Splunk Shares Plummet After Earnings and Outlook Fall Short

Shares of software company Splunk Inc. were falling in the extended session Wednesday after the company’s earnings and outlook fell short of what Wall Street was expecting.

The company saw its shares fall 15% in after-hours trading.

For the fourth quarter, the company reported a loss of $22.7 million, or 15 cents a share, compared with net income of $2.1 million, or 1 cent a share, in the year-ago period. Adjusted earnings were 96 cents a share. Revenue grew to $791.2 million from $622.1 million in the year-ago quarter. Analysts were looking for 97 cents a share on revenue of $782.7 million.

Looking ahead, for the first quarter, Splunk calls for revenue of about $450 million and about $2.6 billion for the year. Analysts surveyed by FactSet are expecting revenue of $526 million for the first quarter and $2.88 billion for the year.

“We expect our cloud products could represent more than 60% of our total software business in the next few years and during this shift, ARR is the best metric to evaluate our growth,” said CFO Jason Child in a statement.

Disclaimer: We have no position in Splunk Inc. (NASDAQ: SPLK) and have not been compensated for this article.