Splunk, Inc. (NASDAQ:SPLK) Q1 2020 Earnings Conference Call - Final Transcript
May 21, 2020 • 04:30 pm ET
Ladies and gentlemen, thank you for standing by, and welcome to the Splunk First Quarter 2021 Conference Call. [Operator Instructions]
I would now like to hand the conference over to your speaker for today, Mr. Ken Tinsley. Sir, you may begin.
Great. Thank you, Valerie and good afternoon, everyone. 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. Also note that we have posted supplemental material on the Investor Relations web page as well. This conference call is being broadcast live via webcast and following the call, an audio replay will be available on our website.
On today's call, we will be making forward-looking statements, including financial guidance and expectations such as our forecast for our second quarter as well as duration, revenue mix, full year and long-term ARR and cash flow; and trends in our markets as well as expectations regarding our products, technology, strategy, customers, markets, acquisitions and investments. These statements reflect our best judgment based on factors currently known to us, and actual events or results may differ materially. Please refer to documents we filed with the SEC, including the 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, the information presented during this call may not contain current or accurate information.
We will also discuss non-GAAP financial measures, which are not prepared in accordance with generally accepted accounting principles. A reconciliation of GAAP and non-GAAP results is provided in the press release and on our website.
With that, let me turn it over to Doug.
Thank you, Ken and thanks, everyone for joining us. In the face of unprecedented volatility and uncertainty, we are focused on remaining a trusted partner to our customers and help them navigate the fundamental changes in how they operate while keeping their data accessible and secure.
In Q1, customers continued to prioritize investments in Splunk and drove ARR growth of 52% over last year, while our transition to cloud accelerated ahead of our expectations. This is also the first quarter with our sales force fully shifted from a total contract value, or TCV, sales motion to a more cloud and subscription-oriented annual contract value, or ACV focus, which we believe better aligns with our customer buying preferences and is consistent with our shift toward cloud-based delivery.
With that as a backdrop, I'd like to discuss a few patterns that have emerged this quarter and the impacts to our business. First, at this time of remote work, we've seen increased demand for Splunk Cloud, driving our cloud mix north of 40%, the highest ever in our history and well above our expectations going into the quarter. In addition