Big-data processing company Splunk Inc. bucked the trend on Wall Street today after posting strong fiscal first-quarter financial results that sent its stock higher in after-hours trading.

The company reported a net loss of $304.3 million in the quarter, improving on the $471 million loss it posted in the same period one year before. Earnings before certain costs such as stock compensation came to 32 cents per share, with revenue rising 34% from a year ago, to $674.1 million.

The results were better than expected. Wall Street had been targeting a much bigger loss of 74 cents per share on lower sales of $631 million.

Splunk’s stock rallied, with a jump of almost 5% in extended trading adding to a similar gain earlier in the day.

The company 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. Splunk counts tens of thousands of organizations as customers, including many of the world’s largest enterprises.

But it has endured a bumpy road of late, with a string of poor earnings results during the pandemic and the departure of longtime Chief Executive officer Doug Merritt last November. Splunk took its time finding a replacement before ultimately deciding on Gary Steele (pictured), who joined the company from cybersecurity firm Proofpoint Inc. in March.

Presiding over his first earnings call, Steele said in a statement that the company’s first-quarter execution was “solid” and that its technology has become foundational to keeping organizations across the world secure and resilient.

“Splunk is still very early in a massive market opportunity,” Steele added. “As our continued growth and strong customer retention demonstrate, we are the system of record for our customers and one that’s deeply embedded within their organization’s security and IT operations.”

The company had some other impressive numbers to share. Notably, it said its cloud revenue rose by 66% in the quarter, to $323 million, meaning it now accounts for nearly half of its total sales. It added that it now has 329 customers with cloud-based annual recurring revenue of greater than $1 million, up 62% from a year ago.

Moreover, Splunk’s dollar-based net retention rate, which is a measure of how much revenue the company squeezes out of existing customers, came to 130%.

Constellation Research Inc. analyst Holger Mueller said new CEO Steele has gotten off to a good start in his reign over the company and seems to have found a strategy to bring it back to profitability. He cited Splunk’s cost-cutting measures, which trimmed more than $50 million from its general and administrative expenses, as an example of this.

“Splunk grew at a healthy rate at the same time, enabling it to reduce its loss per share by over $1, which was a remarkable feat,” Mueller continued. “If the management can continue on this path and deliver a zero by the end of the fiscal year, it will be an incredible turnaround. The next quarter will show us if it’s possible.”

Given the encouraging start to the year, Splunk Chief Financial Officer Jason Child said the company is raising its fiscal 2023 revenue and profitability outlook.

For the second quarter, Splunk is looking at revenue of between $735 million and $755 million, the midpoint of which is above Wall Street’s forecast of $738.8 million in sales. For the full year, the company now sees total sales of $3.3 billion to $3.35 billion, up from an earlier range of $3.25 billion to $3.3 billion.

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