A drop in orders for durable goods pointed to a slowdown in the U.S. economy, but stocks were resilient after taking a beating yesterday. The Dow Jones Industrial Average (DJINDICES:^DJI) and the S&P 500 (SNPINDEX:^SPX) both rose, with the financial sector in the lead.
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Splunk beats expectations
Data analysis platform vendor Splunk reported first-quarter results above expectations, but shares dropped 7.3%. Revenue grew 36% to $425 million, above its guidance for $395 million. GAAP (generally accepted accounting principles) operating loss was $145 million, compared with a loss of $121 million in the period a year ago. But after subtracting out stock-based compensation and amortization, Splunk's non-GAAP operating margin was negative 1.8%, after having guided for negative 8%.
Operating cash flow was $35.0 million, compared with $76.5 million in Q1 last year and $127 million last quarter. The company is shifting to renewable bookings, which affects the timing of invoicing and temporarily lowers cash flow. But Splunk's remaining performance obligations (RPO), revenue yet to be collected on signed contracts, increased 57% to $1.2 billion.
Splunk raised its guidance for full-year revenue from $2.20 billion to $2.25 billion, but lowered its forecast for the year's operating cash flow from $350 million to $250 million. Investors may have had some concern about lower cash flow in the short term, but the company is winning business with customers and is flush with $2.7 billion in cash and equivalents on its balance sheet.
Strong tax season boosts Intuit
Financial software company Intuit beat expectations for the fiscal second quarter, and shares rose 6.7% despite criticism from a group of federal lawmakers about the company's business practices. Revenue for the quarter grew 12.4% to $3.27 billion, and non-GAAP earnings per share increased 16.1% to $5.55. Analysts were expecting the company to earn $5.41 per share on revenue of $3.23 billion.
Its Small Business and Self-Employed Group grew revenue 19% to $887 million, with QuickBooks Online subscribers growing 32% to over 4.2 million. Consumer Group revenue grew 10% to $2.2 billion. The company made a big hike to full-year guidance, raising its revenue growth forecast from 8%-10% to 12%, and non-GAAP EPS from 11%-12% to 15%-16%.
Lawmakers including Sen. Elizabeth Warren, D.-Mass., and Rep. Brad Sherman, D.-Calif., sent a letter to Intuit Wednesday that accused the company of steering customers away from the IRS Free File program and to its paid services. CEO Sasan Goodarzi responded on the conference call, saying, "We stand behind our marketing actions as being both appropriate and consistent with our core value -- integrity without compromise."