Splunk (NASDAQ:SPLK), the company that provides software solutions that provide real-time operational intelligence, has lost 20% of its market capitalization this year. However, Splunk is a big data player and investors can count on the company to deliver in the long run. The company has entered into many partnerships with several leading companies and it could perform well in the future.
Splunk's revenue and earnings are growing rapidly. In the fourth quarter, its total revenues were $99.9 million, up 53% year-over-year. Its Non-GAAP operating income was $4 million, while non-GAAP operating margin was 4%. The company welcomed more than 500 new customers to the Splunk family and now has more than 7,000 customers worldwide.
A Number of Important Partnerships
In quarter four, it signed agreements with both large and mid-size enterprises. For example, a large financial services organization has committed to a multiyear agreement and sending a half terabyte of data per day to Splunk Cloud.
- Warning! GuruFocus has detected 3 Warning Signs with SPLK. Click here to check it out.
- SPLK 15-Year Financial Data
- The intrinsic value of SPLK
- Peter Lynch Chart of SPLK
Hunk, the Splunk analytics for Hadoop that was launched in quarter three, received strong market interest. There’s a significant sales pipeline, mostly in the U.S., Northern Europe and Australia.
The Capital Group, one of the world's largest private investment management companies, selected Hunk, along with other Splunk products, for operational analytics in quarter four. It has a healthy pipeline of Hunk opportunities due to go-to-market activities with its partners, Hortonworks, Cloudera and MapR. The sales cycles for Hunk appears to be about the same as Splunk Enterprise in a range of six to nine months.
Investments to Drive Growth
Splunk’s continued investment in premium apps is driving more value for its customers and more use cases for it. This quarter, it announced the latest version of Enterprise Security 3.0, which helps hospitals protect patient privacy and improve their overall security posture.
It continues to invest heavily in the internal product roadmap with lots of stuff in the pipeline, and also plans to extend by acquiring technologies that accelerate its time-to-market. Last year, it made two acquisitions, BugSense in quarter three, and Cloudmeter in quarte.
Splunk is committed to supporting corporate developers who want to build apps in their languages of choice. In Q4, it launched Eclipse plug-in for Java developers. Customers such as Apollo Group, Cobalt and Snap Interactive, as well as partners such as Cloud Passage, are all using its developer tools to customize and extend the power of the Splunk platform.
There’s a huge partner ecosystem, including resellers, technology partners, GSIs, MSPs and OEMs which are extending Splunk’s reach across all markets.
Splunk recently launched the joint go-to-market initiative with Cisco, focused on simplifying and accelerating threat visibility with Splunk and the Cisco Identity Services Engine. It is supporting Cisco's application-centric infrastructure campaign.
Splunk is working closely with other key partners, such as Palo Alto Networks, where it is conducting joint go-to-market activities, including an upcoming 20-city road show with Palo Alto and its top security channel partners.
In quarter four, it announced its partnership with Amazon Web Services, and now has the free versions of Hunk and Splunk Enterprise available as an Amazon Machine Image, or AMI, on the AWS marketplace and plans to introduce paid versions later this year.
Orange France, the largest provider of e-mail services in France, will use Splunk for application management and track spammers and phishing for over 12 million active mailboxes. Chevron Australia will use Splunk for IT operations to improve operational visibility.
Splunk is all set to make big bucks as a result of its important partnerships with several players. The company has lost considerable value this year, but it could surely go higher in the long run.