Data analytics software firm Sumo Logic Inc. reported an earnings beat and a slightly better-than-expected outlook for its fiscal second quarter as its revenue continues to grow.
For the second quarter ended July 31, Sumo Logic reported a loss even before costs such as stock compensation of $12 million or 10 cents per share, compared with a loss of 11 cents per share in the same quarter last year. Revenue rose 26% from a year ago, to $74.1 million. Analysts had expected a loss of 11 cents per share on revenue of $71.54 million.
As of the end of the quarter, annual recurring revenue sat at $286.2 million, up 25% year-over-year, while the adjusted gross margin was 70%. Net cash used in operating activity was $12 million, free cash flow negative $12.4 million, and cash, cash equivalents and marketable securities on hand were $350.6 million.
Highlights in the quarter included Sumo Logic achieving Threat Detection and Response distinction with Amazon Web Services Security Competency status for Sumo Logic Cloud SIEM and Cloud SOAR solutions. The company also announced Threat Labs, a threat research and security detection unit to help customers, and a new process to deliver observability for Kubernetes, the software that manages the microservices or components of modern applications.
Services provided by Sumo Logic include log management, AWS monitoring, Microsoft Azure and Google Cloud management, Kubernetes management and microservices and cloud security monitoring. Enterprises use the company’s cloud-based data analytics software to gather insights about the state of their information technology infrastructure and help identify cybersecurity threats.
“We continued to deliver improved revenue growth in the second quarter with year-over-year growth of 26% while also driving better operating efficiencies,” Ramin Sayar (pictured), president and chief executive officer of Sumo Logic, said in a statement. “We remain positive on the long-term trends driving our business as companies continue to focus on delivering reliable and secure mission-critical cloud applications for their customers.”
For its fiscal third quarter, Sumo Logic expects an adjsuted net loss per share of 15 cents on revenue of $73.5 million to $74.5 million. Analysts expected revenue of $73 million. For the full fiscal year 2023, adjusted net loss per share is predicted to be 54 to 56 cents on revenue of $289 million to $293 million, versus an analyst-predicted revenue of $290.4 million.
Despite the modest earnings beat and slightly better-than-expected outlook, investors were blase about the figures, with Sumo Logic shares flat after the bell.
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