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
: Congratulations to the Splunk team on putting up a really good show in this Q4. One question for Jason and one for Doug. One for Jason. As you
look at the cloud numbers, I mean, certainly, you're seeing cloud ARR accelerate at scale, which is truly significant. As you play this out, there is a
transition that the company went from license to subscription, then going from subscription to cloud. As you play this out, is it not conceivable
that in a 2-year time horizon or so, if cloud becomes a majority of the revenue, you do actually become a cloud company? And what are the
implications of that for the Splunk business model?
And one for you, Doug, if you can, given that there's a lot of crosscurrents, you've had a change in leadership with the departure of a worldwide
head of field operations and also increasing noise about the competitive environment. And it looks like the execution has certainly improved. What
is your -- as you sit today and do this call with us, what is your outlook for Splunk given the perception of greater competition, the hires you might
or might not be making to the executive team and how your business pans out and your confidence overall? Although you don't have a target for
us 3 years out, how do you think about the 3-year outlook for Splunk, given all the crosscurrents that are being discussed? Once again, congratulations.
Question: Matthew George Hedberg - RBC Capital Markets, Research Division - Analyst
: I'll offer my congrats as well. Doug, you've always been strong at expansion. And I think with the expanded portfolio, it's a really intriguing option
for you guys to continue to drive more wallet share. I didn't notice the customer count. I know you said you had strong close rates. I'm just sort of
curious if you could talk about that motion of new customers now that cloud is 51% of bookings, a majority, do you get a sense that maybe that
land piece of the equation could start to accelerate in fiscal '22?
Question: Matthew George Hedberg - RBC Capital Markets, Research Division - Analyst
: Yes. That's really good to hear. I mean, I think that's what kind of we all would suspect. So it's good to hear those nuggets were good. And I guess
maybe as a follow-up to that, it looks like you guys are hiring at a rapid pace. And with new sales leadership, how do you approach this? Obviously,
you're not giving us full year guidance, but when you think about new reps vis-a-vis your kind of Q1 ARR growth, how are you thinking about that
balance between new reps and productivity gains? Because it seems like there's a real opportunity to kind of accelerate some of this new business
momentum that you discussed and talking about.
Question: Michael Turits - KeyBanc Capital Markets Inc., Research Division - Analyst
: A couple of questions for Jason. First of all, on RPO, which do you sell on total this quarter, and you did mention, obviously, there's been some
duration headwinds. I just want to make sure I get the mechanics right, Jason, that there's a -- from my understanding is there's more that will be
up for renewal, essentially in next year, and we'll start to get, therefore, an acceleration in both total and current RPO?
Question: Michael Turits - KeyBanc Capital Markets Inc., Research Division - Analyst
: And that should impact total and current as well, correct?
Question: Michael Turits - KeyBanc Capital Markets Inc., Research Division - Analyst
: Right. And then, Doug, I hope you don't mind if I ask Jason another question here. Sure, I'll bug you about stuff. And so...
Question: Michael Turits - KeyBanc Capital Markets Inc., Research Division - Analyst
: But obviously, I understand it's a volatile time, so we didn't get the fiscal '22 or the long-term guide. But given what seems, at least factoring out
duration, that you should have a little bit more visibility into -- in the ACV, are we at the point where we can get some feel for cash flow from ops
this year? Or you're minus $200 million this year, does that flip in a meaningful way this year? I would think you'd have a little more of a view there.
Question: Michael Turits - KeyBanc Capital Markets Inc., Research Division - Analyst
: Thanks, Jason. And thanks, Doug, for not being offended on the focus on financials.
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MARCH 03, 2021 / 9:30PM, SPLK.OQ - Q4 2021 Splunk Inc Earnings Call
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