Splunk Inc. (SPLK) announced better-than-expected fiscal fourth-quarter 2019 results on Thursday after the markets closed, accelerating new customer additions as enterprises around the world continue to flock to the company's industry-leading operational intelligence solutions. Splunk also modestly increased its outlook for the coming year.
With shares up 4% in after-hours trading right now, let's take a closer look at how the company ended fiscal 2019.
IMAGE SOURCE: GETTY IMAGES.
Splunk results: The raw numbers
| Metric |
Fiscal Q4 2019* |
Fiscal Q4 2018 |
Year-Over-Year Growth |
|---|---|---|---|
|
Revenue |
$622.1 million |
$459.7 million |
35.3% |
|
GAAP net income (loss) |
$2.1 million |
$33.2 million |
(93.7%) |
|
GAAP earnings (loss) per share |
$0.01 |
$0.23 |
(95.7%) |
DATA SOURCE: SPLUNK. *FOR THE QUARTER ENDED Jan. 31, 2018. GAAP = generally accepted accounting principles.
What happened with Splunk this quarter?
- The top line arrived above Splunk's guidance provided in late November, which called for revenue of $560 million.
- License revenue grew 38% to $411 million, while maintenance & services revenue rose 30.3% to $211.1 million.
- On an adjusted (non-GAAP) basis, which excludes items like stock-based compensation and acquisition costs, net income arrived at $142.2 million, or $0.93 per share. That's up from adjusted earnings of $0.37 per share in the same year-ago period, and well above the $0.76 per share most investors were expecting.
- Adjusted operating margin was 26.8%, above guidance for between 25% and 26%.
- Splunk generated operating cash flow of $127.4 million and free cash flow of $119.4 million.
- Splunk added over 600 new enterprise customers this quarter (accelerating from 500 in Q3), with new and expanded customers including Arlo Technologies, Lego, FIFA, Santos Limited, S&P Global, Steel Dynamics, and the World Wildlife Fund.
Check out the latest Splunk earnings call transcript.
What management had to say
Splunk CEO Doug Merritt stated:
I'm proud of the team's exceptional performance which drove strong results this year. Organizations are competing in a highly complex and constantly changing data landscape. Splunk customers are succeeding because they have access to their data through Splunk's investigative capabilities and integrated monitoring, analysis and automation. Our customers are also increasingly excited about our new technologies which unlock the value from streaming big data and lower the bar to entry for anyone to create business outcomes with data.
Looking forward
For the (current) first quarter of fiscal 2020, Splunk sees total revenue of roughly $395 million, good for year-over-year growth of 26.7%, with adjusted operating margin of negative 8%.
Looking further ahead, Splunk also increased its full fiscal-year 2020 revenue guidance by $50 million, to approximately $2.2 billion, and reiterated its target for full-year adjusted operating margin of roughly 14%.
In this end, this was another straightforward beat-and-raise performance. So even with shares up 45% in the year leading up to this report, I think long-term investors should be more than happy with Splunk's current position, particularly given its ability to sustain outsized growth as hundreds of new customers each quarter realize they can capitalize on their businesses' ever-increasing troves of unstructured data.
