Splunk's Cloud Transition Is Starting to Bear Fruit

The headline numbers didn't appear to be that great, but Splunk's (NASDAQ: SPLK) shareholders have a lot to be happy about after the start to 2020. Revenue in the first quarter increased a meager 2% from a year ago to $434 million, but that obscures massive growth in its cloud-based data analytics business as the company transitions to new accounting standards more suitable for a modern-day software outfit.

The coronavirus lockdown is, of course, clouding the outlook for the rest of the year, but digital transformation is accelerating as organizations look to quickly update operations to avoid any future disruption. For Splunk, which recently surpassed IBM (NYSE: IBM) as the market share leader in IT performance analysis, work-from-home and shelter-in-place mean more fuel just got added to its growth engine.

Image source: Getty Images.

Source Fool.com