Splunk Inc. (NASDAQ:SPLK) released better-than-expected fiscal first-quarter 2020 results on Thursday after the market closed, highlighting hundreds of new enterprise customer additions, strong software-sales growth, and another boost to its full-year outlook. Still, shares of the operational-intelligence platform company are down slightly in after-hours trading in response -- and this despite a more than 5% plunge leading into the report as the broader markets fell.

Let's take a closer look at what drove Splunk as it kicked off the new year.

Splunk logo and images of office on a panoramic TV display.

IMAGE SOURCE: THE MOTLEY FOOL.

Splunk results: The raw numbers

Metric

Fiscal Q1 2020*

Fiscal Q1 2019

Year-Over-Year Growth

Revenue

$424.9 million

$311.6 million

36.4%

GAAP net income (loss)

($155.4 million)

($118.5 million)

N/A

GAAP earnings (loss) per share

($1.04)

($0.83)

N/A

DATA SOURCE: SPLUNK. *FOR THE QUARTER ENDED APRIL 30, 2019. GAAP = generally accepted accounting principles. 

What happened with Splunk this quarter?

  • Revenue was well above Splunk's guidance provided in late February for roughly $395 million.
  • License revenue increased 46% year over year, to $202.9 million, while maintenance and services revenue climbed 28.6%, to approximately $222 million. Within those totals, software revenue jumped 54%, to $265 million. 
  • Splunk generated (non-GAAP) net income of $3.2 million, or $0.02 per share, adjusted for items like stock-based compensation and acquisition costs. This was above consensus expectations for an adjusted loss of $0.14 per share.
  • Adjusted operating margin was negative 1.8%, also above guidance for negative 8%.
  • Splunk generated cash flow from operations of $35 million and free cash flow of $20.1 million.
  • Added more than 400 new enterprise customers this quarter, with notable new and expanded relationships including Brink's, Cerner, Chipotle Mexican Grill, and Slack.

What management had to say

Splunk CEO Doug Merritt stated:

Our customers are successful because they can unlock value from their growing data landscapes with the unique Splunk platform, and this is what fuels our strong performance. In Q1, we released Splunk Connected Experiences and Splunk Business Flow, new products that are part of our vision to take Splunk beyond IT and security and to bring our customers closer to their data. These products further differentiate Splunk as we strive to bring data to every question, every decision and every outcome for any organization.

Looking forward

For the second quarter of fiscal 2020, Splunk expects revenue of roughly $485 million -- up 24.9% year over year and comfortably ahead of the roughly $480 million most analysts were modeling -- with adjusted operating margin of around 3%.

As such, for the full fiscal-year 2020, Splunk raised its guidance (for the second time in as many quarterly reports) to call for revenue of roughly $2.25 billion, up from $2.20 billion. The company reaffirmed its guidance for full fiscal-year adjusted operating margin of approximately 14%.

Put simply -- and thanks to the sustained momentum of its underlying operational-intelligence solutions -- Splunk easily extended its long streak of exceeding guidance and raising forward expectations. While the market's muted reaction may not indicate as much with shares already up 25% year to date, this quarter was as good as any long-term Splunk investor could have asked for.