Splunk (SPLK) Bullish Stance Reiterated at Oppenheimer on Beat/Raise

Splunk (NASDAQ: SPLK) posted revenue of $174.4M, up 50% y/y, and ahead of the consensus $160.2M. Non-GAAP EPS of $0.05 beat the consensus $0.02. License revenue rose 44% y/y to $104M; maintenance and services revenue grew 59% y/y to $70.3M.

Oppenheimer analyst, Shaul Eyal, attributes the strength in the quarter to 4 things:

1. continued strong adoption of security products by existing and new customers (Security accounts for 40% of revenues)

2. triple digit growth of SPLK's cloud products (SPLK is a notable AWS partner)

3. growing TAM (estimated currently at $45B)

4. no change to the competitive landscape.

Godfrey Sullivan is leaving the CEO post and Doug Merritt (SVP Field Ops for past ~2 years) is stepping up to fill the role.

SPLK's security products (40% of revenue) continue to displace some legacy SIEM vendors and Eyal believes a growing number of its core IT OPs customers are beginning to adopt its security offering.

Guidance for F4Q16—revenues of $200-202M, operating margins of 5-6%; for FY16 (Jan.'16)—revenues of $650M (up 45% YoY) vs. prior $628-632M and operating margins of 3% vs. prior 2-3%.

The firm reiterated an Outperform rating and $80 PT, which represents 11.7x FY17E revenue.

For an analyst ratings summary and ratings history on Splunk click here. For more ratings news on Splunk click here.

Shares of Splunk closed at $62.76 yesterday.

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