Splunk Has Exceeded Guidance for 11 Straight Quarters

Splunk Inc. (NASDAQ: SPLK) released impressive fiscal second-quarter 2018 results on Aug. 24 after the market closed, highlighting hundreds of new customers across various disparate industries. This also marks the 11th time in as many reports that the operational-intelligence platform specialist has beaten expectations.

Let's have a closer look at what Splunk accomplished over the past few months.

Splunk results: The raw numbers

What happened with Splunk this quarter?

• On an adjusted (non-GAAP) basis, which adds perspective by excluding items such as stock-based compensation, Splunk generated net income of $11.5 million, or $0.08 per share. Adjusted operating margin arrived at 5.2%.
• By comparison, Splunk's most recent guidance called for lower quarterly revenue between $267 million and $269 million, and lower adjusted operating margin of 4%.
• Billings grew 32% year over year to $303.4 million.
• Licensing revenue climbed 23.5% to $142.9 million, and maintenance revenue rose 41.3% to $137.1 million.
• Splunk generated operating cash flow of $23.2 million and free cash flow of $20.3 million.
• More than 500 new customers were added during the quarter, with new and expanded relationships including the likes of Athenahealth, Carnival Cruise Lines, the Department of Homeland Security, Harvard Business School, Shutterfly, Uber, and Verizon Enterprise Solutions.

What management had to say

Splunk CEO Doug Merritt stated:

Looking forward

For the fiscal third quarter of 2018, Splunk expects revenue to be between $307 million and $309 million -- above the $306.9 million investors were anticipating -- with adjusted operating margin of 8%.

As a result, Splunk once again increased its full fiscal-year 2018 guidance to call for billings of $1.450 billion, up from $1.425 billion previously, and revenue of between $1.210 billion and $1.215 billion, up from $1.195 billion previously. Splunk also reiterated its expectation for full fiscal-year adjusted operating margin of roughly 8%.

All things considered -- and though it shouldn't be terribly surprising, given Splunk's propensity for under-promising and over-delivering -- there was nothing not to like about this report from an investor's perspective. Customers from a wide variety of industries continue to adopt Splunk's solutions in droves. And the company is translating that adoption to stellar revenue growth as its GAAP losses continue to narrow. With shares of Splunk down around 9% over the past three months in spite of its quarterly beat and raise in May, it was hard to blame the market for bidding up the stock after hours following the earnings release.

10 stocks we like better than SplunkWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Splunk wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of August 1, 2017

Steve Symington has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Splunk and Verizon Communications. The Motley Fool recommends Athenahealth and Carnival. The Motley Fool has a disclosure policy.