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What's happening? 
Shares of Splunk (NASDAQ:SPLK) rose by as much as 10% early Friday after the company turned in better-than-expected third-quarter results and raised its full-year guidance.

Why it's happening 
For the fiscal third quarter of 2015, revenue rose 48% year-over-year to $116 million, which resulted in adjusted earnings of $0.02 per share. By contrast, Wall Street was only expecting revenue and earnings of $107.3 million and $0.01 per share, respectively.

In addition, Splunk achieved operating cash flow of $24.3 million (resulting in operating cash flow margin of 20.9%), and free cash flow of $20.2 million, helping it finance continued aggressive investments in R&D, sales, and marketing to both grow its top line and extend its leadership position in real-time operational intelligence software. To be sure, Splunk added 500 new enterprise clients during the quarter, bringing its total to over 8,400 customers worldwide. 

Next, Splunk now expects full fiscal year revenue to be between $438 million to $440 million, compared to its previous range of $423 million to $428 million. Splunk also increased its outlook for adjusted operating margin from 1% previously, to "between 1% and 2%." Analysts, for their part, were already modeling full-year revenue at the high end of that range with earnings of $0.03 per share.

However, investors were willing to overlook that slight guidance shortfall given Splunk's initial guidance for next fiscal year revenue to be roughly $575 million. That's above analysts' consensus, which calls for fiscal 2016 sales of $570.3 million.