D.A. Davidson Likes What It Sees In Splunk's Q2 Report

Splunk Inc SPLK reported robust FYQ2:17 results, with the revenue ahead of the estimates, consensus and guidance.

D.A. Davidson’s Jack Andrews reiterated a Buy rating on the company with a price target of $83.

Beat Results

Splunk reported its revenue and EPS for FYQ2:17 at $212.75 million, with non-GAAP EPS of $0.05, which was in line with the estimate but beat the consensus forecast.

Cloud booking rose more than 200 percent during the quarter, with management implying that booking worth at least $25 million were made in FYQ2:17, almost double the guidance.

Related Link: Despite Investors' Lackluster Response To Splunk's Q2, Drexel Hamilton Analyst Reiterates Buy

“For comparative purposes, this implies that if cloud bookings had merely met SPLK's own expectations, the company would have reported ~$12 million more revenue in the quarter,” Andrews mentioned.

In addition, Splunk added more than 500 new customers, with 446 orders of more than $100,000. For the 16th quarters, out of the past 17, more than 70 percent of License revenues were contributed by existing customers, driven by capacity upselling.

Looking Ahead

The company has also been working closely with AWS, having recently introduced the Splunk App for AWS 4.2, “which helps customers visualize critical information regarding their AWS environments,” Andrews stated.

While the FYQ3:17 guidance was in line with expectations, the company raised its FY2017 guidance, with the revenue guidance raised from $892–$896 million to $910–$914 million.

At time of writing, Splunk was trading at $59.58, down 8.48 percent on the day.

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