snowflake (snow) reported third-quarter earnings that met expectations while revenue beat Wall Street targets. Enterprise software maker product revenue guidance came in below expectations. SNOW stock went down at first, then reversed up.
The company reported third-quarter earnings after the market closed on Wednesday. For the full-year 2024 fiscal year, which begins in the April 2023 quarter, Snowflake said it expects product revenue to grow 47%, below the consensus estimate of 52%.
Since Snowflake’s business model is consumption-based, not subscription-based, bearish investors have raised concerns about a potential U.S. recession curbing demand. Snowflake’s revenue is tied to the amount of data its customers store and store on cloud computing platforms.
For the quarter ended Oct. 31, Snowflake said it lost 63 cents per share, versus 51 cents a year earlier. Analysts polled by FactSet had expected Snowflake to report a loss of 63 cents per share.
The company reports results using generally accepted accounting principles, or GAAP. Snowflake does not detail adjusted earnings in its releases.
The software maker said third-quarter revenue jumped 67 percent to $557 million. Analysts had expected revenue of $539.4 million.
Snow Inventory: Revenue Forecasts Wrong
Snowflake’s earnings report also said that product revenue rose 67% to $522.8 million versus estimates of $505.2 million.
At UBS, analyst Carl Kerstedt said in a report: “To be clear, revenue growth of 67% in the third quarter and evidence of growth of 47% in fiscal 2024 is very impressive in this macro (economy) and certainly says nothing.” Breaking “with Snowflake. However, investor expectations were high on this print.”
For the current quarter ending in January, Snowflake expects product revenue to be $537.5 million in the middle of its forecast. Analysts expected $549.2 million.
SNOW stock initially fell upon the earnings release. But Snowflake stock fell 2.1% to close to 146 in morning trade stock market today.
snowflake stock It’s down 57% for 2022 heading into the earnings report.
Snowflake sells data analysis and management tools that run on cloud computing platforms such as Amazon Web Services, and is part of Amazon.com (AMZN).
Follow Reinhardt Krause on Twitter @tweet For updates on 5G wireless networks, artificial intelligence, cybersecurity, and cloud computing.
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