Snowflake Shares Explode on Strong Revenue and Guidance for the Fourth Quarter
Cloud computing-based data warehousing company Snowflake had its best trading day in a year after ‘phenomenal’ earnings.
Shares of Snowflake were up more than 15% on Thursday after it surpassed analyst expectations for third-quarter revenue this week.
The stock rose 15.9% in Thursday trading to record their largest single-day percentage gain since Dec. 3. 2020, when the stock increased 16.1%.
In the most recent quarter Snowflake reported that its revenue more than double in the most recent quarter.
Additionally the company had provided fourth quarter product revenue guidance between $345 million and $350 million, above the FactSet consensus estimate of $315.9 million.
This would represent year-over-year growth between 94% and 96%.
For the full 2022 fiscal year the company called for $1.126 billion to $1.131 billion in product revenue. That would represent year-over-year growth between 103% and 104%. That guidance was also above the $1.06 billion and $1.07 billion FactSet consensus.
For the third quarter Snowflake reported earnings of a loss of 51 cents a share and revenue of $334.4 million. Analysts according to Refinitiv had been expecting $305.6 million.
Revenue grew 110% year over year in the fiscal third quarter, which ended on Oct. 31. In the previous quarter revenue increased by 104%. The company’s net loss fell to $154.9 million, down from $168.9 million a year prior.
“Large deal activity appears to be building, and international markets are picking up momentum,” wrote Mizuho analyst Gregg Moskowitz. “More broadly, we maintain that SNOW’s offerings are substantially ahead of the competition at this time.”
The analyst called Snowflake’s results “phenomenal.”
“We continue to believe we’re in the early stages of a powerful trend in which companies will largely standardize on SNOW’s platform,” Moskowitz concluded, while reiterating a buy rating and $450 price target.
Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.