Splunk Surprises With Numbers

Last Updated: 1. Dezember 2023By

The news was a bombshell. About two months ago, networking giant Cisco announced the acquisition of cybersecurity provider Splunk for $28 billion. With this deal, Cisco wants to better interlock its hardware offering with Splunk’s software to maximize the boom in cybersecurity and artificial intelligence. However, the deal is not likely to be a sure thing. Especially the regulatory authorities are taking a closer look at the deal with regard to Splunk’s China business. The transaction is to be finalized by the third quarter of next year.

In the meantime, it is worth taking a look at Splunk’s operational development. After all, the US company has just presented its results and provided a positive surprise.

Splunk – the specialist for large data sets in portrait Now, however, to the business model of the US company. Splunk’s software products help customers to monitor, analyze and format unstructured data sets (Big Data). The name „Splunk“ is derived from the term „spelunking“ (cave exploration) and refers to the analysis of previously unknown data sources.

Splunk offers log, monitoring and reporting tools that make machine-generated data accessible and usable for all users, thus making it valuable. Splunk has developed a platform for data analysis. Companies can use it, among other things, to monitor access to IT systems in real time and identify anomalies. The company from San Francisco was already able to win more than 15,000 customers in over 110 countries, including well-known names such as Adobe, Bosch, Coca-Cola, Porsche, Puma or Deutsche Bahn.

Cloud-based subscription model ensures steady business development Recently, Splunk has mainly tried to move its business model more into the cloud. In the second quarter, cloud revenues accounted for 44% of total revenues. While total revenues increased by 15.1% to $1.07 billion, cloud revenues increased by 25% to $469 million. The total revenue exceeded analyst estimates by $40 million.

The number of customers with an annual recurring revenue of over one million dollars increased by 97 year-on-year to 851. The strategy is likely to pay off in the long run. In the last quarter, the company posted a profit of $96 million.

Recurring annual revenue rises to $4 billion Also worth mentioning: Splunk’s total recurring annual revenue rose in the third quarter, which ended on October 31, by 15% to $4 billion. Of this, cloud business accounted for $2.03 billion, or just over 50% of total corporate revenues.

Stock trading slightly below offer price With the takeover offer, Splunk is valued at $28 billion. Cisco’s intention is clear: the dependence on Internet hardware business should be reduced. For this purpose, Cisco has repeatedly taken over other companies. With the purchase of Splunk, the US network equipment supplier wants to expand its software business.

After the encouraging figures, the Splunk share almost unchanged and closed at $150.60. This means that the papers are slightly below the Cisco purchase offer, which is at $157 per Splunk share.