Cover Page
Cover Page - shares shares in Millions | 9 Months Ended | |
Oct. 31, 2023 | Nov. 16, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Oct. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-35498 | |
Entity Registrant Name | Splunk Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 86-1106510 | |
Entity Address, Address Line One | 270 Brannan Street | |
Entity Address, City or Town | San Francisco | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94107 | |
City Area Code | 415 | |
Local Phone Number | 848-8400 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | SPLK | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 168.5 | |
Entity Central Index Key | 0001353283 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --01-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Oct. 31, 2023 | Jan. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 927,962 | $ 690,587 |
Investments, current | 761,746 | 1,316,347 |
Accounts receivable, net | 1,131,616 | 1,572,604 |
Prepaid expenses and other current assets | 130,417 | 174,388 |
Deferred commissions, current | 129,116 | 116,758 |
Total current assets | 3,080,857 | 3,870,684 |
Investments, non-current | 41,630 | 41,700 |
Accounts receivable, non-current | 243,559 | 314,286 |
Operating lease right-of-use assets | 145,753 | 186,981 |
Property and equipment, net | 99,466 | 108,540 |
Intangible assets, net | 78,417 | 119,588 |
Goodwill | 1,416,920 | 1,416,920 |
Deferred commissions, non-current | 251,455 | 242,731 |
Other assets | 33,723 | 42,493 |
Total assets | 5,391,780 | 6,343,923 |
Current liabilities: | ||
Accounts payable | 5,227 | 15,299 |
Accrued compensation | 282,607 | 357,550 |
Accrued expenses and other liabilities | 149,373 | 229,480 |
Deferred revenue, current | 1,384,333 | 1,657,685 |
Debt, current | 0 | 775,656 |
Total current liabilities | 1,821,540 | 3,035,670 |
Debt, non-current | 3,104,926 | 3,099,289 |
Operating lease liabilities | 156,835 | 202,268 |
Deferred revenue, non-current | 82,975 | 91,102 |
Other liabilities, non-current | 26,619 | 26,107 |
Total non-current liabilities | 3,371,355 | 3,418,766 |
Total liabilities | 5,192,895 | 6,454,436 |
Commitments and contingencies (Note 3) | ||
Stockholders' equity: | ||
Common stock: $0.001 par value; 1,000,000,000 shares authorized; 168,539,392 shares outstanding at October 31, 2023, and 164,833,781 shares outstanding at January 31, 2023 | 175 | 171 |
Accumulated other comprehensive loss | (1,118) | (6,363) |
Additional paid-in capital | 5,132,002 | 4,671,776 |
Treasury stock, at cost: 6,756,702 shares at October 31, 2023 and 6,806,618 shares at January 31, 2023 | (982,624) | (989,362) |
Accumulated deficit | (3,949,550) | (3,786,735) |
Total stockholders' equity (deficit) | 198,885 | (110,513) |
Total liabilities and stockholders' equity | $ 5,391,780 | $ 6,343,923 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Oct. 31, 2023 | Jan. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares outstanding (in shares) | 168,539,392 | 164,833,781 |
Treasury stock, shares (in shares) | 6,756,702 | 6,806,618 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2023 | Oct. 31, 2022 | ||
Revenues | |||||
Total revenues | $ 1,067,355 | $ 929,769 | $ 2,729,448 | $ 2,402,603 | |
Cost of revenues | |||||
Total cost of revenues | [1] | 209,973 | 201,765 | 629,111 | 610,712 |
Gross profit | 857,382 | 728,004 | 2,100,337 | 1,791,891 | |
Operating expenses | |||||
Research and development | [1] | 232,541 | 241,395 | 708,592 | 754,143 |
Sales and marketing | [1] | 403,584 | 388,094 | 1,231,724 | 1,193,929 |
General and administrative | [1] | 138,490 | 118,307 | 352,331 | 345,396 |
Total operating expenses | [1] | 774,615 | 747,796 | 2,292,647 | 2,293,468 |
Operating income (loss) | 82,767 | (19,792) | (192,310) | (501,577) | |
Interest and other income (expense), net | |||||
Interest income | 26,719 | 6,700 | 79,343 | 12,919 | |
Interest expense | (10,544) | (11,228) | (32,645) | (34,796) | |
Other income (expense), net | 4,434 | (3,945) | 600 | (7,548) | |
Total interest and other income (expense), net | 20,609 | (8,473) | 47,298 | (29,425) | |
Income (loss) before income taxes | 103,376 | (28,265) | (145,012) | (531,002) | |
Income tax provision | 6,523 | 4,355 | 17,803 | 15,652 | |
Net income (loss) | $ 96,853 | $ (32,620) | $ (162,815) | $ (546,654) | |
Net income (loss) per share: | |||||
Basic net income (loss) per share (in dollars per share) | $ 0.58 | $ (0.20) | $ (0.98) | $ (3.38) | |
Diluted net income (loss) per share (in dollars per share) | $ 0.55 | $ (0.20) | $ (0.98) | $ (3.38) | |
Denominator | |||||
Weighted-average shares used in computing basic net income (loss) per share | 167,894 | 163,044 | 166,472 | 161,738 | |
Weighted-average shares used in computing diluted net income (loss) per share | 185,982 | 163,044 | 166,472 | 161,738 | |
Cloud services | |||||
Revenues | |||||
Total revenues | $ 469,445 | $ 374,027 | $ 1,334,043 | $ 1,043,361 | |
Cost of revenues | |||||
Total cost of revenues | [1] | 136,294 | 119,558 | 400,588 | 361,939 |
License | |||||
Revenues | |||||
Total revenues | 429,356 | 383,584 | 896,225 | 851,111 | |
Cost of revenues | |||||
Total cost of revenues | [1] | 2,141 | 1,259 | 5,486 | 4,059 |
Maintenance and services | |||||
Revenues | |||||
Total revenues | 168,554 | 172,158 | 499,180 | 508,131 | |
Cost of revenues | |||||
Total cost of revenues | [1] | $ 71,538 | $ 80,948 | $ 223,037 | $ 244,714 |
[1]Amounts include stock-based compensation expense, as follows: Cost of revenues $ 21,462 $ 21,842 $ 64,468 $ 64,641 Research and development 81,749 80,126 242,965 251,510 Sales and marketing 60,944 55,610 181,685 186,483 General and administrative 29,792 31,026 88,346 99,111 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2023 | Oct. 31, 2022 | |
Stock-based compensation | $ 577,464 | $ 601,745 | ||
Cost of revenues | ||||
Stock-based compensation | $ 21,462 | $ 21,842 | 64,468 | 64,641 |
Research and development | ||||
Stock-based compensation | 81,749 | 80,126 | 242,965 | 251,510 |
Sales and marketing | ||||
Stock-based compensation | 60,944 | 55,610 | 181,685 | 186,483 |
General and administrative | ||||
Stock-based compensation | $ 29,792 | $ 31,026 | $ 88,346 | $ 99,111 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2023 | Oct. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 96,853 | $ (32,620) | $ (162,815) | $ (546,654) |
Other comprehensive income (loss): | ||||
Net unrealized gain (loss) on investments (net of tax) | 598 | (3,486) | 5,245 | (10,027) |
Total other comprehensive income (loss) | 598 | (3,486) | 5,245 | (10,027) |
Comprehensive income (loss) | $ 97,451 | $ (36,106) | $ (157,570) | $ (556,681) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Cash flows from operating activities | ||
Net loss | $ (162,815) | $ (546,654) |
Adjustments to reconcile net loss to net cash provided by operating activities | ||
Depreciation and amortization | 69,010 | 73,446 |
Amortization of deferred commissions | 97,093 | 81,409 |
Amortization of investment premiums (accretion of discounts), net | (4,909) | (2,062) |
Loss on strategic equity investments, net | 3,414 | 97 |
Amortization of debt issuance costs | 6,642 | 7,878 |
Loss on facility exits | 5,731 | 10,000 |
Non-cash operating lease costs | (5,028) | (3,079) |
Stock-based compensation | 577,464 | 601,745 |
Deferred income taxes | (493) | (1,434) |
Loss on disposal of assets | 29 | 0 |
Changes in operating assets and liabilities | ||
Accounts receivable, net | 511,853 | 407,983 |
Prepaid expenses and other assets | 53,921 | 96,708 |
Deferred commissions | (118,175) | (102,366) |
Accounts payable | (10,072) | (40,773) |
Accrued compensation | (74,943) | (148,794) |
Accrued expenses and other liabilities | (80,227) | (46,224) |
Deferred revenue | (281,479) | (214,238) |
Net cash provided by operating activities | 587,016 | 173,642 |
Cash flows from investing activities | ||
Purchases of property and equipment | (9,186) | (9,229) |
Capitalized software development costs | (8,961) | (5,806) |
Purchases of marketable securities | (1,323,475) | (988,904) |
Maturities of marketable securities | 1,888,244 | 352,864 |
Purchases of strategic investments | (3,343) | (6,359) |
Other investment activities | 0 | 1,534 |
Net cash provided by (used in) investing activities | 543,279 | (655,900) |
Cash flows from financing activities | ||
Proceeds from the exercise of stock options | 413 | 1,398 |
Proceeds from employee stock purchase plan | 51,201 | 48,596 |
Repayment of 2023 Notes | (776,661) | 0 |
Taxes paid related to net share settlement of equity awards | (167,873) | (163,498) |
Net cash used in financing activities | (892,920) | (113,504) |
Net increase (decrease) in cash and cash equivalents | 237,375 | (595,762) |
Cash and cash equivalents at beginning of period | 690,587 | 1,428,691 |
Cash and cash equivalents at end of period | 927,962 | 832,929 |
Supplemental disclosures | ||
Cash paid for income taxes | 8,120 | 10,692 |
Cash paid for interest | 24,775 | 24,452 |
Non-cash investing and financing activities | ||
Increase in accrued purchases of property and equipment | $ 4,203 | $ 2,848 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY - USD ($) $ in Thousands | Total | Common stock | Additional paid-in capital | Additional paid-in capital Cumulative Effect, Period of Adoption, Adjustment | Treasury stock | Accumulated other comprehensive loss | Accumulated deficit | Accumulated deficit Cumulative Effect, Period of Adoption, Adjustment |
Balance, beginning of period at Jan. 31, 2022 | $ 167 | $ 5,032,351 | $ (1,026,611) | $ (1,000,000) | $ (1,199) | $ (3,808,548) | $ 299,675 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Vesting of restricted and performance stock units | 2 | 0 | 0 | |||||
Issuance of common stock upon ESPP purchase | 1 | |||||||
Stock-based compensation | 601,743 | |||||||
Capitalized software development costs | 2,958 | |||||||
Issuance of common stock upon exercise of options | 1,398 | |||||||
Vesting of early exercised options | 1 | |||||||
Taxes paid related to net share settlement of equity awards | (163,500) | |||||||
Issuance of common stock upon ESPP purchase | 48,595 | |||||||
Unrealized gain (loss) from investments (net of tax) | (10,027) | |||||||
Net income (loss) | $ (546,654) | (546,654) | ||||||
Balance, end of period at Oct. 31, 2022 | (569,648) | 170 | 4,496,935 | (1,000,000) | (11,226) | (4,055,527) | ||
Balance, beginning of period at Jul. 31, 2022 | 170 | 4,346,503 | 0 | (1,000,000) | (7,740) | (4,022,907) | 0 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Vesting of restricted and performance stock units | 0 | 0 | 0 | |||||
Issuance of common stock upon ESPP purchase | 0 | |||||||
Stock-based compensation | 188,602 | |||||||
Capitalized software development costs | 448 | |||||||
Issuance of common stock upon exercise of options | 266 | |||||||
Vesting of early exercised options | 0 | |||||||
Taxes paid related to net share settlement of equity awards | (38,884) | |||||||
Issuance of common stock upon ESPP purchase | 0 | |||||||
Unrealized gain (loss) from investments (net of tax) | (3,486) | |||||||
Net income (loss) | (32,620) | (32,620) | ||||||
Balance, end of period at Oct. 31, 2022 | (569,648) | 170 | 4,496,935 | (1,000,000) | (11,226) | (4,055,527) | ||
Balance, beginning of period at Jan. 31, 2023 | (110,513) | 171 | 4,671,776 | 0 | (989,362) | (6,363) | (3,786,735) | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Vesting of restricted and performance stock units | 3 | (6,738) | 6,738 | |||||
Issuance of common stock upon ESPP purchase | 1 | |||||||
Stock-based compensation | 577,464 | |||||||
Capitalized software development costs | 5,776 | |||||||
Issuance of common stock upon exercise of options | 400 | |||||||
Vesting of early exercised options | 0 | |||||||
Taxes paid related to net share settlement of equity awards | (167,876) | |||||||
Issuance of common stock upon ESPP purchase | 51,200 | |||||||
Unrealized gain (loss) from investments (net of tax) | 5,245 | |||||||
Net income (loss) | (162,815) | (162,815) | ||||||
Balance, end of period at Oct. 31, 2023 | 198,885 | 175 | 5,132,002 | (982,624) | (1,118) | (3,949,550) | ||
Balance, beginning of period at Jul. 31, 2023 | 174 | 4,993,644 | $ 0 | (984,689) | (1,716) | (4,046,403) | $ 0 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Vesting of restricted and performance stock units | 1 | (2,065) | 2,065 | |||||
Issuance of common stock upon ESPP purchase | 0 | |||||||
Stock-based compensation | 193,947 | |||||||
Capitalized software development costs | 2,441 | |||||||
Issuance of common stock upon exercise of options | 170 | |||||||
Vesting of early exercised options | 0 | |||||||
Taxes paid related to net share settlement of equity awards | (56,135) | |||||||
Issuance of common stock upon ESPP purchase | 0 | |||||||
Unrealized gain (loss) from investments (net of tax) | 598 | |||||||
Net income (loss) | 96,853 | 96,853 | ||||||
Balance, end of period at Oct. 31, 2023 | $ 198,885 | $ 175 | $ 5,132,002 | $ (982,624) | $ (1,118) | $ (3,949,550) |
Description of the Business and
Description of the Business and Significant Accounting Policies | 9 Months Ended |
Oct. 31, 2023 | |
Accounting Policies [Abstract] | |
Description of the Business and Significant Accounting Policies | Description of the Business and Significant Accounting Policies Business Splunk Inc. (“we,” “us,” “our,” “the Company”) helps customers build a safer and more resilient digital world. We deliver innovative solutions that enable organizations to harness the value of their data to help keep their digital systems secure, available, and performant. Our solutions for security and observability empower Security Operations, IT Operations, and Development Operations teams to maintain resilient systems by monitoring and securing them more quickly and efficiently. We also believe our offerings empower operational transformation, helping customers move from reactive, non-scalable and ineffective approaches to proactive, automated, and machine learning-assisted processes that drive better outcomes even as the scale and complexity of their technology continue to grow. Cisco Merger Agreement On September 20, 2023, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, Cisco Systems, Inc., a Delaware corporation (“Cisco” or “Parent”), and Spirit Merger Corp., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub”), pursuant to which Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly owned subsidiary of Parent. The Company’s Board of Directors (the “Board”) has unanimously approved the Merger Agreement and, subject to certain exceptions set forth in the Merger Agreement, resolved to recommend that our stockholders adopt the Merger Agreement. Under the Merger Agreement, at the effective time of the Merger, each issued and outstanding share of our common stock (subject to certain exceptions set forth in the Merger Agreement) will be canceled and converted into the right to receive $157.00 in cash, without interest thereon, subject to applicable withholding taxes. The Merger Agreement generally requires us to operate our business in the ordinary course, subject to certain exceptions including as required by applicable law, pending consummation of the Merger, and subjects the Company to customary interim operating covenants that restrict us from taking certain specified actions without Cisco’s approval (such approval not to be unreasonably withheld, delayed or conditioned) until the Merger is completed or the Merger Agreement is terminated in accordance with its terms. Either the Company or Parent may terminate the Merger Agreement in certain circumstances, including if (1) the Merger is not completed by March 20, 2025, subject to certain limitations, (2) a governmental authority of competent jurisdiction has issued a final non-appealable governmental order prohibiting the Merger, (3) the Company’s stockholders fail to adopt the Merger Agreement, or (4) the other party materially breaches its representations, warranties or covenants in the Merger Agreement, subject in certain cases, to the right of the breaching party to cure the breach. Parent and the Company may also terminate the Merger Agreement by mutual written consent. Upon termination of the Merger Agreement, (A) Parent, under specified circumstances, including termination following an injunction arising in connection with certain antitrust laws, will be required to pay the Company a termination fee of $1,478,000,000; and (B) the Company, under specified circumstances, including termination of the Merger Agreement by the Company to accept and enter into a definitive agreement with respect to a superior proposal or by Parent upon the Board’s change of recommendation, will be required to pay Parent a termination fee of $1,000,000,000. We are subject to customary restrictions on our ability to solicit alternative acquisition proposals from third parties and to provide non-public information to, and participate in discussions and engage in negotiations with, third parties regarding alternative acquisition proposals, subject to customary exceptions. The completion of the Merger is subject to customary closing conditions, including, among others, approval of the Merger under other applicable antitrust and foreign investment regimes and the adoption of the Merger Agreement by the Company’s stockholders. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, applicable to the consummation of the Merger expired at 11:59 p.m., Eastern Time, on November 13, 2023. During the three months ended October 31, 2023, other than merger-related expenses incurred, the terms of the Merger Agreement did not materially affect the results reported in our unaudited interim condensed consolidated financial statements. Merger-related expenses in the three and nine months ended October 31, 2023 were approximately $22 million and are primarily included in “General and administrative expenses” on our condensed consolidated statement of operations. The foregoing summary of the Merger Agreement and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, the Merger Agreement, which was filed as Exhibit 2.1 to our Current Report on Form 8-K filed on September 21, 2023 and is incorporated herein by reference. Fiscal Year Our fiscal year ends on January 31. References to fiscal 2024, for example, refer to the fiscal year ending January 31, 2024. Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Annual Report on Form 10-K for the fiscal year ended January 31, 2023, filed with the SEC on March 23, 2023. In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements reflect all normal recurring adjustments necessary to state fairly the financial position, results of operations, comprehensive loss and cash flows for the interim periods but are not necessarily indicative of the results of operations to be anticipated for the full fiscal 2024. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, the reported amounts of revenues and expenses and the accompanying notes. For example, we make estimates with respect to the stand-alone selling price for each performance obligation included in customer contracts with multiple performance obligations, uncollectible accounts receivable, the assessment of the useful life and recoverability of long-lived assets (property and equipment, goodwill and identified intangibles), the period of benefit for deferred commissions, stock-based compensation expense, the fair value of assets acquired and liabilities assumed in business combinations, income taxes, the discount rate used to measure lease liabilities and related impairments, and contingencies. Our actual results could differ from those estimates. There have been no significant changes to our significant accounting policies and estimates described in our Annual Report on Form 10-K for the year ended January 31, 2023, filed with the SEC on March 23, 2023. Segments We operate our business as one operating segment: the development, marketing, and sale of cloud services and licensed software solutions that enable our customers to gain real-time business insights by harnessing the value of their data. Our chief operating decision maker is our Chief Executive Officer, who reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance and allocating resources. Principles of Consolidation The accompanying unaudited interim condensed consolidated financial statements include the accounts of Splunk Inc. and its direct and indirect wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation. Foreign Currency The functional currency of our foreign subsidiaries is the U.S. Dollar. Foreign currency transaction gains and losses are included in “Other income (expense), net” on our condensed consolidated statements of operations and were not material during the three and nine months ended October 31, 2023 and 2022. Revenue Recognition Our revenue consists of cloud service fees, license and related maintenance fees, and other service fees. Revenue is recognized when control of the promised subscriptions, products and services are transferred to customers, in an amount that reflects the consideration we expect to receive in exchange for those services and products. Cloud services are provided on a subscription basis and give our customers access to our cloud solutions and any related customer support. Licenses for on-premises software (“licenses”) are typically term licenses and provide the customer with a right to use the software. When a term license is purchased, maintenance is bundled with the license for the term of the license period. Other services include training and professional services that are not integral to the functionality of the cloud services or licenses. Our contracts with customers often contain multiple performance obligations, which may include a combination of cloud services, licenses, related maintenance and support services, professional services and training. The identification of performance obligations and the determination of whether they are distinct and should be accounted for separately may require significant judgment. For contracts with multiple performance obligations, the transaction price is allocated to each performance obligation using the relative stand-alone selling price (“SSP”), and revenue is recognized when the performance obligations are satisfied. We determine the SSP based on an observable standalone selling price when it is available as well as other factors, including the price charged to customers, our discounting practices, and our overall pricing objectives. In situations where pricing is highly variable, we estimate the SSP using the residual approach. For sales of our cloud services, we recognize revenue ratably over customers’ contract terms, beginning when access is provided to the customer, consistent with the pattern of transfer of benefits for those services. We recognize license revenue upon transfer of control of the licenses, which occurs at delivery of the license key to customers, or when the license term commences, if later. We recognize maintenance and support revenue ratably over the maintenance and support term, consistent with the pattern of benefit to the customer for those services. Professional services and training are either provided on a time and materials basis or over a contract term, and we recognize the associated revenue as those services are delivered. When our contracts include customer acceptance provisions, we recognize revenue no earlier than upon customer acceptance. Our policy is to record revenues net of any applicable sales, use, goods and services, value added, and excise taxes. Our multi-year cloud services and license contracts are typically invoiced annually. A current receivable for multi-year cloud services is generally recorded upon invoicing. A receivable for multi-year license contracts is recorded upon delivery, whether or not invoiced, to the extent we have an unconditional right to receive payment in the future related to those licenses. The non-current portion of these receivables, primarily consisting of unbilled receivables from multi-year license contracts, is included in “Accounts receivable, non-current” on our interim condensed consolidated balance sheets. Our standard payment terms generally require payment within 45 days. Actual payment terms and conditions vary. In instances where the timing of revenue recognition differs from the timing of payment, we have determined our contracts do not include a significant financing component. The primary purpose of our invoicing terms is to provide customers with simplified and predictable ways of purchasing our products and services, not to receive financing from our customers or to provide customers with financing. Deferred revenue is recorded when cash payments are received or due in advance of satisfying our performance obligations to customers. It is comprised of balances related to cloud services, maintenance, training and professional services, as well as licenses that were delivered prior to the license term commencing. Recently Adopted Accounting Standards We did not adopt any new accounting standards during the nine months ended October 31, 2023. Recently Issued Accounting Pronouncements Standard Description Effective Date Effect on the Condensed Consolidated Financial Statements Accounting Standards Update (“ASU”) No. 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative The amendments in the ASU are expected to clarify or improve disclosure and presentation requirements of a variety of Codification Topics, allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the Codification with the SEC’s regulations, including disclosure of the methods used in the diluted earnings-per-share computation for each dilutive security. The effective date for each amendment will be the date on which the SEC’s removal of the related disclosure requirements from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. We do not expect the adoption of ASU 2023-06 to have a material impact on our consolidated financial statements. |
Investments and Fair Value Meas
Investments and Fair Value Measurements | 9 Months Ended |
Oct. 31, 2023 | |
Investments, Debt and Equity Securities and Fair Value Disclosures [Abstract] | |
Investments and Fair Value Measurements | Investments and Fair Value Measurements The carrying amounts of certain of our financial instruments including cash equivalents, accounts receivable, accounts payable and accrued liabilities are representative of fair value due to their short-term maturities. Assets and liabilities recorded at fair value in the condensed consolidated financial statements are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels that are directly related to the amount of subjectivity associated with the inputs to the valuation of these assets or liabilities are as follows: Level 1—Observable inputs, such as quoted prices in active markets for identical assets or liabilities. Level 2—Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. The following table sets forth the fair value of our financial assets that were measured on a recurring basis: October 31, 2023 January 31, 2023 (In thousands) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Money market funds $ 94,983 $ — $ — $ 94,983 $ 316,943 $ — $ — $ 316,943 U.S. government and agency securities — 230,273 — 230,273 — 1,180,861 — 1,180,861 Corporate bonds — 34,873 — 34,873 — 53,833 — 53,833 Commercial paper — 624,364 — 624,364 — 141,359 — 141,359 Reported as: Assets: Cash and cash equivalents $ 222,747 $ 376,649 Investments, current 761,746 1,316,347 Total $ 984,493 $ 1,692,996 Our investments in money market funds are measured at fair value on a recurring basis. These money market funds are actively traded and reported daily through a variety of sources. The fair value of the money market fund investments is classified as Level 1. The following table presents our investments in available-for-sale debt securities as of October 31, 2023: (In thousands) Amortized Cost Unrealized Gains Unrealized Losses Fair Value Cash and cash equivalents: Corporate bonds $ 14,631 $ — $ (8) $ 14,623 Commercial paper 113,170 — (29) 113,141 Investments, current: U.S. government and agency securities 230,333 9 (69) 230,273 Corporate bonds 20,269 — (19) 20,250 Commercial paper 511,471 — (248) 511,223 Total available-for-sale investments $ 889,874 $ 9 $ (373) $ 889,510 The following table presents our investments in available-for-sale debt securities as of January 31, 2023: (In thousands) Amortized Cost Unrealized Gains Unrealized Losses Fair Value Cash and cash equivalents: U.S. government and agency securities $ 59,732 $ — $ (26) $ 59,706 Investments, current: U.S. government and agency securities 1,125,700 1 (4,546) 1,121,155 Corporate bonds 54,173 2 (342) 53,833 Commercial paper 142,061 — (702) 141,359 Total available-for-sale investments $ 1,381,666 $ 3 $ (5,616) $ 1,376,053 The following table presents the fair values and unrealized losses related to our investments in available-for-sale debt securities classified by length of time that the securities have been in a continuous unrealized loss position as of October 31, 2023: Less than 12 Months 12 Months or Greater Total (In thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses U.S. government and agency securities $ 177,660 $ (69) $ — $ — $ 177,660 $ (69) Corporate bonds 34,873 (27) — — 34,873 (27) Commercial paper 624,364 (277) — — 624,364 (277) Total $ 836,897 $ (373) $ — $ — $ 836,897 $ (373) The following table presents the fair values and unrealized losses related to our investments in available-for-sale debt securities classified by length of time that the securities have been in a continuous unrealized loss position as of January 31, 2023: Less than 12 Months 12 Months or Greater Total (In thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses U.S. government and agency securities $ 1,162,226 $ (4,530) $ 7,959 $ (42) $ 1,170,185 $ (4,572) Corporate bonds 50,258 (328) 1,887 (14) 52,145 (342) Commercial paper 141,359 (702) — — 141,359 (702) Total $ 1,353,843 $ (5,560) $ 9,846 $ (56) $ 1,363,689 $ (5,616) Investments with maturities of less than 12 months from the balance sheet date are classified as current assets, which are available for use to fund current operations. Investments with maturities greater than 12 months from the balance sheet date are classified as non-current assets. The contractual maturities of our investments in financial assets as of October 31, 2023 were all less than 12 months. Convertible Senior Notes Refer to Note 7 “Convertible Senior Notes” for details regarding the fair value of our convertible senior notes. Equity Investments Our equity investments are included in “Investments, non-current” on our condensed consolidated balance sheets. The following table provides a summary of our equity investments: (In thousands) October 31, 2023 January 31, 2023 Equity investments without readily determinable fair values $ 37,581 $ 37,994 Equity investments under the equity method of accounting 4,049 3,706 Total $ 41,630 $ 41,700 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Oct. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings A putative class action lawsuit alleging violations of federal securities laws was filed on December 4, 2020 in the U.S. District Court for the Northern District of California (the “Court”) against us, our former Chief Executive Officer and our former Chief Financial Officer. The operative complaint, filed by lead plaintiff Louisiana Sheriffs’ Pension & Relief Fund, alleges that defendants made materially false and misleading statements regarding our marketing efforts, hiring practices, and retention of personnel. The lead plaintiff seeks unspecified monetary damages and other relief. On January 30, 2023, the parties entered into a stipulation of settlement, subject to Court approval. The settlement resolves all claims asserted against us and the other named defendants without any admission, concession, or finding of any fault, liability, or wrongdoing by defendants. Under the terms of the settlement, we have caused $30 million to be paid into a settlement escrow account, of which $4.6 million has been paid by us in satisfaction of the retention limit of our primary Director & Officer (“D&O”) insurance policy and $25.4 million will be paid by our insurers, in return for a release of claims and dismissal of the case. On February 7, 2023, lead plaintiff filed an unopposed motion for preliminary approval of the settlement, which attaches the stipulation of settlement. On September 26, 2023, the Court granted preliminary approval of the settlement and scheduled a final approval hearing for February 22, 2024. During the three months ended October 31, 2023, our insurers funded the settlement escrow account and as a result we derecognized the related liability and receivable. Ten derivative lawsuits related to the securities class action were filed in February, March and April 2021, October and December 2022, and January, February and March 2023 in the U.S. District Court for the Northern District of California, the California Superior Court, San Francisco County, and the Court of Chancery of the State of Delaware. Due to the consolidation of several of these lawsuits and the voluntary dismissal of one of the lawsuits, there are now six pending derivative actions. The derivative actions name our former Chief Executive Officer, our former Chief Financial Officer, several other current and former officers, and many of our current and former board members as defendants, and the Company as a nominal defendant. The derivative actions allege claims for breach of fiduciary duties, unjust enrichment, waste of corporate assets, abuse of control, and gross mismanagement against the defendants, and claims for contribution under Sections 10(b) and 21D of the Exchange Act against only our former Chief Executive Officer and former Chief Financial Officer. The plaintiffs seek unspecified monetary damages and other relief on behalf of the Company. We have filed a motion to dismiss the Delaware Chancery Court consolidated action, which is scheduled for hearing on April 11, 2024. The parties have stipulated to stay proceedings in the other five derivative actions. On August 9, 2021, we received a demand letter alleging claims similar to those in the derivative lawsuits. On May 23, 2022, the Board formed a committee to evaluate the stockholder’s demand and make recommendations to the full Board. On September 13, 2022, we received a second demand letter alleging claims similar to those in the derivative lawsuits, which was also referred to the committee. Following the announcement of the Merger, one complaint was filed in the United States District Court for the Northern District of California and two complaints were filed in the United States District Court for the District of Delaware by purported stockholders against the Company and its directors. The complaints assert violations of Section 14(a) and Section 20(a) of the Exchange Act and allege that the proxy statement filed in connection with the proposed transaction between Splunk and Cisco omitted certain purportedly material information regarding, among other things, the background of the Merger, the Company’s financial projections and Qatalyst Partners’ and Morgan Stanley’s financial analyses. The complaints seek, among other things, (i) injunctive relief preventing the consummation of the transaction contemplated by the Merger Agreement; (ii) rescission or rescissory damages in the event the transaction contemplated by the Merger Agreement is implemented; (iii) dissemination of a Solicitation/Recommendation Statement that does not omit material information or contain any misleading disclosures; (iv) an award of damages that plaintiff suffered as a result of the defendant’s purported wrongdoings; and (v) an award of plaintiff’s expenses, including attorneys’ and experts’ fees. In addition, on November 3, 2023, a purported stockholder of Splunk filed a lawsuit in the Superior Court of the State of California in and for the County of Sonoma. The complaint asserts violations of Section 25401 of the California Corporations Code and California common law because the proxy statement purportedly omits material information or contains misleading disclosures regarding, among other things, the background of the Merger, the Company’s financial projections and Qatalyst Partners’ and Morgan Stanley’s financial analyses. The complaint seeks, among other things, (i) injunctive relief preventing the consummation of the Merger, (ii) a declaration that Splunk, its directors and Cisco have violated California Corporations Code Section 25401, (iii) dissemination of corrective and complete disclosures and (iv) attorney’s fees. The plaintiff dismissed this lawsuit with prejudice on November 22, 2023. We are also subject to certain routine legal and regulatory proceedings, as well as demands and claims that arise in the normal course of our business. We make a provision for a liability relating to legal matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impact of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. In our opinion, resolution of any pending claims (either individually or in the aggregate) is not expected to have a material adverse impact on our condensed consolidated results of operations, cash flows or financial position, nor is it possible to provide an estimated amount of any such loss. However, depending on the nature and timing of any such dispute, an unfavorable resolution of a matter could materially affect our future financial position, results of operations or cash flows, or all, in a particular period. Indemnification Arrangements During the ordinary course of business, we may indemnify, hold harmless and agree to reimburse for losses suffered or incurred by our customers, vendors, and each of their affiliates for certain intellectual property infringement and other claims by third parties with respect to our offerings, in connection with our commercial license arrangements or related to general business dealings with those parties. As permitted under Delaware law, we have entered into indemnification agreements with our officers, directors and certain employees, indemnifying them for certain events or occurrences in connection with their service as our officers or directors or those of our direct and indirect subsidiaries. Pursuant to the indemnification agreements, our bylaws, and Delaware law, we are indemnifying our former executive officers in connection with the stipulation of settlement entered into on January 30, 2023. No other claims or reimbursements under indemnification arrangements were material to our interim condensed consolidated financial statements. |
Leases
Leases | 9 Months Ended |
Oct. 31, 2023 | |
Leases [Abstract] | |
Leases | LeasesDuring the three months ended October 31, 2023, and pursuant to our continuing evaluation of office space needs, we entered into an agreement to terminate a lease in London, United Kingdom. As our remaining commitment of $34 million under the lease was assumed by a new tenant, we were relieved of any termination penalties under the lease. As a result of the termination, we recognized an expense of $12 million that primarily consists of the net impact of an inducement fee paid to the new tenant related to their assumption of our remaining commitment under the lease, broker fees, acceleration of depreciation on leasehold improvements, and derecognition of the related ROU asset and lease liability. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Oct. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation and amortization. These assets are depreciated and amortized using the straight-line method over their estimated useful lives. Property and equipment consisted of the following: (In thousands) October 31, 2023 January 31, 2023 Computer equipment and software $ 71,844 $ 82,248 Furniture and fixtures 18,922 27,076 Leasehold and building improvements (1) 100,666 144,130 Capitalized software development costs (2) 65,327 50,590 Property and equipment, gross 256,759 304,044 Less: accumulated depreciation and amortization (157,293) (195,504) Property and equipment, net $ 99,466 $ 108,540 _________________________ (1) Includes costs related to assets not yet placed into service of $0.7 million and $2.8 million, as of October 31, 2023 and January 31, 2023, respectively. (2) Includes costs related to projects still under development of $17.5 million and $5.1 million, as of October 31, 2023 and January 31, 2023, respectively. Depreciation and amortization expense related to property and equipment, net was $8.8 million and $11.6 million for the three months ended October 31, 2023 and 2022, respectively, and $27.8 million and $31.4 million for the nine months ended October 31, 2023 and 2022, respectively. Geographic Information The following table presents our long-lived assets, which consist of property and equipment, net of depreciation and amortization, and operating lease right-of-use assets by geographic region: (In thousands) October 31, 2023 January 31, 2023 United States $ 234,622 $ 251,150 United Kingdom 663 36,667 Other International 9,934 7,704 Total long-lived assets $ 245,219 $ 295,521 |
Acquisition, Goodwill and Intan
Acquisition, Goodwill and Intangible Assets | 9 Months Ended |
Oct. 31, 2023 | |
Business Combinations [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill There was no impairment of goodwill during the nine months ended October 31, 2023 or 2022. Intangible Assets Intangible assets subject to amortization as of October 31, 2023 were as follows: (In thousands, except useful life) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted-Average Remaining Useful Life Developed technology $ 190,350 $ (124,342) $ 66,008 30 Customer relationships 67,300 (54,891) 12,409 11 Total intangible assets subject to amortization $ 257,650 $ (179,233) $ 78,417 Intangible assets subject to amortization as of January 31, 2023 were as follows: (In thousands, except useful life) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted-Average Remaining Useful Life Developed technology $ 204,969 $ (110,757) $ 94,212 36 Customer relationships 90,900 (65,524) 25,376 18 Total intangible assets subject to amortization $ 295,869 $ (176,281) $ 119,588 Amortization expense from acquired intangible assets was $13.3 million and $13.9 million for the three months ended October 31, 2023 and 2022, respectively, and $41.2 million and $42.0 million for the nine months ended October 31, 2023 and 2022, respectively. The expected future amortization expense for acquired intangible assets as of October 31, 2023 is as follows: Fiscal Period (In thousands) Expected Amortization Expense Remaining fiscal 2024 $ 11,455 Fiscal 2025 36,743 Fiscal 2026 19,858 Fiscal 2027 10,361 Total amortization expense $ 78,417 |
Convertible Senior Notes
Convertible Senior Notes | 9 Months Ended |
Oct. 31, 2023 | |
Debt Disclosure [Abstract] | |
Convertible Senior Notes | Convertible Senior Notes The net carrying amounts of each series of Notes as of October 31, 2023 were as follows: (In thousands) 2023 Notes (1) 2025 Notes 2026 Notes 2027 Notes Principal amount $ — $ 862,500 $ 1,000,000 $ 1,265,000 Unamortized issuance costs — (2,485) (9,850) (10,239) Net carrying amount $ — $ 860,015 $ 990,150 $ 1,254,761 _________________________ (1) The Company paid the principal amount of the 2023 Notes in September 2023 in cash. The 2025 Notes, 2026 Notes, and 2027 Notes do not mature within the next twelve months and are classified as "Debt, non-current” on our condensed consolidated balance sheets as of October 31, 2023. The following table sets forth the interest expense related to each series of notes: Three Months Ended October 31, Nine Months Ended October 31, (In thousands) 2023 2022 2023 2022 2023 Notes: Coupon interest expense $ 485 $ 971 $ 2,427 $ 2,913 Amortization of debt issuance costs 205 422 1,005 1,388 Total interest expense related to the 2023 Notes $ 690 $ 1,393 $ 3,432 $ 4,301 2025 Notes: Coupon interest expense $ 2,426 $ 2,426 $ 7,278 $ 7,278 Amortization of debt issuance costs 350 345 952 1,211 Total interest expense related to the 2025 Notes $ 2,776 $ 2,771 $ 8,230 $ 8,489 2026 Notes: Coupon interest expense $ 1,875 $ 1,875 $ 5,625 $ 5,625 Amortization of debt issuance costs 920 911 2,660 2,855 Total interest expense related to the 2026 Notes $ 2,795 $ 2,786 $ 8,285 $ 8,480 2027 Notes: Coupon interest expense $ 3,558 $ 3,558 $ 10,674 $ 10,674 Amortization of debt issuance costs 726 716 2,025 2,424 Total interest expense related to the 2027 Notes $ 4,284 $ 4,274 $ 12,699 $ 13,098 As of October 31, 2023, the total estimated fair values of the 2025 Notes, 2026 Notes, and the 2027 Notes were approximately $0.93 billion, $0.82 billion, and $1.20 billion, respectively. We consider the fair value of the 2025 Notes and the 2027 Notes to be a Level 2 measurement. The fair value for each series of the notes was determined based on the closing trading price per $100 of the applicable series of notes as of the last day of trading for the period. We consider the fair value of the 2026 Notes to be a Level 3 measurement. The estimated fair value of the 2026 Notes represents the present value of future principal and interest payments. 2023 and 2025 Notes In September 2018, we issued $1.27 billion aggregate principal amount of 0.50% Convertible Senior Notes due 2023 (the “2023 Notes”), and $862.5 million aggregate principal amount of 1.125% Convertible Senior Notes due 2025 (the “2025 Notes”). The 2023 Notes were general senior, unsecured obligations of Splunk. The 2025 Notes are general senior, unsecured obligations of Splunk. The total proceeds from the issuance of the 2023 Notes and the 2025 Notes was $2.11 billion, net of initial purchaser discounts and other issuance costs. The 2023 Notes matured on September 15, 2023, and the 2025 Notes will mature on September 15, 2025, in each case unless earlier redeemed, repurchased or converted. The 2023 Notes bore interest from September 21, 2018 at a rate of 0.50% per year and the 2025 Notes bear interest from September 21, 2018 at a rate of 1.125% per year, in each case payable semiannually in arrears on March 15 and September 15 of each year. We paid the principal amount of the 2023 Notes with cash upon maturity in September 2023. The initial conversion rate for the 2023 Notes was, and for the 2025 Notes is, 6.7433 shares of our common stock per $1,000 principal amount of each of the 2023 Notes and 2025 Notes, which is equivalent to an initial conversion price of approximately $148.30 per share of our common stock, subject to adjustment upon the occurrence of certain specified events, including fundamental changes (as defined in the relevant indenture, which may include the Merger, as defined herein). 2026 Notes On July 9, 2021, we issued $1.0 billion aggregate principal amount of 0.75% Convertible Senior Notes due 2026 (the “2026 Notes”). The 2026 Notes are general senior, unsecured obligations of Splunk. The total proceeds from the issuance of the 2026 Notes was $981.7 million, net of issuance costs. The 2026 Notes will mature on July 15, 2026, unless earlier redeemed, repurchased or converted. The 2026 Notes bear interest at a rate of 0.75% per year, payable semiannually in arrears on January 15 and July 15 of each year. The initial conversion rate for the 2026 Notes is 6.25 shares of our common stock per $1,000 principal amount of the 2026 Notes, which is equivalent to an initial conversion price of approximately $160.00 per share of our common stock, subject to adjustment upon the occurrence of certain specified events, including fundamental changes (as defined in the relevant indenture, which may include the Merger). 2027 Notes On June 5, 2020, we issued $1.27 billion aggregate principal amount of 1.125% Convertible Senior Notes due 2027 (the “2027 Notes”). The 2027 Notes are general senior, unsecured obligations of Splunk. The total proceeds from the issuance of the 2027 Notes was $1.25 billion, net of initial purchaser discounts and other issuance costs. The 2027 Notes will mature on June 15, 2027, unless earlier redeemed, repurchased or converted. The 2027 Notes bear interest from June 5, 2020 at a rate of 1.125% per year, payable semiannually in arrears on June 15 and December 15 of each year. The initial conversion rate for the 2027 Notes is 3.9164 shares of our common stock per $1,000 principal amount of the 2027 Notes, which is equivalent to an initial conversion price of approximately $255.34 per share of our common stock, subject to adjustment upon the occurrence of certain specified events, including fundamental changes (as defined in the relevant indenture, which may include the Merger). Other Terms The 2023 Notes were convertible, and the 2025 Notes, and 2027 Notes will be convertible at the option of the holders at any time prior to the close of business on the business day immediately preceding June 15, 2023, June 15, 2025, and December 15, 2026, respectively, only under the following circumstances: • during any fiscal quarter commencing after the fiscal quarter ending on January 31, 2019 (and only during such fiscal quarter) for the 2023 Notes and the 2025 Notes, and October 31, 2020 (and only during such fiscal quarter) for the 2027 Notes, if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price for the relevant series of notes on each applicable trading day; • during the five business day period after any 10 consecutive trading day period (the “measurement period”) in which the trading price (as defined in the indenture governing the relevant series of notes) per $1,000 principal amount of the relevant series of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate for the relevant series of notes on each such trading day; • if we call the relevant series of notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or • upon the occurrence of specified corporate events as set forth in the relevant indenture, including fundamental changes (as defined in the relevant indenture, which may include the Merger). Upon delivery of a notice of a fundamental change, such as the Merger, holders of the 2025 Notes or 2027 Notes may surrender all or any portion of their notes for conversion at any time after the effective date of the Merger or such other transaction until the close of business on the business day preceding the related fundamental change repurchase date of such series of notes. In addition, if specific corporate events, including the Merger, occur prior to the applicable maturity date of the 2025 Notes or the 2027 Notes, we may be required to increase the conversion rate for holders who elect to convert their notes in connection with such corporate events. On or after June 15, 2023, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders of the 2023 Notes were able to convert all or any portion of their 2023 Notes, in multiples of $1000 principal amount, regardless of the foregoing circumstances. On or after June 15, 2025 and December 15, 2026, for the 2025 Notes and 2027 Notes, respectively, until the close of business on the second scheduled trading day immediately preceding the relevant maturity date, holders of the relevant series of notes may convert all or any portion of their notes of such series, in multiples of $1,000 principal amount, regardless of the foregoing circumstances. Upon conversion, we may satisfy our conversion obligation by paying and/or delivering cash, shares of our common stock or a combination of cash and shares of our common stock, at our election, in the manner and subject to the terms and conditions provided in the relevant indenture; provided, in the case of the 2026 Notes, the holder is to determine the settlement method related to any notes converted in connection with the exercise of our redemption option as mentioned below. We may redeem for cash all or any portion of the 2027 Notes, at our option, on or after June 20, 2024, and may currently redeem for cash all or any portion of the 2025 Notes, if the last reported sale price of our common stock has been at least 130% of the conversion price for the relevant series of notes then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption at a redemption price equal to 100% of the principal amount of the relevant series of notes to be redeemed, plus accrued and unpaid interest to, but excluding, the relevant redemption date. Whether to exercise our redemption options under each respective indenture is solely within our control. The 2026 Notes are convertible into shares of our common stock at the option of the holder at any time prior to the close of business on the business day immediately preceding the maturity date. In addition, if specific corporate events, including the Merger, occur prior to the applicable maturity date of the 2026 Notes, we may be required to increase the conversion rate for holders who elect to convert their notes in connection with such corporate events. We may redeem for cash all or any portion of the 2026 Notes, at our option, on or after July 20, 2024 if the last reported sale price of our common stock has been 140% of the conversion price for the 2026 Notes then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption at a redemption price equal to 100% of the principal amount of the 2026 Notes, plus accrued and unpaid interest to, but excluding, the redemption date. Whether to exercise our redemption option is solely within our control. If a fundamental change, including the Merger, occurs prior to the applicable maturity date, holders of the 2025 Notes, 2026 Notes, or 2027 Notes, as applicable, will also have the right to require us to repurchase all or a portion of their Notes for cash at a repurchase price equal to 100% of the principal amount of such Notes, plus any accrued and unpaid interest to, but excluding, the repurchase date of such series of notes. During the three months ended October 31, 2023, the conditions allowing holders of the 2025 Notes, 2026 Notes, and 2027 Notes to redeem were not met. Capped Calls In connection with the issuance of the 2023 Notes, the 2025 Notes, and the 2027 Notes, we entered into privately negotiated capped call transactions relating to each series of Notes (the “Capped Calls”). The Capped Calls are expected to reduce potential dilution to our common stock upon conversion of the applicable series of notes and/or offset any cash payments we may make in excess of the principal amount of converted notes of such series, as the case may be, with such reduction and/or offset subject to a cap. The Capped Calls are subject to adjustment upon the occurrence of certain specified extraordinary events affecting us, including the Merger and tender offers. In addition, the Capped Calls are subject to certain specified additional disruption events that may give rise to a termination of the Capped Calls, including nationalization, insolvency or delisting, changes in law, failures to deliver, insolvency filings and hedging disruptions. As of September 15, 2023, the Capped Calls related to the 2023 Notes are no longer outstanding. The following table sets forth other key terms and premiums paid for the Capped Calls related to the 2023 Notes, the 2025 Notes and the 2027 Notes: Capped Calls Entered into in Connection with the Issuance of the 2023 and 2025 Notes Capped Calls Entered into in Connection with the Issuance of the 2027 Notes Initial strike price, subject to certain adjustments $ 148.30 $ 255.34 Cap price, subject to certain adjustments $ 232.62 $ 378.28 Total premium paid (in thousands) $ 274,275 $ 137,379 For accounting purposes, the Capped Calls are separate transactions, and not part of the terms of any series of notes. As the Capped Calls qualify for a scope exception from derivative accounting for instruments that are both indexed to our own stock and classified in stockholders’ equity on our consolidated balance sheet, the premium paid for the purchase of the Capped Calls has been recorded as a reduction to “Additional paid-in capital” and will not be remeasured. |
Stock Compensation Plans and St
Stock Compensation Plans and Stockholders' Equity | 9 Months Ended |
Oct. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock Compensation Plans and Stockholders' Equity | Stock Compensation Plans and Stockholders’ Equity Equity Incentive Plans In 2012, our Board and stockholders approved the 2012 Equity Incentive Plan (as amended, the “2012 Plan”), which became effective in April 2012 and expired in March 2022 pursuant to its terms. The 2012 Plan provided for the grant of incentive stock options and for the grant of nonstatutory stock options (“options”), restricted stock awards (“RSAs”), restricted stock units (“RSUs”), stock appreciation rights, performance units (“PSUs”) and performance shares. We ceased making grants under the 2012 Plan when it expired in March 2022. In January 2022, our Board approved the 2022 Inducement Plan (the “Inducement Plan”) in accordance with Listing Rule 5635(c)(4) of the corporate governance rules of the Nasdaq Stock Market. The Inducement Plan was effective in April 2022 and was used for grants to new employees only. In April 2022, we granted stand-alone inducement equity awards to our Chief Executive Officer in accordance with Listing Rule 5635(c)(4) of the corporate governance rules of the Nasdaq Stock Market. In the second quarter of fiscal 2023, our board of directors and stockholders approved the 2022 Equity Incentive Plan (the “2022 Plan”) and we ceased making grants under the Inducement Plan. During the nine months ended October 31, 2023 and 2022, upon each settlement date of our outstanding RSUs and PSUs, we withheld shares to cover the required withholding tax based on the value of a share on the settlement date as determined by the closing price of our common stock on the applicable settlement date. If the settlement date did not fall on a trading day, the value of a share was based on the closing price of our common stock on the next trading day following the settlement date. The amount remitted to the tax authorities for the employees’ tax obligations is reflected as a financing activity on our condensed consolidated statements of cash flows. Shares withheld by us as a result of the net settlement of RSUs and PSUs issued under the 2022 Plan and the 2022 Inducement Plan will not become available for future grant or sale. PSUs The following table summarizes our PSU activity during the nine months ended October 31, 2023: Shares Weighted-Average Grant-Date Fair Value Per Share Outstanding as of January 31, 2023 386 $ 193.96 PSUs granted 438 $ 124.22 PSUs vested (152) $ 146.41 Outstanding as of October 31, 2023 672 $ 159.24 Compensation expense for PSUs with financial performance or market vesting conditions is measured using the fair value at the date of grant and recorded over the vesting period of three four Certain PSUs granted in fiscal 2024 are subject to a single market performance condition which allows employees to earn 0% to 200% of their target award over two- and three-year performance periods, with a cap of one-third of the target award eligible to be earned for the two-year performance period. The PSUs granted in fiscal 2023 and certain PSUs granted in fiscal 2024 are subject to a single market performance condition which allows employees to earn 0% to 200% of their target award over one-, two- and three-year performance periods, with a cap of one-third of the target award eligible to be earned for each of the one- and two-year performance periods. As of October 31, 2023, awards related to the one-year performance period for the PSUs granted in fiscal 2023 have been earned. RSUs The following table summarizes our RSU activity during the nine months ended October 31, 2023: Shares Weighted-Average Grant-Date Fair Value Per Share Outstanding as of January 31, 2023 11,627 $ 128.11 RSUs granted 4,202 $ 96.90 RSUs vested (4,416) $ 133.13 RSUs forfeited and canceled (1,408) $ 126.51 Outstanding as of October 31, 2023 10,005 $ 113.01 RSAs The following table summarizes our RSA activity during the nine months ended October 31, 2023: Shares Weighted-Average Grant-Date Fair Value Per Share Outstanding as of January 31, 2023 289 $ 86.15 RSAs vested (41) $ 140.71 Outstanding as of October 31, 2023 248 $ 77.22 Stock Options The following table summarizes our stock option activity during the nine months ended October 31, 2023: Shares Weighted-Average Exercise Price Per Share Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (1) (in thousands) Outstanding as of January 31, 2023 108 $ 10.27 5.3 $ 9,276 Options exercised (37) $ 11.05 Options forfeited and expired (1) $ 20.01 Outstanding as of October 31, 2023 70 $ 9.71 4.4 $ 9,641 Vested and expected to vest 70 $ 9.70 4.5 $ 9,615 Exercisable as of October 31, 2023 65 $ 9.51 4.5 $ 8,908 _________________________ (1) The intrinsic value is calculated as the difference between the exercise price of the underlying stock option award and the closing market price of our common stock as of October 31, 2023. The following table presents unrecognized compensation cost and the related weighted-average recognition period for RSUs, PSUs, RSAs, and stock options as of October 31, 2023: Unrecognized Compensation Cost Weighted-Average Recognition Period RSUs $ 914,011 1.9 PSUs 52,421 1.5 RSAs 12,228 1.9 Stock options 508 1.1 Total unrecognized compensation cost $ 979,168 |
Revenues, Accounts Receivable,
Revenues, Accounts Receivable, Deferred Revenue and Remaining Performance Obligations | 9 Months Ended |
Oct. 31, 2023 | |
Segment Reporting [Abstract] | |
Revenues, Accounts Receivable, Deferred Revenue and Remaining Performance Obligations | Revenues, Accounts Receivable, Deferred Revenue and Remaining Performance Obligations Disaggregation of Revenues The following table presents disaggregated revenues by major product or service type: Three Months Ended October 31, Nine Months Ended October 31, (In thousands) 2023 2022 2023 2022 Revenues Cloud services $ 469,445 $ 374,027 $ 1,334,043 $ 1,043,361 License 429,356 383,584 896,225 851,111 Maintenance and services 168,554 172,158 499,180 508,131 Total revenues $ 1,067,355 $ 929,769 $ 2,729,448 $ 2,402,603 Revenues by geography are based on the shipping address of the customer. The following table presents our revenues by geographic region: Three Months Ended October 31, Nine Months Ended October 31, (In thousands) 2023 2022 2023 2022 United States $ 735,443 $ 684,647 $ 1,813,948 $ 1,685,392 International 331,912 245,122 915,500 717,211 Total revenues $ 1,067,355 $ 929,769 $ 2,729,448 $ 2,402,603 The following table presents revenues as a percentage of consolidated total revenues from customers representing 10% or more of total revenues: Three Months Ended October 31, Nine Months Ended October 31, 2023 2022 2023 2022 Channel Partner A 21 % 23 % 24 % 25 % Channel Partner B 17 % 20 % 16 % 17 % The revenues from these customers are comprised of a number of end user transactions. Accounts Receivable The following table presents total current and non-current accounts receivable by channel partners representing 10% or more of total current and non-current accounts receivable, net: October 31, 2023 January 31, 2023 Channel Partner A 23 % 26 % Channel Partner B 11 % 6 % Deferred Revenue Revenues recognized from amounts included in deferred revenue as of January 31, 2023 and 2022 were $1.4 billion and $1.1 billion during the nine months ended October 31, 2023 and 2022, respectively. Remaining Performance Obligations Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue and non-cancelable amounts that will be invoiced in future periods. Our remaining performance obligations were $3.1 billion as of October 31, 2023, of which we expect to recognize approximately 65% as revenue over the next 12 months, and we expect to recognize substantially all of the remainder over the next 13 to 36 months. |
Income Taxes
Income Taxes | 9 Months Ended |
Oct. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We are subject to income taxes in the U.S. and in foreign jurisdictions. We base our interim tax provision on an estimated annual effective tax rate applied to year-to-date results, and we record discrete tax items in the period to which they relate. Each quarter, we update our estimated annual effective tax rate and record a year-to-date adjustment to our tax provision as necessary. For the three and nine months ended October 31, 2023, we determined that the annual effective tax rate method would not provide a reliable estimate for our U.S. jurisdiction because the rate is highly sensitive to minor changes in forecasted ordinary income or loss. As a result, we applied the actual effective tax rate to the results for our U.S. jurisdiction for the three and nine months ended October 31, 2023. For the three months ended October 31, 2023 and 2022, we recorded income tax expense of $6.5 million and $4.4 million, respectively. For the nine months ended October 31, 2023 and 2022, we recorded income tax expense of $17.8 million and $15.7 million, respectively. Our effective tax rate for the three and nine months ended October 31, 2023 differs from the U.S. statutory rate primarily due to the valuation allowance recorded on our U.S. losses. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 9 Months Ended |
Oct. 31, 2023 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | Net Income (Loss) Per Share Basic net income (loss) per share is computed by dividing the net income (loss) by the weighted-average number of shares of common stock outstanding during the period, less the weighted-average unvested common stock subject to repurchase or forfeiture. Diluted net income (loss) per share is computed by dividing net income (loss), adjusted for the interest expense related to dilutive convertible senior notes, by the weighted-average number of shares of common stock outstanding during the period, adjusted for the effects of potentially dilutive securities, which are comprised of shares underlying the conversion options of our convertible senior notes and employee stock awards, including outstanding stock options, PSUs, RSUs, and ESPP obligations. The dilutive effect of outstanding employee stock awards and our convertible senior notes is reflected in diluted earnings per share by application of the treasury stock method and if-converted method, respectively. The following table sets forth the computation of historical basic and diluted net income (loss) per share: Three Months Ended October 31, Nine Months Ended October 31, (In thousands, except per share amounts) 2023 2022 2023 2022 Net income (loss) per share, basic: Numerator Net income (loss) $ 96,853 $ (32,620) $ (162,815) $ (546,654) Denominator Weighted-average shares used to compute net income (loss) per share, basic 167,894 163,044 166,472 161,738 Net income (loss) per share, basic $ 0.58 $ (0.20) $ (0.98) $ (3.38) Net income (loss) per share, diluted: Numerator Net income (loss) $ 96,853 $ (32,620) $ (162,815) $ (546,654) Interest expense of convertible senior notes - 2023 Notes, 2025 Notes, and 2027 Notes 6,261 — — — Diluted net income $ 103,114 $ (32,620) $ (162,815) $ (546,654) Denominator Weighted-average shares used to compute net income (loss) per share, basic 167,894 163,044 166,472 161,738 Weighted-average effect of potentially dilutive securities: Convertible senior notes - 2023 Notes, 2025 Notes, and 2026 Notes 14,684 — — — Employee stock awards 3,404 — — — Weighted-average shares used to compute net income (loss) per share, diluted 185,982 163,044 166,472 161,738 Net income (loss) per share, diluted $ 0.55 $ (0.20) $ (0.98) $ (3.38) As we were in a net loss position for the three months ended October 31, 2022, and the nine months ended October 31, 2023 and 2022, basic net loss per share is the same as diluted net loss per share for all such periods as the inclusion of all potentially dilutive securities outstanding would have been anti-dilutive. Potentially dilutive securities that were not included in the diluted per share calculations in periods in which they would be anti-dilutive were as follows: Three Months Ended October 31, Nine Months Ended October 31, (In thousands) 2023 2022 2023 2022 Convertible senior notes 4,954 22,258 17,020 22,258 Employee stock awards 1,148 14,214 13,495 14,214 Total 6,102 36,472 30,515 36,472 |
Restructuring
Restructuring | 9 Months Ended |
Oct. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring During the fiscal quarter ended April 30, 2023, we announced a restructuring plan (the “February 2023 Plan”). The February 2023 Plan resulted in a reduction of our global workforce that has been carried out in phases. The Company has incurred $27.6 million in charges in connection with the February 2023 Plan during the nine months ended October 31, 2023 related to estimated severance payments, retention payments, employee benefits and transition costs, and non-cash charges for share-based compensation. (In thousands) Workforce reduction Charges $ 27,642 Payments (24,534) Non-cash items (2,510) Liability as of October 31, 2023 $ 598 The liability as of October 31, 2023 for restructuring charges is included in “Accrued expenses and other liabilities” on our condensed consolidated balance sheets. Restructuring charges related to the February 2023 Plan for the nine months ended October 31, 2023 are included in the condensed consolidated statements of operations, as follows: (In thousands) Cost of revenues $ 1,238 Research and development 14,774 Sales and marketing 3,164 General and administrative 8,466 Total $ 27,642 In October 2023, we initiated a second restructuring plan (the “October 2023 Plan”). The October 2023 Plan will result in a reduction of our global workforce. We expect substantially all of the actions associated with the October 2023 Plan to be completed, and substantially all of the associated charges and cash expenditures to be incurred by April 30, 2024, subject to local law and consultation requirements. As a result of the initiation of certain actions in October, we incurred total charges of $5.9 million in the three months ended October 31, 2023. We expect to incur total charges of approximately $42 million for the fiscal year ending January 31, 2024 related to estimated severance payments, employee benefits and transition costs, and non-cash charges for share-based compensation. (In thousands) Workforce reduction Charges $ 5,925 Payments (248) Non-cash items (1,227) Liability as of October 31, 2023 $ 4,450 The liability as of October 31, 2023 for restructuring charges is included in “Accrued expenses and other liabilities” on our condensed consolidated balance sheets. Restructuring charges related to the October 2023 Plan for the nine months ended October 31, 2023 are included in the condensed consolidated statements of operations, as follows: (In thousands) Cost of revenues $ 120 Research and development 3,691 Sales and marketing 378 General and administrative 1,736 Total $ 5,925 |
Subsequent Event
Subsequent Event | 9 Months Ended |
Oct. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent EventIn August 2023, we entered into an agreement to sublease certain space located in Plano, TX, which was subject to certain closing conditions. On November 13, 2023, the specified closing conditions were satisfied, and we expect to record an impairment charge of approximately $19 million during the three months ending January 31, 2024. As we will remain obligated under the head lease, the related lease liability will not be impacted by the sublease. As of October 31, 2023 we have not ceased use of the space. |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Oct. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Description of the Business a_2
Description of the Business and Significant Accounting Policies (Policies) | 9 Months Ended |
Oct. 31, 2023 | |
Accounting Policies [Abstract] | |
Business and Basis of Presentation | Business Splunk Inc. (“we,” “us,” “our,” “the Company”) helps customers build a safer and more resilient digital world. We deliver innovative solutions that enable organizations to harness the value of their data to help keep their digital systems secure, available, and performant. Our solutions for security and observability empower Security Operations, IT Operations, and Development Operations teams to maintain resilient systems by monitoring and securing them more quickly and efficiently. We also believe our offerings empower operational transformation, helping customers move from reactive, non-scalable and ineffective approaches to proactive, automated, and machine learning-assisted processes that drive better outcomes even as the scale and complexity of their technology continue to grow. Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Annual Report on Form 10-K for the fiscal year ended January 31, 2023, filed with the SEC on March 23, 2023. In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements reflect all normal recurring adjustments necessary to state fairly the financial position, results of operations, comprehensive loss and cash flows for the interim periods but are not necessarily indicative of the results of operations to be anticipated for the full fiscal 2024. |
Cisco Merger Agreement | Cisco Merger Agreement On September 20, 2023, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, Cisco Systems, Inc., a Delaware corporation (“Cisco” or “Parent”), and Spirit Merger Corp., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub”), pursuant to which Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly owned subsidiary of Parent. The Company’s Board of Directors (the “Board”) has unanimously approved the Merger Agreement and, subject to certain exceptions set forth in the Merger Agreement, resolved to recommend that our stockholders adopt the Merger Agreement. Under the Merger Agreement, at the effective time of the Merger, each issued and outstanding share of our common stock (subject to certain exceptions set forth in the Merger Agreement) will be canceled and converted into the right to receive $157.00 in cash, without interest thereon, subject to applicable withholding taxes. The Merger Agreement generally requires us to operate our business in the ordinary course, subject to certain exceptions including as required by applicable law, pending consummation of the Merger, and subjects the Company to customary interim operating covenants that restrict us from taking certain specified actions without Cisco’s approval (such approval not to be unreasonably withheld, delayed or conditioned) until the Merger is completed or the Merger Agreement is terminated in accordance with its terms. Either the Company or Parent may terminate the Merger Agreement in certain circumstances, including if (1) the Merger is not completed by March 20, 2025, subject to certain limitations, (2) a governmental authority of competent jurisdiction has issued a final non-appealable governmental order prohibiting the Merger, (3) the Company’s stockholders fail to adopt the Merger Agreement, or (4) the other party materially breaches its representations, warranties or covenants in the Merger Agreement, subject in certain cases, to the right of the breaching party to cure the breach. Parent and the Company may also terminate the Merger Agreement by mutual written consent. Upon termination of the Merger Agreement, (A) Parent, under specified circumstances, including termination following an injunction arising in connection with certain antitrust laws, will be required to pay the Company a termination fee of $1,478,000,000; and (B) the Company, under specified circumstances, including termination of the Merger Agreement by the Company to accept and enter into a definitive agreement with respect to a superior proposal or by Parent upon the Board’s change of recommendation, will be required to pay Parent a termination fee of $1,000,000,000. We are subject to customary restrictions on our ability to solicit alternative acquisition proposals from third parties and to provide non-public information to, and participate in discussions and engage in negotiations with, third parties regarding alternative acquisition proposals, subject to customary exceptions. The completion of the Merger is subject to customary closing conditions, including, among others, approval of the Merger under other applicable antitrust and foreign investment regimes and the adoption of the Merger Agreement by the Company’s stockholders. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, applicable to the consummation of the Merger expired at 11:59 p.m., Eastern Time, on November 13, 2023. During the three months ended October 31, 2023, other than merger-related expenses incurred, the terms of the Merger Agreement did not materially affect the results reported in our unaudited interim condensed consolidated financial statements. Merger-related expenses in the three and nine months ended October 31, 2023 were approximately $22 million and are primarily included in “General and administrative expenses” on our condensed consolidated statement of operations. |
Fiscal Year | Fiscal Year Our fiscal year ends on January 31. References to fiscal 2024, for example, refer to the fiscal year ending January 31, 2024. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, the reported amounts of revenues and expenses and the accompanying notes. For example, we make estimates with respect to the stand-alone selling price for each performance obligation included in customer contracts with multiple performance obligations, uncollectible accounts receivable, the assessment of the useful life and recoverability of long-lived assets (property and equipment, goodwill and identified intangibles), the period of benefit for deferred commissions, stock-based compensation expense, the fair value of assets acquired and liabilities assumed in business combinations, income taxes, the discount rate used to measure lease liabilities and related impairments, and contingencies. Our actual results could differ from those estimates. There have been no significant changes to our significant accounting policies and estimates described in our Annual Report on Form 10-K for the year ended January 31, 2023, filed with the SEC on March 23, 2023. |
Segments | Segments We operate our business as one operating segment: the development, marketing, and sale of cloud services and licensed software solutions that enable our customers to gain real-time business insights by harnessing the value of their data. Our chief operating decision maker is our Chief Executive Officer, who reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance and allocating resources. |
Principles of Consolidation | Principles of Consolidation The accompanying unaudited interim condensed consolidated financial statements include the accounts of Splunk Inc. and its direct and indirect wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation. |
Foreign Currency | Foreign CurrencyThe functional currency of our foreign subsidiaries is the U.S. Dollar. Foreign currency transaction gains and losses are included in “Other income (expense), net” on our condensed consolidated statements of operations and were not material during the three and nine months ended October 31, 2023 and 2022. |
Revenue Recognition | Revenue Recognition Our revenue consists of cloud service fees, license and related maintenance fees, and other service fees. Revenue is recognized when control of the promised subscriptions, products and services are transferred to customers, in an amount that reflects the consideration we expect to receive in exchange for those services and products. Cloud services are provided on a subscription basis and give our customers access to our cloud solutions and any related customer support. Licenses for on-premises software (“licenses”) are typically term licenses and provide the customer with a right to use the software. When a term license is purchased, maintenance is bundled with the license for the term of the license period. Other services include training and professional services that are not integral to the functionality of the cloud services or licenses. Our contracts with customers often contain multiple performance obligations, which may include a combination of cloud services, licenses, related maintenance and support services, professional services and training. The identification of performance obligations and the determination of whether they are distinct and should be accounted for separately may require significant judgment. For contracts with multiple performance obligations, the transaction price is allocated to each performance obligation using the relative stand-alone selling price (“SSP”), and revenue is recognized when the performance obligations are satisfied. We determine the SSP based on an observable standalone selling price when it is available as well as other factors, including the price charged to customers, our discounting practices, and our overall pricing objectives. In situations where pricing is highly variable, we estimate the SSP using the residual approach. For sales of our cloud services, we recognize revenue ratably over customers’ contract terms, beginning when access is provided to the customer, consistent with the pattern of transfer of benefits for those services. We recognize license revenue upon transfer of control of the licenses, which occurs at delivery of the license key to customers, or when the license term commences, if later. We recognize maintenance and support revenue ratably over the maintenance and support term, consistent with the pattern of benefit to the customer for those services. Professional services and training are either provided on a time and materials basis or over a contract term, and we recognize the associated revenue as those services are delivered. When our contracts include customer acceptance provisions, we recognize revenue no earlier than upon customer acceptance. Our policy is to record revenues net of any applicable sales, use, goods and services, value added, and excise taxes. Our multi-year cloud services and license contracts are typically invoiced annually. A current receivable for multi-year cloud services is generally recorded upon invoicing. A receivable for multi-year license contracts is recorded upon delivery, whether or not invoiced, to the extent we have an unconditional right to receive payment in the future related to those licenses. The non-current portion of these receivables, primarily consisting of unbilled receivables from multi-year license contracts, is included in “Accounts receivable, non-current” on our interim condensed consolidated balance sheets. Our standard payment terms generally require payment within 45 days. Actual payment terms and conditions vary. In instances where the timing of revenue recognition differs from the timing of payment, we have determined our contracts do not include a significant financing component. The primary purpose of our invoicing terms is to provide customers with simplified and predictable ways of purchasing our products and services, not to receive financing from our customers or to provide customers with financing. |
Recently Adopted and Issued Accounting Pronouncements | Recently Adopted Accounting Standards We did not adopt any new accounting standards during the nine months ended October 31, 2023. Recently Issued Accounting Pronouncements Standard Description Effective Date Effect on the Condensed Consolidated Financial Statements Accounting Standards Update (“ASU”) No. 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative The amendments in the ASU are expected to clarify or improve disclosure and presentation requirements of a variety of Codification Topics, allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the Codification with the SEC’s regulations, including disclosure of the methods used in the diluted earnings-per-share computation for each dilutive security. The effective date for each amendment will be the date on which the SEC’s removal of the related disclosure requirements from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. We do not expect the adoption of ASU 2023-06 to have a material impact on our consolidated financial statements. |
Description of the Business a_3
Description of the Business and Significant Accounting Policies New Accounting Pronouncements (Tables) | 9 Months Ended |
Oct. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | Recently Issued Accounting Pronouncements Standard Description Effective Date Effect on the Condensed Consolidated Financial Statements Accounting Standards Update (“ASU”) No. 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative The amendments in the ASU are expected to clarify or improve disclosure and presentation requirements of a variety of Codification Topics, allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the Codification with the SEC’s regulations, including disclosure of the methods used in the diluted earnings-per-share computation for each dilutive security. The effective date for each amendment will be the date on which the SEC’s removal of the related disclosure requirements from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. We do not expect the adoption of ASU 2023-06 to have a material impact on our consolidated financial statements. |
Investments and Fair Value Me_2
Investments and Fair Value Measurements (Tables) | 9 Months Ended |
Oct. 31, 2023 | |
Investments, Debt and Equity Securities and Fair Value Disclosures [Abstract] | |
Schedule of fair value of financial assets and liabilities that were measured on a recurring basis | The following table sets forth the fair value of our financial assets that were measured on a recurring basis: October 31, 2023 January 31, 2023 (In thousands) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Money market funds $ 94,983 $ — $ — $ 94,983 $ 316,943 $ — $ — $ 316,943 U.S. government and agency securities — 230,273 — 230,273 — 1,180,861 — 1,180,861 Corporate bonds — 34,873 — 34,873 — 53,833 — 53,833 Commercial paper — 624,364 — 624,364 — 141,359 — 141,359 Reported as: Assets: Cash and cash equivalents $ 222,747 $ 376,649 Investments, current 761,746 1,316,347 Total $ 984,493 $ 1,692,996 |
Schedule of available-for-sale securities reconciliation | The following table presents our investments in available-for-sale debt securities as of October 31, 2023: (In thousands) Amortized Cost Unrealized Gains Unrealized Losses Fair Value Cash and cash equivalents: Corporate bonds $ 14,631 $ — $ (8) $ 14,623 Commercial paper 113,170 — (29) 113,141 Investments, current: U.S. government and agency securities 230,333 9 (69) 230,273 Corporate bonds 20,269 — (19) 20,250 Commercial paper 511,471 — (248) 511,223 Total available-for-sale investments $ 889,874 $ 9 $ (373) $ 889,510 The following table presents our investments in available-for-sale debt securities as of January 31, 2023: (In thousands) Amortized Cost Unrealized Gains Unrealized Losses Fair Value Cash and cash equivalents: U.S. government and agency securities $ 59,732 $ — $ (26) $ 59,706 Investments, current: U.S. government and agency securities 1,125,700 1 (4,546) 1,121,155 Corporate bonds 54,173 2 (342) 53,833 Commercial paper 142,061 — (702) 141,359 Total available-for-sale investments $ 1,381,666 $ 3 $ (5,616) $ 1,376,053 |
Schedule of unrealized loss on investments | The following table presents the fair values and unrealized losses related to our investments in available-for-sale debt securities classified by length of time that the securities have been in a continuous unrealized loss position as of October 31, 2023: Less than 12 Months 12 Months or Greater Total (In thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses U.S. government and agency securities $ 177,660 $ (69) $ — $ — $ 177,660 $ (69) Corporate bonds 34,873 (27) — — 34,873 (27) Commercial paper 624,364 (277) — — 624,364 (277) Total $ 836,897 $ (373) $ — $ — $ 836,897 $ (373) The following table presents the fair values and unrealized losses related to our investments in available-for-sale debt securities classified by length of time that the securities have been in a continuous unrealized loss position as of January 31, 2023: Less than 12 Months 12 Months or Greater Total (In thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses U.S. government and agency securities $ 1,162,226 $ (4,530) $ 7,959 $ (42) $ 1,170,185 $ (4,572) Corporate bonds 50,258 (328) 1,887 (14) 52,145 (342) Commercial paper 141,359 (702) — — 141,359 (702) Total $ 1,353,843 $ (5,560) $ 9,846 $ (56) $ 1,363,689 $ (5,616) |
Schedule of equity investments | The following table provides a summary of our equity investments: (In thousands) October 31, 2023 January 31, 2023 Equity investments without readily determinable fair values $ 37,581 $ 37,994 Equity investments under the equity method of accounting 4,049 3,706 Total $ 41,630 $ 41,700 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Oct. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and equipment consisted of the following: (In thousands) October 31, 2023 January 31, 2023 Computer equipment and software $ 71,844 $ 82,248 Furniture and fixtures 18,922 27,076 Leasehold and building improvements (1) 100,666 144,130 Capitalized software development costs (2) 65,327 50,590 Property and equipment, gross 256,759 304,044 Less: accumulated depreciation and amortization (157,293) (195,504) Property and equipment, net $ 99,466 $ 108,540 _________________________ (1) Includes costs related to assets not yet placed into service of $0.7 million and $2.8 million, as of October 31, 2023 and January 31, 2023, respectively. (2) Includes costs related to projects still under development of $17.5 million and $5.1 million, as of October 31, 2023 and January 31, 2023, respectively. |
Long-Lived Assets by Geographic Areas | The following table presents our long-lived assets, which consist of property and equipment, net of depreciation and amortization, and operating lease right-of-use assets by geographic region: (In thousands) October 31, 2023 January 31, 2023 United States $ 234,622 $ 251,150 United Kingdom 663 36,667 Other International 9,934 7,704 Total long-lived assets $ 245,219 $ 295,521 |
Acquisition, Goodwill and Int_2
Acquisition, Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Oct. 31, 2023 | |
Business Combinations [Abstract] | |
Schedule of finite-lived intangible assets | Intangible assets subject to amortization as of October 31, 2023 were as follows: (In thousands, except useful life) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted-Average Remaining Useful Life Developed technology $ 190,350 $ (124,342) $ 66,008 30 Customer relationships 67,300 (54,891) 12,409 11 Total intangible assets subject to amortization $ 257,650 $ (179,233) $ 78,417 Intangible assets subject to amortization as of January 31, 2023 were as follows: (In thousands, except useful life) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted-Average Remaining Useful Life Developed technology $ 204,969 $ (110,757) $ 94,212 36 Customer relationships 90,900 (65,524) 25,376 18 Total intangible assets subject to amortization $ 295,869 $ (176,281) $ 119,588 |
Schedule of expected future amortization for capitalized computer software costs developed for internal use | The expected future amortization expense for acquired intangible assets as of October 31, 2023 is as follows: Fiscal Period (In thousands) Expected Amortization Expense Remaining fiscal 2024 $ 11,455 Fiscal 2025 36,743 Fiscal 2026 19,858 Fiscal 2027 10,361 Total amortization expense $ 78,417 |
Convertible Senior Notes (Table
Convertible Senior Notes (Tables) | 9 Months Ended |
Oct. 31, 2023 | |
Debt Disclosure [Abstract] | |
Convertible Senior Notes | The net carrying amounts of each series of Notes as of October 31, 2023 were as follows: (In thousands) 2023 Notes (1) 2025 Notes 2026 Notes 2027 Notes Principal amount $ — $ 862,500 $ 1,000,000 $ 1,265,000 Unamortized issuance costs — (2,485) (9,850) (10,239) Net carrying amount $ — $ 860,015 $ 990,150 $ 1,254,761 _________________________ (1) The Company paid the principal amount of the 2023 Notes in September 2023 in cash. |
Schedule of Interest Expense | The following table sets forth the interest expense related to each series of notes: Three Months Ended October 31, Nine Months Ended October 31, (In thousands) 2023 2022 2023 2022 2023 Notes: Coupon interest expense $ 485 $ 971 $ 2,427 $ 2,913 Amortization of debt issuance costs 205 422 1,005 1,388 Total interest expense related to the 2023 Notes $ 690 $ 1,393 $ 3,432 $ 4,301 2025 Notes: Coupon interest expense $ 2,426 $ 2,426 $ 7,278 $ 7,278 Amortization of debt issuance costs 350 345 952 1,211 Total interest expense related to the 2025 Notes $ 2,776 $ 2,771 $ 8,230 $ 8,489 2026 Notes: Coupon interest expense $ 1,875 $ 1,875 $ 5,625 $ 5,625 Amortization of debt issuance costs 920 911 2,660 2,855 Total interest expense related to the 2026 Notes $ 2,795 $ 2,786 $ 8,285 $ 8,480 2027 Notes: Coupon interest expense $ 3,558 $ 3,558 $ 10,674 $ 10,674 Amortization of debt issuance costs 726 716 2,025 2,424 Total interest expense related to the 2027 Notes $ 4,284 $ 4,274 $ 12,699 $ 13,098 |
Other Key Terms and Premiums Paid for Capped Calls | The following table sets forth other key terms and premiums paid for the Capped Calls related to the 2023 Notes, the 2025 Notes and the 2027 Notes: Capped Calls Entered into in Connection with the Issuance of the 2023 and 2025 Notes Capped Calls Entered into in Connection with the Issuance of the 2027 Notes Initial strike price, subject to certain adjustments $ 148.30 $ 255.34 Cap price, subject to certain adjustments $ 232.62 $ 378.28 Total premium paid (in thousands) $ 274,275 $ 137,379 |
Stock Compensation Plans and _2
Stock Compensation Plans and Stockholders' Equity (Tables) | 9 Months Ended |
Oct. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Disclosure of Share-Based Compensation Arrangements by Share-Based Payment Award | The following table summarizes our PSU activity during the nine months ended October 31, 2023: Shares Weighted-Average Grant-Date Fair Value Per Share Outstanding as of January 31, 2023 386 $ 193.96 PSUs granted 438 $ 124.22 PSUs vested (152) $ 146.41 Outstanding as of October 31, 2023 672 $ 159.24 The following table summarizes our RSU activity during the nine months ended October 31, 2023: Shares Weighted-Average Grant-Date Fair Value Per Share Outstanding as of January 31, 2023 11,627 $ 128.11 RSUs granted 4,202 $ 96.90 RSUs vested (4,416) $ 133.13 RSUs forfeited and canceled (1,408) $ 126.51 Outstanding as of October 31, 2023 10,005 $ 113.01 The following table summarizes our RSA activity during the nine months ended October 31, 2023: Shares Weighted-Average Grant-Date Fair Value Per Share Outstanding as of January 31, 2023 289 $ 86.15 RSAs vested (41) $ 140.71 Outstanding as of October 31, 2023 248 $ 77.22 The following table summarizes our stock option activity during the nine months ended October 31, 2023: Shares Weighted-Average Exercise Price Per Share Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (1) (in thousands) Outstanding as of January 31, 2023 108 $ 10.27 5.3 $ 9,276 Options exercised (37) $ 11.05 Options forfeited and expired (1) $ 20.01 Outstanding as of October 31, 2023 70 $ 9.71 4.4 $ 9,641 Vested and expected to vest 70 $ 9.70 4.5 $ 9,615 Exercisable as of October 31, 2023 65 $ 9.51 4.5 $ 8,908 _________________________ (1) The intrinsic value is calculated as the difference between the exercise price of the underlying stock option award and the closing market price of our common stock as of October 31, 2023. |
Schedule of Unrecognized Compensation Costs | The following table presents unrecognized compensation cost and the related weighted-average recognition period for RSUs, PSUs, RSAs, and stock options as of October 31, 2023: Unrecognized Compensation Cost Weighted-Average Recognition Period RSUs $ 914,011 1.9 PSUs 52,421 1.5 RSAs 12,228 1.9 Stock options 508 1.1 Total unrecognized compensation cost $ 979,168 |
Revenues, Accounts Receivable_2
Revenues, Accounts Receivable, Deferred Revenue and Remaining Performance Obligations, Revenue from Contract with Customer (Tables) | 9 Months Ended |
Oct. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table presents disaggregated revenues by major product or service type: Three Months Ended October 31, Nine Months Ended October 31, (In thousands) 2023 2022 2023 2022 Revenues Cloud services $ 469,445 $ 374,027 $ 1,334,043 $ 1,043,361 License 429,356 383,584 896,225 851,111 Maintenance and services 168,554 172,158 499,180 508,131 Total revenues $ 1,067,355 $ 929,769 $ 2,729,448 $ 2,402,603 |
Revenue from External Customers by Geographic Areas | Revenues by geography are based on the shipping address of the customer. The following table presents our revenues by geographic region: Three Months Ended October 31, Nine Months Ended October 31, (In thousands) 2023 2022 2023 2022 United States $ 735,443 $ 684,647 $ 1,813,948 $ 1,685,392 International 331,912 245,122 915,500 717,211 Total revenues $ 1,067,355 $ 929,769 $ 2,729,448 $ 2,402,603 |
Schedule of Revenue by Channel Partners | The following table presents revenues as a percentage of consolidated total revenues from customers representing 10% or more of total revenues: Three Months Ended October 31, Nine Months Ended October 31, 2023 2022 2023 2022 Channel Partner A 21 % 23 % 24 % 25 % Channel Partner B 17 % 20 % 16 % 17 % |
Schedule Of Accounts Receivable by Channel Partners | The following table presents total current and non-current accounts receivable by channel partners representing 10% or more of total current and non-current accounts receivable, net: October 31, 2023 January 31, 2023 Channel Partner A 23 % 26 % Channel Partner B 11 % 6 % |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 9 Months Ended |
Oct. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of computation of historical basic and diluted net loss per share | The following table sets forth the computation of historical basic and diluted net income (loss) per share: Three Months Ended October 31, Nine Months Ended October 31, (In thousands, except per share amounts) 2023 2022 2023 2022 Net income (loss) per share, basic: Numerator Net income (loss) $ 96,853 $ (32,620) $ (162,815) $ (546,654) Denominator Weighted-average shares used to compute net income (loss) per share, basic 167,894 163,044 166,472 161,738 Net income (loss) per share, basic $ 0.58 $ (0.20) $ (0.98) $ (3.38) Net income (loss) per share, diluted: Numerator Net income (loss) $ 96,853 $ (32,620) $ (162,815) $ (546,654) Interest expense of convertible senior notes - 2023 Notes, 2025 Notes, and 2027 Notes 6,261 — — — Diluted net income $ 103,114 $ (32,620) $ (162,815) $ (546,654) Denominator Weighted-average shares used to compute net income (loss) per share, basic 167,894 163,044 166,472 161,738 Weighted-average effect of potentially dilutive securities: Convertible senior notes - 2023 Notes, 2025 Notes, and 2026 Notes 14,684 — — — Employee stock awards 3,404 — — — Weighted-average shares used to compute net income (loss) per share, diluted 185,982 163,044 166,472 161,738 Net income (loss) per share, diluted $ 0.55 $ (0.20) $ (0.98) $ (3.38) |
Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive | Potentially dilutive securities that were not included in the diluted per share calculations in periods in which they would be anti-dilutive were as follows: Three Months Ended October 31, Nine Months Ended October 31, (In thousands) 2023 2022 2023 2022 Convertible senior notes 4,954 22,258 17,020 22,258 Employee stock awards 1,148 14,214 13,495 14,214 Total 6,102 36,472 30,515 36,472 |
Restructuring (Tables)
Restructuring (Tables) | 9 Months Ended |
Oct. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | (In thousands) Workforce reduction Charges $ 27,642 Payments (24,534) Non-cash items (2,510) Liability as of October 31, 2023 $ 598 Restructuring charges related to the February 2023 Plan for the nine months ended October 31, 2023 are included in the condensed consolidated statements of operations, as follows: (In thousands) Cost of revenues $ 1,238 Research and development 14,774 Sales and marketing 3,164 General and administrative 8,466 Total $ 27,642 (In thousands) Workforce reduction Charges $ 5,925 Payments (248) Non-cash items (1,227) Liability as of October 31, 2023 $ 4,450 Restructuring charges related to the October 2023 Plan for the nine months ended October 31, 2023 are included in the condensed consolidated statements of operations, as follows: (In thousands) Cost of revenues $ 120 Research and development 3,691 Sales and marketing 378 General and administrative 1,736 Total $ 5,925 |
Description of the Business a_4
Description of the Business and Significant Accounting Policies Revenue Recognition (Details) | 3 Months Ended | 9 Months Ended | |
Oct. 31, 2023 USD ($) | Oct. 31, 2023 USD ($) segment | Sep. 20, 2023 $ / shares | |
Segments | |||
Number of operating segments | segment | 1 | ||
Minimum | |||
Revenue Recognition | |||
Accounts receivable payment terms | 45 days | ||
Cisco Merger Agreement | |||
Business Combinations [Abstract] | |||
Debt instrument, converted, right to receive cash (in dollars per share) | $ / shares | $ 157 | ||
Business acquisition, termination fee payable | $ 1,000,000,000 | $ 1,000,000,000 | |
Business acquisition, termination fee receivable | 1,478,000,000 | 1,478,000,000 | |
Merger-related expenses | $ 22,000,000 | $ 22,000,000 |
Investments and Fair Value Me_3
Investments and Fair Value Measurements - Fair Value of Financial Assets (Details) - USD ($) $ in Thousands | Oct. 31, 2023 | Jan. 31, 2023 |
Fair Value Measurements | ||
U.S. treasury securities, corporate bonds and commercial paper | $ 889,510 | $ 1,376,053 |
U.S. Government and Agency Securities | ||
Assets: | ||
Cash and cash equivalents | 59,706 | |
Corporate Bonds | ||
Assets: | ||
Cash and cash equivalents | 14,623 | |
Commercial Paper | ||
Assets: | ||
Cash and cash equivalents | 113,141 | |
Estimate of Fair Value Measurement | Recurring basis | ||
Fair Value Measurements | ||
Money market funds | 94,983 | 316,943 |
Assets: | ||
Cash and cash equivalents | 222,747 | 376,649 |
Investments, current | 761,746 | 1,316,347 |
Total | 984,493 | 1,692,996 |
Estimate of Fair Value Measurement | Recurring basis | Level 1 | ||
Fair Value Measurements | ||
Money market funds | 94,983 | 316,943 |
Estimate of Fair Value Measurement | Recurring basis | Level 2 | ||
Fair Value Measurements | ||
Money market funds | 0 | 0 |
Estimate of Fair Value Measurement | Recurring basis | Level 3 | ||
Fair Value Measurements | ||
Money market funds | 0 | 0 |
U.S. Government and Agency Securities | Investments, Current | ||
Fair Value Measurements | ||
U.S. treasury securities, corporate bonds and commercial paper | 230,273 | 1,121,155 |
U.S. Government and Agency Securities | Estimate of Fair Value Measurement | Recurring basis | ||
Fair Value Measurements | ||
U.S. treasury securities, corporate bonds and commercial paper | 230,273 | 1,180,861 |
U.S. Government and Agency Securities | Estimate of Fair Value Measurement | Recurring basis | Level 1 | ||
Fair Value Measurements | ||
U.S. treasury securities, corporate bonds and commercial paper | 0 | 0 |
U.S. Government and Agency Securities | Estimate of Fair Value Measurement | Recurring basis | Level 2 | ||
Fair Value Measurements | ||
U.S. treasury securities, corporate bonds and commercial paper | 230,273 | 1,180,861 |
U.S. Government and Agency Securities | Estimate of Fair Value Measurement | Recurring basis | Level 3 | ||
Fair Value Measurements | ||
U.S. treasury securities, corporate bonds and commercial paper | 0 | 0 |
Corporate Bonds | Investments, Current | ||
Fair Value Measurements | ||
U.S. treasury securities, corporate bonds and commercial paper | 20,250 | 53,833 |
Corporate Bonds | Estimate of Fair Value Measurement | Recurring basis | ||
Fair Value Measurements | ||
U.S. treasury securities, corporate bonds and commercial paper | 34,873 | 53,833 |
Corporate Bonds | Estimate of Fair Value Measurement | Recurring basis | Level 1 | ||
Fair Value Measurements | ||
U.S. treasury securities, corporate bonds and commercial paper | 0 | 0 |
Corporate Bonds | Estimate of Fair Value Measurement | Recurring basis | Level 2 | ||
Fair Value Measurements | ||
U.S. treasury securities, corporate bonds and commercial paper | 34,873 | 53,833 |
Corporate Bonds | Estimate of Fair Value Measurement | Recurring basis | Level 3 | ||
Fair Value Measurements | ||
U.S. treasury securities, corporate bonds and commercial paper | 0 | 0 |
Commercial Paper | Investments, Current | ||
Fair Value Measurements | ||
U.S. treasury securities, corporate bonds and commercial paper | 511,223 | 141,359 |
Commercial Paper | Estimate of Fair Value Measurement | Recurring basis | ||
Fair Value Measurements | ||
U.S. treasury securities, corporate bonds and commercial paper | 624,364 | 141,359 |
Commercial Paper | Estimate of Fair Value Measurement | Recurring basis | Level 1 | ||
Fair Value Measurements | ||
U.S. treasury securities, corporate bonds and commercial paper | 0 | 0 |
Commercial Paper | Estimate of Fair Value Measurement | Recurring basis | Level 2 | ||
Fair Value Measurements | ||
U.S. treasury securities, corporate bonds and commercial paper | 624,364 | 141,359 |
Commercial Paper | Estimate of Fair Value Measurement | Recurring basis | Level 3 | ||
Fair Value Measurements | ||
U.S. treasury securities, corporate bonds and commercial paper | $ 0 | $ 0 |
Investments and Fair Value Me_4
Investments and Fair Value Measurements - Amortized Cost to Fair Value Reconciliation (Details) - USD ($) $ in Thousands | Oct. 31, 2023 | Jan. 31, 2023 |
Debt Securities, Available-for-sale | ||
Cash and cash equivalents, amortized cost | $ 927,962 | $ 690,587 |
Investments, amortized cost | 889,874 | 1,381,666 |
Investments, unrealized gains | 9 | 3 |
Investments, unrealized losses | (373) | (5,616) |
Investments, fair value | 889,510 | 1,376,053 |
Investments, Current | U.S. Government and Agency Securities | ||
Debt Securities, Available-for-sale | ||
Investments, amortized cost | 230,333 | 1,125,700 |
Investments, unrealized gains | 9 | 1 |
Investments, unrealized losses | (69) | (4,546) |
Investments, fair value | 230,273 | 1,121,155 |
Investments, Current | Corporate Bonds | ||
Debt Securities, Available-for-sale | ||
Investments, amortized cost | 20,269 | 54,173 |
Investments, unrealized gains | 0 | 2 |
Investments, unrealized losses | (19) | (342) |
Investments, fair value | 20,250 | 53,833 |
Investments, Current | Commercial Paper | ||
Debt Securities, Available-for-sale | ||
Investments, amortized cost | 511,471 | 142,061 |
Investments, unrealized gains | 0 | 0 |
Investments, unrealized losses | (248) | (702) |
Investments, fair value | 511,223 | 141,359 |
U.S. Government and Agency Securities | ||
Debt Securities, Available-for-sale | ||
Cash and cash equivalents, amortized cost | 59,732 | |
Cash and cash equivalents, unrealized gains | 0 | |
Cash and cash equivalents, unrealized losses | (26) | |
Cash and cash equivalents, fair value | $ 59,706 | |
Corporate Bonds | ||
Debt Securities, Available-for-sale | ||
Cash and cash equivalents, amortized cost | 14,631 | |
Cash and cash equivalents, unrealized gains | 0 | |
Cash and cash equivalents, unrealized losses | (8) | |
Cash and cash equivalents, fair value | 14,623 | |
Commercial Paper | ||
Debt Securities, Available-for-sale | ||
Cash and cash equivalents, amortized cost | 113,170 | |
Cash and cash equivalents, unrealized gains | 0 | |
Cash and cash equivalents, unrealized losses | (29) | |
Cash and cash equivalents, fair value | $ 113,141 |
Investments and Fair Value Me_5
Investments and Fair Value Measurements - Securities in Unrealized Loss Position (Details) - USD ($) $ in Thousands | Oct. 31, 2023 | Jan. 31, 2023 |
Fair Value | ||
Less than 12 Months | $ 836,897 | $ 1,353,843 |
12 Months or Greater | 0 | 9,846 |
Total | 836,897 | 1,363,689 |
Unrealized Losses | ||
Less than 12 Months | (373) | (5,560) |
12 Months or Greater | 0 | (56) |
Total | (373) | (5,616) |
U.S. Government and Agency Securities | ||
Fair Value | ||
Less than 12 Months | 177,660 | 1,162,226 |
12 Months or Greater | 0 | 7,959 |
Total | 177,660 | 1,170,185 |
Unrealized Losses | ||
Less than 12 Months | (69) | (4,530) |
12 Months or Greater | 0 | (42) |
Total | (69) | (4,572) |
Corporate Bonds | ||
Fair Value | ||
Less than 12 Months | 34,873 | 50,258 |
12 Months or Greater | 0 | 1,887 |
Total | 34,873 | 52,145 |
Unrealized Losses | ||
Less than 12 Months | (27) | (328) |
12 Months or Greater | 0 | (14) |
Total | (27) | (342) |
Commercial Paper | ||
Fair Value | ||
Less than 12 Months | 624,364 | 141,359 |
12 Months or Greater | 0 | 0 |
Total | 624,364 | 141,359 |
Unrealized Losses | ||
Less than 12 Months | (277) | (702) |
12 Months or Greater | 0 | 0 |
Total | $ (277) | $ (702) |
Investments and Fair Value Me_6
Investments and Fair Value Measurements - Contractual Maturities (Details) - USD ($) $ in Thousands | Oct. 31, 2023 | Jan. 31, 2023 |
Fair Value Disclosures [Abstract] | ||
U.S. treasury securities, corporate bonds and commercial paper | $ 889,510 | $ 1,376,053 |
Investments and Fair Value Me_7
Investments and Fair Value Measurements - Equity Investments (Details) - USD ($) $ in Thousands | Oct. 31, 2023 | Jan. 31, 2023 |
Investments, Debt and Equity Securities and Fair Value Disclosures [Abstract] | ||
Equity investments without readily determinable fair values | $ 37,581 | $ 37,994 |
Equity investments under the equity method of accounting | 4,049 | 3,706 |
Total | $ 41,630 | $ 41,700 |
Investments and Fair Value Me_8
Investments and Fair Value Measurements - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Fair Value Disclosures [Abstract] | ||
Loss on strategic equity investments, net | $ 3,414 | $ 97 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Jan. 30, 2023 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation settlement, amount awarded to other party | $ 30 |
Litigation settlement, expense | 4.6 |
Insurance recoveries | $ 25.4 |
Leases (Details)
Leases (Details) $ in Millions | 3 Months Ended |
Oct. 31, 2023 USD ($) | |
Leases [Abstract] | |
Remaining lease commitment | $ 34 |
Operating lease, expense | $ 12 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Oct. 31, 2023 | Jan. 31, 2023 |
Property, Plant and Equipment | ||
Property and equipment, gross | $ 256,759 | $ 304,044 |
Less: accumulated depreciation and amortization | (157,293) | (195,504) |
Property and equipment, net | 99,466 | 108,540 |
Computer equipment and software | ||
Property, Plant and Equipment | ||
Property and equipment, gross | 71,844 | 82,248 |
Furniture and fixtures | ||
Property, Plant and Equipment | ||
Property and equipment, gross | 18,922 | 27,076 |
Leasehold and building improvements | ||
Property, Plant and Equipment | ||
Property and equipment, gross | 100,666 | 144,130 |
Capitalized software development costs | ||
Property, Plant and Equipment | ||
Property and equipment, gross | 65,327 | 50,590 |
Leasehold improvements not in service | ||
Property, Plant and Equipment | ||
Property and equipment, gross | 700 | 2,800 |
Software development costs under development | ||
Property, Plant and Equipment | ||
Property and equipment, gross | $ 17,500 | $ 5,100 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2023 | Oct. 31, 2022 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation and amortization expense on Property and Equipment, net | $ 8.8 | $ 11.6 | $ 27.8 | $ 31.4 |
Property and Equipment - Sche_2
Property and Equipment - Schedule of Property and Equipment by Location (Details) - USD ($) $ in Thousands | Oct. 31, 2023 | Jan. 31, 2023 |
Property, Plant and Equipment | ||
Long-lived assets | $ 245,219 | $ 295,521 |
United States | ||
Property, Plant and Equipment | ||
Long-lived assets | 234,622 | 251,150 |
United Kingdom | ||
Property, Plant and Equipment | ||
Long-lived assets | 663 | 36,667 |
Other International | ||
Property, Plant and Equipment | ||
Long-lived assets | $ 9,934 | $ 7,704 |
Acquisition, Goodwill and Int_3
Acquisition, Goodwill and Intangible Assets - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2023 | Oct. 31, 2022 | |
Business Combinations [Abstract] | ||||
Impairments to goodwill | $ 0 | $ 0 | ||
Amortization of intangible assets | $ 13,300,000 | $ 13,900,000 | $ 41,200,000 | $ 42,000,000 |
Acquisition, Goodwill and Int_4
Acquisition, Goodwill and Intangible Assets - Identifiable Intangible Assets Acquired (Details) | 9 Months Ended | 12 Months Ended |
Oct. 31, 2023 | Jan. 31, 2023 | |
Developed technology | ||
Business Acquisition | ||
Acquired intangible assets, remaining useful life | 30 months | 36 months |
Customer relationships | ||
Business Acquisition | ||
Acquired intangible assets, remaining useful life | 11 months | 18 months |
Acquisition, Goodwill and Int_5
Acquisition, Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Oct. 31, 2023 | Jan. 31, 2023 | |
Finite-Lived Intangible Assets | ||
Gross Fair Value | $ 257,650 | $ 295,869 |
Accumulated Amortization | (179,233) | (176,281) |
Total | 78,417 | 119,588 |
Developed technology | ||
Finite-Lived Intangible Assets | ||
Gross Fair Value | 190,350 | 204,969 |
Accumulated Amortization | (124,342) | (110,757) |
Total | $ 66,008 | $ 94,212 |
Acquired intangible assets, remaining useful life | 30 months | 36 months |
Customer relationships | ||
Finite-Lived Intangible Assets | ||
Gross Fair Value | $ 67,300 | $ 90,900 |
Accumulated Amortization | (54,891) | (65,524) |
Total | $ 12,409 | $ 25,376 |
Acquired intangible assets, remaining useful life | 11 months | 18 months |
Acquisition, Goodwill and Int_6
Acquisition, Goodwill and Intangible Assets - Expected Future Amortization Expense (Details) - USD ($) $ in Thousands | Oct. 31, 2023 | Jan. 31, 2023 |
Business Combinations [Abstract] | ||
Remaining fiscal 2024 | $ 11,455 | |
Fiscal 2025 | 36,743 | |
Fiscal 2026 | 19,858 | |
Fiscal 2027 | 10,361 | |
Total | $ 78,417 | $ 119,588 |
Convertible Senior Notes - Sche
Convertible Senior Notes - Schedule of Carrying Amount of the Liability and Equity (Details) - Convertible Senior Notes $ in Thousands | Oct. 31, 2023 USD ($) |
2023 Notes | |
Debt Instrument, Convertible Debt, Liability Component [Abstract] | |
Principal amount | $ 0 |
Unamortized issuance costs | 0 |
Net carrying amount | 0 |
2025 Notes | |
Debt Instrument, Convertible Debt, Liability Component [Abstract] | |
Principal amount | 862,500 |
Unamortized issuance costs | (2,485) |
Net carrying amount | 860,015 |
2026 Notes | |
Debt Instrument, Convertible Debt, Liability Component [Abstract] | |
Principal amount | 1,000,000 |
Unamortized issuance costs | (9,850) |
Net carrying amount | 990,150 |
2027 Notes | |
Debt Instrument, Convertible Debt, Liability Component [Abstract] | |
Principal amount | 1,265,000 |
Unamortized issuance costs | (10,239) |
Net carrying amount | $ 1,254,761 |
Convertible Senior Notes - Narr
Convertible Senior Notes - Narrative (Details) $ / shares in Units, $ in Thousands | 9 Months Ended | |||
Jul. 09, 2021 USD ($) $ / shares | Jun. 05, 2020 USD ($) $ / shares | Sep. 21, 2018 USD ($) $ / shares | Oct. 31, 2023 USD ($) trading_day | |
Convertible Senior Notes | ||||
Debt Instrument | ||||
Consecutive trading days threshold | trading_day | 10 | |||
Measurement period, business days | trading_day | 5 | |||
Percentage of stock trigger price for measurement period | 98% | |||
Convertible Senior Notes | Fiscal quarter commencing after the fiscal quarter ending on January 31, 2019 | ||||
Debt Instrument | ||||
Trading days threshold | trading_day | 20 | |||
Consecutive trading days threshold | trading_day | 30 | |||
Percentage of stock trigger price | 130% | |||
Convertible Senior Notes 2025 | Level 2 | ||||
Debt Instrument | ||||
Convertible senior notes, fair value | $ 930,000 | |||
Convertible Senior Notes 2027 | Level 2 | ||||
Debt Instrument | ||||
Convertible senior notes, fair value | 1,200,000 | |||
Convertible Senior Notes 2026 | Level 3 | ||||
Debt Instrument | ||||
Convertible senior notes, fair value | 820,000 | |||
2023 Notes | Convertible Senior Notes | ||||
Debt Instrument | ||||
Long-term debt | 0 | |||
Principal amount | $ 1,270,000 | |||
Stated interest rate | 0.50% | |||
Conversion ratio | 0.0067433 | |||
Initial conversion price (in dollars per share) | $ / shares | $ 148.30 | |||
2025 Notes | Convertible Senior Notes | ||||
Debt Instrument | ||||
Long-term debt | 860,015 | |||
Principal amount | $ 862,500 | |||
Stated interest rate | 1.125% | |||
Conversion ratio | 0.0067433 | |||
Initial conversion price (in dollars per share) | $ / shares | $ 148.30 | |||
2023 Notes and 2025 Notes | Convertible Senior Notes | ||||
Debt Instrument | ||||
Proceeds from the issuance of convertible senior notes, net of issuance costs | $ 2,110,000 | |||
2027 Notes | Convertible Senior Notes | ||||
Debt Instrument | ||||
Long-term debt | 1,254,761 | |||
Principal amount | $ 1,270,000 | |||
Stated interest rate | 1.125% | |||
Proceeds from the issuance of convertible senior notes, net of issuance costs | $ 1,250,000 | |||
Conversion ratio | 0.0039164 | |||
Initial conversion price (in dollars per share) | $ / shares | $ 255.34 | |||
2026 Notes | Convertible Senior Notes | ||||
Debt Instrument | ||||
Long-term debt | $ 990,150 | |||
Principal amount | $ 1,000,000 | |||
Stated interest rate | 0.75% | |||
Proceeds from the issuance of convertible senior notes, net of issuance costs | $ 981,700 | |||
Conversion ratio | 0.00625 | |||
Initial conversion price (in dollars per share) | $ / shares | $ 160 | |||
Trading days threshold | trading_day | 20 | |||
Consecutive trading days threshold | trading_day | 30 | |||
Percentage of stock trigger price | 140% | |||
Convertible senior notes repurchase price percentage | 100% | |||
2023, 2025, and 2027 Notes | Convertible Senior Notes | ||||
Debt Instrument | ||||
Trading days threshold | trading_day | 20 | |||
Consecutive trading days threshold | trading_day | 30 | |||
Percentage of stock trigger price | 130% | |||
Convertible senior notes repurchase price percentage | 100% |
Convertible Senior Notes - Sc_2
Convertible Senior Notes - Schedule of Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2023 | Oct. 31, 2022 | |
Debt Instrument | ||||
Amortization of debt issuance costs | $ 6,642 | $ 7,878 | ||
Convertible Senior Notes | 2023 Notes | ||||
Debt Instrument | ||||
Coupon interest expense | $ 485 | $ 971 | 2,427 | 2,913 |
Amortization of debt issuance costs | 205 | 422 | 1,005 | 1,388 |
Total interest expense | 690 | 1,393 | 3,432 | 4,301 |
Convertible Senior Notes | 2025 Notes | ||||
Debt Instrument | ||||
Coupon interest expense | 2,426 | 2,426 | 7,278 | 7,278 |
Amortization of debt issuance costs | 350 | 345 | 952 | 1,211 |
Total interest expense | 2,776 | 2,771 | 8,230 | 8,489 |
Convertible Senior Notes | 2026 Notes | ||||
Debt Instrument | ||||
Coupon interest expense | 1,875 | 1,875 | 5,625 | 5,625 |
Amortization of debt issuance costs | 920 | 911 | 2,660 | 2,855 |
Total interest expense | 2,795 | 2,786 | 8,285 | 8,480 |
Convertible Senior Notes | 2027 Notes | ||||
Debt Instrument | ||||
Coupon interest expense | 3,558 | 3,558 | 10,674 | 10,674 |
Amortization of debt issuance costs | 726 | 716 | 2,025 | 2,424 |
Total interest expense | $ 4,284 | $ 4,274 | $ 12,699 | $ 13,098 |
Convertible Senior Notes - Othe
Convertible Senior Notes - Other Key Terms and Premiums Paid for Capped Calls (Details) - Capped Calls - USD ($) $ / shares in Units, $ in Thousands | Jun. 05, 2020 | Sep. 21, 2018 |
2023 Notes and 2025 Notes | ||
Option Indexed to Issuer's Equity [Line Items] | ||
Initial strike price, subject to certain adjustments (in dollars per share) | $ 148.30 | |
Cap price, subject to certain adjustments (in dollars per share) | $ 232.62 | |
Total premium paid | $ 274,275 | |
2027 Notes | ||
Option Indexed to Issuer's Equity [Line Items] | ||
Initial strike price, subject to certain adjustments (in dollars per share) | $ 255.34 | |
Cap price, subject to certain adjustments (in dollars per share) | $ 378.28 | |
Total premium paid | $ 137,379 |
Stock Compensation Plans and _3
Stock Compensation Plans and Stockholders' Equity - Schedule of Award Activity (Details) | 9 Months Ended |
Oct. 31, 2023 $ / shares shares | |
PSUs | |
Number of Shares | |
Balances at the beginning of the period (in shares) | shares | 386,000 |
Granted (in shares) | shares | 438,000 |
Vested (in shares) | shares | (152,000) |
Balances at the end of the period (in shares) | shares | 672,000 |
Weighted-Average Grant-Date Fair Value Per Share | |
Balances at the beginning of the period (in dollars per share) | $ / shares | $ 193.96 |
Granted (in dollars per share) | $ / shares | 124.22 |
Vested (in dollars per share) | $ / shares | 146.41 |
Balances at the end of the period (in dollars per share) | $ / shares | $ 159.24 |
RSUs | |
Number of Shares | |
Balances at the beginning of the period (in shares) | shares | 11,627,000 |
Granted (in shares) | shares | 4,202,000 |
Vested (in shares) | shares | (4,416,000) |
Forfeited and canceled (in shares) | shares | (1,408,000) |
Balances at the end of the period (in shares) | shares | 10,005,000 |
Weighted-Average Grant-Date Fair Value Per Share | |
Balances at the beginning of the period (in dollars per share) | $ / shares | $ 128.11 |
Granted (in dollars per share) | $ / shares | 96.90 |
Vested (in dollars per share) | $ / shares | 133.13 |
Forfeited and canceled (in dollars per share) | $ / shares | 126.51 |
Balances at the end of the period (in dollars per share) | $ / shares | $ 113.01 |
RSAs | |
Number of Shares | |
Balances at the beginning of the period (in shares) | shares | 289,000 |
Vested (in shares) | shares | (41,000) |
Balances at the end of the period (in shares) | shares | 248,000 |
Weighted-Average Grant-Date Fair Value Per Share | |
Balances at the beginning of the period (in dollars per share) | $ / shares | $ 86.15 |
Vested (in dollars per share) | $ / shares | 140.71 |
Balances at the end of the period (in dollars per share) | $ / shares | $ 77.22 |
Stock Compensation Plans and _4
Stock Compensation Plans and Stockholders' Equity - Schedule of Option Activity (Details) - Options - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended |
Oct. 31, 2023 | Jan. 31, 2023 | |
Shares | ||
Outstanding at the beginning of the period (in shares) | 108,000 | |
Options exercised (in shares) | (37,000) | |
Options forfeited and expired (in shares) | (1,000) | |
Outstanding at the end of the period (in shares) | 70,000 | 108,000 |
Vested and expected to vest at the end of the period (in shares) | 70,000 | |
Exercisable at the end of the period (in shares) | 65,000 | |
Weighted-Average Exercise Price Per Share | ||
Balances at the beginning of the period (in dollars per share) | $ 10.27 | |
Options exercised (in dollars per share) | 11.05 | |
Options forfeited and expired (in dollars per share) | 20.01 | |
Balances at the end of the period (in dollars per share) | 9.71 | $ 10.27 |
Vested and expected to vest at the end of the period (in dollars per share) | 9.70 | |
Exercisable at the end of the period (in dollars per share) | $ 9.51 | |
Weighted-Average Remaining Contractual Term | ||
Weighted-Average Remaining Contractual Term (in years) | 4 years 4 months 24 days | 5 years 3 months 18 days |
Vested and expected to vest at the end of the period | 4 years 6 months | |
Vested and exercisable at the end of the period | 4 years 6 months | |
Aggregate Intrinsic Value | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | $ 9,276 | |
Outstanding at the end of the period (in dollars) | 9,641 | $ 9,276 |
Vested and expected to vest at the end of the period (in dollars) | 9,615 | |
Vested and exercisable at the end of the period (in dollars) | $ 8,908 |
Stock Compensation Plans and _5
Stock Compensation Plans and Stockholders' Equity - Narrative (Details) - PSUs | 9 Months Ended |
Oct. 31, 2023 | |
Minimum | |
Stock Compensation Plans | |
Award vesting rights | 0% |
Vesting period | 3 years |
Maximum | |
Stock Compensation Plans | |
Award vesting rights | 200% |
Vesting period | 4 years |
Stock Compensation Plans and _6
Stock Compensation Plans and Stockholders' Equity - Unrecognized Compensation Costs (Details) $ in Thousands | 9 Months Ended |
Oct. 31, 2023 USD ($) | |
Stock Compensation Plans | |
Total unrecognized compensation cost | $ 979,168 |
RSUs | |
Stock Compensation Plans | |
Total unrecognized compensation cost related to other awards | $ 914,011 |
Weighted-average period over which unrecognized compensation cost is expected to be recognized | 1 year 10 months 24 days |
PSUs | |
Stock Compensation Plans | |
Total unrecognized compensation cost related to other awards | $ 52,421 |
Weighted-average period over which unrecognized compensation cost is expected to be recognized | 1 year 6 months |
RSAs | |
Stock Compensation Plans | |
Total unrecognized compensation cost related to other awards | $ 12,228 |
Weighted-average period over which unrecognized compensation cost is expected to be recognized | 1 year 10 months 24 days |
Options | |
Stock Compensation Plans | |
Total unrecognized compensation cost related to stock options | $ 508 |
Weighted-average period over which unrecognized compensation cost is expected to be recognized | 1 year 1 month 6 days |
Revenues, Accounts Receivable_3
Revenues, Accounts Receivable, Deferred Revenue and Remaining Performance Obligations - Disaggregated Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2023 | Oct. 31, 2022 | |
Disaggregation of Revenue | ||||
Total revenues | $ 1,067,355 | $ 929,769 | $ 2,729,448 | $ 2,402,603 |
Cloud services | ||||
Disaggregation of Revenue | ||||
Total revenues | 469,445 | 374,027 | 1,334,043 | 1,043,361 |
License | ||||
Disaggregation of Revenue | ||||
Total revenues | 429,356 | 383,584 | 896,225 | 851,111 |
Maintenance and services | ||||
Disaggregation of Revenue | ||||
Total revenues | $ 168,554 | $ 172,158 | $ 499,180 | $ 508,131 |
Revenues, Accounts Receivable_4
Revenues, Accounts Receivable, Deferred Revenue and Remaining Performance Obligations - Revenue by Geography (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2023 | Oct. 31, 2022 | |
Concentration Risk | ||||
Revenues | $ 1,067,355 | $ 929,769 | $ 2,729,448 | $ 2,402,603 |
United States | ||||
Concentration Risk | ||||
Revenues | 735,443 | 684,647 | 1,813,948 | 1,685,392 |
International | ||||
Concentration Risk | ||||
Revenues | $ 331,912 | $ 245,122 | $ 915,500 | $ 717,211 |
Revenues, Accounts Receivable_5
Revenues, Accounts Receivable, Deferred Revenue and Remaining Performance Obligations - Customer Concentration Risk (Details) - Customer concentration risk | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2023 | Oct. 31, 2022 | Jan. 31, 2023 | |
Revenues | Customer One | |||||
Concentration Risk | |||||
Concentration risk, percentage | 21% | 23% | 24% | 25% | |
Revenues | Customer Two | |||||
Concentration Risk | |||||
Concentration risk, percentage | 17% | 20% | 16% | 17% | |
Accounts receivable | Customer One | |||||
Concentration Risk | |||||
Concentration risk, percentage | 23% | 26% | |||
Accounts receivable | Customer Two | |||||
Concentration Risk | |||||
Concentration risk, percentage | 11% | 6% |
Revenues, Accounts Receivable_6
Revenues, Accounts Receivable, Deferred Revenue and Remaining Performance Obligations, Deferred Revenue - Deferred Revenue (Details) - USD ($) $ in Millions | 9 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | ||
Recognition of deferred revenue from opening deferred balance | $ 1,400 | $ 1,100 |
Revenues, Accounts Receivable_7
Revenues, Accounts Receivable, Deferred Revenue and Remaining Performance Obligations - Remaining Performance Obligation (Details) $ in Millions | Oct. 31, 2023 USD ($) |
Disaggregation of Revenue | |
Revenue, Remaining Performance Obligation, Amount | $ 3,100 |
Revenue, Remaining Performance Obligation, Percentage | 65% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2022-05-01 | |
Disaggregation of Revenue | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 12 months |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2023 | Oct. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Income tax provision | $ 6,523 | $ 4,355 | $ 17,803 | $ 15,652 |
Net Income (Loss) Per Share - S
Net Income (Loss) Per Share - Schedule of Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2023 | Oct. 31, 2022 | |
Numerator | ||||
Net income (loss) | $ 96,853 | $ (32,620) | $ (162,815) | $ (546,654) |
Interest expense of convertible senior notes - 2023 Notes, 2025 Notes, and 2027 Notes | 6,261 | 0 | 0 | |
Diluted net income | $ 103,114 | $ (32,620) | $ (162,815) | $ (546,654) |
Denominator | ||||
Weighted-average shares used to compute net income (loss) per share, basic (in shares) | 167,894 | 163,044 | 166,472 | 161,738 |
Net income (loss) per share, basic (in dollars per share) | $ 0.58 | $ (0.20) | $ (0.98) | $ (3.38) |
Weighted-average shares used to compute net income (loss) per share, diluted (in shares) | 185,982 | 163,044 | 166,472 | 161,738 |
Net income (loss) per share | ||||
Net income (loss) per share, diluted (in dollars per share) | $ 0.55 | $ (0.20) | $ (0.98) | $ (3.38) |
Convertible senior notes - 2023 Notes, 2025 Notes, and 2026 Notes | ||||
Denominator | ||||
Weighted-average effect of potentially dilutive securities (in shares) | 14,684 | 0 | 0 | 0 |
Employee stock awards | ||||
Denominator | ||||
Weighted-average effect of potentially dilutive securities (in shares) | 3,404 | 0 | 0 | 0 |
Net Income (Loss) Per Share - P
Net Income (Loss) Per Share - Potentially Dilutive Securities (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Oct. 31, 2023 | Oct. 31, 2022 | |
Potentially dilutive securities | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 6,102 | 36,472 | 30,515 | 36,472 |
Convertible senior notes - 2023 Notes, 2025 Notes, and 2026 Notes | ||||
Potentially dilutive securities | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 4,954 | 22,258 | 17,020 | 22,258 |
Employee stock awards | ||||
Potentially dilutive securities | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 1,148 | 14,214 | 13,495 | 14,214 |
Restructuring - Narrative (Deta
Restructuring - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 31, 2023 | Jan. 31, 2024 | |
February 2023 Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Charges | $ 27,642 | |
October 2023 Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Charges | $ 5,925 | |
October 2023 Plan | Forecast | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and related cost, expected cost | $ 42,000 |
Restructuring - Restructuring R
Restructuring - Restructuring Reserve (Details) $ in Thousands | 9 Months Ended |
Oct. 31, 2023 USD ($) | |
February 2023 Plan | |
Restructuring Cost and Reserve [Line Items] | |
Charges | $ 27,642 |
October 2023 Plan | |
Restructuring Cost and Reserve [Line Items] | |
Charges | 5,925 |
Employee Severance | February 2023 Plan | |
Restructuring Cost and Reserve [Line Items] | |
Charges | 27,642 |
Payments | (24,534) |
Non-cash items | (2,510) |
Restructuring reserve | 598 |
Employee Severance | October 2023 Plan | |
Restructuring Cost and Reserve [Line Items] | |
Charges | 5,925 |
Payments | (248) |
Non-cash items | (1,227) |
Restructuring reserve | $ 4,450 |
Restructuring - Restructuring C
Restructuring - Restructuring Charges Included in the Condensed Consolidated Statements of Operations (Details) $ in Thousands | 9 Months Ended |
Oct. 31, 2023 USD ($) | |
February 2023 Plan | |
Restructuring Cost and Reserve [Line Items] | |
Charges | $ 27,642 |
October 2023 Plan | |
Restructuring Cost and Reserve [Line Items] | |
Charges | 5,925 |
Cost of revenues | February 2023 Plan | |
Restructuring Cost and Reserve [Line Items] | |
Charges | 1,238 |
Cost of revenues | October 2023 Plan | |
Restructuring Cost and Reserve [Line Items] | |
Charges | 120 |
Research and development | February 2023 Plan | |
Restructuring Cost and Reserve [Line Items] | |
Charges | 14,774 |
Research and development | October 2023 Plan | |
Restructuring Cost and Reserve [Line Items] | |
Charges | 3,691 |
Sales and marketing | February 2023 Plan | |
Restructuring Cost and Reserve [Line Items] | |
Charges | 3,164 |
Sales and marketing | October 2023 Plan | |
Restructuring Cost and Reserve [Line Items] | |
Charges | 378 |
General and administrative | February 2023 Plan | |
Restructuring Cost and Reserve [Line Items] | |
Charges | 8,466 |
General and administrative | October 2023 Plan | |
Restructuring Cost and Reserve [Line Items] | |
Charges | $ 1,736 |
Subsequent Event (Details)
Subsequent Event (Details) $ in Millions | 3 Months Ended |
Jan. 31, 2024 USD ($) | |
Subsequent Event | |
Subsequent Event [Line Items] | |
Operating Lease, Impairment Loss | $ 19 |