Big data company Splunk Inc. reported strong earnings results today with its third-quarter profit and revenue topping Wall Street’s expectations, although it was forced to cut its outlook for the rest of the fiscal year.

Splunk delivered a loss before certain costs such as stock compensation of 37 cents per share on revenue of $664.75 million, up 19% from a year ago. The company’s net loss for the quarter came to $343.2 million.

The results were better than expected, with Wall Street having forecast a bigger loss of 53 cents per share on revenue of $646 million.

Notably, the results come just two weeks after former Splunk Chief Executive Doug Merritt quit the company. Graham Smith, the chair of Splunk’s board, has replaced him on an interim basis.

Splunk’s stock crashed in the hours that followed the shock news of Merritt’s departure and has been declining steadily since then. Today’s report did nothing to reverse that trend.

Smith, who will serve as interim CEO until a permanent successor to Merritt can be found, said the company’s third-quarter results were a “significant milestone” for Splunk as it hit $1 billion in cloud annual recurring revenue for the first time. Cloud now accounts for 68% of Splunk’s software bookings, he explained.

“Our third-quarter results underscore the role Splunk is playing in our customers’ digital transformations and the immense trust organizations have in our data platform and security and observability solutions,” Smith added.

Splunk sells a popular data processing platform that enterprises use to detect and troubleshoot technical issues in their information technology infrastructure. The platform also provides an extensive set of tools for tackling cybersecurity incidents such as breaches. The company counts tens of thousands of organizations as customers, including many of the world’s largest enterprises.

Splunk Chief Financial Officer Jason Child said the company ended the third quarter with 635 customers with a total annual recurring revenue of more than $1 million, up 43% from a year ago.

“The demand environment remains strong and customer engagement is excellent, especially for existing customers managing their hybrid environments,” Child continued. “We expect our momentum to continue through the end of the year and we’re on track to end FY22 with more than $3 billion of total ARR.”

Splunk’s management didn’t provide any updates on the search for a new, permanent CEO, but whoever comes in will have tough task on their hands, said Constellation Research Inc. analyst Holger Mueller. He pointed out that while Splunk’s cloud subscription revenue grew, the company’s costs grew much faster on a year-over-year basis.

“Splunk added $100 million in revenue compared to last year but its operating costs are up $180 million. Overall, its losses this quarter are up $120 million,” Mueller said. “Splunk’s management will have to find a way out of this dilemma somehow, either by finding a way to grow faster or by keeping a lid on its spending. But neither option will be easy.”

During the quarter, Splunk held its annual user conference. The .conf21 event was delivered virtually just prior to Merritt’s surprise departure and saw Splunk announced key enhancements to the Splunk Cloud Platform and Splunk Enterprise. Those updates came alongside a major revamp of Splunk’s observability tools and various new capabilities added to Splunk Security Cloud, Splunk Enterprise Security and Splunk SOAR.

Looking to its fourth and final quarter of fiscal 2022, Splunk said it sees revenue of $740 million to $790 million. Despite forecasting a fairly wide range, its estimates are way below Wall Street’s target of $834 million in revenue.

For the full year, Splunk cut its revenue outlook to a range of $2.51 billion to $2.56 billion, down from its prior forecast of $2.53 billion to $2.6 billion. Wall Street’s consensus stays the same at $2.58 billion.