Splunk Inc. (NASDAQ: SPLK), which has expanded its customer-base regularly over the years, on Wednesday said fourth-quarter earnings increased supported by a double-digit growth in software revenues. The company also provided guidance for the first quarter and fiscal 2021, which however fell short of expectations.
Also read: Splunk Q3 2020 Earnings Conference Call Transcript
The software maker lost significant market value in recent weeks in the selloff linked to the coronavirus outbreak. The stock plunged about 13% during Wednesday’s extended trading session, immediately after the announcement.
Earnings Meet
The San Francisco-based tech firm reported earnings of $0.96 per share for the quarter, excluding special items, representing a 3% growth from the year-ago quarter. It was in line with analysts’ forecast. On an unadjusted basis, it posted a net loss of $22.73 million or $0.15 per share, compared to profit of $2.13 million or $0.01 per share a year earlier.
Solid Demand
A 33% growth in software revenues, amid growing demand for the company’s cloud offerings, pushed up fourth-quarter revenues to $791 million, which is slightly above the consensus estimate. Splunk signed more than 450 new customers during the three-month period.
“This was a transformational year for Splunk. We have transitioned our business model, our product strategy and introduced new and enhanced pricing models as part of our company-wide, cloud-first approach. These shifts have provided unprecedented value to our customers by bringing Data-to-Everything,” said Doug Merritt, CEO of Splunk.
Outlook
For the first quarter, the management currently expects revenues of about $450 million, which is lower than the consensus forecast. Adjusted operating margin is expected to be negative 25%. For the whole of 2021, the company predicts revenues of $2.6 billion and break-even operating margin, on an adjusted basis.
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Splunk’s stock closed Wednesday’s regular session higher but fell sharply following the earnings announcement. It gained 25% in the past twelve months. However, the momentum waned in recent weeks and the stock pulled back amid the coronavirus selloff.