Splunk Beats Expectations Again, Makes an Acquisition
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Splunk Inc. (NASDAQ: SPLK) released strong fiscal fourth-quarter results on Thursday after the market closed, highlighting a notable acquisition to expand its security capabilities and accelerated customer growth as enterprises realize the power of its operational-intelligence platform in making sense of their unstructured machine data. This also marked Splunk's 13th straight quarter of handily exceeding its guidance.
With shares up more than 9% Friday as the market digests the news, let's take a closer look at what Splunk had to say.
Image source: Splunk.
Splunk results: The raw numbers
| Metric | Fiscal Q4 2018* | Fiscal Q4 2017 | Year-Over-Year Growth |
|---|---|---|---|
| Revenue | $419.7 million | $306.5 million | 36.9% |
| GAAP net income (loss) | ($25.1 million) | ($74.2 million) | N/A |
| GAAP earnings (loss) per share | ($0.18) | ($0.54) | N/A |
Data source: Splunk. *For the quarter ended Jan. 31, 2018.
What happened with Splunk this quarter?
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Revenue arrived above guidance provided in November, which called for between $388 million and $390 million.
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License revenue grew 33.5% to $254.3 million, while maintenance and services revenue increased 42.7% to $165.4 million.
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On a non-GAAP basis, which excludes items like stock-based compensation and acquisition expenses, Splunk generated net income of $53.9 million, or $0.37 per share.
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Adjusted operating margin was 17.4% -- above guidance for 16%.
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Total billings grew 44% year over year to $622.8 million.
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The company generated operating cash flow of $146.1 million and free cash flow of $139.5 million.
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Splunk signed over 570 new enterprise customers during the quarter, up from 450 last quarter. Notable new and expanded customers include Shopify, ViaSat, and The Washington Post.
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Splunk agreed to acquire Phantom Cyber Corporation for $350 million -- a leader in security orchestration, automation, and response (SOAR) platforms. Assuming the acquisition closes as planned in the first half of 2018, customers will be able to use Splunk for orchestration and automation as part of their security operations center platform, accelerating incident response with reduced staffing and skills challenges.
What management had to say
Splunk CEO Doug Merritt stated:
Organizations around the world are increasingly turning to Splunk to get strategic business answers from their machine data. Our opportunity is massive. We reached the milestone of more than $1.2 billion in revenue by keeping a relentless focus on customer success. We will continue to invest in our customers by delivering great products, and I'm excited by our agreement to acquire Phantom to bring in a new age of analytics-driven security.