(Bloomberg) -- Splunk Inc. shares rose in extended trading on Wednesday after it reported fourth-quarter results that beat expectations. It also gave a first-quarter revenue outlook that fell short of the average estimate.
The infrastructure software company reported revenue of $745 million, above the analyst consensus of $677.8 million. Annual recurring revenue came in at $2.36 billion, up 41% from the year-ago period, while cloud ARR rose 83% to $810 million. Analysts had been looking for $2.31 billion in ARR and roughly $753.5 million in cloud ARR.
“Our number-one goal is to get customers to the cloud, and we saw an acceleration in growth this quarter,” Splunk Chief Executive Officer Doug Merritt said in an interview. “We're seeing really good adoption and best-in-class annual recurring revenue growth.”
Shares of Splunk rose about 4% after the report. Based on the most recent close, the stock is down about 30% since early December, when it reported third-quarter results and gave an outlook that was below expectations. It fell 4% in Wednesday's regular session.
For the first quarter, Splunk forecast revenue between $480 million and $500 million, and total annual recurring revenue between $2.42 billion and $2.44 billion. Analysts are looking for revenue of $505.2 million and ARR of $2.44 billion, according to Bloomberg Consensus data.
“Transitions are painful, but we view this year as the last major impact transition year,” said Merritt, who added that macroeconomic uncertainties were a factor in Splunk declining to give a full-year forecast.
“Spending in general is under higher scrutiny, and the environment is making people pause a little more. At the same time, the pandemic has forced companies that weren't aggressive about the cloud to realize they need to get there.”
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