Splunk’s Revenue by Segment (2017-2023)

This statistic highlights Splunk’s Revenue by Segment from 2017 onwards, split between Cloud services, License, and Maintenance and services.

Splunk’s Revenue by Segment

Splunk Inc. generated total revenue of $745.08 million in Q4 2021 from the following segments:

• Cloud services
• License
• Maintenance and services

(All figures in millions, except percentages)

Cloud services

Cloud service enables a customer to use hosted software over the contract period without taking possession of the software. Splunk’s Cloud Platform facilitates the customer to collect, monitor, search, report, and analyze all the real-time as well as historical machine data. Cloud service is centrally and uniformly distributed by Splunk to its large customer base which includes customers ranging from Fortune 100 companies to small and medium-sized businesses. Splunk manages and regularly updates its cloud platform service so that all its customers can receive the most current features and functionality. Splunk recognizes the revenues generated from cloud services, over the associated subscription term. Splunk Cloud’s annual subscription fees are based on either the volume of data indexed per day or purchased infrastructure and data storage the customers require. 

Splunk Inc. generated $171.40 million from cloud services in Q4 2021. This segment contributed 23% of the total revenue generated in Q4 2021. The total revenue generated by Splunk through cloud service in the fiscal year 2021 is $554.13 million.

License

License revenues are recognized from term license and perpetual license which allows the customer a right to use the software. License fees are based on either the estimated daily data indexing capacity or the computing power the customers require. The license fee is recognized upon transfer of control of the software, that is at the time the license key is delivered to the customer, or when the license term commences. License revenues are recognized from sales of licenses to new customers and by selling additional licenses to existing customers which also includes renewal of term licenses. 

Splunk Inc. generated $405.95 million from license fees in Q4 2021. However, the revenue generated by this segment has declined by 22% year-over-year from $517.54 million in Q4 2020. Revenue from license contributed 54% of the total revenue generated in Q4 2021. The total revenue generated by Splunk through license fees in the fiscal year 2021 is $971.38 million.

Maintenance and services

Splunk generates maintenance and services revenues from maintenance agreements and professional services and training.

• Maintenance revenues: When a customer purchases a term license, maintenance is bundled with the license for the term of the license period. On the other hand, when a perpetual license is purchased, a customer also purchases one year of maintenance for which he is charged a percentage of the license fee. Customer who is engaged in maintenance agreements is entitled to receive support and unspecified upgrades and enhancements which become available during the maintenance period. Maintenance revenues are recognized on a straight-line basis, over the associated maintenance period. 

• Professional services and training revenues: Splunk’s professional services are focused on helping the customers use the software in highly complex operational environments. Training and professional services fees are recognized as revenue when services are delivered or recognized over the subscription period. 

Splunk Inc. generated $167.73 million from maintenance and services in Q4 2021. However, the revenue generated by this segment has declined by 39% year-over-year from $273.64 million in Q4 2020. Revenue from maintenance and services contributed 23% of the total revenue generated in Q4 2021. The total revenue generated by Splunk through maintenance and services in the fiscal year 2021 is $816.02 million.

Splunk’s revenue has decreased due to its transition to the subscription model. License revenues have decreased due to lower average contract duration and due to macroeconomic uncertainties during fiscal 2021 that resulted in a delay in the customer payments, especially for certain high-dollar and long-term contracts. This decrease in license revenues was partly compensated by an increase in cloud services revenues. 

Company Overview

Splunk Inc. is an American-based technology company that was established in October 2003 by Rob Das, Erik Swan, and Michael Baum. Its headquarters is in San Francisco, California. Splunk Inc. had its initial public offering in 2012 and its common stocks are listed on the NASDAQ Global Select Market under the trading symbol “SPLK”. 

Splunk Inc. developed software that enables searching, analyzing, and monitoring machine-generated data via a Web-style interface. It translates its real-time data into graphs, reports, and visualizations through a searchable repository. Such data helps an organization to identify data patterns, providing metrics, and diagnose problems.

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