Graham Smith, Interim CEO:
“…Before I talk about our Q3 results and business momentum, I’d like to first introduce myself. As you all learned a few weeks ago, Doug Merritt has stepped down as President and CEO, and the Board has appointed me Interim CEO while they conduct a search to identify Splunk’s next leader. I’ve served as a member of our Board of Directors since 2011, taking on the Chair role in 2019. Since I retired from the CFO role at Salesforce in 2015, I have served and continue to serve on the Boards of category leaders and innovators across the SaaS landscape.
Splunk is an extraordinary company. Having spent a decade on the Board, I’ve always appreciated the power of our products, but it’s a true honor to be leading its passionate, customer-focused employees.
What differentiated Splunk’s technology when I became a Board member, our unmatched scalable index is still a critical and unique component of our platform. Over the years, we’ve built on that index to offer an extensible data platform that powers purpose-built solutions for security and observability, giving tens of thousands of organizations the ability to break down silos and investigate, correlate and take action on data at incredible scale.
What’s more, over the last 1.5 years, Splunk has become the data foundation upon which our customers have adapted to a remote work environment and navigated the immense challenges and opportunities created by global pandemic.
I want to thank Doug for his innumerable contributions to Splunk. Doug built Splunk’s amazing go-to-market muscle in his early years at the company and then took on the critical product and business model transformations, which have enabled Splunk to become a global tech leader that it is. Under Doug’s leadership, Splunk has grown from $450 million in revenue to now nearly $3 billion in annual recurring revenue, propelling us towards a future where every organization can harness the full power of its data.
Turning to our quarterly results. Our Q3 execution was strong as we continued to deliver high value to our customers around the world. Q3 was Splunk’s first $1 billion cloud quarter with cloud ARR reaching $1.1 billion and growing 75% year-over-year. This was our 11th straight quarter of 70-plus percent cloud ARR growth. Our cloud bookings mix jumped to 68%, our highest ever. And our cloud dollar-based net retention rate increased to 130%. Total ARR grew 37% from the year ago period, keeping Splunk in the rarefied group of multibillion-dollar companies growing faster than 30%.
In October, we welcomed more than 20,000 Splunk customers, prospects and partners to our .conf user conference. We showcased Splunk as the data foundation for the hybrid world. And we showed how our customers can unlock innovation by building resilience, improving security and gaining end-to-end visibility of their data. We announced numerous platform innovations to help customers take action on data wherever it originates. We revealed our new Ingest Actions capability, enabling organizations to take action on data motion to redact, filter and route data to Splunk or to external S3 storage. Ingest Actions is just one of the new ways we are helping our customers manage their high-value data more economically.
We also highlighted enhancements to federated search, providing a unified search experience whether the data is in the cloud or on-prem. This type of hybrid capability continues to differentiate Splunk even as we accelerate our cloud transformation.
As we all know, security continues to be essential to digital transformation. So at .conf, we also highlighted our capabilities like risk-based alerting, threat intelligence management and SOAR visual playbook editor to help customers detect, investigate and respond to threats faster through increased automation.
One of our most important security wins in Q3 was with the U.S. Navy. Our partner, Leidos, and the U.S. Navy expanded their use of Splunk to further secure their mission-critical systems, adding Splunk for real-time monitoring of mission systems, which includes cybersecurity, NetOps and continuous monitoring….”