Shares in Snowflake (SNOW) tumbled on weaker-than-expected fiscal 2024 revenue expectations for SNOW stock. The software maker reported a smaller-than-expected fourth-quarter loss as revenue beat Wall Street’s targets.
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Snowflake reported fourth-quarter earnings after the market close on Wednesday. For the quarter ended Jan. 31, Snowflake said it lost 64 cents per share, compared to a loss of 43 cents a year earlier. Analysts polled by FactSet had expected Snowflake to report a loss of 66 cents per share.
Snowflake stock: international growth is slowing
The company reports results using generally accepted accounting principles, or GAAP. Snowflake doesn’t break out custom revenue in its releases. Still, SNOW stock analysts predicted an adjusted loss of 5 cents per share.
Third-quarter revenue increased 53% to $589 million, the software maker said. Analysts had forecast revenue of $575.9 million.
“SNOW reported a solid fourth quarter with product growth of 54% above Street at 50%,” TD Cowen analyst Derrick Wood said in a report. “That said, mixed international performance, shorter-term commitments and slower ramps of new business led management to cut the 2024 fiscal guide from 47% to 40%.”
SNOW shares fell 7.9% to 154.50 in early trading in the stock market today.
SNOW Forecast
For the current quarter ending April, Snowflake expects product revenue to be between $568 million and $573 million. Meanwhile, analysts had expected $582.1 million.
SNOW stock was up 7% in 2023 heading into the Snowflake earnings report.
Snowflake sells data analysis and management tools that run on cloud computing platforms such as Amazon Web Services, part of Amazon.nl (AMZN). Because Snowflake’s business model is consumption-based rather than subscription-based, bearish investors have raised concerns about a possible US recession curbing demand.
Weak guidance Data dog (DDOG), also an AWS partner, recently pressured SNOW stock.
SNOW stock has a relative strength rating of 52 out of the 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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