It’s a new day for your data. Cisco, led by Splunk, will revolutionize the way companies use 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 along with market-leading security and visibility solutions
- With Splunk, Cisco becomes one of the largest software companies in the world
SAN JOSE, CA, March 18, 2024 /PRNewswire/ — Cisco (NASDAQ: CSCO ) today announced that it has completed the acquisition of Splunk, laying the groundwork to provide unparalleled visibility and insight into an organization’s entire digital footprint.
To thrive in the new digital era, organizations must Connect and protect everything they do. They must connect the people, places, applications, data and devices that drive their business, while protecting their entire digital footprint from cybersecurity threats, downtime and other critical business risks.
Cisco Chairman and CEO Chuck Robbins and Cisco Executive Vice President and General Manager, Splunk, Gary Steele discuss Cisco’s closing of the Splunk acquisition.
Cisco Splunk logo
Cisco will bring the full power of the network, along with market-leading security and visibility solutions, to provide a real-time, unified view of the entire digital landscape, helping teams proactively defend critical infrastructure, prevent outages, and improve the network experience.
“We are thrilled to officially welcome Splunk to Cisco,” he said Chuck Robbins, president and chief executive officer 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.”
“The unification of Splunk and Cisco will bring tremendous value to our mutual customers around the world,” he said Gary Steele, Executive Vice President, General Manager, Splunk. “The combination of Cisco and Splunk will provide truly end-to-end visibility and insight into an organization’s entire digital footprint, providing an unprecedented level of resiliency through the most comprehensive and powerful portfolio of security and visibility products on the market.”
Cisco will drive and protect the AI revolution
The adoption and impact of AI is outpacing the introduction of any technology we’ve ever seen.
Effective use of the right data at scale is critical to enabling the meaningful benefits of AI and helping organizations achieve results never before possible. To truly take advantage of AI, organizations need infrastructure to power it, data to develop it, a security platform to protect it, and an observation 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 enable customers to do things that were not possible before,” he said Stephen Elliott, Group Vice President, I&O, Cloud Operations and DevOps at IDC. “In conclusion, Cisco has created a unique set of solutions for network, security and operations executives in the market. When you add this to their investments in channels and artificial intelligence, customers should consider the higher levels of business value that can now be unlocked.”
“Accenture congratulates Cisco on its acquisition of Splunk,” it said Julie Sweet, president and chief executive officer of Accenture. “We enjoy a long-term partnership with both companies and look forward to the opportunities this collaboration provides our customers in the future.
Better Together: How Cisco and Splunk Will Benefit Customers, Partners, and Developers
The combination of Cisco and Splunk will allow users to:
Better security. A highly comprehensive threat prevention, detection, investigation and response security solution for organizations of any size, leveraging cloud, network and endpoint traffic for unparalleled visibility.
Better visibility. An extremely comprehensive, full-stack visibility solution to deliver incredible digital experiences in a hybrid, multi-cloud environment.
Better networking. A leading secure network solution delivered on an intelligent, resilient and continuously optimized network infrastructure.
Better AI. Cisco’s networking portfolio –– combined with enhanced security, end-to-end visibility and a comprehensive data platform – enables customers to securely leverage the power of artificial intelligence across their organizations and applications.
Better economy. Cisco and Splunk’s platform approach will help our customers consolidate multiple products—delivering better business results and reducing costs.
Cisco and Splunk also bring together global development and partner communities with extensive experience in extending the security, visibility and capabilities of the data platform with turnkey applications and solutions for customers. Our collective partner ecosystem can create new profitable revenue streams through high-value services and the introduction of innovative new AI-based applications and solutions.
Over the next few months, customers can expect a number of new product innovations across the portfolio with Splunk integration – click here for more details. Many of these innovations and more will be showcased at Cisco Live, 2.-4. June 2024and .conf24, From June 11 to 14, 2024.
transaction details
Under the terms of the deal, Cisco acquired Splunk for 157 dollars per share in cash, which represents approx 28 billion dollars in capital value. The transaction is expected to be cash flow positive (excluding certain acquisition-related items and other items) and accretive to Cisco’s non-standardized gross margin in fiscal 2025, and accretive to non-standardized earnings per share in fiscal 2026. Additionally, accelerated will Cisco’s revenue growth and non-GAAP gross margin increase.
Cisco and Splunk notified NASDAQ of the completion of the acquisition and requested that NASDAQ file a delisting notice with the Securities and Exchange Commission (“SEC”) on Splunk’s behalf. Splunk’s common stock ceased trading on NASDAQ prior to the open of trading today.
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About Cisco
Cisco (NASDAQ: CSCO) is a world technology leader that securely connects everything to make everything possible. Our purpose is to empower an inclusive future for all by helping our customers rethink their applications, empower hybrid work, secure their enterprise, transform their infrastructure and achieve 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 US and other countries. A list of Cisco trademarks can be found at www.cisco.com/go/trademarks. The 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 that are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements that are not statements of historical fact (including statements that contain the words “will ,” “believes,” “plans,” “anticipates,” “expects,” “estimates,” “endeavors,” “goal,” “intends,” “may,” “endeavors,” “continues,” “projects,” “seeks,” or “goals,” or the negative of these terms or other comparable terminology, as well as similar expressions) should be considered forward-looking statements, although not all forward-looking statements contain those 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 beyond management’s control. Forward-looking statements may include statements about the expected benefits to Cisco, Splunk and their customers from the completed transaction, the integration of the complementary capabilities of Splunk and Cisco to create an end-to-end platform designed to unlock greater digital resilience for customers, plans to future investments and distribution of capital, and the expected financial results of Cisco after the transaction. Forward-looking statements are based on Cisco’s current expectations, estimates and projections and are necessarily subject to associated risks relating to, among other things, (i) Cisco’s ability 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 regarding Splunk’s business and realize anticipated synergies, (iii) the outcome of any legal proceedings related to the transaction, (iv) the accounting effects related to the Splunk acquisition , (v) legislative, regulatory and economic developments, (vi) general economic conditions and (vii) retention of key personnel. Therefore, actual results may differ materially and unfavorably from the expected results or outcomes set forth in any forward-looking statements. For information on other related risks, see the “Risk Factors” section of Cisco’s most recent report on Form 10-Q filed at February 20, 2024 and its most recent report on Form 10-K filed on September 7, 2023as 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 flows, non-GAAP gross margin and non-GAAP earnings per share information.
Positive or accretive cash flow is the Company’s incremental cash flow from operations expected 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 associated with a one-time conversion of Splunk’s employee equity awards and cash retention awards.
Non-GAAP measures are not consistent with or an alternative to measures prepared in accordance with generally accepted accounting principles (“GAAP”) and may differ from non-GAAP measures used by other companies. Furthermore, 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 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 when combined 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 related to its financial condition and its historical and projected results of operations. We have not reconciled the estimated future cash flows, non-GAAP gross margin or non-GAAP EPS data included in this press release to the most directly comparable GAAP measure because it cannot be done without reasonable effort because we currently do not have sufficient data to accurately estimate the individual adjustments involved in the most directly comparable GAAP measure that would be required for such reconciliations. We expect the variability of these items to have a potentially unpredictable and potentially material impact on our future GAAP financial results.
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