Posted on Friday, Dec 4th 2020
Big data player Splunk (NASDAQ: SPLK) recently announced its third quarter results that failed to impress the market. The company has been on an acquisition spree to add several companies that complement its focus on building one of
the most comprehensive observability offerings in the industry. Splunk’s Financials
Revenues for the third quarter fell 11% to $559 million, missing the market’s expectations of $613.83 million. Adjusted loss of $1.26 per share was also wider than the market’s estimate of $0.09 per share.
By segment, license revenues fell 35.7% to $176.8 million. Maintenance and service revenues grew 0.9% to $173.6 million. Cloud revenues grew 80% over the year to $145 million.
Among other metrics, Annual Recurring Revenue (ARR) grew 44% over the year to $2.07 billion. This was a milestone quarter for Splunk when its ARR crossed the $2 billion mark.
Splunk forecast revenues of $650-$700 million for the current quarter, ahead of the market’s forecast of $612.3 million.
Splunk has been on an acquisition spree during the quarter. Earlier last month, Splunk announced its plans to acquire Palo-Alto based Flowmill. Flowmill is a privately held cloud network company with expertise in network performance monitoring (NPM). The acquisition will allow Splunk to expand its existing observability capabilities, allowing its customers to analyze and take relevant actions based on other cloud network and infrastructure data. They will be able to quickly resolve network-related issues, optimize network performance, and reduce network costs. Terms of the deal were also not revealed.
In October, it announced its plans to acquire Estonia-based Plumbr. Founded in 2011, Plumbr is a Java performance monitoring solution that helps customers deliver fast and reliable software to its end users. It offers advanced instrumentation, profiling and Real User Monitoring (RUM) capabilities that help monitor Java, PHP, Python, and .Net applications. The addition of Plumbr’s technology to Splunk’s Observability Suite will give Splunk’s customers the ability to monitor and troubleshoot existing applications and conduct RUM, database monitoring, and code profiling. Prior to the acquisition, Plumbr had raised $1.8 million in four rounds of funding from investors including Karma Ventures, Jaan Tallinn, Mobi, Sten Tamkivi, and Matt Arnold. Terms of the acquisition were not disclosed.
Splunk also announced the acquisition of Atlanta-based Rigor. Rigor was founded in 2010 to simplify front-end performance monitoring by combining the power of synthetic monitoring with an intelligent optimization engine. Its products help customers find, fix, and prevent web and API performance issues. The acquisition will help Splunk expand its APM and DEM capabilities. Splunk plans to integrate Rigor’s offerings within its Observability Suite to provide customers with a seamless and end-to-end observability experience, to help them across both cloud and on-premises environments. Rigor was privately held prior to the acquisition and its funding, financials, and deal details are not disclosed.
Its stock is currently trading at $158.03 with a market capitalization of $35.35 billion. It had climbed to a 52-week high of $225.89 in August. The stock has recovered from the 52-week low of $93.92 it had fallen to in March this year.
Photo Credit: Ted Striker /Flickr.com This segment is a part in the series : Cloud Stocks . Smartsheet Acquiring Bootstrapped Startups to Drive Growth . Bootstrapped Unicorn Atlassian is Acquiring Capital Efficient Startups . Netflix Price Hike Ruffles Competition . How Will Carbon Black Differentiate? . ServiceNow Grows Through Addition of Capital-Efficient Startups . Zendesk and Freshworks Follow Different Acquisition Strategies . Tableau Grows Through Small Acquisitions . Open Platform Strategy Stands Intuit in Good Stead . Will GoDaddy Follow the PaaS Route? . Adobe Delivers Via PaaS More »» . A Look at Oracle’s 2018 M&A Activity . What Apps Will Drive More Traction for Cloudera? . Slack's App Focus Will Be Key to Post-IPO Success . IBM Counts on its Cloud and Platform for the Turnaround . Atlassian Acquires From its PaaS Marketplace . What Should SAP Acquire to Triple its Value by 2023? . Expect ServiceNow to Acquire From App Marketplace . 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Pure Storage Experimenting with Pricing Models . Palo Alto Networks Expands Security Capabilities . RingCentral Cashing in on the Hybrid Work Environment . Splunk Tackles Decelerating Growth with Product Upgrades . MongoDB's Atlas Capabilities Expand to the Government Sector . Analysis of Bill.com's Invoice2Go Acquisition . DocuSign Banks on Agreement Cloud . Smartsheet's Expanding Use Cases . Analysis of Salesforce's Servicetrace Acquisition . Zscaler Focuses on Federal Agencies . Coupa Launches PaaS Strategy . Analysis of BlackLine’s Kyriba Partnership . PagerDuty's Expanding Integration Portfolio . Analysis of Tenable's Accurics Acquisition . Upstart’s Improving AI Algorithm in FinTech Consumer Lending . Analysis of C3.ai's Growing Partnerships . Analysis of Veeva's Learnaboutgmp Acquisition . Analysis of Adobe's Frame.io Acquisition . Snowflake Focuses on the Financial Services Sector . CrowdStrike Expands Government Offerings . Zoom Focuses on Expanding Reseller Offerings . 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