Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of operational intelligence software specialist Splunk (NASDAQ:SPLK) plunged 18% Friday despite its better than expected first-quarter results.

So what: Quarterly revenue rose 50% year over year to $85.9 million. Meanwhile, adjusted operating margin was negative 4.2%, which translated to an adjusted loss of $0.04 per share. Analysts on average, were looking for a wider loss of $0.06 per share on lower sales of $80.74 million.

Splunk expects current-quarter revenue between $92 million and $94 million, with adjusted operating margin between negative 2% and negative 4%. Analysts, on average, were modeling a second-quarter loss of $0.02 per share on sales of $91.6 million.

Finally -- and this explains today's pullback -- Splunk raised its full fiscal-year revenue guidance to between $402 million and $410 million, up from its previous guidance for fiscal 2015 sales of $400 million. Curiously, though, adjusted operating margin is still expected to be roughly zero. Analysts, for their part, were already expecting a breakeven year on sales of $406.9 million.

Now what: Splunk certainly wasn't kidding a few weeks ago when it said investors should expect "strong fiscal first quarter FY15 results." But it's obvious the market was hoping for a bigger guidance increase based on analysts' full-year expectation going into the report. And with shares of Splunk priced for perfection at roughly 19.5 times trailing 12-month sales and 300 times the next year's estimated earnings, investors were understandably demanding blockbuster results on every metric. As a result, while this certainly doesn't mean Splunk's long-term story is broken, I have no problem continuing to watch this one from the sidelines.

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Steve Symington has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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