Splunk (SPLK) has reported earnings. In short, our reaction is incredibly bullish. The stock rallied all day into earnings, and they were fantastic. We beleive that this beat versus expectaions and guidance raise will send shares up double digits again tomorrow. Below are the highlights:

“Third Quarter 2018 Financial Highlights

  • Total revenues were $328.7 million, up 34% year-over-year.
  • Total billings were $381.6 million, up 38% year-over-year.
  • GAAP operating loss was $50.8 million; GAAP operating margin was negative 15.5%.
  • Non-GAAP operating profit was $32.3 million; non-GAAP operating margin was positive 9.8%.
  • GAAP loss per share was $0.36; non-GAAP earnings per share was $0.17.
  • Operating cash flow was $52.3 million with free cash flow of $46.9 million.

“I’m proud of our global performance for the quarter and our increased outlook through the rest of the year,” said Doug Merritt, President and CEO, Splunk. “Splunk announced a wide range of innovations at .conf2017 including native support for metrics and machine learning updates to Splunk® Enterprise and Splunk Cloud; new event analytics capabilities in Splunk IT Service Intelligence; new content updates for Splunk Enterprise Security; and a host of new use case-specific solutions. Splunk customers are seizing upon the growing opportunity machine data presents and only Splunk can help them get answers on-premises, in the cloud or across hybrid environments.”

Third Quarter 2018 and Recent Business Highlights:

Customers:

  • Signed more than 450 new enterprise customers.
  • New and Expansion Customers Include: 21st Century Fox, Arizona State University, ATB Financial, Atlassian, Banner Health, BCD Travel, Blackbaud, Blucora, CallidusCloud, Cincinnati Children’s Hospital Medical Center, Daimler (DDAIF) (Germany), Deakin University (Australia), Defense Health Agency, Derbyshire Fire & Rescue (England), The E.W. Scripps Company, Johns Hopkins University, Li & Fung (Hong Kong), Nutanix, Norsk Helsenett (Norway), PIMCO, Purdue University, SAS, Smithsonian Institution, Texas Department of Transportation, U.S. Army, U.S. Department of Homeland Security Data Center, Vodafone Egypt, Yahoo! JAPAN

Products:

Corporate:

  • Acquired selected assets of Rocana Inc., a company providing analytics solutions for the IT market, to extend Splunk’s IT operations leadership.
  • Acquired SignalSense Inc., a company offering cloud-based advanced data collection and breach detection solutions, further advancing Splunk’s machine learning capabilities.
  • Showcased flexible pricing programs tailored to fit the needs of all customers and deliver value no matter where organizations are in their Splunk journey.
  • Unveiled new, free training programs to help military veterans and youth train for careers in technology through Splunk4Good in partnership with nonprofits AWS re:Start, NPower, Wounded Warrior Project and Year Up.
  • Inducted 42 members of the 2018 cohort of the SplunkTrust program to recognize some of the most dedicated members of the Splunk Community.

Strategic and Channel Partners:

Recognition:

Events:

  • Hosted .conf2017: the 8th Annual Splunk Conference in Washington, drawing more than 7,000 Splunk enthusiasts, customers and partners.
  • Honored the winners of the 2017 Revolution Awards at .conf2017, recognizing spectacular achievements from Splunk’s worldwide customers and partners.
  • Hosted the first-ever SplunkLive! in Montreal and additional SplunkLive! events in cities worldwide, including BeijingSeattleShanghai and Singapore. Presentations can be found on the SplunkLive! website.

Appointments:

  • Appointed Sara Baack, chief marketing officer of Equinix, and Elisa Steele, former CEO and president of Jive Software, to Splunk’s Board of Directors.
  • Promoted Susan St. Ledger to the newly created role of president, worldwide field operations.

Financial Outlook

The company is providing the following guidance for its fiscal fourth quarter 2018 (ending January 31, 2018):

  • Total revenues are expected to be between $388 million and $390 million.
  • Non-GAAP operating margin is expected to be approximately 16%.

The company is updating its previous guidance provided on August 24, 2017 for its fiscal year 2018 (ending January 31, 2018):

  • Total billings are expected to be approximately $1.485 billion (was approximately $1.450 billion).
  • Total revenues are expected to be between $1.239 and $1.241 billion (was between $1.210 and $1.215 billion).
  • Non-GAAP operating margin is expected to be approximately 8.5% (was approximately 8%).

The company is providing the following guidance for its fiscal year 2019 (ending January 31, 2019):

  • Total revenues are expected to be approximately $1.550 billion.
  • Non-GAAP operating margin is expected to be approximately 10.5%.”
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