- With Splunk (SPLK -16.3%) predicting 60%-62% of its FQ2 revenue will come from licenses, the company implying license rev. growth will slow to 28%-35% from FQ1's 42% and FY14's 46%, writes FBN.
- The firm also notes Splunk's $100K+ deal count only rose 27% Y/Y in FQ1 (to 167), down from FQ4's 69%, and that current product billings growth slowed to 41% from 73% in FQ4 and 60% in FY14. Nonetheless, it thinks "risk/reward is attractive" following Splunk's selloff, and suspects guidance is once more conservative.
- Canaccord reiterates a Buy, but is worried Splunk might be hitting a growth wall. "As a firm scales, hiring becomes the primary chokepoint ... because you end up hiring too many people who are unable to scale ... The challenge is that unless you’re exceptionally ruthless and willing to fire some people ... you risk scuffling at few years down the road."
- UBS is defending Splunk, arguing (among other things) competition still isn't a problem, a proven sales chief has just been hired, and the company's valuation is still only 1/6 to 1/9 of the total addressable big data market.
- Likewise, William Blair thinks a "continued mix shift to a higher proportion of ratable deals was the key driver of any underperformance versus expectations," rather than any fundamental problems.
- FQ1 results, guidance/details