Splunk announced that Silver Lake will make a $1 billion investment in convertible senior notes to support the continued transformation of its business.
Splunk expects to use the proceeds from the new investment to fund growth initiatives and manage its capital structure, including a newly authorized share repurchase program of up to $1 billion that will be executed over time.
“We’ve significantly evolved our business since we began our transformation to become a cloud-first company over two years ago, and today’s announcement reaffirms the strength of our business fundamentals, cloud strategy and high-growth trajectory,” said Doug Merritt, President and CEO of Splunk. “Silver Lake has a strong reputation and track record of investing in innovative technology companies, and with their support, we are accelerating toward our goals as we deliver the most scalable and powerful data platform in the cloud.”
Earlier this month, Splunk reported Cloud annual recurring revenue (ARR) of $877 million for the first fiscal quarter 2022, an increase of 83% year-over-year. Splunk finished its first quarter with 56% of its software bookings from Cloud and 203 customers with Cloud ARR greater than $1 million, up 99% year-over-year.
“We have long admired Splunk’s world-class team and technology, and we believe the company is now at an important inflection point,” said Kenneth Hao, Chairman and Managing Partner of Silver Lake. “It has become increasingly clear that a cloud-driven transformation is critical to modernization and Splunk is ideally positioned to help organizations throughout the world manage the complexity associated with this transition. We are confident in the opportunities ahead and eager to work with Doug and his team to support Splunk’s next phase of growth.”
In connection with Silver Lake’s investment, Hao will be appointed to Splunk’s Board of Directors. With Hao’s appointment, Splunk’s Board will comprise 11 members, 10 of whom are independent.
“Ken brings more than 30 years of experience in technology investing and working with management teams to build and grow great companies, and we are excited to welcome him to the Splunk Board,” said Graham Smith, Chair of the Splunk Board. “Through this partnership with Silver Lake, Splunk is well positioned to build on the momentum the team has generated and continue to enable customers to break barriers across IT, Security and DevOps while driving sustainable value for our stockholders.”
Terms of the Transaction and Share Repurchase Program: Under the terms of the investment, Silver Lake will purchase $1 billion in aggregate principal amount of Splunk’s convertible senior notes (the “Notes”). The Notes will have an initial conversion price of $160.00 per share of Splunk’s Common Stock, subject to customary anti-dilution and other adjustments. The initial conversion price of $160.00 represents a 30% premium to the volume-weighted average closing price of the Common Stock over a 10-day period ending on June 21, 2021. The Notes will mature in July 2026, unless earlier repurchased, redeemed or converted. The Notes will bear interest at 0.75% per year.
In connection with this transaction, Splunk’s Board has authorized the repurchase of up to $1 billion of its common shares in the open market, based on prevailing market prices, or in privately negotiated transactions. The repurchase is intended to offset the dilutive effect of the Notes.
Additional information regarding this announcement may be found in a Form 8-K that will be filed today with the U.S. Securities and Exchange Commission.
Advisors: Goldman Sachs & Co. LLC is acting as lead financial advisor and Centerview Partners is also acting as financial advisor to Splunk, and Wilson Sonsini Goodrich & Rosati and Wachtell, Lipton, Rosen & Katz are serving as Splunk’s legal advisors in the transaction.
Simpson Thacher & Bartlett is serving as legal advisor to Silver Lake.
The Latest
In the world of digital-first business, there is no tolerance for service outages. Businesses know that outages are the quickest way to lose money and customers. For smaller organizations, unplanned downtime could even force the business to close ... A new study from PagerDuty, The State of AI-First Operations, reveals that companies actively incorporating AI into operations now view operational resilience as a growth driver rather than a cost center. But how are they achieving it? ...
In live financial environments, capital markets software cannot pause for rebuilds. New capabilities are introduced as stacked technology layers to meet evolving demands while systems remain active, data keeps moving, and controls stay intact. AI is no exception, and its opportunities are significant: accelerated decision cycles, compressed manual workflows, and more effective operations across complex environments. The constraint isn't the models themselves, but the architectural environments they enter ...
Like most digital transformation shifts, organizations often prioritize productivity and leave security and observability to keep pace. This usually translates to both the mass implementation of new technology and fragmented monitoring and observability (M&O) tooling. In the era of AI and varied cloud architecture, a disparate observability function can be dangerous. IT teams will lack a complete picture of their IT environment, making it harder to diagnose issues while slowing down mean time to resolve (MTTR). In fact, according to recent data from the SolarWinds State of Monitoring & Observability Report, 77% of IT personnel said the lack of visibility across their on-prem and cloud architecture was an issue ...
In MEAN TIME TO INSIGHT Episode 23, Shamus McGillicuddy, VP of Research, Network Infrastructure and Operations, at EMA discusses the NetOps labor shortage ...
Technology management is evolving, and in turn, so is the scope of FinOps. The FinOps Foundation recently updated their mission statement from "advancing the people who manage the value of cloud" to "advancing the people who manage the value of technology." This seemingly small change solidifies a larger evolution: FinOps practitioners have organically expanded to be focused on more than just cloud cost optimization. Today, FinOps teams are largely — and quickly — expanding their job descriptions, evolving into a critical function for managing the full value of technology ...
Enterprises are under pressure to scale AI quickly. Yet despite considerable investment, adoption continues to stall. One of the most overlooked reasons is vendor sprawl ... In reality, no organization deliberately sets out to create sprawling vendor ecosystems. More often, complexity accumulates over time through well-intentioned initiatives, such as enterprise-wide digital transformation efforts, point solutions, or decentralized sourcing strategies ...
Nearly every conversation about AI eventually circles back to compute. GPUs dominate the headlines while cloud platforms compete for workloads and model benchmarks drive investment decisions. But underneath that noise, a quieter infrastructure challenge is taking shape. The real bottleneck in enterprise AI is not processing power, it is the ability to store, manage and retrieve the relentless volumes of data that AI systems generate, consume and multiply ...
The 2026 Observability Survey from Grafana Labs paints a vivid picture of an industry maturing fast, where AI is welcomed with careful conditions, SaaS economics are reshaping spending decisions, complexity remains a defining challenge, and open standards continue to underpin it all ...
The observability industry has an evolving relationship with AI. We're not skeptics, but it's clear that trust in AI must be earned ... In Grafana Labs' annual Observability Survey, 92% said they see real value in AI surfacing anomalies before they cause downtime. Another 91% endorsed AI for forecasting and root cause analysis. So while the demand is there, customers need it to be trustworthy, as the survey also found that the practitioners most enthusiastic about AI are also the most insistent on explainability ...
In the modern enterprise, the conversation around AI has moved past skepticism toward a stage of active adoption. According to our 2026 State of IT Trends Report: The Human Side of Autonomous AI, nearly 90% of IT professionals view AI as a net positive, and this optimism is well-founded. We are seeing agentic AI move beyond simple automation to actively streamlining complex data insights and eliminating the manual toil that has long hindered innovation. However, as we integrate these autonomous agents into our ecosystems, the fundamental DNA of the IT role is evolving ...