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The Splunk website
Tiffany Hagler-Geard/Bloomberg
Splunk
Shares are heading higher in late trading after the data security and IT surveillance software provider reported better-than-expected results for its first fiscal quarter ended April 30.
For the quarter, Splunk (ticker: SPLK) reported revenue of $674 million, up 34% from a year ago, and ahead of both the company’s guidance range $615 million to $635 million and Street’s consensus forecast of $628 million. Splunk said cloud revenue was $323 million, up 66%, as the company continued to make progress in transitioning its business to a cloud-based software model.
On a non-GAAP basis, Splunk lost 32 cents per share in the quarter, well below Street’s consensus forecast for a loss of 74 cents. According to generally accepted accounting principles, the company lost $2.89 per share.
Shares of Splunk late in Wednesday’s trading are up 5.1%, at $97.84. For the year to the close of regular trading on Wednesday, the stock is down about 20%.
The quarter marks the first financial report from new CEO Gary Steele, who joined the company six weeks ago from security software company Proofpoint.
“Our first quarter execution was strong, with the team delivering strong revenue growth as the world’s largest organizations continued to place their trust in Splunk,” Steele said in a statement. “In this complex and unpredictable world, Splunk has become essential in keeping organizations secure and resilient so they can succeed and innovate at scale.”
The orientation was strong. For the July quarter, Splunk forecasts revenue of $735-755 million, versus Street’s consensus of $737 million. The company expects non-GAAP operating margin in the quarter to range from -8% to -11%. Splunk now sees annual revenue of between $3.3 billion and $3.35 billion, down from a previous range of $3.25 billion to $3.3 billion.
In an interview with Barrons, CFO Jason Child noted that Splunk is experiencing an acceleration in growth, with revenue growing at its fastest pace in three years. Asked about any impact on the business from ongoing macroeconomic issues, Child said the company sees nothing. He noted that their biggest business is security software, and that in the current environment, “security budgets are not at risk.”
Write to Eric J. Savitz at eric.savitz@barrons.com
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