Snow stock drops in FY2023 revenue growth guidance

Snowflake’s January quarter earnings showed a narrower-than-expected loss, but SNOW stock fell on fiscal 2023 revenue guidance that beat expectations.

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snowflake (snow) fourth-quarter earnings after the market closed on Wednesday. In trading before the market opens on stock market todaySnowflake stock fell 18.3% to close at 216.25.

“Snow Snow delivered a third of product growth another quarter, but it fell short of high expectations,” Jefferies analyst Brent Till said in a report.

For the full fiscal year 2023 that ends in January, Snowflake forecast product revenue of $1.89 billion in the middle of its forecast, with growth of nearly 80%, topping analysts’ estimates of $1.87 billion.

While SNOW stock provides excellent revenue growth, it is trading at high multiples despite the recent correction in software stocks.

“Snowflake’s growth at scale is better than any other software company in history, but given the plurality, expectations are understandably very high,” Deutsche Bank analyst Brad Zelnick said in a report.

He added, “But of all the reasons we ‘miss’ we think this is as good as it gets – tech platform improvements essentially improve pricing/performance for customers that initially impact consumption (revenue) while increasing their 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 estimated Snowflake’s revenue at $373 million.

Snowflake stock reported a loss of 43 cents a share using generally accepted accounting principles, or GAAP, compared to a loss of 70 cents a share the previous year. Analysts expected the company to report a loss of 50 cents per share.

Snowflake’s stock does not break adjusted earnings in its earnings releases. Analysts estimated a profit of 3 cents on an adjusted basis.

Additionally, Snowflake announced its acquisition of Streamlit. Terms were not disclosed.

Ice stock: Customers continue to grow exponentially

In addition, Snowflake said it now has 184 customers with “12-month overdue product revenue in excess of $1 million,” compared to 148 customers on October 31.

Snowflake sells Data analysis and management tools operating on cloud computing platforms such as Amazon Web Services. The competition for snowflake stock rages on.

Snowflake is making infrastructure changes that affect how customers are billed.

“The SNOW platform improvements caused a modest negative impact on revenue in the fourth quarter,” Greg Moskovitz, an analyst at Mizuho Securities, said in a report. “However, this is just the tip of the iceberg. The broader deployment of the warehouse scheduling service, along with the new AWS chipset, should lead to a much greater material impact in fiscal year 2023.”

He added, “Specifically, management expects a decline in total revenue of approximately $165 million, which is clearly very significant and wholly unexpected. This is expected to be offset by $68 million in revenue from additional workloads as customers benefit from price performance improvements to consume more. .”

Snowflake pulled the largest ever initial public offering by a software company in September 2020. Snowflake’s initial public offering raised $3.4 billion.

Snowflake stock is down 22% in 2022 heading into an earnings report.

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