Cloud analytics firm Sumo Logic delivers earnings beat

Cloud analytics software provider Sumo Logic Inc. just managed to beat expectations for its fiscal second-quarter results today, but the market was less than impressed as its stock fell sharply in after-hours trading.

The company reported a loss before certain costs such as stock compensation of 11 cents per share. Revenue came to $58.8 million, up 19% from the same period one year ago.

Wall Street had been modeling a greater loss of 14 cents per share on revenue of $56.69 million, but with the company’s stock falling more than 6% in the hours after the report, some had clearly been hoping for a stronger performance.

Sumo Logic sells a cloud analytics platform that provides insights into information technology infrastructure issues and cybersecurity threats. It provides services such as log management, Amazon Web Services monitoring, Azure and Google Cloud Platform management, Kubernetes management, and microservices and cloud security monitoring. The platform also lends itself to more business-oriented use cases such as customer analytics.

Sumo Logic Chief Executive Ramin Sayar (pictured) said the company saw strong momentum in the quarter for a broad range of use cases, including observability and security. “We will continue to invest in platform and expanded routes to market to position us to capture the significant opportunity created by digital transformation and cloud migration,” he said.

It was a fairly busy quarter for Sumo Logic on the platform front, with the company closing on its acquisition of the open-source monitoring tools provider Sensu Inc. to add more capabilities to its Observability platform. It also launched new Real User Monitoring and Span Analytics capabilities in the Observability platform, bringing it closer to its goal of enabling companies to harness business data to predict everything from customer’s buying patterns to seasonal sales dips and spikes.

Sumo Logic also announced general availability of a new product called Sumo Logic Cloud Security Operations Center.

Constellation Research Inc. analyst Holger Mueller said Sumo Logic keeps growing at a good rate, proof that its vision of continuous intelligence is resonating with customers and the market. He noted the company is still unprofitable, though, and explained it needs to find a way to keep investors happy by balancing the books better.

“Sumo Logic’s management will either have to find more growth from somewhere or cut down on the cost side in order to get onto a trajectory where it might break even,” Mueller said.

Looking to the third quarter, Sumo Logic said it sees revenue of $60.3 million to $61.3 million, which would represent growth of around 16% to 18%, a touch lower than the quarter just gone. Wall Street is reckoning revenue of $60.05 million.

For its fiscal year 2022, Sumo Logic said it’s looking for $236.8 million and $238.8 million in sales, ahead of the consensus estimate of $235 million.

Photo: SiliconANGLE

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