Splunk stock plunges as CEO Doug Merritt steps down

- Advertisement -


  • Spunk’s board chairman, Graham Smith, is taking over as interim CEO immediately from CEO Doug Merritt.
  • Under Merritt, Splunk’s stock performance hasn’t quite been in line with the S&P 500 index.

- Advertisement -

Shares of data-analytics software maker Splunk fell as much as 19% after the company said CEO Doug Merritt was stepping down and Graham Smith, its board chairman, was taking over as interim CEO, effective immediately. Splunk is looking for a new permanent chief.

- Advertisement -

The stock move was the third worst on Splunk’s record and on track for the sharpest decline since December.

The leadership change creates more uncertainty for a company working to be viewed as a cloud company than a vendor of more traditional on-premises software.

- Advertisement -

Merritt joined Splunk in 2014 as a senior vice president after stints at Cisco, Peoplesoft and SAP, and in 2015 he replaced Godfrey Sullivan as CEO of Splunk, who took the company public in 2012. Smith is a former chief financial officer of Salesforce who joined the board of Splunk in 2011.

CEO transition is “an additional concern”, the company is working with KeyBanc analysts led by Michael Turits, on top of risks such as increased competition from public cloud providers, observable market penetration and ongoing business model development. Equivalent to the hold rating on Splunk stock, written in a note distributed to customers.

During Merritt’s tenure, Splunk is shifting more towards providing its software as a cloud service, which has impacted revenue and operating margins. Other enterprise software companies, such as Adobe, Autodesk and Microsoft, have gone through similar adjustments. Splunk reported $605.7 million in quarterly revenue in August, up 23% year over year, while cloud revenue, $217.4 million, was up 73%.

Splunk stock has gained nearly 120% since Merritt became CEO, while the S&P 500 index has gained 125% over the same period.

The coronavirus pandemic hurt Splunk, along with enterprise software providers like IBM. The company had trouble collecting receivables, and customers hesitated to make big deals and ask for payment concessions.

In September Okta hired Susan St. Leger, president of Splunk’s worldwide regional operations.

Watch: Splunk CEO discusses new initiative by data analytics firm focused on government cyber security

,

- Advertisement -

Stay on top - Get the daily news in your inbox

DMCA / Correction Notice

Recent Articles

Related Stories

Stay on top - Get the daily news in your inbox