Splunk's share price plunges after CEO steps down

Splunk is now focused on 'identifying a leader with a proven track record of scaling operations and growing multi-billion dollar enterprises'

Splunk CEO Doug Merritt is stepping down as president and CEO after six years in the role.

Graham Smith, chair of Splunk's board of directors, has been appointed interim CEO effective immediately.

The announcement saw Splunk's stock plunge by 18 per cent, CNBC reported, in its sharpest decline since December.

It comes just five months after Splunk received $1bn worth of private equity investment from Silver Lake Investment, which it said would be used to support the continued transformation of the business.

"As the board and I considered how to best position Splunk for long-term success and continued growth, we determined now is the right time to transition to our next phase of leadership - in particular, the board is focused on identifying a leader with a proven track record of scaling operations and growing multi-billion dollar enterprises," Merritt said.

"I am grateful to have had the opportunity to work alongside our world-class team, who I'm confident will continue to ensure Splunk is the partner of choice to the most forward-thinking and data-centric organisations on the planet."

Smith has served as a member of Splunk's board since 2011 and as chair since 2019, while also holding a number of executive positions at Salesforce including as CFO from December 2007 to July 2014.

"As a long-tenured director with significant experience in scaling cloud businesses, Graham has the expertise and acumen to lead Splunk as we conduct a search for the company's next CEO," said Steve Newberry, Splunk's newly appointed lead independent director of the board.

"The board, Doug and Splunk's management team are committed to ensuring a successful transition, and we are fortunate to have a leader of Graham's calibre to help ensure Splunk continues executing its strategy and creating value for our stockholders."

Splunk has also announced preliminary results for its third quarter. The data platform vendor is forecasting cloud annual recurring revenue (ARR) of approximately $1.105bn, a 75 per cent year-over-year growth, and total ARR of approximately $2.825bn, a 37 per cent year-over-year growth.

It recently launched its new partner Partnerverse Programme, which Splunk's EMEA channel boss, Blanca Galletero, told CRN would allow partners "to become much more specialised".