Shares of Splunk (NASDAQ:SPLK) dropped on Thursday after the data analytics software provider reported mixed fourth-quarter results. Splunk's bottom line came up a bit short, and its guidance was well below analyst expectations. The stock was down about 9.4% at 3:40 p.m. EST.
Splunk reported fourth-quarter revenue of $791 million, up 27% year over year and about $7.7 million higher than the average analyst estimate. Software revenue jumped 33% to $617 million. In fiscal 2020, Splunk's annualized recurring revenue grew by 54%.
Non-GAAP (adjusted) earnings per share came in at $0.96, up from $0.93 in the prior-year period but $0.01 below analyst expectations. The company posted a loss of $0.15 per share under generally accepted accounting principles.
"This was a transformational year for Splunk," said CEO Doug Merritt. "We have transitioned our business model, our product strategy and introduced new and enhanced pricing models as part of our companywide, cloud-first approach."
Cloud products are expected to account for more than 60% of total software revenue within a few years.
While Splunk's results weren't too far off the mark, the company's guidance missed badly. For the first quarter, Splunk expects revenue of $450 million, up just 6% year over year and well below the $523 million analysts were expecting.
For the full year, Splunk sees revenue of $2.6 billion, along with a breakeven non-GAAP operating margin. Analysts were expecting revenue guidance of $2.82 billion.
Splunk's transition to the cloud is likely hurting the company's results. On a big down day for the broader market, a mixed report was enough to send the stock tumbling.