Middlebury SIC – Technology NASDAQ: SPLK Sell Pitch Middlebury SIC – Technology Cam Allan, Aman Tej Deol, Henry Fleming, David Rubenstein, Jonny Schwartz October 10, 2017

Original Investment Thesis Splunk is a market leader large cash balance for acquisitions and can pursue large scale growth in big data and infrastructure Price target: $70.00 Pros: Acquisition of Capsida ($190 million) and Metafor (undisclosed), both in 2015 537 apps that make sense of every form of data Cloud adoption Rapid expansion of machine data Data seen as an industry with major growth in volume Cons: Not profitable – net losses since inception and operating expenses expected to increase Young firm in an unproven market Complexity of services Original Price: $56.74 (December 5, 2017) Current Price: $63.81 (October 10, 2017)

Eco System of Splunk Current situation Does not stand alone in most functions: Splunk functions as an add on to a CRM Many competitors/new innovators coming as alternative “add ons” for CRMs Examples: Logstach, Graylog, SumoLogic, Logentries, Loggly, AppDynamic, Prelert These companies are all in bidding wars to partner with CRMs Acquisition Failed attempts Future attempts *Symantec September 2017 *Company founded 2003: almost 15YOLD *Cisco buys AppDynamic January 2017 ($3.7B) *new competitors are younger (seen on left) *Elastic buys Prelert instead September 2016 *People see the stock as inflated therefore price acquirer rather go with younger alternative

Stock Performance SPLK 1 Year Stock Price Compared to S&P 500 (red), Dow Jones Industrial Average (Orange), and NASDAQ Composite (blue). Source: Bloomberg Data Base

SPLK Ratios December 5, 2016 October 10, 2016 P/E: 171.54 PEG: N/A P/S: 8.58 EV/EBITDA: -8.80 ROE: -43.17 TTM EPS: -2.66 Cost basis: $26,798 P/E: 121.58 PEG (Est.): 2.72 P/S: 8.36 EV/EBITDA: -13.62 ROE: -43.97 TTM EPS: -2.48 Current market value: $28,076

Stock Outlook Pros Cons $421 million total cash balance for FY 2017 Acquired Rocana, Inc. on October 9 Funded with cash from Splunk’s balance sheet Management goal to reach $2 billion in revenue and 20,000 customers 14,000 customers currently Cons Year over year net income has been rapidly declining -37MM in FY2013 to -355MM in FY2017 No profits at Splunk Poor ratios Downgraded by Morgan Stanley on October 2 from overweight to equalweight Splunk doesn’t give a dividend Technical analysis: Resistance level and MACD

Recommendation: Sell the full market position at the current price Conclusion Recommendation: Sell the full market position at the current price