Splunk Inc. Class Action Lawsuit
- Company Name
- Splunk Inc.
- Stock Symbol
- Class Period
- October 21, 2020 to December 2, 2020
- Northern District of California
The Splunk Inc. class action lawsuit charges Splunk and certain of its executives with violations of the Securities Exchange Act of 1934 and seeks to represent purchasers or acquirers of Splunk common stock between October 21, 2020 and December 2, 2020, inclusive (the “Class Period”). The Splunk class action lawsuit was commenced on December 4, 2020 in the Northern District of California and is captioned Pavlova-Coleman v. Splunk Inc., No. 20-cv-08600.
Splunk purports to provide software solutions that ingest data from different sources, including systems, devices, and interactions and turns that data into meaningful business insights across an organization. According to Splunk, its “Data-to-Everything platform enables users to investigate, monitor, analyze and act on data regardless of format or source.”
The Splunk class action lawsuit alleges that, throughout the Class Period, defendants made false and/or misleading statements and/or failed to disclose that: (1) Splunk was not closing deals with its largest customers in the third fiscal quarter of 2021; (2) Splunk was not hitting the financial targets it had previously announced; and (3) as a result of the foregoing, defendants’ public statements were materially false and misleading at all relevant times.
On December 2, 2020, Splunk announced its financial results for its third fiscal quarter of 2021. In this announcement, Splunk reported total revenues of $559 million, which were down 11% year over year and missed estimates by nearly $60 million. Furthermore, Splunk announced quarterly non-GAAP earnings per share of -$0.07, missing estimates by $0.15, as well as GAAP earnings per share of -$1.26, missing by $0.24 per share. Splunk also announced guidance for the fourth quarter of 2021, including total revenues between $650 and $700 million and non-GAAP operating margins of between negative 4% and positive 3%. During Splunk’s earnings call later that day, Splunk’s President, Director, and Chief Executive Officer, defendant Douglas Merritt, admitted that despite Splunk having reiterated its 2021 third quarter guidance just ten days before the close of the quarter, these results fell “certainly short of both our expectations and our communication of those expectations.” On this news, the price of Splunk common stock fell more than 23%, damaging investors.
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