Snowflake Offers Weak Product Revenue Guidance, Stock Tumbles

Snowflake (SNOW) reported third-quarter earnings that met expectations whereas income topped Wall Avenue targets. The enterprise software program maker’s product income steerage got here in beneath expectations, and SNOW inventory tumbled.


The corporate reported third quarter earnings after the market shut on Wednesday. For full-year fiscal 2024, which begins with the April 2023 quarter, Snowflake stated it expects product income development of 47%, beneath consensus estimates of 52%.

As a result of Snowflake’s enterprise mannequin is consumption-based quite than subscription-based, bearish traders have raised issues over a attainable U.S. recession curbing demand. Snowflake income is tied to how a lot knowledge its clients crunch and retailer on cloud computing platforms.

For the quarter ending Oct. 31, Snowflake stated it misplaced 63 cents per share versus a 51-cent loss a 12 months earlier. Analysts polled by FactSet anticipated Snowflake to report a lack of 63 cents a share.

The corporate reviews outcomes utilizing usually accepted accounting ideas, or GAAP. Snowflake doesn’t escape adjusted earnings in its releases.

Third-quarter income climbed 67% to $557 million, the software program maker stated. Analysts had predicted income of $539.4 million.

SNOW Inventory: Income Outlook Misses

The Snowflake earnings report additionally stated product income rose 67% to $522.8 million vs. estimates of $505.2 million.

For the present quarter ending in January, Snowflake expects product income of $537.5 million on the midpoint of its outlook. Analysts had anticipated $549.2 million.

SNOW inventory fell 5.9% to 134.32 in early buying and selling on the inventory market at present.

Snowflake inventory was down 57% for 2022 heading into the earnings report.

Snowflake sells knowledge analytics and administration instruments that run on cloud-computing platforms corresponding to Amazon Internet Providers, a part of (AMZN).

Amid the bear market in software program development shares, the software program inventory has a Relative Power Score of 17 out of a best-possible 99, in keeping with IBD Inventory Checkup.

Comply with Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wi-fi, synthetic intelligence, cybersecurity and cloud computing.


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