The report sent Splunk shares down 1.5% in late trading. The Q3 report comes two weeks after the company surprised Wall Street by announcing Splunk’s CEO, Doug Merritt, was stepping down and the company would initiate an executive search for his replacement. Interim CEO Graham Smith, chair of Splunk’s Board of directors, remarked that the quarter’s results represented “a significant milestone for Splunk, as it was [its] first billion-dollar cloud ARR quarter, with cloud accounting for a record 68% of [its] software bookings.” Revenue in the three months ending in October rose 19%, year over year, to $664.75 million, yielding a net loss of 37 cents a share. Analysts had been modeling $646 million and a 53-cent loss per share. CFO Jason Child said, “Once again, our execution was very strong as we grew cloud ARR by $130 million to more than $1.1 billion dollars, up 75% over last year.” Child added, “We expect our momentum to continue through the end of the year, and we’re on track to end FY22 with more than $3 billion of total ARR.” For the current quarter, the company sees revenue of $740 million to $790 million, versus consensus for $828 million. For the full year, the company cut its revenue outlook to a range of $2.51 billion to $2.56 billion from a prior range of $2.53 billion to $2.6 billion. That compares to a consensus of $2.58 billion. Splunk also reduced its outlook for non-GAAP operating profit margin to a range of negative 15% to negative 17%, lower than the prior outlook of negative 14% to negative 17%. For fiscal 2023, the company sees its annualized recurring revenue from cloud totaling $2 billion and its total ARR coming in at $3.9 billion. Wall Street has been modeling total ARR in 2023 of $4.07 billion.
