Total software revenue increased 5% YoY, driven by a 17% increase in subscription revenue, largely due to the contribution of Splunk. Splunk contributed $413 million in total revenue for the quarter.

The company notes that customers are scrutinizing spend and that product demand declined in the first half of fiscal 2024. Although product deployments improved in Q3, some impacts on product demand are expected to continue through at least the end of fiscal 2024.

The company is focused on delivering innovation across technologies to assist customers in digital transformations and is making progress on strategic priorities, while operating in a challenging macroeconomic and competitive environment.

A restructuring plan was initiated in Q3 2024 to realign the organization and enable further investment in key priority areas, with estimated pretax charges of up to $800 million. This plan is expected to be substantially completed during the first half of fiscal 2025.

Operating expenses as a percentage of revenue increased by 6.1 percentage points YoY, indicating a potential decrease in operational efficiency.

Management is focused on delivering innovation across technologies and accelerating innovation across the portfolio while operating in a challenging macroeconomic and competitive environment.

The company acknowledges that instability in global credit markets, geopolitical tensions, and economic challenges in China may continue to put pressure on global economic conditions, which could materially harm the business.

The company notes that supply chain issues and component shortages may continue to impact the business, including the risk of excess and obsolete inventory and increased costs.

The company acknowledges that it is vulnerable to cyber attacks, data breaches, and other incidents, which could disrupt operations, harm its reputation, and lead to legal and regulatory action.

The company acknowledges intense competition in the networking and communications industries, which can change rapidly due to technological innovation and different business models from various geographic regions.

The company notes that the number of competitors providing niche product solutions may increase and the identity and composition of competitors may change as the company increases its activity in newer product areas.

The company relies on third-party licenses for many of its products, and the inability to obtain such licenses on acceptable terms could materially harm its business.

The company initiated a restructuring plan in Q3 2024 to realign the organization and enable further investment in key priority areas, which is expected to improve operational efficiency.

The company notes that it is focused on supply chain management to balance the need to maintain supply chain flexibility and the risk of inventory obsolescence.

Operating expenses as a percentage of revenue increased by 6.1 percentage points YoY, indicating a potential decrease in operational efficiency.

The company is focused on delivering innovation across its technologies to assist customers in their digital transformations and is accelerating innovation across its portfolio.

The company is investing in key priority areas to drive innovation and growth, including in areas such as AI, security, and observability.

The company acknowledges that the markets for its products and services are characterized by rapidly changing technology, and a failure to predict and respond to emerging trends could harm its business.

The company repurchased $1.256 billion of its stock during the quarter, continuing its stock repurchase program.

The company declared a quarterly dividend of $0.40 per common share, indicating a continued commitment to returning value to shareholders.

The net decrease in cash and cash equivalents and investments was primarily driven by a net outflow for the acquisition of Splunk of $27.4 billion.

The company has announced a goal to achieve net zero across all scopes of greenhouse gas emissions by 2040, which relies on various assumptions and estimates.

The company notes an increasing focus from regulators and investors concerning environmental, social, and governance (ESG) matters.

The company acknowledges that it could fail to achieve, or be perceived to fail to achieve, its 2040 net zero goal or other ESG-related initiatives, which could negatively impact its reputation.

The company notes that it continues to operate in a challenging macroeconomic and highly competitive environment.

The company acknowledges that global economic conditions and geopolitical tensions may continue to put pressure on global economic conditions, which could materially harm the business.

The company notes that supply chain disruptions and component shortages may continue to impact the business, including the risk of excess and obsolete inventory and increased costs.