Splunk Inc.

Ladies and gentlemen, thank you for standing by and welcome to the Splunk Inc. fourth quarter 2021 financial results conference call. At this time, all participant lines are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Ken Tinsley. Thank you. Please go ahead, sir.

Great. Thank you, and good afternoon. With me on the call today are Doug Merritt and Jason Child. After market closed today, we issued a press release, which is posted on our website. Also note that we have posted supplemental material on the investor relations webpage as well. This conference call is being broadcast live via webcast, and following the call, an audio replay will be available on our website. On today's call, we will be making forward-looking statements, including financial guidance and expectations, such as our forecast for our first quarter, as well as future expectations of revenue mix, renewals, duration, and cloud growth and cloud growth margin, as well as trends in our markets and our business, and expectations regarding our acquisitions, products, technology, strategy, customers, demand, and markets. These statements are based on our assumptions as to the macroeconomic environment in which we will be operating and reflect our best judgment based on factors currently known to us and actual events or results may differ materially. Many of these assumptions relate to matters that are beyond our control and changing rapidly, including the impact of the COVID-19 pandemic on our business and that of our customers and the overall economic environment. Related to this uncertainty, certain customers have and may in the future continue to decrease or delay spending commitments, particularly for certain high-dollar and long-term contracts. Please refer to documents we file with the SEC, including the Form 8-K filed with today's press release. Those documents contain risks and other factors which may cause our actual results to differ from those contained in our forward-looking statements. These forward-looking statements are being made as of today, and we disclaim any obligation to update or revise these statements. If this call is reviewed after today, the information presented during this call may not contain current or accurate information. We will also discuss non-GAAP financial measures which are not prepared in accordance with generally accepted accounting principles. A reconciliation of GAAP and non-GAAP results is provided in the press release and on our website. With that, let me turn it over to Doug.

Thank you, Ken, and thanks to everyone on the call for joining us. Q4 was a strong finish to a memorable year for Splunk. I'm proud of both our results, as well as the dedication and tenacity of our team over these past 12 months, and particularly during our year end. And I'm so very grateful for the trust and commitment of our customers and partners. Splunk ended the year with overall annual recurring revenue of $2.36 billion, up 41% over last year. Even more importantly, we saw continued impressive results in our cloud-first initiative, with cloud ARR delivery of $810 million, up 83% over last year, and accelerating from our growth rate in Q3. Thriving our continued transition to the cloud has been our number one company priority for the past three years, and that's continuing into FY22. We remain very pleased with the progress for our transition to cloud. Looking back in time, just four years ago, cloud was less than 20% of our software bookings, delivering $48 million in revenue and the upper end of allowable daily data volume was about 10 terabytes per day. Today, cloud revenue stands at $554 million, representing an 84% CAGR. We're deploying 100 terabyte plus footprints with customers taking advantage of workload versus data ingest pricing and Cloud now represents the majority of our business, with 51% of our software bookings coming from cloud in Q4. We've seen that when our customers move to cloud, the investment they make in Splunk expands rapidly, as they utilize the high velocity of our cloud innovations, features, and machine learning, ultimately allowing them to free up resourcing and reorient their focus and time to what's most critical to them. Despite the continuing uncertainty and volatility of the macro environment, we had a strong finish to the year. In Q4, we saw procurement patterns that were closer to what we experienced in Q1 and Q2, and we were also able to close transactions with several of the accounts that had deals slip in Q3. Throughout the 100-plus customer interactions I've had over the past several months, I'm hearing about their continued belief in the value of our technology, and I'm seeing many of them expand their commitments to Splunk as a result. Over the past year, the world has experienced more change than in the past 10 years, and there are signs that 2021 will be similar, especially when it comes to data and to technology. Already, we're seeing companies with a strong digital strategy outpacing their peers. The organizations that prioritize the strategic use and operationalization of all of their data will achieve significant business and economic benefits. We're also seeing cybersecurity attacks at unprecedented levels and scale. The magnitude of the SolarWinds hack has hammered home the unsettling but ever-present reality of the digital era, that all organizations are likely to get hacked at some point. Digital security has become a broad governance imperative. Splunk is working side by side with our customers to help them drive the change, resiliency, and optimization around both of these key and critical trends. As an example, at the onset of the SolarWinds hack, Splunk took immediate action to both enable customers to investigate whether they had been impacted by the attack and to confirm that Splunk itself had not been impacted. Our customers counted on us to deliver timely detection capabilities. We did not disappoint. Our security strategy team published materials to guide our customers on how to use our products to find evidence of the Sunburst backdoor. Our professional services and customer success teams deployed remote, on-demand services to help customers implement this guidance. From there, our product and security teams released timely Splunk research and dynamic security content using the update capability in Splunk Enterprise Security to help our customers understand their own risk. As a whole, we responded rapidly to deliver the best-in-class value that our customers and community expect from Splunk. We know that all organizations run a journey to bring data to everything, and our mission to remove the barriers between data and action so everyone thrives in the data age has never been more important. The breadth and depth of our Data to Everything platform dramatically enhances the richness and value of our focused solutions for our customers across IT operations, security, and DevOps. Observability was among the standouts within our business in FY21, fueled by customers accelerating their own digital transformations and shifting to modern application development. Our customers are clearly excited about our observability capabilities, and the market is too. Just last week, industry analyst firm GigaOM published the industry's first ever evaluation of the cloud observability market. naming Splunk as the only outperformer and knowing that Splunk has emerged as one of the leaders in the observability space. Here are just a few examples from this past quarter where Splunk enabled some of the largest and most innovative organizations in the world to do more and bring more of their teams together on a common data platform. British grocery retailer Tesco is a longtime Splunk customer and the third largest retailer in the world in terms of gross revenue. Tesco recently expanded their use of Splunk, Enterprise Security, and our Observability Suite to better support an 80% increase in online sales brought on by COVID-19 and the run-up to Christmas. By leveraging Splunk to take action on their data, Tesco can provide their customers with a seamless online shopping experience and improved delivery speed. Nationwide Building Society, the largest building society in the world, expanded their use of Splunk Cloud and Enterprise Security to ensure their 15 million members receive the fastest response and protection against fraudulent activity. Relying on Splunk as an integral part of their cloud transformation, the British Mutual Financial Institution has already seen a significant cost reduction across all services and will be better equipped to safeguard their customers, their financial accounts, and their personal data. Leading omni-channel commerce platform Shopify continues to expand their use of Splunk Enterprise as well as Splunk Application Performance Management, or APM, as the company transforms their observability strategy. With the increase in e-commerce and online purchases brought on by COVID-19, Shopify expanded with Splunk to address their growing tracing and application monitoring demands, as well as provide them with visibility across their entire organization. With their observability solutions, Shopify is able to scale and support over one million merchants selling their products online. Longtime customer Okta upgraded their use of Splunk Cloud, which serves as their data at everything platform across the entire business. With Splunk Cloud, Okta can better serve their 9,400 plus customers by monitoring and providing faster response times and fewer error rates. Okta also leverages Splunk to better understand customer usage patterns, enabling them to continue to enhance their customer experience capabilities. These customer wins in Q4 underline the importance data plays as organizations scale their online and virtual environments. In summary, we delivered a strong finish to our year as we continue to deliver for our customers and execute across our multi-pronged transition. Once again, the majority of our software bookings came from the cloud, driven by cloud ARR growing at 83% year-over-year. With an overall $2.36 billion business growing at 41%, we are delivering best-in-class growth at scale. which is just one of the many reasons Splunk was just included among Fortune's most admired companies for the first time ever. We're excited about the year ahead and the opportunity to serve our customers with our incredibly rich technology portfolio, our industry-leading customer success and support offerings, and our cloud-first footing. I'll now hand over to Jason for more on the quarter and fiscal year results. Jason?