sumo-20220308
false000164326900016432692022-03-082022-03-08

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________
FORM 8-K
___________________
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of Earliest Event Reported): March 8, 2022
___________________
Sumo Logic, Inc.
(Exact name of registrant as specified in its charter)
___________________
Delaware001-3950227-2234444
(State or other jurisdiction of
incorporation or organization)
(Commission File Number)(I.R.S. Employer
Identification Number)
305 Main Street
Redwood City, California 94063
(Address of principal executive offices, including zip code)
(650) 810-8700
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
___________________
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, par value $0.0001 per shareSUMO
The Nasdaq Stock Market LLC
(Nasdaq Global Select Market)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Item 2.02. Results of Operations and Financial Condition.

On March 8, 2022, Sumo Logic, Inc. issued a press release announcing its financial results for its fourth quarter ended January 31, 2022. A copy of the press release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.

The information contained in Item 2.02 of this current report on Form 8-K and in Exhibit 99.1 attached hereto are "furnished" and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, and shall not be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number    Description         
99.1    Press Release dated March 8, 2022
104    Cover Page Interactive Data File (embedded within the Inline XBRL document)




SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
SUMO LOGIC, INC.
Date: March 8, 2022
By:/s/ Stewart Grierson
Name:Stewart Grierson
Title:Chief Financial Officer
(Principal Financial Officer)


Document
https://cdn.kscope.io/3ece3ccfc498ded6b4588f5853406e49-sumologo.jpg
Exhibit 99.1
Sumo Logic Announces Fourth Quarter and Fiscal Year 2022 Financial Results
Fourth quarter revenue grew 24% year-over-year to $67.0 million
Full year fiscal 2022 revenue grew 19% year-over-year to $242.1 million

REDWOOD CITY, CA. — March 8, 2022 Sumo Logic (NASDAQ: SUMO), the SaaS analytics platform to enable reliable and secure cloud-native applications, today announced financial results for the fourth quarter and fiscal year 2022, ended January 31, 2022.

“We delivered 24% growth in the fourth quarter and were able to execute on our plan to reaccelerate revenue growth in the back half of fiscal 2022. Across the markets we serve, digital transformation and cloud migration initiatives remain high priority, and were key drivers of the strength and contribution we saw across our customer base this quarter,” said Ramin Sayar, president and CEO of Sumo Logic. "Our highly differentiated SaaS analytics platform positions us well for continued revenue growth in the upcoming year."

Fourth Quarter Fiscal 2022 Financial Highlights
Revenue was $67.0 million, an increase of 24% year-over-year
Revenue, excluding our largest revenue customer, was $62.4 million, an increase of 23% year-over-year
GAAP gross margin was 66%; non-GAAP gross margin was 72%
GAAP operating loss was $30.5 million; GAAP operating margin was (45)%
Non-GAAP operating loss was $11.1 million; non-GAAP operating margin was (17)%
GAAP net loss was $33.6 million or $0.30 per share
Non-GAAP net loss was $14.2 million or $0.13 per share
Net cash used in operating activities was $10.5 million; free cash flow was $(11.2) million
Cash and cash equivalents and marketable securities were $356.5 million as of January 31, 2022

Full Year Fiscal 2022 Financial Highlights
Revenue was $242.1 million, an increase of 19% year-over-year
GAAP gross margin was 68%; non-GAAP gross margin was 73%
GAAP operating loss was $121.3 million; GAAP operating margin was (50)%
Non-GAAP operating loss was $48.2 million; non-GAAP operating margin was (20)%
GAAP net loss was $123.4 million or $1.13 per share
Non-GAAP net loss was $50.3 million or $0.46 per share
Net cash used by operating activities was $30.5 million; free cash flow was $(32.9) million

Recent Highlights
Sumo Logic created a Log4j Response Center along with webinars and blogs on how to best discover potential threats and mitigate risks.
Announced new features to Sumo Logic Cloud SOAR with War Room and App Central, which help expedite manual processes and provide customers with critical resources to boost necessary automation allowing faster response to incidents.
Sumo Logic saw substantial growth in usage of our service during fiscal 2022 as adoption of our platform expanded. Our scalable, multi-tenant platform ingested an average of 790 terabytes of data per day, scanned an average of 1.5 exabytes of data per day, and scanned approximately 3 quadrillion events on average per day during January 2022, which is more than double the ingest and scans compared to the month of January 2021.

Financial Outlook
For the first quarter of fiscal 2023, Sumo Logic expects:
Total revenue between $65.5 million and $66.5 million, representing 21% to 23% growth year-over-year
Non-GAAP operating margin of (28)% to (27)%
Non-GAAP net loss per share of $0.17 on approximately 114.0 million weighted average shares outstanding



For the full fiscal year 2023, Sumo Logic expects:
Total revenue between $288.0 million and $292.0 million, representing 19% to 21% growth year-over-year
Non-GAAP operating margin of (27)% to (26)%
Non-GAAP net loss per share of $0.68 to $0.66 on approximately 116.5 million weighted average shares outstanding
These statements are forward-looking and actual results may differ materially. Please refer to the Forward-Looking Statements safe harbor below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.
Guidance for non-GAAP financial measures excludes stock-based compensation expense and amortization of acquired intangible assets. We have not provided the most directly comparable GAAP measures because certain items are out of our control or cannot be reasonably predicted. Accordingly, a reconciliation for forward-looking non-GAAP operating loss and non-GAAP net loss per share is not available without unreasonable effort. Please refer to Non-GAAP Financial Measures below.

Conference Call Details
The company will host a conference call and live webcast on Tuesday, March 8, 2022, at 1:30 p.m. Pacific time (4:30 p.m. Eastern time). The news release with the financial results will be accessible on Sumo Logic’s investor relations website at investor.sumologic.com prior to the conference call. To access the conference call, dial (877) 407-0784 from the United States or (201) 689-8560 internationally and reference the company name and conference title. Following the completion of the call, a replay will be available for approximately two weeks. The replay can be accessed by dialing (844) 512-2921 from the United States or (412) 317-6671 internationally and using the recording passcode 13727163. A live webcast and replay of the conference call can also be accessed from the Sumo Logic Investor Relations website at investor.sumologic.com.

Supplemental Financial and Other Information
Supplemental financial and other information can be accessed through Sumo Logic’s investor relations website at investor.sumologic.com. Sumo Logic uses the investor relations section on its website as the means of complying with its disclosure obligations under Regulation FD. Accordingly, we recommend that investors should monitor Sumo Logic’s investor relations website in addition to following Sumo Logic’s press releases, SEC filings, and social media.

Non-GAAP Financial Measures
In addition to our financial information presented in accordance with GAAP, we believe the following non-GAAP financial measures are useful in evaluating our operating performance. We use the following non-GAAP financial measures, collectively, to evaluate our ongoing operations and for internal planning and forecasting purposes, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies, and to communicate with our board of directors concerning our financial performance. We believe that non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, may be helpful to investors because they provide consistency and comparability with past financial performance and meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our business, results of operations, or outlook. The non-GAAP financial measures are presented for supplemental informational purposes only, have limitations as analytical tools, and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP and may be different from similarly-titled non-GAAP financial measures used by other companies. In addition, other companies, including companies in our industry, may calculate similarly-titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, and not to rely on any single financial measure to evaluate our business, which it includes in press releases announcing quarterly financial results, including this press release.



Non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP loss from operations, non-GAAP operating margin, non-GAAP net loss, and non-GAAP net loss per share: We define these non-GAAP financial measures as their respective GAAP measures, excluding expenses related to stock-based compensation expense and related employer taxes on equity, amortization of acquired intangibles, and acquisition-related expenses. We use these non-GAAP financial measures as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies, and to communicate with our board of directors concerning our financial performance.
Free cash flows: We define free cash flow as cash used in operating activities less purchases of property and equipment and capitalized internal-use software costs. We believe free cash flow is a useful indicator of liquidity that provides our management, board of directors, and investors with information about our future ability to generate or use cash to enhance the strength of our balance sheet and further invest in our business and pursue potential strategic initiatives.
Please see the reconciliation tables at the end of this release for the reconciliation of GAAP and non-GAAP results.

Forward-Looking Statements
This press release contains express and implied forward-looking statements including but not limited to, statements regarding our GAAP and non-GAAP guidance for the first fiscal quarter and full fiscal year 2023, expectations regarding the benefits of our offerings, our growth strategy and investments, our market opportunity, and our ability to achieve success. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond our control. Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to our ability to realize the anticipated benefits from our acquisitions, our ability to achieve and maintain future profitability, our ability to attract new customers and retain and sell additional functionality and services to our existing customers, our ability to sustain and manage our growth, our ability to successfully add new features and functionality to our platform, our ability to compete effectively in an increasingly competitive market, and general market, political, economic, and business conditions, including the impact of COVID-19, and other risks detailed in our Form 10-Q filed with the Securities and Exchange Commission (SEC) on December 8, 2021 and in our Annual Form 10-K for the year ended January 31, 2022 that will be filed with the SEC, which should be read in conjunction with this press release and the financial results included herein.
Past performance is not necessarily indicative of future results. The forward-looking statements included in this press release represent our views as of the date of this press release. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release. We anticipate that subsequent events and developments could cause our views to change. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

About Sumo Logic
Sumo Logic, Inc. (NASDAQ: SUMO) empowers the people who power modern, digital business. Through its SaaS analytics platform, Sumo Logic enables customers to deliver reliable and secure cloud-native applications. The Sumo Logic Continuous Intelligence Platform™ helps practitioners and developers ensure application reliability, secure and protect against modern security threats, and gain insights into their cloud infrastructures. Customers around the world rely on Sumo Logic to get powerful real-time analytics and insights across observability and security solutions for their cloud-native applications. For more information, visit www.sumologic.com.

For more information, please contact:

Investor Relations Contact
Bryan Liberator
IR@sumologic.com
Media Contact
Carmen Harris
charris@sumologic.com



Sumo Logic, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited
Three Months Ended January 31,Year Ended January 31,
2022202120222021
Revenue
$67,049 $54,152 $242,125 $202,637 
Cost of revenue
22,751 14,352 78,308 56,492 
Gross profit
44,298 39,800 163,817 146,145 
Operating expenses:
Research and development
24,884 18,450 94,652 70,206 
Sales and marketing
36,011 28,656 131,311 109,190 
General and administrative
13,871 12,312 59,129 44,408 
Total operating expenses
74,766 59,418 285,092 223,804 
Loss from operations
(30,468)(19,618)(121,275)(77,659)
Interest and other income (expense), net
(24)(170)10 (419)
Interest expense
(41)(49)(174)(703)
Loss before provision for income taxes
(30,533)(19,837)(121,439)(78,781)
Provision (benefit) for income taxes
3,033 752 1,926 1,516 
Net loss
$(33,566)$(20,589)$(123,365)$(80,297)
Net loss per share, basic and diluted
$(0.30)$(0.20)$(1.13)$(1.65)
Weighted-average shares used to compute net loss per share, basic and diluted
112,303 101,700 108,695 48,805 




Sumo Logic, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
January 31,
2022
January 31,
2021
Assets
Current assets:
Cash and cash equivalents$79,986 $404,140 
Marketable securities, current210,645 — 
Accounts receivable, net49,451 44,761 
Prepaid expenses9,792 10,509 
Deferred sales commissions, current17,110 12,790 
Other current assets2,865 3,110 
Total current assets369,849 475,310 
Marketable securities, noncurrent65,866 — 
Property and equipment, net4,960 4,156 
Operating lease right-of-use assets6,110 — 
Goodwill94,967 50,672 
Acquired intangible assets, net26,221 10,656 
Deferred sales commissions, noncurrent32,689 27,857 
Other assets1,469 1,856 
Total assets$602,131 $570,507 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable$7,755 $4,832 
Accrued expenses and other current liabilities25,425 23,316 
Operating lease liabilities, current4,619 — 
Deferred revenue, current131,329 102,625 
Total current liabilities169,128 130,773 
Operating lease liabilities, noncurrent2,346 — 
Deferred revenue, noncurrent5,944 4,076 
Other liabilities5,744 4,246 
Total liabilities183,162 139,095 
Stockholders’ equity:
 Common stock11 10 
Additional paid-in-capital944,447 829,238 
Accumulated other comprehensive loss(4,333)(45)
Accumulated deficit(521,156)(397,791)
Total stockholders’ equity418,969 431,412 
Total liabilities and stockholders’ equity$602,131 $570,507 



Sumo Logic, Inc.
Condensed Consolidated Statement of Cash Flows
(in thousands)
(unaudited)
Three Months Ended January 31,Year Ended January 31,
2022202120222021
Cash flows from operating activities
Net loss$(33,566)$(20,589)$(123,365)$(80,297)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization4,292 2,146 14,181 8,298 
Amortization of deferred sales commissions4,494 3,328 15,847 11,476 
Accretion (amortization) of marketable securities purchased at a premium (discount)914 — 3,070 — 
Stock-based compensation, net of amounts capitalized15,019 12,285 54,146 40,951 
Non-cash lease cost1,046 — 4,178 — 
Other2,326 449 474 635 
Changes in operating assets and liabilities, net of impact of acquisitions:
Accounts receivable(6,104)(3,092)(4,194)(17,809)
Prepaid expenses847 (1,923)714 (4,199)
Other assets(254)(1,955)850 (2,574)
Deferred sales commissions(8,747)(8,053)(24,999)(25,771)
Accounts payable(1,458)(1,196)2,825 (1,345)
Accrued expenses and other current liabilities(217)2,340 1,589 4,121 
Deferred revenue13,022 16,321 29,458 18,016 
Operating lease liabilities(1,142)— (4,513)— 
Other liabilities(1,017)(1,035)(752)1,319 
Net cash used in operating activities(10,545)(974)(30,491)(47,179)
Cash flows from investing activities
Purchases of marketable securities(65,137)— (424,724)— 
Maturities of marketable securities44,550 — 102,508 — 
Sales of marketable securities26,251 — 41,731 — 
Purchases of property and equipment(459)(780)(2,258)(1,138)
Capitalized internal-use software costs(182)— (182)(1,205)
Cash paid for acquisitions, net of cash and restricted cash acquired— — (40,340)— 
Net cash used in investing activities5,023 (780)(323,265)(2,343)
Cash flows from financing activities
Proceeds from initial public offering, net of underwriting discounts— — — 349,166 
Proceeds from borrowings— — — 24,250 
Repayment of borrowings— — — (24,250)
Payments of deferred offering costs— (3,041)(93)(4,362)
Proceeds from employee stock purchase plan3,252 — 7,977 — 
Proceeds from exercise of common stock options4,352 1,169 22,326 7,282 
Cash paid for holdback consideration in connection with acquisition — — — (100)
Net cash (used in) provided by financing activities7,604 (1,872)30,210 351,986 
Effect of exchange rate changes on cash and cash equivalents(434)297 (608)163 
Change in cash and cash equivalents and restricted cash1,648 (3,329)(324,154)302,627 
Cash and cash equivalents and restricted cash:
Beginning of period78,638 407,769 404,440 101,813 
End of period$80,286 $404,440 $80,286 $404,440 



Sumo Logic, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(in thousands, except per share data and percentages)
(unaudited)
Three Months Ended January 31,Year Ended January 31,
2022202120222021
Reconciliation of gross profit and gross margin
GAAP gross profit$44,298 $39,800 $163,817 $146,145 
Add: Stock-based compensation expense and related employer payroll taxes296 196 854 510 
Add: Amortization of acquired intangible assets3,596 1,642 11,753 6,759 
Add: Acquisition-related expenses79 — 230 — 
Non-GAAP gross profit$48,269 $41,638 $176,654 $153,414 
GAAP gross margin66 %73 %68 %72 %
Non-GAAP gross margin72 %77 %73 %76 %
Reconciliation of operating expenses
GAAP research and development$24,884 $18,450 $94,652 $70,206 
Less: Stock-based compensation expense and related employer payroll taxes(6,864)(4,122)(24,363)(13,728)
Less: Acquisition-related expenses(242)— (777)— 
Non-GAAP research and development$17,778 $14,328 $69,512 $56,478 
GAAP sales and marketing$36,011 $28,656 $131,311 $109,190 
Less: Stock-based compensation expense and related employer payroll taxes(4,590)(3,669)(16,397)(11,532)
Less: Amortization of acquired intangible assets(150)— (383)— 
Less: Acquisition-related expenses(97)— (278)— 
Non-GAAP sales and marketing$31,174 $24,987 $114,253 $97,658 
GAAP general and administrative$13,871 $12,312 $59,129 $44,408 
Less: Stock-based compensation expense and related employer payroll taxes(3,458)(4,298)(14,279)(15,181)
Less: Acquisition-related expenses— — (3,756)— 
Non-GAAP general and administrative$10,413 $8,014 $41,094 $29,227 
Reconciliation of operating loss and operating margin
GAAP loss from operation$(30,468)$(19,618)$(121,275)$(77,659)
Add: Stock-based compensation expense and related employer payroll taxes15,208 12,285 55,893 40,951 
Add: Amortization of acquired intangible assets3,746 1,642 12,136 6,759 
Add: Acquisition-related expenses418 — 5,041 — 
Non-GAAP operating loss$(11,096)$(5,691)$(48,205)$(29,949)
GAAP operating margin(45)%(36)%(50)%(38)%
Non-GAAP operating margin(17)%(11)%(20)%(15)%
Reconciliation of net loss
GAAP net loss$(33,566)$(20,589)$(123,365)$(80,297)
Add: Stock-based compensation expense and related employer payroll taxes15,208 12,285 55,893 40,951 
Add: Amortization of acquired intangible assets3,746 1,642 12,136 6,759 
Add: Acquisition-related expenses418 — 5,041 — 
Non-GAAP net loss$(14,194)$(6,662)$(50,295)$(32,587)
GAAP net loss per share$(0.30)$(0.20)$(1.13)$(1.65)
Non-GAAP net loss per share$(0.13)$(0.07)$(0.46)$(0.67)
Weighted average shares outstanding, basic and diluted112,303 101,700 108,695 48,805 
Reconciliation of cash used in operating activities to free cash flow
GAAP cash used in operating activities$(10,545)$(974)$(30,491)$(47,179)
Less: Purchases of property and equipment(459)(780)(2,258)(1,138)
Less: Capitalized internal-use software(182)— (182)(1,205)
Free cash flow$(11,186)$(1,754)$(32,931)$(49,522)