Shares of data-management company Splunk (SPLK -0.04%) were up on Thursday after it reported results for the first quarter of its fiscal 2023 that surpassed analysts' expectations on the top and bottom lines. As of 1:40 p.m. ET, Splunk stock was up 9%.
For the period, which ended April 30, Splunk's revenue was up 34% year over year to $674 million. Management had only guided for revenue in the range of $615 million to $635 million. Needless to say, that Splunk beat the top end of guidance by such a solid margin was a pleasant surprise for shareholders.
The tech company is in transition. In November, long-time President and CEO Doug Merritt abruptly stepped down. Also, Splunk has been shifting to a cloud-subscription model, which impacts how its financial metrics are reported. Considering the nature of the company's transition, it's encouraging to see such strong top-line gains: Its 34% revenue growth was its strongest since the first quarter of its fiscal 2020. In other words, it appears the changes are paying off in the form of re-accelerating growth.
In addition to beating expectations, Splunk raised its guidance. For the year, it expects to generate revenue of $3.30 billion to $3.35 billion, up from its previous guidance range of $3.25 billion to $3.30 billion.
While the growth is good, keep in mind that Splunk is still booking operating losses. Its operating loss was almost $292 million in fiscal Q1 alone. And while management expects to at least breakeven on an operating level for the fiscal year, investors should keep in mind that this guidance isn't for the GAAP (generally accepted accounting principles) metric. Real, unadjusted operating losses could remain elevated for the foreseeable future.