Analytics-software firm Splunk reported a strong fiscal fourth quarter.
Tiffany Hagler-Geard/Bloomberg
Splunk stock is trading higher in late trading Wednesday after the analytics-software company posted better-than-expected results for its fiscal-fourth-quarter ended Jan. 31.
For the quarter, Splunk (ticker: SPLK) posted revenue of $745 million, down 6% from a year ago, but well above the Wall Street analyst consensus estimate for $686 million. Non-GAAP profits were 38 cents a share, crushing the consensus estimate for 4 cents a share.
Cloud-based annualized recurring revenue, or ARR, was $810 million, up 83%. Total ARR was $2.36 billion, up 41%. Cloud revenue in the quarter was $171 million, up 72%. Splunk said it had 510 customers with ARR above $1 million, up 44% from a year earlier.
“It was a clean beat across the board,” Splunk CFO Jason Childs said in an interview with Barron’s. Splunk has been in the middle of transitioning to a cloud-based software business, and away from on-premises software implementations, while also shifting to a subscription-based revenue model and away from perpetual licenses. That is a shift that many software companies have made, and it often leads to investor unease, and stock underperformance. Spunk is no exception—but Childs thinks the company has gotten through the worst of it.
For the April quarter, Splunk sees revenue of $480 million to $500 million, falling shy of the Street consensus at $507.3 million, with ARR of $2.42 billion to $2.44 billion. Childs notes that revenue will remain lumpy as Splunk continues to work through its ongoing business-mode transition.
“Just three years ago, we set out to radically transform Splunk to better help our customers put data at the heart of their own organizations and strategy,” Splunk CEO Doug Merritt said in a statement. “We now have more than 500 customers investing over $1 million annually in our platform and solutions.”
In late trading, Splunk stock is up 5% to $150.50. The stock had dropped 4% in the regular session.
Write to Eric J. Savitz at [email protected]
