Shares in Splunk Inc. rose in after-hours trading today after the big data company surprised investors with stronger-than-expected earnings and revenue in its fiscal first quarter.

For its fiscal first quarter that ended April 30, Splunk reported adjusted earnings of 18 cents per share, up from a loss of 32 cents per share in the same quarter of last year. Revenue rose 11%, to $751.5 million. Analysts had expected a loss of 14 cents per share on revenue of $722.9 million.

Splunk’s annual recurring revenue grew 16% year-over-year, to $3.725 billion, and the number of customers with an ARR of over $1 million 120 year-over-year, to 810. The company’s cloud revenue rose 30%, to $419 million, operating cash flow jumped 243%, to $492 million, and free cash leaped 253%, to $486 million.

Highlights from the quarter included Splunk beefing up its observability and incident response tools in March. The updates include new features for its Observability Cloud and Mission Control and the launch of a new service called Edge Processor.

The enhancements to Observability Cloud and Mission Control, alongside the introduction of Edge Processor, were aimed at bolstering resilience against cyberattacks and infrastructure issues. With a focus on improving on-call efficiency, increasing alert accuracy and expediting security threat response, the upgrades leverage machine learning and real-time data analysis, offering what Splunk says is a unified solution for enterprise cybersecurity.

Splunk also received an “In Process” status from the Federal Risk and Authorization Management Program and a “Pending” status from the State Risk and Authorization Management Program during the quarter. The designations are part of an effort by Splunk to secure authorization to offer attested versions of the Splunk Cloud Platform to governmental entities.

“Q1 was a milestone quarter for Splunk, demonstrating our operating leverage,” Chief Financial Officer Brian Roberts said in the company’s earnings release. “Notably, we generated nearly half a billion dollars of free cash flow in Q1 and are raising our operating margin and free cash flow outlook for the full year.”

For its fiscal second quarter, Splunk expects revenue of between $880 million to $895 million — higher than an expected $868 million. For its full fiscal year, Splunk said it expects revenue of about $3.9 billion. Splunk shares rose more than 7% after the bell as investors approved of the company’s solid numbers.

Photo: Splunk