Splunk stock price plunged sharply in post market trading as the company missed second-quarter consensus revenue estimate. The revenues also dropped significantly from the year-ago period. The company has also slashed its full-year revenue outlook due to strong market competition and pandemic related business disruptions.

The shares of Splunk performed superbly in the past couple of months. Splunk stock price has recently hit an all-time high of $220. However, the future performance looks bleak amid lower than expected financial growth.

Its second-quarter revenue of $492 million plunged 5% year-over-year and missed analyst’s estimates by $28 million.

SPLK Splunk Inc. daily Stock Chart

“As organizations continue to adapt to tectonic societal shifts brought on by COVID-19, one thing is constant: the power of data to radically transform business,” said Doug Merritt, President, and CEO, Splunk.

On the positive side, its strategy of moving the business model towards cloud business is working. This is because its cloud business represents almost half of software bookings. Its cloud ARR came in at $568 million, up 89% year over year.

“Splunk’s cloud business continues to accelerate, now representing more than half of our software bookings in the quarter – a major milestone in our cloud journey,” Merritt continued. “I’m very proud of our team, strong execution, and continued momentum as we look forward to revealing our line-up of trendsetting product innovations at .conf20,” CEO added.

Investors reacted negatively to second-quarter revenue miss and lower guidance for the third quarter. It anticipates third-quarter revenue in the range of $600-630M, down compared to the analyst’s consensus estimate for $639M.

Splunk stock price slid more than 2% in post-market trading after earnings announcement. The shares of Splunk are up close to 35% since the beginning of this year and shares rallied nearly 70% in the past twelve months.