Plunk Some Money in Splunk?

The Saratogian (Saratoga, NY) - - BUSINESS -

One of the ben­e­fits of the new dig­i­tal econ­omy is the large amounts of avail­able data that can shed light on what’s hap­pen­ing within an or­ga­ni­za­tion’s op­er­a­tions. Com­pa­nies of­ten need data an­a­lyt­ics soft­ware to turn that data into ac­tion­able in­sights, and Splunk (Nas­daq: SPLK) is a leader in that field, tak­ing in a hefty $517 mil­lion in its last quar­ter, up 33% over the pre­vi­ous year’s level.

Splunk helps busi­nesses or­ga­nize and an­a­lyze both data locked up in old legacy com­puter sys­tems and data gen­er­ated by newer cloud­based op­er­a­tions. Its an­a­lyt­ics en­gine has a broad range of uses, from mon­i­tor­ing equip­ment con­nected to a net­work, to pay­ment pro­cess­ing ac­tiv­ity, to co­or­di­nat­ing cy­ber­se­cu­rity ef­forts.

Its stock is down from its sum­mer highs, in part be­cause man­age­ment pro­jected neg­a­tive op­er­at­ing cash flow of $300 mil­lion for fis­cal 2020 — driven by a new pric­ing struc­ture and a faster-than-ex­pected shift from per­pet­ual li­censes to cloud­based re­new­able subscripti­ons.

Over the longer term, that shift will mean more pre­dictable rev­enue streams, with Splunk adding more than 400 new en­ter­prise cus­tomers in the first quar­ter of fis­cal 2020 alone, in­clud­ing Chipo­tle Mex­i­can Grill, Cerner and Slack. Risk­tol­er­ant long-term in­vestors might con­sider Splunk for their port­fo­lios.

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