What happened

Shares of Splunk Inc. (NASDAQ:SPLK) jumped as much as 12% in Friday's early trading, and traded up 9.2% as of 12:00 p.m. EDT after the operational intelligence platform specialist announced strong fiscal second-quarter 2018 results.

Quarterly revenue climbed 31.8% to $280 million -- well above Splunk's most recent guidance for between $267 million and $269 million -- and translated to adjusted net income of $11.5 million, or $0.08 per share. Meanwhile, adjusting operating margin was 5.2%, also above guidance for 4%.

CEO Dough Merritt credited "solid sales execution" for Splunk's relative outperformance, especially in the Europe, Middle East, and Africa region.

A man on a ladder drawing a yellow chart on a brick wall, indicating business success.


So what

Digging deeper, Splunk's billings for the quarter climbed 32% year over year to $303.4 million. The company also added more than 500 new customers in the second quarter, bringing its base to over 14,000, with notable new and expanded relationships including Athenahealth, Carnival, The Department of Homeland Security, Harvard Business School, Verizon Enterprise Solutions, and the state of Montana.

"I am looking forward to the more than 140 customer presentations at .conf2017, our annual users conference [...]," added Merritt. "It is an excellent opportunity to learn the many new ways that leading organizations are using Splunk software to solve problems and gain Operational Intelligence."

Now what

For the full fiscal year of 2018, Splunk now expects billings to be roughly $1.450 billion, an increase from guidance for $1.425 billion previously. Full-year revenue should arrive in the range of $1.210 billion to $1.215 billion, up from the company's prior outlook for $1.195 billion. Splunk continues to expect full-year adjusted operating margin of 8%.

All things considered, this was a simple beat and raise as Splunk's platform becomes a more ubiquitous presence for tens of thousands of customers around the world. And it's no surprise to see the stock rallying today as a result.

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