Earnings Results: Snowflake slashes forecast, stock slumps after earnings

by | May 24, 2023 | Stock Market

Shares of Snowflake Inc. sank nearly 13% in after-hours trading Wednesday after the data-software company topped expectations with its latest results but cut its outlook for the full year. The company generated a fiscal first-quarter net loss of $226 million, or 70 cents a share, compared with a loss of $166 million, or 53 cents a share, in the year-earlier period. On an adjusted basis, Snowflake
reported earnings per share of 15 cents, up from 8 cents a year before, while analysts tracked by FactSet were projecting 5 cents.

Snowflake’s revenue rose to $624 million from $422 million, while analysts were modeling $609 million. Product revenue amounted to $590 million, whereas analysts were looking for $572 million. “Data has gravitational pull, and given the vast universe of data Snowflake manages, it is no surprise that interest in data science, AI and machine learning is escalating while its uses are rapidly evolving,” Chief Executive Frank Slootman said in a release. The company had a net revenue retention rate of 151% in the quarter, compared with 158% in the fiscal fourth quarter. For the fiscal second quarter, Snowflake’s management expects product revenue of $620 million to $625 million, while the FactSet consensus was for $647 million. Looking at the full fiscal year, the company expects $2.6 billion in product revenue, which would amount to 34% growth. The company’s prior outlook was for $2.705 billion in product revenue, amounting to 40% growth. Prior to the report, Baird analyst William Power wrote …

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