Splunk Inc (NASDAQ:SPLK) stock fell 10.39% (As on August 25, 11:14:52 AM UTC-4, Source: Google Finance) after the company posted better than expected results for the second quarter of FY 23. Cloud revenue was $346 million, up 59%, reflecting continued adoption of the Cloud Platform. The professional services and education were 7% of total revenues in the quarter. RPO bookings was $794 million, up 17% over last year, which was lower than planned as several customers slowed their expansions or significant deployments due to macro uncertainty. This caution was also apparent in the shorter contract duration, which was down about 2 months versus last year. On a duration-adjusted basis, RPO bookings growth was 29%. The company ended the quarter with total ARR of $3.33 billion, up 27% year-over-year and cloud ARR of just over $1.5 billion, up 55%. Meanwhile, the majority of the ARR adjustment is primarily attributable to a slower pace of existing customer migrations and expansions of their cloud deployments given the uncertain economic environment.

SPLK in the second quarter of FY 23 has reported the adjusted earnings per share of 9 cents, beating the analysts’ estimates for the adjusted loss per share of 37 cents, according to Zacks Investment Research. The company had reported the adjusted revenue growth of 32 percent to $798.8 million in the second quarter of FY 23, beating the analysts’ estimates for revenue of $747.1 million. Cloud gross margin was 69% in Q2, up 9 points from last year.  Total gross margin was 79%, up 3 points year-over-year. Operating margin was positive 4% in the quarter.

For the current quarter ending in November, Splunk said it expects revenue in the range of $835 million to $855 million. Analysts surveyed by Zacks had expected revenue of $836.4 million. For the third quarter Non-GAAP operating margin is expected to be between 6% and 8%.

The company expects full-year revenue in the range of $3.35 billion to $3.4 billion (was previously between $3.30 billion and $3.35 billion). For the fiscal year 2023 (ending January 31, 2023), the Non-GAAP operating margin is expected to be approximately 8% (was previously 2%), Total ARR is expected to be approximately $3.65 billion; Cloud ARR is expected to be approximately $1.8 billion (was previously $3.9 billion and $2.0 billion respectively), Operating cash flow is expected to be at least $420 million (was previously $400 million) and Free Cash flow is expected to be at least $400 million.