Tag Archives: data

Splunk Pops On Sales Growth, Bigger Big Data Deals And More Of Them

Spunky Big Data stock Splunk ( SPLK ) popped as much as 16% Friday, after the company late Thursday posted better-than-expected earnings and sales, comforting investors in software stocks that had been battered in recent weeks. Earnings minus items for Splunk’s fiscal Q4 ended Jan. 31 rose 22% to 11 cents per share, where Wall Street analysts had expected 8 cents. Revenue rose 49% to $220 million, $17 million more than analysts expected. The company also forecast Q1 revenue higher than Wall Street estimates. Splunk stock eased off its session high but was still up nearly 10% in early afternoon trading in the stock market today , near 42, and still 45% off a 16-month high set July 23 at 76.29. The IBD Computer Software-Database group, which includes Splunk, rose as much as 3% Friday and was up more than 1% in early afternoon trading. Enterprise stocks got a boost not just from Splunk, but also from No. 1 customer relationship management software maker  Salesforce.com ( CRM ), which offered upbeat guidance after the close Wednesday. Salesforce rose 11% Thursday and was down a fraction Friday afternoon. Splunk stock had fallen 23% on Feb. 5, the day after high-flyer Tableau Software ( DATA ) stunned Wall Street with decelerating sales growth and weak guidance for 2016. Following Tableau’s lead, software issues fell by such a sizeable margin that analysts started calling it a software sector correction. “The Splunk (Q4) results were better than anticipated, given the recent disappointing quarters in fast-growth software, particularly SPLK’s Big Data cousin, Tableau,” wrote Needham analyst Scott Zeller in a Friday research note. “Splunk has faced growth deceleration over the past year, yet the company finished fiscal 2016 with a respectable 45% (year to year) billings growth and 48% revenue growth. “It is our belief (Q4) was driven by big deals (not disclosed), suggested by the ASPs  (average sale prices) of $80,000 in the quarter vs. typical $40,000-$50,000 range. The challenge will be to convince investors that SPLK can reaccelerate billings and revenue growth, rather than maintain consistent growth.” Zeller reiterated a hold rating on Splunk stock. More positive, with a buy rating and a 67 price target, Evercore ISI analyst Kirk Materne put Splunk’s historical average sale price at $50,000 per software license and $70,000 in Q3, compared with $80,000 in Q4. “Big-deal metrics highlight growing momentum across Splunk’s product suite,” Materne said in a research note. For the year, he says Splunk customers signed 1,447  six-figure deals, up from 1,112 in fiscal 2015, and 102 seven-figure transactions, up from 68 such biggies in 2015. It also penned three eight-figure deals last year vs. two in the company’s entire previous history. “Splunk continued its strong customer-count trajectory as well, adding 621 net new customers in the quarter and bringing its total customer count to over 11,000,” Materne noted. “Combined, we believe the fact that Splunk continues to accelerate customer additions while also growing its average contract size is a clear indication of the high level of demand for the company’s solutions and its growing strategic value in the enterprise.” Splunk guided the current Q1 ending April 30 to a non-GAAP operating margin loss of 1% to 2%, on sales of $172 million to $174 million. Analysts polled by Thomson Reuters expect a 1-cent loss minus items on revenue of $171 million, which would compare to a similar 1-cent loss on $125.7 million in the year-earlier quarter. For Q4, Splunk posted a fully reported loss of 61 cents per share, up from a 47-cent loss in the year-earlier quarter.

If Workday Beat Consensus, That’ll Be 13 For 14 Quarters Since IPO

Well, it’s no Salesforce.com ( CRM ) in size, but investors are turning their attention to hot little rival Workday ( WDAY ), which reports earnings after the close Monday. The maker of cloud-based HR and financial software likely will show continued fast growth — while likely staying in the red as it spends to grow. For its fiscal Q4 2016 ended Jan. 31 , Workday guided to revenue of $317 million to $320 million, up 40% to 41% from the year-earlier quarter. Analysts polled by Thomson Reuters had modeled $320.3 million when Workday issued its Q3 results three months ago, but since then the consensus has slipped to $319.6 million. Workday didn’t forecast earnings, but analysts expect an adjusted loss per share of 4 cents vs. a 6-cent loss in the year-earlier quarter. Like many stocks, Workday has been scraping bottom lately, hitting a 39-month low on Feb. 9 at 47.32. Workday stock fell 16% on Feb. 5, but it wasn’t alone. That was the day Tableau Software ( DATA ) tanked 49.5% after releasing slower growth guidance for 2016, sending most software stocks down with it. Since then, Workday stock has enjoyed two good weeks, up 1% in early trading in the stock market today , near 60 but still down 25% for the year. Workday stock rose 3.2% Thursday, with enterprise software stocks helped by Salesforce.com’s late-Wednesday earnings beat and better-than-expected guidance. Salesforce.com stock rose 11% Thursday but was down a fraction early Friday. Noting that Workday “has beaten consensus revenue and EPS estimates in 12 of the 13 quarters it has been public,” D.A. Davidson analyst Jack Andrews is bullish. “We expect (Q4)  revenue to grow 41.9% …  to $321.2 million, above consensus …  and above the high end of the (Workday-provided) guidance range. By segment, we are projecting 44.6% growth in subscription services to $263 million (81.9% of total revenue) and 31.0% growth in professional services to $58.2 million,” he said in a research report. He expects a 3-cent per-share loss minus items, a penny better than consensus. “One interesting note is that we believe Oracle ( ORCL ) has pulled back a bit on its promotional program on SaaS (Software as a Service) and aims to offer future promotions to customers tactically, rather than automatically,” Andrews wrote. Davidson maintains a buy rating on Oracle stock.  It also has a buy rating on Workday stock, with a 99 price target. Oracle stock rose 1.8% Thursday, but was flat early Friday. Investment banker R.W. Baird on Thursday lowered its price target on Workday to 70 from 85, but it rates the stock outperform. “Workday’s share price has also been significantly reduced along with other high-valuation software stocks during the recent correction,” wrote Baird analyst Steven Ashley. In Workday’s Q3 earnings conference call with analysts, CFO Mark Peek said an adjusted operating profit likely wouldn’t happen until Q2 this year.

Palo Alto Networks Q2 Beats Amid Market Share Gains

Palo Alto Networks ( PANW ) stock rocketed Thursday as the cybersecurity firm’s model of providing a simplified product boosted market-share gains and helped fiscal Q2 results as well as Q3 sales guidance top projections. For its fiscal Q2 ended Jan. 31, Palo Alto’s earnings per share soared 110.5% to 40 cents, beating estimates by a penny. Sales jumped 54% to $334.7 million, above views of $318.3 million. Both measures, however, decelerated for the second consecutive quarter. Shares closed up 9.7% and rallied another 4% in after-hours trading. Customers aren’t interested in puzzle-piecing together their security solution, CEO Mark McLaughlin said on a conference call. That platform focus drove Palo Alto to add 2,000 new customers to its 30,000-strong client base. He also noted a “paradigm shift” from reactive security to the platform. ‘Buying All Elements’ “People are not interested in adding one more agent onto the endpoint,” he said. “So simplified on the endpoint is a driver and it’s very analogous to when people say, ‘Hey, I don’t want firewall and plus, plus, plus (more products).” Billings also surged 62% to $459 million during Q2 as customers began “buying all elements of our platform,” CFO Steffan Tomlinson said on the call. Subscription revenue of $84.3 million grew 68% vs. the year-ago quarter. “We’re seeing customers standardizing on our platform,” McLaughlin said. And with that, “they’re adopting a lot more subscription services than they have in the past.” Current-quarter sales guidance for $335 million-$339 million topped analyst forecasts for $334.9 million, but Palo Alto’s EPS ex items outlook for 41-42 cents missed Wall Street expectations for 45 cents. The company’s Q3 sales would be up 44% at the midpoint of guidance, and EPS ex items would rise 80% at the midpoint. But both metrics would also decelerate for the third consecutive quarter. On a seasonal basis, Q1 and Q3 tend to be weaker, Tomlinson said. While McLaughlin said security remains a top priority globally, IBD’s 41-company Computer Software-Security group has fallen 20% year to date. Over the same time period, Palo Alto Networks stock has lost 26%. McLaughlin acknowledged the stock shake-up — likely related to disappointing guidance from tech firms like Tableau ( DATA ) and LinkedIn ( LNKD ) — but said there’s nothing to indicate the macro environment will play out along stock market lines. Taking Market Share Palo Alto also appears to be swiping market share from Cisco ( CSCO ), Check Point Software Technology ( CHKP ), Fortinet ( FTNT ) and Juniper Networks ( JNPR ), McLaughlin said. Of the $300 million in added 2015 revenue across the five vendors, Palo Alto accounted for $120 million. “The average is $58 million,” he said. “I think it’s very obvious we’re taking share from everyone in the space for the math to work out that way.” During Q2, Palo Alto also announced a data-sharing partnership with Proofpoint ( PFPT ), similar to a deepened IBM ( IBM )-Check Point alliance unveiled Thursday. The Palo Alto-Proofpoint alliance will drive automated and coordinated protection across Palo Alto’s platform, Proofpoint’s targeted attack protection and SocialPatrol. The Big Picture Customers are fed up with cybersecurity vendors that try to monetize data threat intelligence, McLaughlin said. “The big picture is the way we monetize intelligence is in the platform itself,” he told analysts. “The more intelligence we have in the platform, the better job we do. And we have an insatiable desire for platform intelligence.” He added: “You better be able to take intelligence and put it in your platform, and do something with it. That’s where the value will lie.”