Snowflake (SNOW) reported a loss for the April quarter that met estimates while revenue topped Wall Street targets, though growth decelerated. Snowflake stock tumbled on Thursday as its product revenue outlook came in only slightly ahead of views.
“Snowflake’s Q1 product revenue growth reflected a slowing of consumption patterns on macro headwinds in April, which impacted activity among specific high-growth customers due to a pull-forward of demand in the prior year,” said JPMorgan analyst Mark Murphy in a report. “However, despite the near-term drag on revenue upside, we remain impressed by the company’s robust free cash flow generation and long-term growth trajectory at scale.”
Snowflake is among software companies with a consumption-based business model rather than renewable subscriptions.
UBS analyst Karl Keirstead said in a report: “The fact that Snowflake – with one of the strongest fundamental stories in tech – is seeing some early macro weakness (even if only in a narrow pocket of customers) is a negative read-through to other tech firms with similar exposures.”
SNOW Stock Reports Loss
At Cowen, analyst Derrick Wood said: “Management indicated that consumption growth on its platform trended down in April, weighed down by a handful of larger customers in consumer-facing markets who are seeing slower end-market demand.”
The enterprise software maker reported a 53-cents-a-share loss for Snowflake stock using generally accepted accounting principles, or GAAP, compared with a loss of 70 cents per share a year earlier.
Analysts polled by FactSet expected the company to report a loss of 53 cents a share.
Snowflake stock tumbled 10.3% to 119.13 in morning trading on the stock market today. The company released earnings after the market close on Wednesday.
Snowflake Stock: Product Revenue Guidance Meets Views
Analysts also estimated Snowflake would report zero-cents earnings on an adjusted basis. But the company does not break out adjusted earnings in its releases.
Snowflake said first-quarter revenue jumped 85% to $422.4 million from a year…