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Splunk Gross Margin %

: 82.79% (As of Oct. 2019)
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Gross Margin % is calculated as gross profit divided by its revenue. Splunk's Gross Profit for the three months ended in Oct. 2019 was $519 Mil. Splunk's Revenue for the three months ended in Oct. 2019 was $626 Mil. Therefore, Splunk's Gross Margin % for the quarter that ended in Oct. 2019 was 82.79%.

Warning Sign:

Splunk Inc gross margin has been in long term decline. The average rate of decline per year is -1.8%.


NAS:SPLK' s Gross Margin % Range Over the Past 10 Years
Min: 79.75   Max: 90.6
Current: 81.93

79.75
90.6

During the past 10 years, the highest Gross Margin % of Splunk was 90.60%. The lowest was 79.75%. And the median was 86.50%.

NAS:SPLK's Gross Margin % is ranked higher than
85% of the 1915 Companies
in the Software industry.

( Industry Median: 46.42 vs. NAS:SPLK: 81.93 )

Splunk had a gross margin of 82.79% for the quarter that ended in Oct. 2019 => Durable competitive advantage

The 5-Year average Growth Rate of Gross Margin for Splunk was -1.80% per year.


Splunk Gross Margin % Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Splunk Annual Data
Jan10 Jan11 Jan12 Jan13 Jan14 Jan15 Jan16 Jan17 Jan18 Jan19
Gross Margin % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 84.83 82.93 79.75 80.41 80.88

Splunk Quarterly Data
Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Jan17 Apr17 Jul17 Oct17 Jan18 Apr18 Jul18 Oct18 Jan19 Apr19 Jul19 Oct19
Gross Margin % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 81.45 84.93 77.45 80.97 82.79

Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.


Splunk Gross Margin % Distribution

* The bar in red indicates where Splunk's Gross Margin % falls into.



Splunk Gross Margin % Calculation

Gross Margin is the percentage of Gross Profit out of sales or Revenue.

Splunk's Gross Margin for the fiscal year that ended in Jan. 2019 is calculated as

Gross Margin % (A: Jan. 2019 )=Gross Profit (A: Jan. 2019 ) / Revenue (A: Jan. 2019 )
=1458.3 / 1803.01
=(Revenue - Cost of Goods Sold) / Revenue
=(1803.01 - 344.676) / 1803.01
=80.88 %

Splunk's Gross Margin for the quarter that ended in Oct. 2019 is calculated as


Gross Margin % (Q: Oct. 2019 )=Gross Profit (Q: Oct. 2019 ) / Revenue (Q: Oct. 2019 )
=-107.8 / 626.336
=(Revenue - Cost of Goods Sold) / Revenue
=(626.336 - 107.819) / 626.336
=82.79 %

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.


Splunk  (NAS:SPLK) Gross Margin % Explanation

Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.

Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %

1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key

Splunk had a gross margin of 82.79% for the quarter that ended in Oct. 2019 => Durable competitive advantage


Be Aware

If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.


Splunk Gross Margin % Related Terms


Splunk Gross Margin % Headlines

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