Splunk Inc. (NASDAQ: SPLK) reported its second quarter financial results after the closing bell on Wednesday. Initially, shares rose during extended trading hours, however, shares declined by as much as 10% on Thursday.
For the second quarter, Splunk reported earnings of USD 0.30 per share on revenue USD 516.6 Million. Splunk crushed FactSet’s earnings estimate of USD 0.12 per share and revenue forecast of USD 488.4 Million.
Splunk reported a 33% growth year-over-year in revenue, primarily driven by the increase in its software revenues. Software revenue was USD 350 Million for the quarter, increasing by 46% year-over-year. Cloud ARR surpassed USD 300 Million, reporting an 80% growth year-over-year.
“With year-over-year revenue growth of 80% and ARR now over $300 million, the strength of our cloud business is driving a faster transition to a renewable software model,” said Jason Child, Chief Financial Officer, Splunk. “By the end of the year, we expect that virtually all new software sales will be cloud or term license-based.”
Maintenance and services revenue grew from USD 187.63 Million in the second quarter of 2018 to USD 279.27 Million. Meanwhile, license revenue jumped to USD 279.27 Million compared to USD 200.66 Million a year ago.
During the quarter, Splunk reported that almost 500 new enterprise customers signed up. Customers included ABB, Denny’s, Doordash, Duke University, Harvard Business School, NATO, United States Postal Service, Verizon Media, and Zoom.
In addition, Splunk also acquired cloud monitoring provider, SignalFx. Under the terms of the agreement, Splunk agreed to acquire SignalFx for USD 1.05 Billion in a stock and cash mix deal. The acquisition is expected to close in the second half of fiscal 2020.
“I am excited by our strong quarter, tremendous cloud growth, and our agreement to acquire SignalFx. I am particularly pleased with how quickly we are accelerating our business transformation to cloud, and the impact cloud is having on our customers,” said Doug Merritt, President and Chief Executive Officer, Splunk.
For the third quarter, Splunk is expecting total revenues of USD 600 Million. And for the full-year, the Company is expecting total revenues of USD 2.30 Billion, revised from its previous forecast of USD 2.25 Billion.