By Sam Boughedda
After the close Monday, Splunk (NASDAQ:SPLK) announced that Chief Financial Officer Jason Child will be leaving the firm in early November to become CFO at privately held semiconductor business Arm.
In its press release, the company stated it has begun a search for its next CFO with the assistance of a "leading executive search firm."
Following the news, a Needham & Company analyst stated in a note that following a call with Splunk's management, they believe the decision to leave Splunk was Child's choice and not the result of activist involvement, while the "opportunity to appoint a new CFO following Mr. Child's departure will allow CEO Gary Steele to continue building his Executive team."
In the same press release, Splunk also reaffirmed its third quarter and fiscal 2023 guidance, with fiscal third quarter 2023 revenues expected to be between $835 million and $855 million and fiscal full year 2023 revenues expected to be between $3.35 billion and $3.4 billion.
Elsewhere, a Mizuho analyst said in his note that they weren't expecting Splunk to reiterate its F3Q and FY23 outlook.
"While we were not expecting this, we also wouldn't characterize it as a surprise given SPLK's uneven execution and a series of recent executive personnel changes. More broadly, we believe SPLK is a depressed stock, although we also continue to believe the company faces significant competitive challenges, and remain concerned whether it can consistently execute," wrote the analyst, who reiterated a Neutral rating and slightly lowered the firm's price target on the stock to $110 form $115.
Meanwhile, a BofA analyst said in a research note that they believe the transition plan is "likely to provide continuity, though may represent some overhang until a fulltime CFO is in place given the complexity/moving pieces underlying Splunk's model."
"The reiterated guidance (~1 month remaining in the quarter) should somewhat alleviate concerns of a worsening demand environment and any execution risk associated with recent executive changes. We recognize an intensifying competitive environment in the broader observability market; however, we believe that Splunk remains a top vendor to the enterprise in the core logging category, with potential to gain traction in the adjacent observability segment over time with an emerging offering," added the analyst.
Splunk shares are up 1.75% at the time of writing.