sumo-20220526
false000164326900016432692022-05-262022-05-26

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): May 26, 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 May 26, 2022, Sumo Logic, Inc. issued a press release announcing its financial results for its first quarter ended April 30, 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 NumberDescription
99.1
104Cover 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: May 26, 2022
By:/s/ Stewart Grierson
Name:Stewart Grierson
Title:Chief Financial Officer
(Principal Financial Officer)


Document
https://cdn.kscope.io/f64c6e90efce87a1c647c3fa037707f5-sumologo.jpg
Exhibit 99.1
Sumo Logic Announces First Quarter Fiscal 2023 Financial Results
First quarter revenue grew 25% year-over-year to $67.9 million
First quarter ARR grew 27% year-over-year to $273.3 million

REDWOOD CITY, CA. — May 26, 2022 — Sumo Logic (NASDAQ: SUMO), the SaaS analytics platform to enable reliable and secure cloud-native applications, today announced financial results for the first quarter of its fiscal 2023 ended April 30, 2022.

“We started our fiscal year strong as we delivered 25% revenue growth in the first quarter. Escalating security threats are driving a healthy demand environment, and we remain well positioned with a unified platform that delivers both observability and security,” said Ramin Sayar, President and CEO of Sumo Logic. "The go-to-market changes we are making are underway, and customers are continuing to recognize the value of our differentiated SaaS analytics platform that ensures their applications are reliable and secure.”

First Quarter Fiscal 2023 Financial Highlights
Revenue was $67.9 million, an increase of 25% year-over-year
Annual Recurring Revenue ("ARR") was $273.3 million, an increase of 27% year-over-year
GAAP gross margin was 64%; non-GAAP gross margin was 70%
GAAP operating loss was $34.8 million; GAAP operating margin was (51)%
Non-GAAP operating loss was $15.4 million; non-GAAP operating margin was (23)%
GAAP net loss was $34.8 million or $0.30 per share
Non-GAAP net loss was $15.3 million or $0.13 per share
Net cash used in operating activities was $1.4 million; free cash flow was $(2.0) million
Cash and cash equivalents and marketable securities were $358.9 million as of April 30, 2022

Recent Highlights
Released the OpenTelemetry Distro Collector which is designed to simplify and democratize the collection of logs, metrics, traces, and metadata from modern cloud applications, and establishes OpenTelemetry as its future standard to collect all machine data.
Released the Sensu Integration Catalog which is a self-service marketplace featuring over 40 turn-key integrations.
Announced support for the AWS for Games initiative for Amazon Web Services to accelerate digital gaming at scale.
Appointed Tej Redkar as Chief Product Officer, Sophie Kitson as Chief Human Resources Officer, and John D. Harkey, Jr. to our Board of Directors.

Financial Outlook
For the second quarter of fiscal 2023, Sumo Logic expects:
Total revenue between $71.0 million and $72.0 million, representing 21% to 22% growth year over year
Non-GAAP operating margin of (24)% to (23)%
Non-GAAP net loss per share of $0.15 on approximately 116.0 million weighted average shares outstanding
For the full fiscal year 2023, Sumo Logic expects:
Total revenue between $289.0 million and $292.0 million, representing 19% to 21% growth year over year
Non-GAAP operating margin of (25)% to (24)%
Non-GAAP net loss per share of $0.64 to $0.62 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 related employer payroll taxes, amortization of acquired intangible assets, acquisition-related expenses, and expenses related to a cooperation agreement. 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. Refer to Non-GAAP Financial Measures below.

Conference Call Details
The company will host a conference call and live webcast on Thursday, May 26, 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 13729960. 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 stock-based compensation expense and related employer payroll taxes, amortization of acquired intangible assets, acquisition-related expenses, and expenses related to a cooperation agreement. 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 second fiscal quarter and full fiscal year 2023, the expected benefits of hiring new executives and expectations regarding the benefits of our offerings, our growth strategy and investments, our market opportunity, the potential impact of the macro environment, 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 Annual Report on Form 10-K for the year ended January 31, 2022, filed with the Securities and Exchange Commission (SEC) on March 14, 2022, and other filings and reports that we may file from time to time with the SEC. Additional information will be made available in our Quarterly Report on Form 10-Q for the quarter ended April 30, 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 April 30,
20222021
Revenue$67,855 $54,219 
Cost of revenue
24,145 15,395 
Gross profit43,710 38,824 
Operating expenses:
Research and development
26,253 20,443 
Sales and marketing
35,290 30,278 
General and administrative
16,996 14,573 
Total operating expenses78,539 65,294 
Loss from operations(34,829)(26,470)
Interest and other income (expense), net631 (16)
Interest expense(29)(86)
Loss before provision for income taxes(34,227)(26,572)
Provision for income taxes523 342 
Net loss$(34,750)$(26,914)
Net loss per share, basic and diluted$(0.30)$(0.26)
Weighted-average shares used to compute net loss per share, basic and diluted114,324 104,033 




Sumo Logic, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
April 30,
2022
January 31,
2022
Assets
Current assets:
Cash and cash equivalents$79,737 $79,986 
Marketable securities, current228,406 210,645 
Accounts receivable, net48,690 49,451 
Prepaid expenses9,823 9,792 
Deferred sales commissions, current17,524 17,110 
Other current assets2,837 2,865 
Total current assets387,017 369,849 
Marketable securities, noncurrent50,777 65,866 
Property and equipment, net4,944 4,960 
Operating lease right-of-use assets5,041 6,110 
Goodwill93,603 94,967 
Acquired intangible assets, net21,881 26,221 
Deferred sales commissions, noncurrent31,579 32,689 
Other assets1,106 1,469 
Total assets$595,948 $602,131 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable$9,920 $7,755 
Accrued expenses and other current liabilities24,966 25,425 
Operating lease liabilities, current4,614 4,619 
Deferred revenue, current142,583 131,329 
Total current liabilities182,083 169,128 
Operating lease liabilities, noncurrent1,157 2,346 
Deferred revenue, noncurrent6,141 5,944 
Other liabilities5,570 5,744 
Total liabilities194,951 183,162 
Stockholders’ equity:
Common stock12 11 
Additional paid-in-capital964,761 944,447 
Accumulated other comprehensive loss(7,870)(4,333)
Accumulated deficit(555,906)(521,156)
Total stockholders’ equity400,997 418,969 
Total liabilities and stockholders’ equity$595,948 $602,131 



Sumo Logic, Inc.
Condensed Consolidated Statement of Cash Flows
(in thousands)
(unaudited)
Three Months Ended April 30,
20222021
Cash flows from operating activities
Net loss$(34,750)$(26,914)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization4,283 2,044 
Amortization of deferred sales commissions4,631 3,401 
Amortization (accretion) of marketable securities purchased at a premium (discount)790 566 
Stock-based compensation, net of amounts capitalized13,277 12,133 
Non-cash operating lease cost1,055 1,062 
Other(162)23 
Changes in operating assets and liabilities
Accounts receivable757 837 
Prepaid expenses(37)592 
Other assets180 1,144 
Deferred sales commissions(3,934)(5,658)
Accounts payable2,181 1,383 
Accrued expenses and other current liabilities(164)(1,295)
Deferred revenue11,451 9,177 
Operating lease liabilities(1,156)(1,134)
Other liabilities166 (80)
Net cash used in operating activities(1,432)(2,719)
Cash flows from investing activities
Purchases of marketable securities(51,683)(267,548)
Maturities of marketable securities41,022 1,558 
Sales of marketable securities5,920 — 
Purchases of property and equipment(371)(247)
Capitalized internal-use software costs(187)— 
Net cash used in investing activities(5,299)(266,237)
Cash flows from financing activities
Payments of deferred offering costs— (93)
Proceeds from exercise of common stock options6,954 8,019 
Net cash provided by financing activities6,954 7,926 
Effect of exchange rate changes on cash and cash equivalents(472)(9)
Change in cash and cash equivalents and restricted cash(249)(261,039)
Cash and cash equivalents and restricted cash:
Beginning of period80,286 404,440 
End of period$80,037 $143,401 



Sumo Logic, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(in thousands, except per share data and percentages)
(unaudited)
Three Months Ended April 30,
20222021
Reconciliation of gross profit and gross margin
GAAP gross profit$43,710 $38,824 
Add: Stock-based compensation and related employer payroll taxes316 173 
Add: Amortization of acquired intangible assets3,559 1,537 
Add: Acquisition-related expenses81 — 
Non-GAAP gross profit$47,666 $40,534 
GAAP gross margin64 %72 %
Non-GAAP gross margin70 %75 %
Reconciliation of operating expenses
GAAP research and development$26,253 $20,443 
Less: Stock-based compensation and related employer payroll taxes(6,554)(4,858)
Less: Acquisition-related expenses(292)— 
Non-GAAP research and development$19,407 $15,585 
GAAP sales and marketing$35,290 $30,278 
Less: Stock-based compensation and related employer payroll taxes(2,917)(3,722)
Less: Amortization of acquired intangible assets(150)— 
Less: Acquisition-related expenses(101)— 
Non-GAAP sales and marketing$32,122 $26,556 
GAAP general and administrative$16,996 $14,573 
Less: Stock-based compensation and related employer payroll taxes(3,759)(4,188)
Less: Acquisition-related expenses— (1,216)
Less: Expenses related to a cooperation agreement(1,720)— 
Non-GAAP general and administrative$11,517 $9,169 
Reconciliation of operating loss and operating margin
GAAP loss from operation$(34,829)$(26,470)
Add: Stock-based compensation and related employer payroll taxes13,546 12,941 
Add: Amortization of acquired intangible assets3,709 1,537 
Add: Acquisition-related expenses474 1,216 
Add: Expenses related to a cooperation agreement1,720 — 
Non-GAAP operating loss$(15,380)$(10,776)
GAAP operating margin(51)%(49)%
Non-GAAP operating margin(23)%(20)%
Reconciliation of net loss
GAAP net loss$(34,750)$(26,914)
Add: Stock-based compensation and related employer payroll taxes13,546 12,941 
Add: Amortization of acquired intangible assets3,709 1,537 
Add: Acquisition-related expenses474 1,216 
Add: Expenses related to a cooperation agreement1,720 — 
Non-GAAP net loss$(15,301)$(11,220)
GAAP net loss per share$(0.30)$(0.26)
Non-GAAP net loss per share$(0.13)$(0.11)
Weighted average shares outstanding, basic and diluted114,324 104,033 




Sumo Logic, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures (Continued)
(in thousands)
(unaudited)
Three Months Ended April 30,
20222021
Reconciliation of cash used in operating activities to free cash flow
GAAP cash used in operating activities$(1,432)$(2,719)
Less: Purchases of property and equipment(371)(247)
Less: Capitalized internal-use software costs(187)— 
Free cash flow$(1,990)$(2,966)