Splunk Q1 Results Beat Street Expectations, Raises FY23 Guidance, Shares Rise

• Splunk Inc (NASDAQ:SPLK) reported first-quarter FY23 revenue growth of 34.3% year-over-year to $674.08 million, beating the consensus of $628.75 million.
• Cloud revenue was $323 million (+66% Y/Y). Cloud Dollar-Based Net Retention Rate was 130%. 329 customers with cloud ARR greater than $1 million (+62% Y/Y).
• The gross margin expanded by 425 bps to 70%. The adjusted gross margin was 74.7% vs. 71.5% a year ago.
• The operating loss reduced to $291.69 million, from $435.35 million in 1Q22.
• Adjusted EPS was $(0.32), above the consensus of $(0.74).
• Splunk generated cash from operating activities of $143.35 million, compared to $70.66 million a year ago. Free cash flow of $137.73 million.
• 2Q23 Outlook: Splunk expects total revenue of $735 million and $755 million vs. a consensus of 737.01 million; Non-GAAP operating margin of negative 8% and negative 11%.
• FY23 Outlook: The company sees total revenues of $3.3 billion and $3.35 billion (previously $3.25 and $3.3 billion) vs. a consensus of $3.27 billion, and a Non-GAAP operating margin of ~2% (prior between 0% and 2%).
• Price Action: SPLK shares are trading higher by 2% at $94.88 during the post-market session on Wednesday.