![]() Splunk Revenue Segments (Seeking Alpha, Splunk, Fountainhead)Įmbedded Strategy: Splunk changed its strategy from selling licenses to focus more on multi year cloud SaaS contracts to cement longer term relationships and increase upselling opportunities. ![]() Let's take a look at its business and some of the strategic initiatives it is taking to shore up growth, profitability and fending competition from Datadog ( DDOG) to see if it's worth buying now or on declines.ĭata by YCharts Splunk's Revenue Segments: Focusing on the Cloud Now, its valuation is at a more reasonable 4X sales at $93 per share. Splunk used to sport a P/S multiple above 13 at one time with a sky high stock price of over $225. Splunk not surprisingly on its part, too, forecasted only 9% growth for 2023 and at a relatively sedate 15% growth for the next 5 years. However, these catalysts are in the rearview mirror now and according to an excellent article on Seeking Alpha, most Datacenter hyperscalers and Cloud service providers have warned of declining growth and demand. Massive needs for security and event monitoring, growth from Cloud Service Providers, Hyperscalers and Work From Home because of Covid-19 greatly boosted demand. ![]() Splunk had a brilliant decade growing revenues at 32% each year from a fledgling $302Mn in FY2014 to the $3.6Bn security behemoth it has become today. The laundry list of services is also vital for adding new logos as Splunk needs to expand to negotiate a much tougher selling environment in 2023. This allows for adoption of new use cases for upselling to embedded customers, a key characteristic of valuable SaaS companies. As we can see from the slide, they have a wide arsenal of services beyond SIEM. The key competitive advantages that stand out for Splunk are its scale and size and its wide range of productions and solutions. Often the SIEM segment is also categorized as APM (Application Performance Monitoring) with both having much of the same functions of security, observability and monitoring.
0 Comments
Leave a Reply. |
Details
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |