It's a new day for your data. Cisco,
supercharged by Splunk, will revolutionize the way companies
harness data to connect and protect every aspect of their
organizations.
News summary
- Cisco is now uniquely poised to power, protect, and advance the
AI revolution for customers
- Cisco will bring the full power of the network together with
market-leading security and observability solutions
- With Splunk, Cisco becomes one of the largest software
companies globally
SAN JOSE, Calif., March 18, 2024 /PRNewswire/ -- Cisco
(NASDAQ: CSCO) today announced it completed the acquisition of
Splunk, setting the foundation for delivering unparalleled
visibility and insights across an organization's entire digital
footprint.
To thrive in the new digital era, organizations must
connect and protect all that they do. They need to
connect the people, places, applications, data, and devices that
power their business while protecting their entire digital
footprint from cybersecurity threats, downtime, and other critical
business risks.
Cisco will bring the full power of the
network, together with market-leading security and
observability solutions, to deliver a real-time unified view of the
entire digital landscape, helping teams proactively defend critical
infrastructure, prevent outages, and refine the network
experience.
"We are thrilled to officially welcome Splunk to Cisco," said
Chuck Robbins, Chair and CEO of
Cisco. "As one of the world's largest software companies, we will
revolutionize the way our customers leverage data to connect and
protect every aspect of their organization as we help power and
protect the AI revolution."
"Uniting Splunk and Cisco will bring tremendous value to our
joint customers worldwide," said Gary
Steele, Executive Vice President, General Manager, Splunk.
"The combination of Cisco and Splunk will provide truly
comprehensive visibility and insights across an organization's
entire digital footprint, delivering an unprecedented level of
resilience through the most extensive and powerful security and
observability product portfolio on the market."
Cisco will Power and Protect the AI Revolution
The adoption and impact of AI are outpacing that of any
technology introduction we have ever seen.
Effective use of the right data at massive scale is critical to
enable the meaningful benefits of AI and help organizations drive
outcomes never before possible. To truly reap the benefits of AI,
organizations need the infrastructure to power it, the data to
develop it, a security platform to protect it, and an observability
platform to monitor and manage it in real time. Cisco will be able
to do all four together.
"Cisco and Splunk is a transformative combination that will
allow customers to do things that weren't possible before," said
Stephen Elliot, Group Vice
President, I&O, Cloud Operations, and DevOps at IDC. "With the
close, Cisco has created a unique set of solutions for networking,
security, and operations executives in the market. When you add
that to their channel and AI investments, customers should be
considering the higher levels of business value that can now be
unlocked."
"Accenture congratulates Cisco on the acquisition of Splunk,"
said Julie Sweet, Chair and CEO
Accenture. "We have enjoyed long-term partnerships with both
companies and look forward to the opportunities this collaboration
presents to our clients in the future.
Better Together: How Cisco and Splunk will Benefit Customers,
Partners and Developers
The combination of Cisco and Splunk will provide customers
with:
Better Security. A highly comprehensive security solution
for threat prevention, detection, investigation, and response for
organizations of any size, utilizing cloud, network, and endpoint
traffic for unparalleled visibility.
Better Observability. A highly comprehensive
full-stack observability solution for delivering amazing digital
experiences across a multi-cloud hybrid environment.
Better Networking. A leading secure networking solution
delivered on intelligent, resilient, and continually optimized
network infrastructure.
Better AI. Cisco's networking portfolio –– combined with
enhanced security, full-stack observability, and a comprehensive
data platform –– empowers customers to securely harness the power
of AI throughout their organizations and applications.
Better Economics. Cisco and Splunk's platform
approach will help our customers consolidate numerous point
products—delivering better business outcomes and reducing
costs.
Cisco and Splunk also bring together global developer and
partner communities with extensive experience extending security,
observability, and data platform capabilities with pre-packaged
applications and solutions for customers. Our collective partner
ecosystem can create new profitable revenue streams through
high-value services and by deploying innovative new applications
and AI-powered solutions.
Over the next several months, customers can expect a number of
new product innovations across the portfolio with the integration
of Splunk - for additional details please click here. Many of these
innovations and more will be showcased at Cisco Live,
June 2-4, 2024, and .conf24,
June 11-14, 2024.
Transaction Details
Under the terms of the agreement, Cisco acquired Splunk for
$157 per share in cash, representing
approximately $28 billion in equity
value. The transaction is expected to be cash flow positive
(excluding certain acquisition related and other items) and
non-GAAP gross margin accretive in Cisco's fiscal year 2025, and
non-GAAP EPS accretive in fiscal year 2026. Additionally, it will
accelerate Cisco's revenue growth and non-GAAP gross margin
expansion.
Cisco and Splunk notified NASDAQ of the completion of the
acquisition and requested that NASDAQ file a notification of
delisting with the Securities and Exchange Commission (the "SEC")
on Splunk's behalf. Splunk's common stock ceased trading on NASDAQ
prior to the opening of trading today.
Other Resources
- Cisco Blog: A New Day for Data
- Chuck Robbins and Gary Steele Video
- Cisco Newsroom
- B-roll
- Media assets
About Cisco
Cisco (NASDAQ: CSCO) is the
worldwide technology leader that securely connects everything to
make anything possible. Our purpose is to power an inclusive future
for all by helping our customers reimagine their applications,
power hybrid work, secure their enterprise, transform their
infrastructure, and meet their sustainability goals. Discover more
on The Newsroom and follow us on X at @Cisco.
Cisco and the Cisco logo are trademarks or registered trademarks
of Cisco and/or its affiliates in the U.S. and other countries. A
listing of Cisco's trademarks can be found at
www.cisco.com/go/trademarks. Third-party trademarks mentioned are
the property of their respective owners. The use of the word
partner does not imply a partnership relationship between Cisco and
any other company.
Forward-Looking Statements
This press release may be
deemed to contain forward-looking statements, which are subject to
the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Any statements that are not statements of
historical fact (including statements containing the words "will,"
"believes," "plans," "anticipates," "expects," "estimates,"
"strives," "goal," "intends," "may," "endeavors," "continues,"
"projects," "seeks," or "targets," or the negative of these terms
or other comparable terminology, as well as similar expressions)
should be considered to be forward-looking statements, although not
all forward-looking statements contain these identifying words.
Readers should not place undue reliance on these forward-looking
statements, as these statements are management's beliefs and
assumptions, many of which, by their nature, are inherently
uncertain, and outside of management's control. Forward-looking
statements may include statements regarding the expected benefits
to Cisco, Splunk and their respective customers from the completed
transaction, the integration of Splunk's and Cisco's complementary
capabilities to create an end-to-end platform designed to unlock
greater digital resilience for customers, plans for future
investment and capital allocation, and the expected financial
performance of Cisco following the completed transaction.
Statements regarding future events are based on Cisco's current
expectations, estimates, and projections and are necessarily
subject to associated risks related to, among other things, (i) the
ability of Cisco to successfully integrate Splunk's market
opportunities, technology, personnel and operations and to achieve
expected benefits, (ii) Cisco's ability to implement its plans,
forecasts and other expectations with respect to Splunk's business
and realize expected synergies, (iii) the outcome of any legal
proceedings related to the transaction, (iv) the effects on the
accounting relating to the acquisition of Splunk, (v) legislative,
regulatory, and economic developments, (vi) general economic
conditions, and (vii) the retention of key personnel. Therefore,
actual results may differ materially and adversely from the
anticipated results or outcomes indicated in any forward-looking
statements. For information regarding other related risks, see the
"Risk Factors" section of Cisco's most recent report on Form 10-Q
filed on February 20, 2024 and its
most recent report on Form 10-K filed on September 7, 2023, as well as the "Risk Factors"
section of Splunk's most recent report on Form 10-Q filed with the
SEC on November 28, 2023. The parties
undertake no obligation to revise or update any forward-looking
statements for any reason, except as required by law.
Non-GAAP Information
This press release includes
future estimated cash flow, non-GAAP gross margin, and non-GAAP EPS
information.
Positive or accretive cash flow is the Company's incremental
cash flow from operations anticipated to result from the
transaction including cash flow from Splunk's operations, expected
synergies, and financing costs (including foregone interest
income), and excluding certain transaction costs, cash payments
related to the one-time conversion of Splunk employee equity
awards, and cash retention awards.
Non-GAAP measures are not in accordance with, or an alternative
for, measures prepared in accordance with generally accepted
accounting principles ("GAAP") and may be different from non-GAAP
measures used by other companies. In addition, non-GAAP measures
are not based on any comprehensive set of accounting rules or
principles. Cisco believes that non-GAAP measures have limitations
in that they do not reflect all of the amounts associated with
Cisco's results of operations as determined in accordance with GAAP
and that these measures should only be used to evaluate Cisco's
results of operations in conjunction with the corresponding GAAP
measures. Cisco believes that the presentation of non-GAAP measures
provides useful information to investors and management regarding
financial and business trends relating to its financial condition
and its historical and projected results of operations. We have not
reconciled future estimated cash flow, non-GAAP gross margin, or
non-GAAP EPS information included in this press release to the most
directly comparable GAAP measure because this cannot be done
without unreasonable effort because we do not currently have
sufficient data to accurately estimate the individual adjustments
included in the most directly comparable GAAP measure that would be
necessary for such reconciliations. We expect the variability of
these items to have a potentially unpredictable, and a potentially
significant, impact on our future GAAP financial results.
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