Splunk Inc.

or 2022 Financial Results Conference call begin momentarily. Thank you for your patience and please stand by. Thank you. Hello. Thank you for standing by, and welcome to the Splunk, Inc. Second Quarter 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star 1 on your telephone. Please be advised that today's conference is being recorded. Should you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Ken Tinsley. Please go ahead.

Great. Thank you, Operator, 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 investor relations website, along with supplemental material. This conference call is being broadcast live via webcast, and following the call, an audio replay will be available on the website. On today's call, we will be making forward-looking statements, including financial guidance and expectations, such as our forecast for our third quarter and our fiscal year 2022, as well as future expectations of revenue mix, renewals, duration, RPO growth, cloud growth, bookings, gross margin, and operating cash flow, as well as trends in our markets and our business, and our 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. Please refer to documents we filed with the SEC including the form 8K filed with today's press release. Those documents contain risks and other factors that 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. So with that, let me turn it over to Doug.

Thanks, Ken, and good afternoon, everyone. Our team delivered another very strong quarter, with cloud ARR growing 72%, our 10th consecutive quarter of 70% plus growth. Over the last year, we've also doubled the number of customers with cloud ARR of more than $1 million. And our cloud dollar-based net retention rate remains best in class at 129%. These results speak to the high strategic value we delivered to the world's largest and most dynamic organizations. Our Q2 outperformance was also broad-based. With each of our major geographic regions exceeding plan and validating their customers globally, are relying on Splunk and our market-leading data platform and cloud-based capabilities. Splunk offers the most comprehensive data platform in the market today, powering our customers' security, IT, and DevOps teams. We are 100% focused on enabling them to make sense of and act on their log, metric, and trace data to achieve the outcomes that matter most to them. Royal Philippine organizations rapidly migrate to the cloud, so they can more effectively and securely serve their own customers. We brought together the best cloud experts in the market to do this, while evolving our platform and customer-facing teams to serve our customers' multi-cloud and hybrid worlds. When we talk about Splug supporting multi-cloud deployments, we're enabling deep and native visibility across any public cloud, AWS, Google Cloud, Microsoft Azure, and others, as well as any combination of those clouds. Our priority is for our customers to have the highest level of visibility across their organization's data, so they can serve their own customers effectively and securely. And when we talk about supporting any hybrid deployment, we're referring to helping customers at absolutely any stage of their transition to the cloud, whether they're still prominently on-prem or all in on the cloud or somewhere between. As transformation in the cloud accelerates and data ingestion needs skyrocket, our customers have asked for more flexible pricing. That's why we introduced workload-based pricing nearly two years ago. allowing our customers to take action on even more of their data without any gates on the ingestion of that data. This quarter's results showed that our customers are increasingly favoring this pricing option. During Q2, more than 80% of net new cloud ARR was from workload-based pricing, up more than 3x from a year ago. And now, more than 25% of our total cloud ARR is from customers utilizing workload-based pricing. and our customers are reaping the benefits. For example, after using Splunk on-prem for five years, a major North American-based services provider to the finance industry decided to begin to shift to Splunk Cloud and workload-based pricing in Q2. This shift was driven from expected infrastructure management savings of 75%, increased Splunk feature and capability velocity, and the ability to forego a costly hardware refresh that had been planned for next year. Also in Q2, One of India's top five banks decided to go all in on Splunk Cloud and workload-based pricing. They are leaning on the versatility of our pricing model, making it central to their overall security and cloud transformation strategy. They're leveraging Splunk Cloud services to drive efficiency and visibility across their entire technological infrastructure, delivering a world-class banking experience to their customers. By improving the efficiency of their operations, this customer expects to be better able to meet strict compliance requirements and reduce risk, while taking advantage of Splunk Cloud's scalability to help accelerate their digital transformation. And workload pricing was a big factor in one of several competitor displacements during Q2. For example, a major North American financial services firm had grown tired of the billing surprises a competitor dropped on them every single month. This customer appreciated our flat, predictable, and transparent pricing, and turned to Splunk to monitor their workloads across multiple clouds. Both existing and new customers are embracing Splunk Cloud. For example, one organization new to Splunk this past quarter was the Norwegian Labor and Welfare Administration, also known as NAV. NAV, one of Norway's largest public entities, purchased the Splunk Cloud platform to help optimize and secure the distribution of Norway's citizens of unemployment benefits, pensions, and more that amount to one-third of the national budget. NAV is on a rapid digital transformation journey and relies on Splunk as their trusted tech partner to accelerate their systems from on-premise to the cloud in a way that's flexible, scalable, and compliant with Norway's central government regulations. Now let's turn to our product portfolio. In Q2, we launched our Splunk Observability, IT, and Security Clouds. applying our evolved cloud platform and pricing to our customer's specific needs. During our last earnings call, I shared news of our launch of Splunk Observability Cloud, which brings together the world's best-in-class solutions for infrastructure monitoring, application performance monitoring, real user monitoring, synthetic monitoring, log investigation, and incident response, giving IT and DevOps teams full stack visibility and context across any hybrid or multi-cloud environment. This integrated multifaceted delivery enables some powerful capabilities and outcomes for our customers. For example, with Splunk Observability Cloud, our customer, Lenovo, reduced their mean time to resolution from 30 minutes to about five, allowing them to maintain 100% uptime through Black Friday traffic, which was 300% higher than the previous year. When it comes to IT operations, we're delivering some of the most broad and robust services in the market through our IT cloud. which combines the power of end-to-end virtual service visibility and monitoring with next-generation stream-based infrastructure monitoring and dashboard generation, incident and event management, and on-call distribution response capabilities. And Splunk has recently recognized the value we're delivering to our IT customers. We earned Gartner's number one spot in the ITOM performance analysis market for 2020. We were also named the leader in AIOps by Omdia and Research in Actions. giving us independent validation that customers looking to modernize IT operations through advanced analytics and automation are increasingly turning to Splunk as a preferred solution provider. Turning to security, this cyber threat landscape continues to grow in attack frequency and complexity, and we are rapidly innovating so our customers remain agile to adapt to ever-evolving threats. We spent Q2 helping customers better protect themselves from new threats like the Kaseya Revel ransomware attack and more. We also launched Splunk Security Cloud, a modern security operations platform that gives customers advanced security analytics, automated security operations, and integrated threat intelligence on one comprehensive platform. Companies like the Environmental Systems Research Institute, Real Chemistry, and Soriana are already benefiting from our security cloud pricing model using a common and predictable metric. In Q2, a leading healthcare services company and existing ITOps customer, invested in our new security cloud as they built out their next-gen SIEM. Their existing SIEM couldn't meet the technical requirements that the customer was looking for and that our security cloud could deliver. While their ITOps team owned a Splunk perpetual license, it was our ability to offer workload-based pricing for our security cloud that helped this customer expand from ITOps into security with Splunk. We also want a significant eight-figure deal at one of the five largest banks in Latin America. Here, the customer is looking for a single solution for all their machine data, security, and advanced machine learning in a rapidly evolving cyberspace full of threats. Basic logging and security offerings from two of our competitors fell short of matching Splunk's breadth and depth of offerings delivered on one cohesive platform. With Splunk, this large enterprise is now collecting data once and using it for investigation, IT use cases, and to protect their mission-critical assets, including financial and confidential data. And last month, for the eighth year in a row, Splunk continued to be a leader in the 2021 Gartner SIM Matcher Quadrant. Gartner also validated Splunk as number one in the SIM performance analysis market for 2020. Additionally, we retained the number one spot in IDC's Cyber Analytics, Intelligence Response and Orchestration, and Tier 2 SOC Analytics market shares. On the partner front, we're seeing terrific progress as well. For example, Splunk has continued to work with AWS to release new offerings that provide a more curated experience for customers who have an AWS-centric cloud adoption model. Announcing Q2, the new Splunk Security Analytics for AWS is a simplified security analytics solution designed for lean security teams. This offering leverages deep, centralized visibility of AWS environments, accelerating threat detection investigation and response capabilities for security teams who have fewer staff. Also, one of our long-term preferred managed service provider partners, BlueVoyant, recently announced the launch of their BlueVoyant Modern SOC for Splunk Cloud platform. The platform is designed to empower customers to maximize their investment in Splunk Cloud through features such as white glove technical workshops, rapid onboarding into Splunk Cloud, and 24 by 7 managed detection response powered by Blue Boeing's 24x7 managed SOC. And finally, we're excited to host over 15,000 Splunk customers and partners at our annual user conference in October, where we'll roll out new capabilities, our updated product and services roadmap, and further celebrate the data ecosystem and the incredible ways our customers are training data into doing. When it comes to innovating on behalf of our customers over nearly two decades, we never rest. I'm so proud of the entire Splunk team for delivering another fantastic quarter, and I want to thank our customers and partners for inspiring us to better serve them every day. Thank you, and I'll turn it over to Jason for more on the quarter.