2023-08-15 09:01:48 ET
Splunk ( NASDAQ: SPLK ) is slated to report second-quarter results on August 23 and investment firm Monness, Crespi, Hardt believes the quarter will show a slowdown, especially in cloud spending, with further "uncertainty" for the rest of the year.
Analyst Brian White, who has a neutral rating on Splunk ( SPLK ) shares, said he's expecting revenue growth of 16% year-over-year to $923.9M, which would top the consensus estimate of $888.1M and be an acceleration from the previous quarter. However, that 16% growth rate is down markedly from last year's 32% year-over-year growth.
Additionally, White is expecting license revenue of $308.6M and cloud services revenue of $446.7M, with maintenance and services revenue of $168.7M, down 1% year-over-year.
"In recent quarters, Splunk has called out delays in workloads migrating and expanding in the cloud," White wrote in an investor note.
White also noted that Splunk's ( SPLK ) competition has seen some missteps in recent weeks, notably Datadog ( DDOG ), which issued a weaker-than-expected forecast for the third-quarter and cut its revenue outlook for 2023.
"Datadog called out slower [second-quarter] usage growth at existing customers relative to recent quarters but indicated that aggregate usage growth improved in July, roughly in line with [first-quarter] trends," White added.
Looking into the back-half of fiscal 2024, White is forecasting $1.025B in revenue for the third-quarter and $4.021B for all of fiscal 2024, above Wall Street's forecast of $981.4M and $3.905B, respectively.
Splunk ( SPLK ) shares were up 1.2% in pre-market trading on Tuesday.
More on Splunk
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Splunk Q2 results likely to show slowdown, 'uncertainty' ahead: analyst