At the peak of its after-hours move, Splunk was valued at more than $20 billion, up from $18.2 billion at the close of trading.
Splunk declined to comment. A Cisco representative did not immediately respond to requests for comment.
Splunk’s software has gained popularity as a tool for spotting security threats. Cisco has sought to expand its security business while also selling data center networking equipment and Webex collaboration software.
Shares of Splunk have fallen 49% since reaching a record in September 2020. The stock fell 18% on Nov. 15, after the company said CEO Doug Merritt, who had been running the company for six years, would be stepping down immediately. The board named Chairman Graham Smith as interim CEO and kicked off a search for a permanent replacement.
Splunk has been in the process of shifting toward providing cloud services to customers, and said in December that almost 37% of revenue in the latest quarter was tied to cloud usage.
Total revenue at Splunk grew 19% from a year earlier, while Cisco’s overall revenue in the most recent quarter increased 8%. Cisco has long grown its business through acquisitions and in 2020 it bought networking monitoring company ThousandEyes for about $1 billion.
Should a deal for Splunk be consummated it would be by far Cisco’s largest ever.
According to a follow-up report from Bloomberg, talks between the companies broke down in recent weeks.