Splunk’s Customers Are Demanding Shorter Contracts

Data platform discloses unexpected end-of-quarter trend toward non-traditional terms and timelines.

August 26, 2022

Splunk (SPLK), an enterprise data platform, is blaming macroeconomic concerns for recent shifts in customer behavior it did not expect. In its latest quarterly filing, Splunk inserted new language revealing it encountered trouble closing certain deals at quarter’s end. It also disclosed details about customer contract length that suggest customers are hesitant to make longer term commitments:

“Toward the end of the second quarter of fiscal 2023, we began to see changes in customer buying patterns due to the uncertain macroeconomic environment, including a slower pace of expansions or migrations to cloud services, longer sales cycles and shorter duration contracts than we expected.”

Later in the filing, when discussing traditional seasonality, Splunk also inserted new language warning historical patterns are not reliable indicators of future sales activity.

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