Splunk Inc (SPLK) Reports Fiscal Q3 2024 Earnings: Cloud Revenue Soars as ARR Hits $4.0 Billion

Robust Cloud Growth and Operational Efficiency Drive Splunk's Performance

  • Annual Recurring Revenue (ARR) increased by 15% year-over-year to $4.0 billion.
  • Cloud revenue grew by 26%, contributing significantly to a total revenue of $1.067 billion.
  • GAAP net income nearly reached $100 million, with a substantial increase in operating cash flow.
  • Non-GAAP operating margin stood at 31%, reflecting improved profitability.
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On November 28, 2023, Splunk Inc (SPLK, Financial) released its 8-K filing, announcing financial results for the fiscal third quarter ended October 31, 2023. The company, a leader in cybersecurity and observability, reported a 15% year-over-year increase in its Annual Recurring Revenue (ARR) to $4.0 billion, with cloud revenue growing by 26% to $469 million. This growth in cloud revenue is a testament to the company's solid momentum in its cloud business, which now represents the majority of the total ARR.

Financial Performance Overview

Splunk Inc (SPLK, Financial) demonstrated strong financial health in the third quarter of fiscal 2024. Total revenues reached $1.067 billion, with cloud services contributing $469 million, a significant increase from the previous year. The company's GAAP Operating Expenses saw a modest increase of 4% year-over-year, while non-GAAP Operating Expenses decreased by 1%. This operational efficiency contributed to a nearly $100 million GAAP net income for the quarter.

Moreover, the trailing twelve-month operating cash flow surged by 182% year-over-year to $863 million, and the adjusted free cash flow saw an even more impressive year-over-year increase of 199% to $857 million. The company also reported having 851 customers with Total ARR greater than $1 million, marking an increase of 97 customers from the previous year.

Key Financial Statements Highlights

The condensed consolidated statements of operations revealed that Splunk Inc (SPLK, Financial) experienced a gross profit of $857.4 million for the quarter, with a basic net income per share of $0.58 and diluted net income per share of $0.55. The balance sheet showed a healthy cash and cash equivalents position of $927.9 million, with total assets amounting to $5.39 billion. Total liabilities stood at $5.19 billion, resulting in a stockholders' equity of $198.9 million.

The cash flow statement highlighted the company's strong cash generation capabilities, with net cash provided by operating activities totaling $85.4 million for the quarter and $587 million for the nine months ended October 31, 2023.

Management Commentary

Splunk delivered a solid third quarter and marked several milestones in our journey to deliver exceptional customer and shareholder value, including our agreement to join forces with Cisco,” said Gary Steele, President and CEO of Splunk. “Organizations are continuing to unlock value with Splunk, and in Q3 we saw solid momentum in our cloud business as Cloud ARR grew 26% year-over-year and now represents the majority of Total ARR. Our results demonstrate our accelerated innovation, relentless customer focus and consistent execution, and I'm confident we are well-positioned for the future.”
“We remain focused on driving growth and increasing profitability and are pleased with our progress in Q3. We drove ARR growth of 15% to $4.0 billion, achieved a non-GAAP operating margin of 31% and generated nearly $100 million of GAAP net income,” said Brian Roberts, CFO of Splunk.

Business and Product Highlights

During the quarter, Splunk Inc (SPLK, Financial) continued to innovate, enhancing its security and observability product portfolio. The company's products, Splunk SOAR and Splunk Enterprise Security, won awards in four categories based on customer reviews. Splunk also celebrated the first anniversary of the Open Cybersecurity Schema Framework (OCSF) project and released the 2023 CISO Report and Global Impact Report, highlighting its commitment to addressing broader societal challenges.

It is important to note that in light of the pending transaction with Cisco, Splunk will not be hosting an earnings conference call to review the third quarter or providing a financial outlook.


Splunk Inc (SPLK, Financial) has demonstrated a strong fiscal performance in the third quarter of 2024, with significant growth in cloud revenue and ARR. The company's focus on innovation and customer value, along with operational efficiency, has resulted in robust profitability and cash flow. As Splunk continues its journey, the proposed acquisition by Cisco is expected to further strengthen its market position.

Explore the complete 8-K earnings release (here) from Splunk Inc for further details.