Splunk (NASDAQ:SPLK) shares gained more than 9% in premarket Thursday following the company's better-than-expected Q1 results.
Splunk reported EPS of $0.18, better than the consensus that called for a loss per share of $0.14. Revenue was $752 million, beating the consensus estimate of $722.99M.
“Splunk delivered another solid quarter and once again delivered durable growth with increasing profitability and free cash flow,” chief executive Gary Steele said in a statement.
Cloud revenue increased 30% year-over-year to $419M. Total ARR was $3.725 billion, representing a 16% year-over-year growth.
For Q2/24, the company expects revenue in the range of $880M-$895M, better than the consensus of $868M. Total ARR is expected to be approximately $3.825B.
For the full year, the company anticipates revenue of $3.9B, at the top-end of its prior range of $3.85B-$3.9B. Total ARR is expected in the range of $4.125B-$4.175B.
BTIG analysts raised the price target by $7 to $128 per share.
"We were pleased with the results. Execution is clearly showing signs of improving, cost initiatives are gaining traction, and we came away with a higher degree of confidence in forecasts for both FY24 and FY25. Reiterate Buy," the analysts said.
Mizuho analysts also boosted the price target but remains Neutral-rated.
"Valuation remains generally depressed, although we also continue to believe SPLK faces significant competitive challenges, and remain concerned about whether it can consistently execute," they wrote in a note.
(Additional reporting by Senad Karaahmetovic)