Investors are celebrating as Snowflake outpaces Wall Street forecasts, showcasing strong growth in cloud data solutions.
Could this signal a turning point for tech stocks? Sometimes all you can do is go against the odds and show everyone what you’re about.
That’s what it seems has happened with Snowflake, who surpassed everyone’s expectations and outperformed their expected revenue calls. Thus leading to a better-than-expected index performance on the stock exchange.
Snowflake Inc., a prominent and highly regarded provider in the rapidly evolving realm of cloud-based data storage solutions, is an American technology company that specialises in innovative data management.
Snowflake shares surged 19% in after-hours trading on Wednesday following the software firm’s impressive fiscal third-quarter earnings report, which exceeded analysts’ expectations.
Here are the key results compared to analyst forecasts from LSEG:
– Adjusted Earnings per Share: 20 cents, surpassing the anticipated 15 cents
– Revenue: $942 million, exceeding the expected $897 million
For the quarter ending on October 31, Snowflake reported a year-over-year revenue increase of 28%. However, the company also experienced a net loss of $324.3 million, or 98 cents per share, widening from the previous year’s loss of $214.3 million, or 65 cents per share.
Notably, product revenue was $900.3 million, accounting for about 96% of total revenue. Looking ahead, Snowflake projected product revenue to reach $3.43 billion for fiscal 2025, suggesting a growth rate of 29%—a revision from the earlier management forecast of $3.36 billion, which indicated a 26% growth.
Snowflake will still have a lot of work to do to maintain its new position in the ever-expanding world of data analytics and management. With its new valuation and revenue projects, Snowflake will have to make good on a lot of the promises they made. All of this will have to be done just to keep the company expanding and growing.
The year-end outlook reveals an improved adjusted operating margin of 5%, a notable increase from the 3% guidance provided in August. By the end of October, Snowflake boasted a total of 10,618 customers, having gained 369 during the fiscal third quarter, surpassing analysts’ expectations of 10,601 customers, according to StreetAccount.
In a significant development, Snowflake announced a multi-year partnership with Anthropic, a competing AI startup backed by Amazon, and confirmed its acquisition of Datavolo, although the financial details remain undisclosed. As of Wednesday’s market close, Snowflake’s stock has declined by 35% in 2024, in contrast to a 24% rise in the S&P 500 index.
Source: CNBC
