Splunk ups outlook, delivers strong Q3

A land and expand strategy is leading to strong growth for Splunk, best known for its machine data monitoring software.

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Splunk reported third quarter sales that were up 48 percent from a year ago and well ahead of expectations as the company added 500 new customers.

The company, which has become an important operations monitoring vendor for the enterprise, reported a net loss of $48.55 million, or 40 cents a share, on revenue of $116 million. Splunk reported a third quarter non-GAAP profit of 2 cents a share.

Wall Street was expecting Splunk to break even on a non-GAAP basis on sales of $107.3 million.

Also see:  Enterprise tech vendors: Sizing up the next gen field  |  Splunk rolls out new products, platform upgrades to boost big data muscle

As for the outlook, Splunk raised its view for the fiscal year. For the fourth quarter, Splunk projected revenue between $135 million and $137 million with non-GAAP margins of 4 percent to 5 percent.

For the fiscal year ending Jan. 31, Splunk projected revenue between $438 million or $440 million. Splunk's previous outlook was for annual revenue of $423 million to $428 million.

And for fiscal 2016, Splunk is expecting revenue of about $575 million.

Splunk is a good example of a next-gen enterprise vendor that is deploying a land and expand approach. The company enters corporations via departments, developers and IT personnel, but then later becomes more of an option for line of business leaders.

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The company said it added more than 500 customers with strong growth in security monitoring. Splunk Cloud, a SaaS option, is also performing well. Splunk recently revamped its Splunk Enterprise software, which is used to monitor machine data.

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