The company’s transition to a cloud-based subscription model from the earlier hosted model is expected to benefit the top-line in Q2. Analysts have projected second-quarter revenues of $488.35 million, up 25.8% year-over-year, riding on strong growth in software revenues.
In the first quarter, software revenues registered a 54% increase to $265 million.
Down the line, the San Francisco, California-based big data
firm to expected to post a profit of 12 cents per share in the second quarter,
compared to 8 cents per share a year ago. Splunk has surpassed analysts’
estimates in all of the four trailing quarters.
Separately, investors will be interested to see whether the slowdown in customer additions witnessed in Q1 would continue into Q2. In the second quarter of last year, Splunk had added over 550 new enterprise customers, so investors will be looking at a year-over-year rise.
The
company’s client base has grown consistently over the last decade from 450 at
the fiscal 2008 end to 17,500 at the end of fiscal 2019.
The data analysis provider has acquired firms like Rocana,
SignalSense, Drastin, Phantom, and VictorOps over the past two years to augment
its service offerings, which has helped it to compete with its peers and expand
its client base.
Splunk has also entered into strategic partnerships with
firms like Amazon Web Services, Cisco Systems, Symantec and Accenture. These
deals are expected to bring in more clients and expand its service offerings
across the globe, which is going to be accretive to earnings in the near
future.
SPLK shares have gained 19% since the beginning of this year, and 18% in the past year.
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