#SPLUNK REVENUE SOFTWARE#

That accelerated development led to lower-than-expected fiscal second-quarter revenue. During the earnings call, CEO Doug Merritt anticipated that this forward-looking metric will reach 60% this fiscal year, ending Jan.

#SPLUNK REVENUE SOFTWARE#

As an illustration, cloud-based bookings represented 53% of total software bookings in the fiscal second quarter, up from 36% one year ago. Splunk's transition to the cloud is happening faster than anticipated. Unsurprisingly, diminishing revenue and lower gross margin led to a larger GAAP loss of $261 million, more than doubling the loss posted in the prior-year quarter and reflecting the company's near-term challenges.

And non-GAAP (adjusted) total gross margin declined 560 basis points to 78.4%, down from 84.2% one year ago. Thus, during the recent quarter, cloud services' relatively low gross margin of 52.5% paled in comparison to the license segment's 96.9%. But now, Splunk must provide the computing infrastructure with its cloud-based offerings. Its legacy licensing business involves minimal costs, as it consists of distributing software to its customers' infrastructure.

In addition, that transition to the cloud is pressuring the company's gross margin. Splunk reported $626.3 million of revenue in the prior-year quarter. For that reason, management expects another quarter of unexciting performance with third-quarter revenue expected to land in the range of $600 million to $630 million, depending on how the cloud segment performs.

Splunk revenue