The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst
: Graham, very good to reconnect after a long time. I'm curious to get your thoughts on the CEO search. What are the attributes is the
Board looking for? And I also wanted to call out the tremendous cloud performance in the quarter. The 68% is a significant metric.
You're guiding to 70%. And that, I guess, becomes a question for Jason. As you project that out, 20% of your ARR in the next fiscal
year is going -- actually, 50% is going to come from cloud. What does that mean for the longer-term cash generation potential of
the business? How much more confident or not are you with respect to the longer-term cash generation of the business as a result
of the cloud transition, which is playing out even more quicker than we expected? Kudos.
Question: Matthew George Hedberg - RBC Capital Markets, Research Division - Analyst
: I guess for either of you. Could you talk about new customer -- new cloud customer adoption? You guys talked about workload
pricing for all the comp. Are you seeing acceleration? Obviously, you're seeing strong results out of your cloud business, but are you
seeing acceleration in new customer additions on the cloud side?
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DECEMBER 01, 2021 / 9:30PM, SPLK.OQ - Q3 2022 Splunk Inc Earnings Call
Question: Matthew George Hedberg - RBC Capital Markets, Research Division - Analyst
: Got it. Actually, maybe a follow-up for you. As we start to think about turning the calendar to fiscal '23, is the sales force where it
needs to be in terms of both, I guess, capacity and productivity relative to your ARR guide next year?
Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst
: Graham, nice to hear your voice again. And I wanted to direct this question to Jason. We weren't expecting fiscal '23 guide on this
call. So thank you for providing that. I think that's a positive. And I just wanted to ask if you might unpack it a little bit, and in particular,
the $3.9 billion in ARR. And the extent, Jason, to which you might be embedding a measure of conservatism for a couple of things,
the somewhat murky macro environment out there, but also the fact that you're undertaking a CEO search and you probably have
a desire not to leave an incoming CEO too tough a guide to meet. So to what extent might you be embedding things like that or
other factors in your outlook for year-end ARR?
Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst
: Great. I think that's appreciated. And then, Jason, if I could ask a follow-up really on the revenue line. It's -- and I think you're sympathetic
with all of us, it's tough to model. Sometimes you guys beat pretty cleanly. Other times, it's a little bit lighter as the mix shifts. I guess
as term duration compresses and as Teresa or team do a good job increasing the cloud bookings mix, I can understand why that
might create some pressure on revenues. But in the third quarter, actually, your [6 65] came up pretty appreciably above your
guidance. So despite these pressures, what caused the revenue upside in the October quarter? And why would that necessarily
reverse in 4Q?
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