Snowflake's stock flies higher as software company's outlook impresses

MW Snowflake's stock flies higher as software company's outlook impresses

By Emily Bary

Snowflake's past three earnings reports spurred negative stock reactions, but investors seem to like the company's upbeat guidance this time around

Snowflake Inc.'s past few earnings reports haven't been well-received by Wall Street, but the company's latest numbers and outlook seem to be hitting the spot.

The data-software company forecasts product revenue of $906 million to $911 million for the January quarter, while analysts tracked by FactSet were modeling $882 million.

Snowflake's stock (SNOW) jumped 14% in after-hours action Wednesday.

For the October quarter, Snowflake posted revenue of $942 billion, up from $734 million a year before, while analysts had been looking for $899 million. Snowflake's product revenue rose 29% to $900 million, topping the $848 million consensus view.

"Our obsessive drive to produce product cohesion and ease of use has built Snowflake into the easiest and most cost-effective enterprise data platform," Chief Executive Sridhar Ramaswamy said in a release.

Snowflake said year-over-year growth in remaining performance obligations amounted to 55% in the latest quarter, marking an acceleration. The company posted 48% growth on the metric for the July quarter. Remaining performance obligations tracks the amount of contracted future revenue that Snowflake has yet to recognize.

The company logged a quarterly net loss of $324 million, or 98 cents a share, compared with $214 million, or 65 cents a share, in the year-prior period.

On an adjusted basis, Snowflake earned 20 cents in earnings per share, compared with 25 cents a year prior. The FactSet consensus was for 15 cents.

Snowflake also said that it plans to acquire data-integration platform Datavolo to help simplify workloads for customers. And Snowflake has a new partnership with artificial-intelligence company Anthropic that will bring Anthropic's Claude large language models models to Snowflake's data cloud.

A gain for Snowflake shares in Thursday's regular session would snap a streak of three post-earnings declines.

-Emily Bary

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November 20, 2024 16:22 ET (21:22 GMT)

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