What happened Shares of data monitoring and analytics platform provider Splunk (NASDAQ: SPLK) were hit hard on Thursday after the company delivered a disappointing third-quarter report. The stock fell by as much as 25.9%, and as of 2:24 p.m. EST, was trading down by about 21%. Image source: Getty Images. So what Splunk's Q3 results and management's guidance for Q4 were both well below analysts' expectations. Revenue came in at $559 million, down 11% year over year. On average, analysts were expecting revenue of $613 million. Splunk also reported an adjusted loss per share of $1.26 -- far behind the $0.09 per share in profit analysts had been modeling for. The company's top-line weakness derived from a sharp drop in its license revenue. Its cloud services revenue, however, soared by 80% year over year to $145 million. "While the environment was a challenge in the quarter, we are enthusiastic about the large and growing opportunity ahead and remain confident in our long-term growth trajectory," said Splunk CFO Jason Child in the earnings release. Now what Management said it expects fourth-quarter revenue to be in the $650 million to $700 million range. This compares to the analysts' consensus forecast of $778 million. Still, the tech company's fast-growing cloud business has management optimistic despite the worse-than-expected results. "Our cloud momentum continued in the third quarter, we exceeded our cash flow target significantly and we ended with Cloud [annual recurring revenue] up 71% year-over-year -- among the highest growth rates in the industry," said Child. 10 stocks we like better than SplunkWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Splunk wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of November 20, 2020 Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Splunk. The Motley Fool has a disclosure policy.Source