Sumo Logic (SUMO) stock down after earnings release
SUMO Logic’s stock price was down marginally in after-hours trading Monday following the release of the company’s latest earnings report.
Redwood City-based SUMO closed up slightly at $13.68 on the Nasdaq Global Select Market to rebound after closing down 4.9%, or 70 cents, at $13.59 on Friday 3 December as the earnings report loomed.
SUMO boosted its revenue 20% year-over-year to $62m (£46.75) from $51.87m. That increase beat a 17% hike expected in a recent report by Cowen & Company analyst Derrick Wood. The company provided the report to Capital.com.
According to Wood, Wall Street had also expected SUMO to post a 17% revenue increase. Contrary to analyst expectations, Sumo also bettered the 19.8% revenue increase achieved in the previous quarter.
Sumo provides cloud-based machine data analytics in the US and abroad.
Performance driven by customer growth
“Overall, our performance was driven by improving customer growth and the continued adoption of our observability and security portfolio, which leveraged many of our new features and enhancements released earlier this year,” said president and CEO Ramin Sayar on a conference call with analysts, adding the company saw the best expansion that it has seen in multiple quarters.
He said the company’s customer count grew more than 10% year-over-year.
On an adjusted, non-GAAP basis, SUMO reported a loss of 12 cents per share, beating the 14-cent-per-share loss anticipated among analysts polled by Dow Jones.
Sumo’s total non-GAAP loss increased 28.9% year-over-year to $30.8m from $23.9m.
The company reported a GAAP net loss of $30.8m, or 28 cents per share.
Earlier Monday, Sumo announced the appointment of Stewart Grierson as CFO.
“I’m particularly excited because Stewart has been leading high-growth private and public companies for more than 25 years,” said Sayar on the conference call.
Grierson previously held CFO posts with software developer Delphix and ArcSight and worked for KPMG earlier in his career. He will replace Sydney Carey who is leaving the company on 31 December to pursue other opportunities.
New CFO announced
Carey’s resignation was announced in August but she remained with the company in an advisory role. Sumo said her departure did not result from any disagreement with the company over its accounting principles or practices or financial statement disclosures.
Sayar assumed oversight of a new office of the CFO during the interim.
For accounting purposes, the latest reporting period served as the third quarter of SUMO’s 2023 fiscal year.
SUMO projected revenue of $63.7m to $64.7m for the fourth quarter, which would represent an 18% to 20% year-over-year increase. On a full-year basis, SUMO expects revenue to rise 18% to $238.8m to $238.9m.
“We remain optimistic about our future as we continue to evolve and improve our go-to-market capabilities under new leadership,” said Jennifer McCord, vice-president of finance and chief accounting officer, on the conference call.
She was referring to new president of field operations Lynne Doherty, who assumed her post 1 November. Her arrival coincided with the announced departure of chief revenue officer Steve Fitz, who will leave the company at year-end.
In his recent report, Cowen analyst Wood said Doherty can improve SUMO’s go-to-market capabilities and should drive overall growth re-acceleration in the next fiscal year.
Monday’s relative stock price stability during regular trading hours contrasted with Friday where SUMO fell 6.8% at one point.