Why Splunk Inc (NASDAQ: SPLK) stock is going gangbusters today

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Splunk Inc (NASDAQ: SPLK) stock surged over 7.4% in the pre-market session of November 22nd, 2019 (Source: Google finance) after the company posted better than expected results for the third quarter of FY 20. The software company reported a fiscal third-quarter net loss of $57.6 million compared to the losses of $55.7 million in the year-ago period.

SPLK in the third quarter of FY 20 has reported the adjusted earnings per share of 58 cents, beating the analysts’ estimates for the adjusted earnings per share of 54 cents, according to analysts polled by FactSet. The company had reported the adjusted revenue growth of 30 percent to $626.3 million in the third quarter of FY 20, beating the analysts’ estimates for revenue of $604.6 million. SPLK has delivered 40% rise in the Software revenues were $454 million. The company has posted the Non-GAAP operating income of $106 million with the non-GAAP operating margin of 16.8%. The company has generated negative operating cash flow of $135 million with negative free cash flow of $162 million.

For the fiscal fourth quarter, analysts expect earnings to be of $1.03 a share and sales to be of $770 million. Splunk expects fiscal fourth-quarter revenue to be of $780 million. Non-GAAP operating margin is expected to be approximately 23% for the fourth quarter. For FY 20, the company expects total revenues to be approximately $2.35 billion (was approximately $2.30 billion) and Non-GAAP operating margin is expected to be approximately 14%

Meanwhile, SPLK has announced the acquisition of Omnition, which is a stealth-mode SaaS company that is innovating in distributed tracing, improving monitoring across microservices applications, and Streamlio, which is an open source distributed messaging leader that will help accelerate Splunk’s real-time stream processing. Further, the company has recently launched Splunk Ventures, which is a $150 million fund designed to fuel the next generation of data analytics. Splunk Ventures’ Innovation Fund expects to invest $100 million in startups working for the transformation of data into business value, and Splunk Ventures’ Social Impact Fund expects to invest $50 million in organizations using data for the good of society. Splunk also announced its first Social Impact Fund investment in Zonehaven, which is a cloud-based analytics application designed to help communities use data to improve evacuations and reduce wildfire risk.

In addition, the company has introduced the Data-to-Everything Platform, which is designed to unlock trapped value by bringing data to every question, decision, and action.

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