Re: Cisco Systems Inc (CSCO)
CSCO PE = 16.7x 3% div
CSCO has a $212.5 Billion market Splunk represents 13% of CSCO's market cap
I am planning on moving all my Juniper Networks (JNPR) proceeds into CSCO as they were acquired by HPE for $40/share.
CSCO looks like an interesting value/Tech play especially w/ the recent acquisition of Splunk. CSCO paid $28 Billion. That's 13% of CSCO's current Market cap.
Splunk s/d be the new growth engine for CSCO especially w/ their AI offering. NVDA & MSFT are their top customers. Splunk's cybersecurity and data analytics services as well as their new AI service offerings are hosted by Amazon AWS.
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Cisco's recent acquisition of Splunk for $28 billion primarily focuses on enhancing its cybersecurity and observability capabilities.
Key Points:- Acquisition Details: Cisco completed the acquisition of Splunk to combine their strengths in cybersecurity and data analytics, aiming to create a comprehensive AI-powered data platform 1 2 4
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Splunk's recent financial performance indicates significant growth and expansion in its customer base. Here are the key metrics:
Recent Revenues- Fiscal Year 2024 Revenue: Splunk reported revenues of approximately $4.22 billion for the fiscal year ending January 31, 2024, reflecting a strong growth trajectory.
Growth- Year-over-Year Growth: This represents an increase from $3.65 billion in fiscal year 2023, showcasing a growth rate of around 15.5%.
Earnings
Net Income: For fiscal year 2024, Splunk reported a net income of approximately $297 million, compared to a net loss of about $265 million in the previous fiscal year.
Number of Subscribers/Customers
Customer Base: Splunk serves over 20,000 customers globally, which includes a diverse range of industries and sectors. This customer base has been steadily increasing as the demand for data analytics and cybersecurity solutions grows.
These metrics highlight Splunk's robust performance and its strategic positioning in the market, particularly in areas related to data analytics and security solutions.
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Splunk has experienced notable changes in its subscriber growth rate recently, reflecting its strategic shift towards cloud services and subscription models.
Recent Subscriber Growth Metrics- Annual Recurring Revenue (ARR):
- For fiscal year 2024, Splunk reported a 15% year-over-year growth in total ARR, reaching approximately $4.2 billion. This growth is indicative of a strong demand for its subscription-based offerings 2 3.
- Cloud ARR Growth:
- Cloud ARR specifically saw a 23% increase, highlighting the company's successful transition to cloud services. In the latest quarter, cloud revenue grew by 29% year-over-year, demonstrating robust momentum in this segment 1 2 .
- Customer Base Expansion:
- Splunk added 109 customers with total ARR greater than $1 million, bringing the total to nearly 900 high-value customers. This indicates a strong increase in its enterprise customer base, which is crucial for sustained revenue growth 2 6.
- Historical Context:
- Over the past few years, Splunk has shifted from a traditional software licensing model to a cloud-centric approach. This transition began gaining traction around fiscal year 2022, marked by significant increases in cloud revenue and overall customer engagement 1 2
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Summary
Splunk's subscriber growth rate has shown a positive trend, particularly in cloud services, which are becoming increasingly central to its business model. The company continues to expand its customer base significantly, positioning itself well for future growth in the cybersecurity and observability markets. |
