Snowflake earnings for the January quarter showed a narrower-than-expected loss but SNOW stock tumbled on fiscal 2023 revenue guidance that merely edged by expectations.
Snowflake (SNOW) released fourth-quarter earnings after the market close on Wednesday. In morning trading on the stock market today, Snowflake stock retreated 16.1% to near 222, clawing back a bit from bigger losses.
“SNOW delivered another quarter of triple digit product growth but fell short of lofty expectations,” said Jefferies analyst Brent Thill in a report.
For full-year fiscal 2023 which ends in January, Snowflake forecast product revenue of $1.89 billion at the midpoint of its forecast, about 66% growth, edging by analyst estimates of $1.87 billion.
While SNOW stock offers stellar revenue growth, it trades at a high multiple despite a recent correction in software stocks.
“Snowflake’s growth at scale bests every other software company in history, but given the multiple, expectations are understandably very high,” said Deutsche Bank analyst Brad Zelnick in a report.
He added: “But of all reasons to ‘miss’ we believe this is about as good as it gets — basically tech platform enhancements are driving improved price/performance for customers that is initially weighing on consumption (revenue) while expanding share of a theoretically infinite market.”
Snowflake Narrows Its Losses
Snowflake said fourth-quarter revenue jumped 101% to $384 million from a year earlier, slowing from 110% growth in the October quarter. Analysts had estimated Snowflake revenue at $373 million.
Snowflake stock reported a loss of 43 cents a share using generally accepted accounting principles, or GAAP, compared with a loss of 70 cents per share a year earlier. Analysts expected the company to report a loss of 50 cents a share.
Snowflake stock does not break out adjusted earnings in its earnings releases. Analysts estimated a 3-cent profit on an adjusted basis.
In addition, Snowflake announced the acquisition of Streamlit. Terms were not disclosed.
SNOW Stock: Large Customer Growth Continues