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Splunk (SPLK) sinks 16% as CEO steps down

By Joyanta Acharjee

15:48, 15 November 2021

Splunk makes software that digs into data
Splunk makes software that digs into data – Photo: Shutterstock

Software company Splunk released preliminary third-quarter financial numbers Monday and also said Graham Smith is replacing Doug Merritt as interim CEO.

As at 10:14 EST (UTC-5) the stock was down 16% to $141.81.

Splunk’s media team did not immediately respond to an email from seeking the reason behind the announcement.

Splunk said while the board conducts a search for a permanent replacement, Smith will focus on investments and priorities for the company’s upcoming fiscal year to ensure continued customer and cloud transformation success.

Former Salesforce CFO

Prior to Splunk, Smith was CFO at software company Salesforce.

We determined now is the right time to transition to our next phase of leadership - in particular, the board is focused on identifying a leader with a proven track record of scaling operations and growing multi-billion dollar enterprises,” Merritt said in a press release. 

Merritt will remain with the company as a strategic adviser.

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Splunk said fiscal third-quarter revenues will be approximately $660m (£491m), representing 19% year-over-year growth.

Total annual recurring revenue (ARR) a key software-as-a-service metric – will be approximately $2.83bn, representing 37% growth and cloud ARR will be approximately $1.11bn, representing 75% growth.

Non-GAAP operating margin will be approximately negative 14%, Splunk said.

Continued momentum

“Thanks to our team’s focused execution, we had another excellent quarter and surpassed $1bn of cloud ARR. We continue to deliver high value to our customers as we see continued momentum in our cloud and business model transformations,” Splunk CFO Jason Child said. 

The company is scheduled to release full fiscal third-quarter earnings on 1 December.

Splunk makes software designed to investigate, monitor, analyse and act on data at any scale. The company has more than 7,500 employees in 27 offices worldwide.

Read more: Cybersecurity sector roundup: The cost of safety

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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