Big data analytics company Splunk Inc. is flying high today, its stock up more than 8% in after-hours trading after it reported third-quarter financial results that topped Wall Street’s expectations.

The company reported earnings before certain costs such as stock compensation of 83 cents per share on revenue of $930 million, up by an impressive 39% from the same period one year ago. Wall Street’s analysts had been targeting earnings of just 25 cents per share on sales of $847.7 million, so the results were a resounding success.

The strong performance helped Splunk trim its overall loss to just $32.6 million, down from a $343.3 million loss one year ago. Three months ago, Splunk reported a loss of $209.7 million, so it’s clearly making strong progress on its path to profitability.

Splunk is the creator of a popular data processing platform that’s used by large enterprises to detect and troubleshoot technical issues within their information technology infrastructure. Splunk also offers tools for dealing with cybersecurity incidents such as data breaches. Its tools are popular, with Splunk counting thousands of enterprises among its customers.

Splunk Chief Executive Gary Steele (pictured), who took over the reins earlier this year, said the company delivered a “solid quarter” with very strong revenue growth. “Our results underscore the value our customers place in Splunk,” he said. “The world’s largest and most innovative enterprises continue to invest in our platform and make their businesses more resilient through faster insights and action across security, IT and DevOps.”

The CEO added that he was especially pleased to see Splunk’s progress as it strives to balance long-term, durable growth with profitability. “We also made very good progress on our expense reduction during the quarter,” he added. “As a result, we are increasing our full-year outlook for total revenues, profitability and free cash flow.”

Much of Splunk’s growth was driven by the cloud, where revenue jumped 54% to $374 million. Cloud revenue now accounts for more than a third of the company’s total sales. Splunk’s customer base also grew impressively. It said it now counts 754 customers who spend at least $1 million a year on Splunk’s platform, up 19% from a year earlier.

Looking to the fourth quarter, Splunk said it’s forecasting revenue of between $1.055 billion and $1.085 billion, which is more or less in line with Wall Street’s target of $1.07 billion. For the full year, Splunk said it expects total sales of between $3.455 billion and $3.485 billion, up from its earlier range of $3.35 billion to $3.4 billion. Wall Street has Splunk’s annual sales pegged at exactly $3.4 billion.

“Splunk is clearly on the road to recovery, with the team around Gary Steele managing to keep the company running on more or less the same cost base this year as it did in 2021,” said Holger Mueller of Constellation Research Inc. “The difference is it achieved almost 40% more revenue. It means Steele and his team is much more focused, managing spend more effectively and generally doing a lot of hard work behind the scenes. If they keep it up, the company could even hit a profit by the end of the fourth quarter.”

Photo: CNBC Television/YouTube