Snowflake (SNOW) reported third-quarter earnings that met expectations while revenue topped Wall Street targets. The enterprise software maker’s product revenue guidance came in below expectations, and SNOW stock tumbled.
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For the quarter ending Oct. 31, Snowflake said it lost 63 cents per share versus a 51-cent loss a year earlier. Analysts polled by FactSet expected Snowflake to report a loss of 63 cents a share.
The company reports results using generally accepted accounting principles, or GAAP. Snowflake does not break out adjusted earnings in its releases.
Third-quarter revenue climbed 67% to $557 million, the software maker said. Analysts had predicted revenue of $539.4 million.
SNOW Stock: Revenue Outlook Misses
The Snowflake earnings report also said product revenue rose 67% to $522.8 million vs. estimates of $505.2 million.
For the current quarter ending in January, Snowflake expects product revenue of $537.5 million at the midpoint of its outlook. Analysts had expected $549.2 million.
Because Snowflake’s business model is consumption-based rather than subscription-based, bearish investors have raised concerns over a possible U.S. recession curbing demand. Snowflake revenue is tied to how much data its customers crunch and store on cloud computing platforms.
SNOW stock tumbled 13% to near 124 in extended trading on the stock market today.
Snowflake stock was down 57% for 2022 heading into the earnings report.
Snowflake sells data analytics and management tools that run on cloud-computing platforms such as Amazon Web Services, part of Amazon.com (AMZN).
Amid the bear market in software growth stocks, the software stock has a Relative Strength Rating of 17 out of a best-possible 99, according to IBD Stock Checkup.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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Source: https://www.investors.com/news/technology/snow-stock-snowflake-earnings-snowflake-stock-q32022/?src=A00220&yptr=yahoo