Big Data player Splunk’s (NASDAQ: SPLK) cloud bets are paying off. The company recently announced its first quarter results. While the results were not entirely impressive, the market’s pleased with the company’s continued push into cloud services.
Revenues for the first quarter grew 2% over the year to $424.9 million, falling short of the market’s expectations of $443 million. Adjusted loss of $0.54 per share was better than the market’s estimated loss of $0.57 per share but significantly higher than previous year’s loss of $0.02 per share.
By segment, license revenues fell 26% to $148.4 million. Maintenance and service revenues grew 9% to $173.5 million. Cloud revenues grew an impressive 81% over the year to $112 million.
Among other metrics, Annual Recurring Revenue (ARR) grew 52% over the year to $1.775 billion. Its shift to a SaaS model is accelerating as cloud business accounted for nearly half of total software bookings in the quarter with cloud ARR growing 52% over the year.
Splunk forecast revenues of $520 million for the quarter and withdrew its earlier guidance for the fiscal year.
Splunk’s Growing Cloud Partnerships
Splunk has been focusing on expanding its cloud-base to drive growth. Recently it announced an expanded partnership with Google Cloud. As part of the expansion, Splunk Cloud will soon be available on Google Cloud so that customers will be able to drive actionable insights and enable fast decisions across the enterprise. Additionally, the two companies will integrate Splunk Cloud across Google Cloud and will release native integrations with Anthos, Google Cloud Security Command Center, and Google Cloud’s operations suite. These integrations will enable new and existing customers to share critical data between applications and draw insights from data extracted from both hybrid and multi-cloud environments.
Besides Google, Splunk also expanded its relationship with AWS. As part of the new relationship, both Splunk and AWS will work together across products, go-to-market, and the field. Recently, Splunk and AWS released the Workload Migration Program that helps organizations migrate on-premises legacy Splunk Enterprise workloads to Splunk Cloud on AWS. The two also released an AWS Service Ready program Lambda Ready, which recognizes Splunk’s solutions for customers to build, manage, and run serverless applications.
To help its customers accelerate their transition to the cloud, Splunk announced an accelerated release schedule for premium solutions on Splunk Cloud. The Splunk IT Service Intelligence (ITSI) 4.5 for Splunk Cloud will deliver a centralized framework for monitoring and investigation. It will offer an enhanced service monitoring and event management capability to help organizations manage large deployments. Additionally, the Splunk Machine Learning Toolkit (MLTK) has also been updated with a simplified, customizable interface that will provide broader access of the tool to lesser technical users. The service is available with Splunk Cloud or Splunk Enterprise and will provide visualization capabilities. The toolkit will also allow users to build models to help with forecasting, clustering and outlier detection.
The market is very pleased with Splunk. Its stock is currently trading at $188.54 with a market capitalization of $29.9 billion. It had climbed to a 52-week high of $188.74 earlier this week. The stock has recovered from the 52-week low of $93.92 in March this year.
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This segment is a part in the series : Cloud Stocks