Splunk SPLK reported second-quarter fiscal 2022 non-GAAP loss of 62 cents per share, which beat the Zacks Consensus Estimate by 10.14% but widened from loss of 33 cents in the year-ago quarter.Revenues increased 23.2% year over year to $605.7 million and beat the consensus mark by 7.74%.Splunk Inc. Price, Consensus and EPS Surprise Splunk Inc. price-consensus-eps-surprise-chart | Splunk Inc. QuoteQuarter in DetailsLicense revenues (36.3% of revenues) were $219.6 million, up 24.2% year over year. Cloud services revenues (35.9% of revenues) surged 72.7% year over year to $217.4 million. Maintenance & service revenues (27.9% of revenues) fell 10.7% to $168.7 million.Notably, Cloud represented 54% of total software bookings in the reported quarter, lower than 56% in the previous quarter but higher than 53% in the year-ago quarter. Splunk has been benefiting from partnerships with Alphabet and Amazon’s cloud offerings, namely Google Cloud and AWS.Splunk ended the quarter with total annual recurring revenues (“ARR”) of $2.63 billion, up 36.7% year over year. Cloud ARR soared 71.8% year over year to $976 million.This Zacks Rank #3 (Hold) company ended the fiscal second quarter with 582 customers generating ARR greater than $1 million, up 47% year over year. Moreover, Splunk had 234 customers with Cloud ARR greater than $1 million, up 100% year over year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Notable clients in the reported quarter included Arlo Technologies ARLO, Chartis Group LLC, Fujitsu, Hiscox Underwriting Group Services Limited, Intel Corporation INTC, N-able Technologies, Inc., Norwegian Labour and Welfare Administration (NAV), and Rover Group, Inc. ROVR.Remaining performance obligation (“RPO”) was $1.92 billion, up 10% year over year.Operating DetailsNon-GAAP gross margin contracted 320 basis points (bps) from the year-ago quarter to 75.1% due to greater proportion of cloud revenue contribution. Splunk’s non-GAAP cloud gross margin expanded 150 bps from the year-ago quarter to 60.7%Non-GAAP operating expenses, as a percentage of revenues, increased to 95% from 91.2% in the year-ago quarter. Research & development and general and administrative expenses expanded 320 bps and 330 bps year over year, respectively. Sales & marketing expenses declined 270 bps.Non-GAAP operating loss was $120.8 million compared with loss of $63 million in the year-ago quarter.Balance Sheet & Cash FlowAs of Jul 31, 2021, cash & cash equivalents, including investments, were $2.49 billion compared with $1.86 billion as of Apr 30, 2021.Net cash flow used in operating activities was $55.9 million compared with the year-ago quarter’s net cash flow used in operating activities of $170.07 million and the sequential quarter’s net cash flow from operating activities of $70.7 million.Free cash outflow was $59.4 million at the end of the fiscal second quarter compared with the year-ago quarter’s free cash outflow of $181.3 million and the previous quarter’s cash flow of $69.9 million.GuidanceFor third-quarter fiscal 2022, Splunk expects revenues in the range of $625 million to $650 million. Non-GAAP operating margin is likely to be between -15% and -20%.Moreover, total ARR is expected between $2.8 billion and $2.825 billion. Cloud ARR is expected to be between $1.1 billion and $1.11 billion.For full-year fiscal 2022, Splunk expects revenues in the range of $2.53 billion to $2.6 billion. Non-GAAP operating margin is likely to be between -14% and -17%.Moreover, total ARR is expected between $3.08 billion and $3.13 billion. Cloud ARR is expected to be between $1.3 billion and $1.33 billion. Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. You know this company from its past glory days, but few would expect that it's poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks' Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Intel Corporation (INTC): Free Stock Analysis Report Splunk Inc. (SPLK): Free Stock Analysis Report Arlo Technologies, Inc. (ARLO): Free Stock Analysis Report Rover Group, Inc. (ROVR): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research