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Delaware
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86-1106510
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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(Do not check if a smaller reporting company)
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Page
No.
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April 30, 2016
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January 31, 2016
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||||
Assets
|
|
|
|
|
|
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Current assets
|
|
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|
|
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Cash and cash equivalents
|
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$
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428,245
|
|
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$
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424,541
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Investments, current portion
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594,246
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|
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584,498
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||
Accounts receivable, net
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98,607
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181,665
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||
Prepaid expenses and other current assets
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30,599
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26,565
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Total current assets
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1,151,697
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1,217,269
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||
Investments, non-current
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1,500
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1,500
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||
Property and equipment, net
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144,655
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134,995
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Intangible assets, net
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46,504
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49,482
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Goodwill
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124,642
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123,318
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Other assets
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14,866
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10,275
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Total assets
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$
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1,483,864
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$
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1,536,839
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Liabilities and Stockholders' Equity
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|
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Current liabilities
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|
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Accounts payable
|
|
$
|
4,885
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|
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$
|
4,868
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Accrued payroll and compensation
|
|
62,171
|
|
|
95,898
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|
||
Accrued expenses and other liabilities
|
|
43,192
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|
|
49,879
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||
Deferred revenue, current portion
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|
354,888
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|
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347,121
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|
||
Total current liabilities
|
|
465,136
|
|
|
497,766
|
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||
Deferred revenue, non-current
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|
95,889
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102,382
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||
Other liabilities, non-current
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|
89,789
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|
77,277
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||
Total non-current liabilities
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|
185,678
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|
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179,659
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Total liabilities
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650,814
|
|
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677,425
|
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||
Commitments and contingencies (Note 3)
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|
|
|
|
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Stockholders’ equity
|
|
|
|
|
|
|
||
Common stock: $0.001 par value; 1,000,000,000 shares authorized; 132,676,092 shares issued and outstanding at April 30, 2016, and 131,543,467 shares issued and outstanding at January 31, 2016
|
|
133
|
|
|
132
|
|
||
Accumulated other comprehensive loss
|
|
(1,233
|
)
|
|
(3,770
|
)
|
||
Additional paid-in capital
|
|
1,600,641
|
|
|
1,528,647
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Accumulated deficit
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(766,491
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)
|
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(665,595
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)
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Total stockholders’ equity
|
|
833,050
|
|
|
859,414
|
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||
Total liabilities and stockholders’ equity
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|
$
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1,483,864
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|
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$
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1,536,839
|
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Three Months Ended April 30,
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||||||
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2016
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2015
|
||||
Revenues
|
|
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License
|
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$
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100,992
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|
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$
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71,872
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Maintenance and services
|
|
84,960
|
|
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53,793
|
|
||
Total revenues
|
|
185,952
|
|
|
125,665
|
|
||
Cost of revenues (1)
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|
|
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License
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2,962
|
|
|
1,161
|
|
||
Maintenance and services
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36,538
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21,924
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Total cost of revenues
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39,500
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|
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23,085
|
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Gross profit
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146,452
|
|
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102,580
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Operating expenses (1)
|
|
|
|
|
|
|
||
Research and development
|
|
67,371
|
|
|
44,698
|
|
||
Sales and marketing
|
|
145,151
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|
|
101,989
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|
||
General and administrative
|
|
32,073
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|
|
26,872
|
|
||
Total operating expenses
|
|
244,595
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|
|
173,559
|
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Operating loss
|
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(98,143
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)
|
|
(70,979
|
)
|
||
Interest and other income (expense), net
|
|
|
|
|
|
|
||
Interest income (expense), net
|
|
(403
|
)
|
|
360
|
|
||
Other income (expense), net
|
|
(1,125
|
)
|
|
89
|
|
||
Total interest and other income (expense), net
|
|
(1,528
|
)
|
|
449
|
|
||
Loss before income taxes
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(99,671
|
)
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|
(70,530
|
)
|
||
Income tax provision
|
|
1,225
|
|
|
656
|
|
||
Net loss
|
|
$
|
(100,896
|
)
|
|
$
|
(71,186
|
)
|
|
|
|
|
|
|
|
||
Basic and diluted net loss per share
|
|
$
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(0.77
|
)
|
|
$
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(0.57
|
)
|
|
|
|
|
|
|
|
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Weighted-average shares used in computing basic and diluted net loss per share
|
|
131,494
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|
|
124,548
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Cost of revenues
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|
$
|
7,555
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|
|
$
|
6,532
|
|
Research and development
|
|
29,206
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|
|
20,075
|
|
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Sales and marketing
|
|
40,233
|
|
|
29,610
|
|
||
General and administrative
|
|
14,376
|
|
|
9,892
|
|
|
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Three Months Ended April 30,
|
||||||
|
|
2016
|
|
2015
|
||||
Net loss
|
|
$
|
(100,896
|
)
|
|
$
|
(71,186
|
)
|
Other comprehensive loss
|
|
|
|
|
|
|
||
Net unrealized gain (loss) on investments
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|
339
|
|
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(25
|
)
|
||
Foreign currency translation adjustments
|
|
2,198
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|
|
15
|
|
||
Total other comprehensive gain (loss)
|
|
2,537
|
|
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(10
|
)
|
||
Comprehensive loss
|
|
$
|
(98,359
|
)
|
|
$
|
(71,196
|
)
|
|
|
Three Months Ended April 30,
|
||||||
|
|
2016
|
|
2015
|
||||
Cash flows from operating activities
|
|
|
|
|
|
|
||
Net loss
|
|
$
|
(100,896
|
)
|
|
$
|
(71,186
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
6,461
|
|
|
3,466
|
|
||
Amortization of investment premiums
|
|
258
|
|
|
361
|
|
||
Stock-based compensation
|
|
91,370
|
|
|
66,109
|
|
||
Deferred income taxes
|
|
(506
|
)
|
|
(319
|
)
|
||
Excess tax benefits from employee stock plans
|
|
(692
|
)
|
|
(466
|
)
|
||
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
||||
Accounts receivable, net
|
|
83,058
|
|
|
47,072
|
|
||
Prepaid expenses, other current and non-current assets
|
|
(8,119
|
)
|
|
(327
|
)
|
||
Accounts payable
|
|
99
|
|
|
402
|
|
||
Accrued payroll and compensation
|
|
(33,727
|
)
|
|
(18,355
|
)
|
||
Accrued expenses and other liabilities
|
|
(2,891
|
)
|
|
640
|
|
||
Deferred revenue
|
|
1,274
|
|
|
1,218
|
|
||
Net cash provided by operating activities
|
|
35,689
|
|
|
28,615
|
|
||
Cash flows from investing activities
|
|
|
|
|
|
|||
Purchases of investments
|
|
(142,787
|
)
|
|
(160,514
|
)
|
||
Maturities of investments
|
|
133,120
|
|
|
160,000
|
|
||
Purchases of property and equipment
|
|
(3,709
|
)
|
|
(6,415
|
)
|
||
Other investment activities
|
|
—
|
|
|
(1,500
|
)
|
||
Net cash used in investing activities
|
|
(13,376
|
)
|
|
(8,429
|
)
|
||
Cash flows from financing activities
|
|
|
|
|
||||
Proceeds from the exercise of stock options
|
|
1,664
|
|
|
5,366
|
|
||
Taxes paid related to net share settlement of equity awards
|
|
(21,731
|
)
|
|
—
|
|
||
Excess tax benefits from employee stock plans
|
|
692
|
|
|
466
|
|
||
Net cash provided by (used in) financing activities
|
|
(19,375
|
)
|
|
5,832
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
|
766
|
|
|
174
|
|
||
Net increase in cash and cash equivalents
|
|
3,704
|
|
|
26,192
|
|
||
Beginning of period
|
|
424,541
|
|
|
387,315
|
|
||
End of period
|
|
$
|
428,245
|
|
|
$
|
413,507
|
|
Supplemental disclosures
|
|
|
|
|
|
|
||
Cash paid for income taxes
|
|
$
|
990
|
|
|
$
|
489
|
|
Non-cash investing and financing activities
|
|
|
|
|
|
|
||
Change in accrued purchases of property and equipment
|
|
821
|
|
|
647
|
|
||
Vesting of early exercised options
|
|
—
|
|
|
28
|
|
||
Change in capitalized construction costs related to build-to-suit lease
|
|
10,065
|
|
|
8,508
|
|
|
|
April 30, 2016
|
|
January 31, 2016
|
||||||||||||||||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
|
$
|
383,875
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
383,875
|
|
|
$
|
374,571
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
374,571
|
|
U.S. treasury securities
|
|
—
|
|
|
594,246
|
|
|
—
|
|
|
594,246
|
|
|
—
|
|
|
607,892
|
|
|
—
|
|
|
607,892
|
|
||||||||
Other
|
|
—
|
|
|
—
|
|
|
1,500
|
|
|
1,500
|
|
|
—
|
|
|
—
|
|
|
1,500
|
|
|
1,500
|
|
||||||||
Reported as:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
$
|
383,875
|
|
|
|
|
|
|
|
|
|
|
|
$
|
397,965
|
|
||||||
Investments, current portion
|
|
|
|
|
|
|
|
594,246
|
|
|
|
|
|
|
|
|
584,498
|
|
||||||||||||||
Investments, non-current
|
|
|
|
|
|
|
|
1,500
|
|
|
|
|
|
|
|
|
1,500
|
|
||||||||||||||
Total
|
|
|
|
|
|
|
|
|
|
|
$
|
979,621
|
|
|
|
|
|
|
|
|
|
|
|
$
|
983,963
|
|
|
|
April 30, 2016
|
||||||||||||||
|
|
Amortized Cost
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Fair Value
|
||||||||
Investments, current portion:
|
|
|
|
|
|
|
|
|
||||||||
U.S. treasury securities
|
|
$
|
593,964
|
|
|
$
|
322
|
|
|
$
|
(40
|
)
|
|
$
|
594,246
|
|
Total available-for-sale investments in U.S. treasury securities
|
|
$
|
593,964
|
|
|
$
|
322
|
|
|
$
|
(40
|
)
|
|
$
|
594,246
|
|
|
|
Less than 12 Months
|
|
12 Months or Greater
|
|
Total
|
||||||||||||||||||
|
|
Fair Value
|
|
Unrealized Losses
|
|
Fair Value
|
|
Unrealized Losses
|
|
Fair Value
|
|
Unrealized Losses
|
||||||||||||
U.S. treasury securities
|
|
$
|
69,694
|
|
|
$
|
(27
|
)
|
|
$
|
97,473
|
|
|
$
|
(13
|
)
|
|
$
|
167,167
|
|
|
$
|
(40
|
)
|
|
|
April 30, 2016
|
||
Due within one year
|
|
$
|
594,246
|
|
Total
|
|
$
|
594,246
|
|
|
|
Payments Due by Period
|
||||||||||||||||||
|
|
Total
|
|
Less Than 1
year |
|
1-3 years
|
|
3-5 years
|
|
More Than 5
years |
||||||||||
Operating lease commitments*
|
|
$
|
172,580
|
|
|
$
|
13,513
|
|
|
$
|
45,331
|
|
|
$
|
32,148
|
|
|
$
|
81,588
|
|
Fiscal Period:
|
|
|
||
Remaining nine months of fiscal 2017
|
|
$
|
4,703
|
|
Fiscal 2018
|
|
11,683
|
|
|
Fiscal 2019
|
|
12,510
|
|
|
Fiscal 2020
|
|
12,886
|
|
|
Fiscal 2021
|
|
13,272
|
|
|
Fiscal 2022
|
|
13,670
|
|
|
Thereafter
|
|
21,977
|
|
|
Total future minimum lease payments
|
|
$
|
90,701
|
|
|
|
As of
|
||||||
|
|
April 30, 2016
|
|
January 31, 2016
|
||||
Computer equipment and software
|
|
$
|
45,682
|
|
|
$
|
43,883
|
|
Furniture and fixtures
|
|
14,094
|
|
|
13,398
|
|
||
Leasehold and building improvements (1)
|
|
41,422
|
|
|
41,028
|
|
||
Building (2)
|
|
82,250
|
|
|
72,186
|
|
||
|
|
183,448
|
|
|
170,495
|
|
||
Less: accumulated depreciation and amortization
|
|
(38,793
|
)
|
|
(35,500
|
)
|
||
Property and equipment, net
|
|
$
|
144,655
|
|
|
$
|
134,995
|
|
|
|
Fair Value
|
|
Useful Life (months)
|
||
Developed technology
|
|
$
|
2,300
|
|
|
48
|
Other acquired intangible assets
|
|
370
|
|
|
36
|
|
Total intangible assets acquired
|
|
$
|
2,670
|
|
|
|
|
|
Fair Value
|
|
Useful Life (months)
|
||
Developed technology
|
|
$
|
44,300
|
|
|
72
|
In-process research and development
|
|
1,300
|
|
|
Indefinite*
|
|
Customer relationships
|
|
190
|
|
|
36
|
|
Total intangible assets acquired
|
|
$
|
45,790
|
|
|
|
|
|
Three Months Ended April 30,
|
||
|
|
2015
|
||
Revenues
|
|
$
|
125,665
|
|
Net loss
|
|
$
|
(77,646
|
)
|
Basic and diluted net loss per share
|
|
$
|
(0.62
|
)
|
|
|
Carrying amount
|
||
Balance as of January 31, 2016
|
|
$
|
123,318
|
|
Foreign currency translation adjustments
|
|
1,324
|
|
|
Balance as of April 30, 2016
|
|
$
|
124,642
|
|
|
|
Gross Fair Value
|
|
Accumulated Amortization
|
|
Net Book Value
|
|
Weighted Average Remaining Useful Life
(months)
|
||||||
Developed technology
|
|
$
|
59,370
|
|
|
$
|
(14,873
|
)
|
|
$
|
44,497
|
|
|
56
|
Customer relationships
|
|
1,810
|
|
|
(1,439
|
)
|
|
371
|
|
|
13
|
|||
Other acquired intangible assets
|
|
1,180
|
|
|
(844
|
)
|
|
336
|
|
|
22
|
|||
Total intangible assets subject to amortization
|
|
$
|
62,360
|
|
|
$
|
(17,156
|
)
|
|
$
|
45,204
|
|
|
|
Fiscal Period:
|
|
|
||
Remaining nine months of fiscal 2017
|
|
$
|
8,819
|
|
Fiscal 2018
|
|
10,283
|
|
|
Fiscal 2019
|
|
8,024
|
|
|
Fiscal 2020
|
|
7,619
|
|
|
Fiscal 2021
|
|
7,383
|
|
|
Thereafter
|
|
3,076
|
|
|
Total amortization expense
|
|
$
|
45,204
|
|
|
|
|
|
Options Outstanding
|
|
RSUs and PSUs
Outstanding
|
|
|||||||||||||
|
|
Shares Available
for Grant
|
|
Shares
|
|
Weighted-
Average
Exercise
Price
Per Share
|
|
Weighted-
Average
Remaining
Contractual
Term
|
|
Aggregate
Intrinsic
Value (1)
|
|
Shares
|
|
|||||||
|
|
|
|
|
|
|
|
(in years)
|
|
(in thousands)
|
|
|
|
|||||||
Balances as of January 31, 2016
|
|
6,553,144
|
|
|
3,715,999
|
|
|
$
|
4.72
|
|
|
4.24
|
|
$
|
154,696
|
|
|
14,752,253
|
|
|
Additional shares authorized
|
|
6,577,173
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Options exercised
|
|
|
|
|
(360,275
|
)
|
|
4.62
|
|
|
|
|
|
|
|
|
|
|
||
Options forfeited and expired
|
|
10,392
|
|
|
(10,392
|
)
|
|
1.36
|
|
|
|
|
|
|
|
|
|
|
||
RSUs and PSUs granted
|
|
(1,607,790
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
1,607,790
|
|
|
||
RSUs vested
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,239,699
|
)
|
|
|||||
Shares withheld related to net share settlement of RSUs
|
|
467,349
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
RSUs forfeited and canceled
|
|
390,407
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(390,407
|
)
|
|
||
Balances as of April 30, 2016
|
|
12,390,675
|
|
|
3,345,332
|
|
|
$
|
4.74
|
|
|
3.84
|
|
$
|
158,222
|
|
|
14,729,937
|
|
|
Vested and expected to vest
|
|
|
|
3,345,141
|
|
|
$
|
4.74
|
|
|
3.84
|
|
$
|
158,214
|
|
|
14,278,462
|
|
|
|
Exercisable as of April 30, 2016
|
|
|
|
3,264,406
|
|
|
$
|
4.57
|
|
|
3.74
|
|
$
|
154,852
|
|
|
|
|
|
|
Three Months Ended April 30,
|
||||||
|
|
2016
|
|
2015
|
||||
United States
|
|
$
|
137,805
|
|
|
$
|
95,187
|
|
International
|
|
48,147
|
|
|
30,478
|
|
||
Total revenues
|
|
$
|
185,952
|
|
|
$
|
125,665
|
|
|
|
As of
|
||||||
|
|
April 30, 2016
|
|
January 31, 2016
|
||||
United States
|
|
$
|
139,086
|
|
|
$
|
129,268
|
|
International
|
|
5,569
|
|
|
5,727
|
|
||
Total property and equipment, net
|
|
$
|
144,655
|
|
|
$
|
134,995
|
|
|
|
Three Months Ended April 30,
|
||||||
|
|
2016
|
|
2015
|
||||
Numerator:
|
|
|
|
|
|
|
||
Net loss
|
|
$
|
(100,896
|
)
|
|
$
|
(71,186
|
)
|
Denominator:
|
|
|
|
|
|
|
||
Weighted-average common shares outstanding
|
|
132,101
|
|
|
124,563
|
|
||
Less: Weighted-average unvested common shares subject to repurchase or forfeiture
|
|
(607
|
)
|
|
(15
|
)
|
||
Weighted-average shares used to compute net loss per share, basic and diluted
|
|
131,494
|
|
|
124,548
|
|
||
Net loss per share, basic and diluted
|
|
$
|
(0.77
|
)
|
|
$
|
(0.57
|
)
|
|
|
As of April 30,
|
||||
|
|
2016
|
|
2015
|
||
Shares subject to outstanding common stock options
|
|
3,345
|
|
|
5,487
|
|
Shares subject to outstanding RSUs, PSUs and RSAs
|
|
15,327
|
|
|
12,162
|
|
Employee stock purchase plan
|
|
606
|
|
|
316
|
|
Total
|
|
19,278
|
|
|
17,965
|
|
•
|
Extend our technological capabilities.
|
•
|
Continue to expand our direct and indirect sales organization, including our channel relationships, to increase our sales capacity and enable greater market presence.
|
•
|
Further penetrate our existing customer base and drive enterprise-wide adoption.
|
•
|
Enhance our value proposition through a focus on solutions which address core and expanded use cases.
|
•
|
Grow our user communities and partner ecosystem to increase awareness of our brand, target new use cases, drive operational leverage and deliver more targeted, higher value solutions.
|
•
|
Continue to deliver a rich developer environment to enable rapid development of enterprise applications that leverage machine data and the Splunk platform.
|
|
Three Months Ended
|
||||||
|
April 30,
|
|
April 30,
|
||||
|
2016
|
|
2015
|
||||
Net cash provided by operating activities
|
$
|
35,689
|
|
|
$
|
28,615
|
|
Less purchases of property and equipment
|
(3,709
|
)
|
|
(6,415
|
)
|
||
Free cash flow (Non-GAAP)
|
$
|
31,980
|
|
|
$
|
22,200
|
|
Net cash used in investing activities
|
$
|
(13,376
|
)
|
|
$
|
(8,429
|
)
|
Net cash provided by (used in) financing activities
|
$
|
(19,375
|
)
|
|
$
|
5,832
|
|
|
|
GAAP
|
|
Stock-based compensation
|
|
Employer payroll tax on employee stock plans
|
|
Amortization of acquired intangible assets
|
|
Adjustments related to financing lease obligation
|
|
Non-GAAP
|
||||||||||||
Cost of revenues
|
|
$
|
39,500
|
|
|
$
|
(7,555
|
)
|
|
$
|
(262
|
)
|
|
$
|
(2,912
|
)
|
|
$
|
26
|
|
|
$
|
28,797
|
|
Gross Margin
|
|
78.8
|
%
|
|
4.0
|
%
|
|
0.1
|
%
|
|
1.6
|
%
|
|
—
|
%
|
|
84.5
|
%
|
||||||
Research and development
|
|
67,371
|
|
|
(29,206
|
)
|
|
(756
|
)
|
|
(71
|
)
|
|
58
|
|
|
37,396
|
|
||||||
Sales and marketing
|
|
145,151
|
|
|
(40,233
|
)
|
|
(1,026
|
)
|
|
(151
|
)
|
|
118
|
|
|
103,859
|
|
||||||
General and administrative
|
|
32,073
|
|
|
(14,376
|
)
|
|
(441
|
)
|
|
—
|
|
|
26
|
|
|
17,282
|
|
||||||
Operating loss
|
|
(98,143
|
)
|
|
91,370
|
|
|
2,485
|
|
|
3,134
|
|
|
(228
|
)
|
|
(1,382
|
)
|
||||||
Operating margin
|
|
(52.8
|
)%
|
|
49.2
|
%
|
|
1.3
|
%
|
|
1.7
|
%
|
|
(0.1
|
)%
|
|
(0.7
|
)%
|
||||||
Net loss
|
|
$
|
(100,896
|
)
|
|
$
|
91,370
|
|
|
$
|
2,485
|
|
|
$
|
3,134
|
|
|
$
|
1,263
|
|
(2)
|
$
|
(2,644
|
)
|
Net loss per share
(1)
|
|
$
|
(0.77
|
)
|
|
$
|
0.70
|
|
|
$
|
0.02
|
|
|
$
|
0.02
|
|
|
$
|
0.01
|
|
|
$
|
(0.02
|
)
|
|
|
GAAP
|
|
Stock-based compensation
|
|
Employer payroll tax on employee stock plans
|
|
Amortization of acquired intangible assets
|
|
Adjustments related to financing lease obligation
|
|
Non-GAAP
|
||||||||||||
Cost of revenues
|
|
$
|
23,085
|
|
|
$
|
(6,532
|
)
|
|
$
|
(263
|
)
|
|
$
|
(911
|
)
|
|
$
|
—
|
|
|
$
|
15,379
|
|
Gross Margin
|
|
81.6
|
%
|
|
5.2
|
%
|
|
0.2
|
%
|
|
0.8
|
%
|
|
—
|
%
|
|
87.8
|
%
|
||||||
Research and development
|
|
44,698
|
|
|
(20,075
|
)
|
|
(903
|
)
|
|
(69
|
)
|
|
—
|
|
|
23,651
|
|
||||||
Sales and marketing
|
|
101,989
|
|
|
(29,610
|
)
|
|
(1,076
|
)
|
|
(150
|
)
|
|
—
|
|
|
71,153
|
|
||||||
General and administrative
|
|
26,872
|
|
|
(9,892
|
)
|
|
(580
|
)
|
|
—
|
|
|
(222
|
)
|
|
16,178
|
|
||||||
Operating loss
|
|
(70,979
|
)
|
|
66,109
|
|
|
2,822
|
|
|
1,130
|
|
|
222
|
|
|
(696
|
)
|
||||||
Operating margin
|
|
(56.5
|
)%
|
|
52.6
|
%
|
|
2.2
|
%
|
|
0.9
|
%
|
|
0.2
|
%
|
|
(0.6
|
)%
|
||||||
Net loss
|
|
$
|
(71,186
|
)
|
|
$
|
66,109
|
|
|
$
|
2,822
|
|
|
$
|
1,130
|
|
|
$
|
222
|
|
|
$
|
(903
|
)
|
Net loss per share
(1)
|
|
$
|
(0.57
|
)
|
|
$
|
0.53
|
|
|
$
|
0.02
|
|
|
$
|
0.01
|
|
|
$
|
—
|
|
|
$
|
(0.01
|
)
|
|
|
Three Months
Ended April 30,
|
||||||
|
|
2016
|
|
2015
|
||||
|
|
(in thousands)
|
||||||
Condensed Consolidated Statement of Operations Data:
|
|
|
|
|
|
|||
Revenues
|
|
|
|
|
||||
License
|
|
$
|
100,992
|
|
|
$
|
71,872
|
|
Maintenance and services
|
|
84,960
|
|
|
53,793
|
|
||
Total revenues
|
|
185,952
|
|
|
125,665
|
|
||
Cost of revenues
|
|
|
|
|
|
|||
License
|
|
2,962
|
|
|
1,161
|
|
||
Maintenance and services
|
|
36,538
|
|
|
21,924
|
|
||
Total cost of revenues
|
|
39,500
|
|
|
23,085
|
|
||
Gross profit
|
|
146,452
|
|
|
102,580
|
|
||
Operating expenses
|
|
|
|
|
|
|
||
Research and development
|
|
67,371
|
|
|
44,698
|
|
||
Sales and marketing
|
|
145,151
|
|
|
101,989
|
|
||
General and administrative
|
|
32,073
|
|
|
26,872
|
|
||
Total operating expenses
|
|
244,595
|
|
|
173,559
|
|
||
Operating loss
|
|
(98,143
|
)
|
|
(70,979
|
)
|
||
Interest and other income (expense), net
|
|
|
|
|
||||
Interest income (expense), net
|
|
(403
|
)
|
|
360
|
|
||
Other income (expense), net
|
|
(1,125
|
)
|
|
89
|
|
||
Total interest and other income (expense), net
|
|
(1,528
|
)
|
|
449
|
|
||
Loss before income taxes
|
|
(99,671
|
)
|
|
(70,530
|
)
|
||
Income tax provision
|
|
1,225
|
|
|
656
|
|
||
Net loss
|
|
$
|
(100,896
|
)
|
|
$
|
(71,186
|
)
|
|
|
Three Months
Ended April 30, |
|
|
|||||||
|
|
2016
|
|
2015
|
|
% Change
|
|||||
|
|
($ amounts in thousands)
|
|
|
|||||||
Revenues
|
|
|
|
|
|
|
|
|
|||
License
|
|
$
|
100,992
|
|
|
$
|
71,872
|
|
|
40.5
|
%
|
Maintenance and services
|
|
84,960
|
|
|
53,793
|
|
|
57.9
|
%
|
||
Total revenues
|
|
$
|
185,952
|
|
|
$
|
125,665
|
|
|
48.0
|
%
|
Percentage of revenues
|
|
|
|
|
|
|
|
|
|
||
License
|
|
54.3
|
%
|
|
57.2
|
%
|
|
|
|||
Maintenance and services
|
|
45.7
|
|
|
42.8
|
|
|
|
|||
Total
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
|
Three Months
Ended April 30, |
|
|
|||||||
|
|
2016
|
|
2015
|
|
% Change
|
|||||
|
|
($ amounts in thousands)
|
|
|
|||||||
Cost of revenues
|
|
|
|
|
|
|
|
|
|
||
License
|
|
$
|
2,962
|
|
|
$
|
1,161
|
|
|
155.1
|
%
|
Maintenance and services
|
|
36,538
|
|
|
21,924
|
|
|
66.7
|
%
|
||
Total cost of revenues
|
|
$
|
39,500
|
|
|
$
|
23,085
|
|
|
71.1
|
%
|
Gross margin
|
|
|
|
|
|
|
|||||
License
|
|
97.1
|
%
|
|
98.4
|
%
|
|
|
|
||
Maintenance and services
|
|
57.0
|
%
|
|
59.2
|
%
|
|
|
|
||
Total gross margin
|
|
78.8
|
%
|
|
81.6
|
%
|
|
|
|
|
|
Three Months
Ended April 30, |
|
|
|||||||
|
|
2016
|
|
2015
|
|
% Change
|
|||||
|
|
($ amounts in thousands)
|
|
|
|||||||
Operating expenses (1)
|
|
|
|
|
|
|
|
|
|
||
Research and development
|
|
$
|
67,371
|
|
|
$
|
44,698
|
|
|
50.7
|
%
|
Sales and marketing
|
|
145,151
|
|
|
101,989
|
|
|
42.3
|
%
|
||
General and administrative
|
|
32,073
|
|
|
26,872
|
|
|
19.4
|
%
|
||
Total operating expenses
|
|
$
|
244,595
|
|
|
$
|
173,559
|
|
|
40.9
|
%
|
Percentage of revenues
|
|
|
|
|
|
|
|
||||
Research and development
|
|
36.2
|
%
|
|
35.6
|
%
|
|
|
|
||
Sales and marketing
|
|
78.1
|
|
|
81.1
|
|
|
|
|||
General and administrative
|
|
17.3
|
|
|
21.4
|
|
|
|
|||
Total
|
|
131.6
|
%
|
|
138.1
|
%
|
|
|
|||
|
|
|
|
|
|
|
|||||
(1) Includes stock-based compensation expense:
|
|
|
|
||||||||
Research and development
|
|
$
|
29,206
|
|
|
$
|
20,075
|
|
|
|
|
Sales and marketing
|
|
40,233
|
|
|
29,610
|
|
|
|
|
||
General and administrative
|
|
14,376
|
|
|
9,892
|
|
|
|
|
||
Total stock-based compensation expense
|
|
$
|
83,815
|
|
|
$
|
59,577
|
|
|
|
|
|
|
Three Months
Ended April 30, |
||||||
|
|
2016
|
|
2015
|
||||
|
|
(in thousands)
|
||||||
Interest and other income (expense), net:
|
|
|
|
|
||||
Interest income (expense), net
|
|
$
|
(403
|
)
|
|
$
|
360
|
|
Other income (expense), net
|
|
(1,125
|
)
|
|
89
|
|
||
Total interest and other income (expense), net
|
|
$
|
(1,528
|
)
|
|
$
|
449
|
|
|
|
Three Months
Ended April 30, |
||||||
|
|
2016
|
|
2015
|
||||
|
|
(in thousands)
|
||||||
Income tax provision
|
|
$
|
1,225
|
|
|
$
|
656
|
|
|
|
April 30, 2016
|
|
January 31, 2016
|
||||
|
|
(in thousands)
|
||||||
Cash and cash equivalents
|
|
$
|
428,245
|
|
|
$
|
424,541
|
|
|
|
|
|
|
||||
|
|
Three Months
Ended April 30,
|
||||||
|
|
2016
|
|
2015
|
||||
|
|
(in thousands)
|
||||||
Cash provided by operating activities
|
|
$
|
35,689
|
|
|
$
|
28,615
|
|
Cash used in investing activities
|
|
(13,376
|
)
|
|
(8,429
|
)
|
||
Cash provided by (used in) financing activities
|
|
(19,375
|
)
|
|
5,832
|
|
|
|
Payments Due by Period
|
||||||||||||||||||
|
|
Total
|
|
Less Than 1
year |
|
1-3 years
|
|
3-5 years
|
|
More Than 5
years |
||||||||||
Operating lease commitments*
|
|
$
|
172,580
|
|
|
$
|
13,513
|
|
|
$
|
45,331
|
|
|
$
|
32,148
|
|
|
$
|
81,588
|
|
Fiscal Period:
|
|
|
||
Remaining nine months of fiscal 2017
|
|
$
|
4,703
|
|
Fiscal 2018
|
|
11,683
|
|
|
Fiscal 2019
|
|
12,510
|
|
|
Fiscal 2020
|
|
12,886
|
|
|
Fiscal 2021
|
|
13,272
|
|
|
Fiscal 2022
|
|
13,670
|
|
|
Thereafter
|
|
21,977
|
|
|
Total future minimum lease payments
|
|
$
|
90,701
|
|
•
|
the timing of our sales during the quarter, particularly because a large portion of our sales occur toward the end of the quarter, or the loss or delay of a few large contracts;
|
•
|
the mix of revenues attributable to larger transactions as opposed to smaller transactions and the impact that a change in mix may have on the overall average selling price of our offerings;
|
•
|
the mix of revenues attributable to perpetual licenses and term licenses, subscriptions, enterprise adoption agreements, maintenance and professional services and training, which may impact our revenue, deferred revenue, gross margins and operating income;
|
•
|
the renewal and usage rates of our customers;
|
•
|
changes in the competitive dynamics of our market;
|
•
|
changes in customers’ budgets and in the timing of their purchasing decisions;
|
•
|
customers delaying purchasing decisions in anticipation of new offerings or software enhancements by us or our competitors;
|
•
|
customer acceptance of and willingness to pay for new versions of our offerings or new solutions for specific product and end markets;
|
•
|
our ability to successfully introduce and monetize new offerings and licensing and service models for our new offerings;
|
•
|
our ability to control costs, including our operating expenses;
|
•
|
the amount and timing of our stock-based compensation expenses;
|
•
|
the timing of satisfying revenue recognition criteria;
|
•
|
our ability to qualify and successfully compete for government contracts;
|
•
|
the collectability of receivables from customers and resellers, which may be hindered or delayed; and
|
•
|
general economic conditions, both domestically and internationally, as well as economic conditions specifically affecting industries in which our customers participate.
|
•
|
improve the performance and capabilities of our offerings and technology through research and development;
|
•
|
continue to develop, enhance, expand adoption of and globally deliver our cloud services, including Splunk Cloud, and comply with applicable laws in each jurisdiction in which we offer such services;
|
•
|
successfully develop, introduce and expand adoption of new offerings;
|
•
|
increase revenues from existing customers through increased or broader use of our offerings within their organizations;
|
•
|
successfully expand our business domestically and internationally;
|
•
|
maintain and expand our customer base and the ways in which our customers use our offerings;
|
•
|
successfully compete with other companies, open source projects and custom development efforts that are currently in, or may in the future enter, the markets for our offerings;
|
•
|
successfully provide our customers a compelling business case to purchase our offerings in a time frame that matches our and our customers’ sales and purchase cycles and at a compelling price point;
|
•
|
generate leads and convert users of the trial versions of our offerings to paying customers;
|
•
|
prevent users from circumventing the terms of their licenses and subscriptions;
|
•
|
continue to invest in our application development platform to deliver additional content for our offerings and to foster an ecosystem of developers and users to expand the use cases of our offerings;
|
•
|
maintain and enhance our website and cloud services infrastructure to minimize interruptions when accessing our offerings;
|
•
|
process, store and use our customers’ data in compliance with applicable governmental regulations and other legal obligations related to data privacy, data protection, data transfer, data residency, encryption and security;
|
•
|
hire, integrate and retain world-class professional and technical talent; and
|
•
|
successfully integrate acquired businesses and technologies.
|
•
|
improving our key business applications, processes and IT infrastructure to support our business needs;
|
•
|
enhancing information and communication systems to ensure that our employees and offices around the world are well-coordinated and can effectively communicate with each other and our growing base of customers and channel partners;
|
•
|
enhancing our internal controls to ensure timely and accurate reporting of all of our operations and financial results; and
|
•
|
appropriately documenting our IT systems and our business processes.
|
•
|
IT departments of potential customers which have undertaken custom software development efforts to analyze and manage their machine data;
|
•
|
companies targeting the big data market by commercializing open source software, such as the various Hadoop distributions and NoSQL data stores, including Elastic;
|
•
|
security, systems management and other IT vendors, including BMC Software, CA Technologies, Hewlett Packard Enterprise, IBM, Intel, Microsoft, Dell Software and VMware;
|
•
|
business intelligence vendors, analytics and visualization vendors, including IBM and Oracle; and
|
•
|
small, specialized vendors that provide complementary and competitive solutions in enterprise data analytics, log aggregation and management, data warehousing and big data technologies that may compete with our offerings.
|
•
|
increased management, travel, infrastructure and legal compliance costs associated with having multiple international operations;
|
•
|
reliance on channel partners;
|
•
|
longer payment cycles and difficulties in collecting accounts receivable or satisfying revenue recognition criteria, especially in emerging markets;
|
•
|
increased financial accounting and reporting burdens and complexities;
|
•
|
general economic conditions in each country or region;
|
•
|
economic and political uncertainty around the world;
|
•
|
compliance with multiple and changing foreign laws and regulations, including those governing employment, tax, privacy and data protection, data transfer and the risks and costs of non-compliance with such laws and regulations;
|
•
|
compliance with laws and regulations for foreign operations, including the United States Foreign Corrupt Practices Act, the United Kingdom Bribery Act, import and export control laws, tariffs, trade barriers, economic sanctions and other regulatory or contractual limitations on our ability to sell our offerings in certain foreign markets, and the risks and costs of non-compliance;
|
•
|
heightened risks of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact financial results and result in restatements of financial statements and irregularities in financial statements;
|
•
|
fluctuations in currency exchange rates and the related effect on our financial results;
|
•
|
difficulties in repatriating or transferring funds from or converting currencies in certain countries;
|
•
|
the need for localized software and licensing programs;
|
•
|
reduced protection for intellectual property rights in some countries and practical difficulties of enforcing intellectual property and contract rights abroad; and
|
•
|
compliance with the laws of numerous foreign taxing jurisdictions and overlapping of different tax regimes.
|
•
|
our failure to predict market demand accurately in terms of product functionality and to supply offerings that meet this demand in a timely fashion;
|
•
|
defects, errors or failures;
|
•
|
negative publicity about their performance or effectiveness;
|
•
|
delays in releasing to the market our new offerings or enhancements to our existing offerings to the market;
|
•
|
introduction or anticipated introduction of competing products by our competitors;
|
•
|
poor business conditions for our end-customers, causing them to delay IT purchases; and
|
•
|
reluctance of customers to purchase products incorporating open source software.
|
•
|
changes in fiscal or contracting policies;
|
•
|
decreases in available government funding;
|
•
|
changes in government programs or applicable requirements;
|
•
|
the adoption of new laws or regulations or changes to existing laws or regulations;
|
•
|
potential delays or changes in the government appropriations or other funding authorization processes; and
|
•
|
delays in the payment of our invoices by government payment offices.
|
•
|
third-party developers may not continue developing or supporting the software apps that they share on Splunkbase;
|
•
|
we cannot provide any assurance that these apps meet the same quality standards that we apply to our own development efforts, and, to the extent they contain bugs or defects, they may create disruptions in our customers’ use of our offerings or negatively affect our brand;
|
•
|
we do not currently provide support for software apps developed by third-party software developers, and users may be left without support and potentially cease using our offerings if the third-party software developers do not provide support for these apps;
|
•
|
these third-party software developers may not possess the appropriate intellectual property rights to develop and share their apps; and
|
•
|
some of these developers may use the insight they gain using our offerings and from documentation publicly available on our website to develop competing products.
|
•
|
an acquisition may negatively affect our financial results because it may require us to incur charges or assume substantial debt or other liabilities, may cause adverse tax consequences or unfavorable accounting treatment, may expose us to claims and disputes by third parties, including intellectual property claims and disputes, or may not generate sufficient financial return to offset additional costs and expenses related to the acquisition;
|
•
|
potential goodwill impairment charges related to acquisitions;
|
•
|
costs and potential difficulties associated with the requirement to test and assimilate the internal control processes of the acquired business;
|
•
|
we may encounter difficulties or unforeseen expenditures in integrating the business, technologies, products, personnel or operations of any company that we acquire, particularly if key personnel of the acquired company decide not to work for us or if we are unable to retain key personnel;
|
•
|
we may not realize the expected benefits of the acquisition;
|
•
|
an acquisition may disrupt our ongoing business, divert resources, increase our expenses and distract our management;
|
•
|
an acquisition may result in a delay or reduction of customer purchases for both us and the company acquired due to customer uncertainty about continuity and effectiveness of service from either company;
|
•
|
the potential impact on relationships with existing customers, vendors and distributors as business partners as a result of acquiring another company or business that competes with or otherwise is incompatible with those existing relationships;
|
•
|
the potential that our due diligence of the acquired company or business does not identify significant problems or liabilities;
|
•
|
we may encounter difficulties in, or may be unable to, successfully sell any acquired products;
|
•
|
an acquisition may involve the entry into geographic or business markets in which we have little or no prior experience or where competitors have stronger market positions;
|
•
|
an acquisition may require us to comply with additional laws and regulations or result in liabilities resulting from the acquired company’s pre-acquisition failure to comply with applicable laws;
|
•
|
our use of cash to pay for an acquisition would limit other potential uses for our cash;
|
•
|
if we incur debt to fund such acquisition, such debt may subject us to material restrictions on our ability to conduct our business as well as financial maintenance covenants; and
|
•
|
to the extent that we issue a significant amount of equity securities in connection with future acquisitions, existing stockholders may be diluted and earnings per share may decrease.
|
•
|
actual or anticipated fluctuations in our financial results;
|
•
|
the financial projections we provide to the public, any changes in these projections or our failure to meet or exceed these projections;
|
•
|
failure of securities analysts to initiate or maintain coverage of our company, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors;
|
•
|
ratings changes by any securities analysts who follow our company;
|
•
|
announcements by us or our competitors of significant technical innovations, acquisitions, strategic partnerships, joint ventures or capital commitments;
|
•
|
changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular;
|
•
|
price and volume fluctuations in certain categories of companies or the overall stock market, including as a result of trends in the global economy;
|
•
|
any major change in our board of directors or management;
|
•
|
lawsuits threatened or filed against us; and
|
•
|
other events or factors, including those resulting from war, incidents of terrorism or responses to these events.
|
•
|
authorize our board of directors to issue, without further action by the stockholders, shares of undesignated preferred stock with terms, rights and preferences determined by our board of directors;
|
•
|
require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent;
|
•
|
specify that special meetings of our stockholders can be called only by our board of directors, the Chairman of our board of directors, or our Chief Executive Officer;
|
•
|
establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors;
|
•
|
establish that our board of directors is divided into three classes, Class I, Class II and Class III, with each class serving three-year staggered terms;
|
•
|
prohibit cumulative voting in the election of directors;
|
•
|
provide that our directors may be removed only for cause;
|
•
|
provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum; and
|
•
|
require the approval of our board of directors or the holders of a supermajority of our outstanding shares of capital stock to amend our bylaws and certain provisions of our certificate of incorporation.
|
Date: June 9, 2016
|
|
|
|
|
|
|
|
|
|
SPLUNK INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/ David F. Conte
|
|
|
David F. Conte
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
Exhibit
Number
|
|
Description
|
|
|
|
3.1
|
|
Amended and Restated Bylaws of the Registrant (
incorporated by referenced to Exhibit 3.1 filed with the Registrant’s Current Report on Form 8-K filed on March 11, 2016)
.
|
|
|
|
10.1#
|
|
Employment Offer Letter between the Registrant and Susan St. Ledger, dated as of March 3, 2016.
|
|
|
|
10.2#
|
|
Transition Plan and Release Agreement between the Registrant and Guido Schroeder, dated as of March 15, 2016.
|
|
|
|
31.1
|
|
Certification of Principal Executive Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
|
|
31.2
|
|
Certification of Principal Financial Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
|
|
32.1
|
|
Certification of Principal Executive Officer and Principal Financial Officer Required Under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. §1350.
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Schema Linkbase Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Definition Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Labels Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Presentation Linkbase Document
|
#
|
|
Indicates management contract or compensatory plan.
|
|
|
|
Best,
|
|
|
|
|
|
/s/ Doug Merritt
|
|
|
Doug Merritt
|
|
|
Chief Executive Officer and President
|
|
|
Splunk Inc.
|
|
|
/s/ Susan St. Ledger
|
|
March 7, 2016
|
Susan St. Ledger
|
|
Date
|
(1)
|
Between the date of this letter through the Termination Date, you will continue to be paid your current annualized base salary of $330,000. You will continue to participate in Splunk’s equity plans in which you are currently participating, and the equity awards you previously received will continue to vest in accordance with the terms of the applicable equity plan. You will also continue to participate in the Splunk benefit plans in which you are currently participating;
|
(2)
|
You acknowledge that the amounts stated in paragraph (1) above comprise all salary, bonus, compensation and benefits that will be payable or provided to you as a result of your continued employment with Splunk, and you are not eligible to receive any compensation or benefits under any other Company plan or program. All amounts will be paid in accordance with Splunk’s standard practices, and less deductions and withholdings;
|
(3)
|
You will remain an “at will” employee, which means that either you or Splunk may terminate your employment at any time, with or without cause and with or without reason. You must comply with all applicable Splunk policies and practices (including, but not limited to, the Code of Business Conduct and Ethics and Insider Trading Policy), and the terms of the attached Release Agreement both prior to and after your Termination Date, as applicable;
|
(4)
|
Prior to the Termination Date you will, as requested, remain available in person, by phone and electronic means and provide reasonable and timely assistance to answer questions and transition your duties and responsibilities;
|
(5)
|
Both prior to and after the Termination Date, you agree that at the Company’s request, you will provide reasonable assistance to the Company or any associated company in any threatened or actual litigation, arbitration, investigation or regulatory proceeding concerning it or them where you have knowledge of any facts or other matters which the Company or any associated company reasonably considers is relevant to such legal proceedings (including but not limited to giving statements, affidavits, testimony, meeting with legal and other professional advisers, attending interviews, hearings and giving evidence). The Company will, to the extent permitted by law and applicable court rules, reimburse you for reasonable out-of-pocket expenses you incur in extending such cooperation, in accordance with the Company’s Travel and Expense Policy; and
|
(6)
|
If you voluntarily resign before the Termination Date, or if you are hired into a position outside the Company and intend to begin your new employment before the Termination Date, you must provide prompt written notice to Splunk regarding the date you intend to resign or begin your new employment, as applicable, and the compensation and benefits described in paragraph (1) above (the "
Additional Compensation and Benefits
") will end immediately upon the earlier of the date you voluntarily resign or the date you begin your new employment. In this instance, you will still receive the Severance Benefits (defined below), subject to adjustment of the date under which your coverage under Splunk's health plans will end, provided you sign and return the Release Agreement on or before April 8, 2016 and not revoke the same, as described below) and the Confirmatory Release Agreement (attached hereto as Attachment 3) on the date your employment terminates.
|
(1)
|
A lump sum payment equal to six (6) months of your then-current base salary in the amount of $165,000;
|
(2)
|
A pro-rated portion of your annual bonus for the year of termination, payable at target in the amount of $57,750.00;
|
(3)
|
Your coverage under the Splunk group health plans is scheduled to end on April 30, 2016. However, you will have the opportunity to continue the benefits under the Splunk group health plans under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) to the same extent previously provided, for six (6) months, through October 31, 2016, or until you become eligible for group health insurance benefits from another employer or entity, whichever occurs first. You understand that you must inform Splunk if you receive group health coverage from another employer or entity before October 31, 2016, and that you may not increase the number of designated dependents, if any, during this time unless you do so at your own expense. The period of such Splunk-paid COBRA coverage shall be considered part of your COBRA coverage entitlement period, and may, for tax purposes, be considered income to you. This benefit will only be provided to the extent allowable by law. If such payment of COBRA premiums would result in a Splunk excise tax, then no such premiums will be paid, and if doing so would not cause imposition of an excise tax you will be paid a single lump sum of $12,000. You have been advised by Splunk to consult with Vita or an advisor of your choice regarding COBRA continuation coverage or other coverage options through the Health Insurance Marketplace, Medicaid or other group health plan coverage options (such as a spouse’s plan) through what is called a “special enrollment” period. Splunk does not guarantee or imply that a “special enrollment” period or an “open enrollment” period will be available to you on, or shortly after October 31, 2016;
|
(4)
|
Acceleration of vesting as to six (6) months of shares subject to all equity awards which have been granted to you. Such accelerated vesting shall be measured from the Termination Date. You shall have six (6) months following your separation from service from the Company in which to exercise all vested options that have been granted to you. For the avoidance of doubt, any equity: 1) granted in calendar year 2016 (whether RSUs or PSUs); or 2) that is scheduled to vest after October 29, 2016 shall not be earned or vested and all such equity shall be cancelled on or around the Termination Date;
|
(5)
|
Outplacement services for up to six (6) months following your Termination Date will be provided by an outplacement services firm selected by Splunk. Splunk will pay the outplacement services firm directly;
|
(6)
|
If you are terminated with Cause (as that term is defined in your Change in Control Letter dated March 23, 2012) (the “
Change in Control Letter
”), the Additional Compensation and Benefits will end immediately and you will not receive any Severance Benefits. If you are terminated for any reason without Cause not during the Change in Control Period (as defined in your Change in Control Letter), and provided that you sign and return the Release Agreement and Confirmatory Release Agreement as provided herein, you will receive any unpaid Additional Compensation and Benefits and Severance Benefits; and
|
(7)
|
Effective as of your Termination Date, your Change in Control Letter shall terminate, however paragraphs 3 (Confidentiality); 4 (At-Will Employment); 6 (Section 409A Matters); 7 (Definitions); and 8 (Arbitration) shall continue in full force and effect, except as specifically modified by the Release Agreement.
|
Very truly yours,
|
|
|
/s/ Tracy Edkins
|
|
|
Tracy Edkins
|
|
|
Chief Human Resources Officer
|
|
|
/s/ Guido Schroeder
|
|
|
Guido Schroeder
|
|
|
|
|
|
Dated: March 15, 2016
|
|
|
Dated: March 17, 2016
|
|
/s/ Guido Schroeder
|
(Must be signed and returned on or before April 8, 2016)
|
|
Guido Schroeder
|
EMPLOYEE:
|
|
|
|
|
|
Signature: /s/ Guido Schroeder
|
|
|
Print Name: Guido Schroeder
|
|
|
SPLUNK INC.:
|
|
|
|
|
|
By: /s/ Helen Fahey
|
|
|
Name: Helen Fahey
|
|
|
Title: HR
|
|
|
1.
|
Termination of Employment
. My employment with Splunk terminated on the Termination Date.
|
2.
|
Affirmation of Release Agreement
. To the extent that I have or may have a claim against the Company arising out of or in connection with my employment or its termination or after the date on which I executed the Release Agreement, I hereby release all such claims. Without limiting the foregoing, I reaffirm the Release Agreement in its entirety, including but not limited to the Release of All Claims contained therein, which in accordance with the conditions to which it is subject, will remain in full force and effect.
|
Dated: April 29, 2016
|
|
/s/ Guido Schroeder
|
(Must be signed and returned by noon PT on April 29, 2016)
|
|
Guido Schroeder
|
Date: June 9, 2016
|
|
|
/s/ Douglas S. Merritt
|
|
Douglas S. Merritt
|
|
|
|
President and Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
Date: June 9, 2016
|
|
|
/s/ David F. Conte
|
|
David F. Conte
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial and Accounting Officer)
|
Date: June 9, 2016
|
|
|
|
|
|
/s/ Douglas S. Merritt
|
|
/s/ David F. Conte
|
Douglas S. Merritt
|
|
David F. Conte
|
|
|
|
President and Chief Executive Officer
|
|
Chief Financial Officer
|
|
|
|
(Principal Executive Officer)
|
|
(Principal Financial and Accounting Officer)
|