What happened

Shares of cloud-based data intelligence company Sumo Logic (SUMO) took a hit on Friday. The stock fell as much as 14.7% but was down 10.3% as of 2:25 p.m. EDT.

The stock's gain follows the cloud log management specialist's fiscal second-quarter earnings release. Shares are likely down, in part, due to some concerns from the earnings report, as well as two analysts' moves to downgrade their ratings for the stock.

A chart showing a stock price falling.

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So what

The tech company's revenue for its second quarter of fiscal 2022 rose 19% year over year to $58.8 million. Sumo's non-GAAP (adjusted) bottom line came in at a loss of $0.11 on a per-share basis. Analysts on average were expecting revenue of $56.7 million and an adjusted loss per share of $0.14. 

But BTIG analyst Gray Powell, who downgraded his rating for the stock from buy to neutral, said that the company's increased outlook for full-year revenue was driven only by an improved view for sales from its largest customer. Excluding potential revenue from this customer, management's outlook was actually lowered, Powell explains. Piper Sandler analyst Rob Owens similarly lowered his rating for the stock from overweight to neutral, noting that he wants to see more execution from the company before getting more bullish.

Now what

Management said it expects full-year fiscal 2022 revenue to increase 17% to 18% year over year to $236.8 million to $238.8 million. Excluding its largest customer, it expects revenue to be between $221.2 million and $223.2 million. Management was previously expecting revenue when excluding its largest customer to be between $221.7 million and $224.7 million. 

But management is confident about the company's future. "Combined with our investments to increase our routes to market, we are well positioned to capture this expansive opportunity created by digital transformation and cloud migration," said Sumo Logic CEO Ramin Sayar.