Cloud Stocks: Splunk Is On A Shopping Spree

Photo Credit: Ted Striker/Flickr.com

Big data player Splunk (NASDAQ: SPLK) recently announced its third-quarter results that failed to impress the market. The company has been on an acquisition spree to add several companies that complement its focus on building one of the most comprehensive observability offerings in the industry.

Splunk’s Financials

Revenues for the third quarter fell 11% to $559 million, missing the market’s expectations of $613.83 million. Adjusted loss of $1.26 per share was also wider than the market’s estimate of $0.09 per share.

By segment, license revenues fell 35.7% to $176.8 million. Maintenance and service revenues grew 0.9% to $173.6 million. Cloud revenues grew 80% over the year to $145 million.

Among other metrics, Annual Recurring Revenue (ARR) grew 44% over the year to $2.07 billion. This was a milestone quarter for Splunk when its ARR crossed the $2 billion mark.

Splunk forecast revenues of $650-$700 million for the current quarter, ahead of the market’s forecast of $612.3 million.

Splunk’s Acquisitions

Splunk has been on an acquisition spree during the quarter. Earlier last month, Splunk announced its plans to acquire Palo-Alto based Flowmill. Flowmill is a privately held cloud network company with expertise in network performance monitoring (NPM). The acquisition will allow Splunk to expand its existing observability capabilities, allowing its customers to analyze and take relevant actions based on other cloud network and infrastructure data. They will be able to quickly resolve network-related issues, optimize network performance, and reduce network costs. Terms of the deal were also not revealed.

In October, it announced its plans to acquire Estonia-based Plumbr. Founded in 2011, Plumbr is a Java performance monitoring solution that helps customers deliver fast and reliable software to its end users. It offers advanced instrumentation, profiling, and Real User Monitoring (RUM) capabilities that help monitor Java, PHP, Python, and .Net applications. The addition of Plumbr’s technology to Splunk’s Observability Suite will give Splunk’s customers the ability to monitor and troubleshoot existing applications and conduct RUM, database monitoring, and code profiling. Prior to the acquisition, Plumbr had raised $1.8 million in four rounds of funding from investors including Karma Ventures, Jaan Tallinn, Mobi, Sten Tamkivi, and Matt Arnold. Terms of the acquisition were not disclosed.

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Sramana Mitra is the founder of One Million by One Million (1M/1M), a global virtual incubator that aims to help one million entrepreneurs ...

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