Shares of Snowflake fell sharply in pre-market trading Thursday after the cloud-based data storage company reported strong results for the first fiscal quarter ending in April, but gave disappointing guidance for the July quarter, while slashing its forecast for the fiscal year ending in January 2024.
Snowflake (ticker symbol: SNOW) fell 14% to $152.53 in pre-market trading.
For the April quarter, Snowflake reported revenue of $623.6 million, up 48% from a year earlier and ahead of the Street’s forecast of $609 million. Product revenue — a metric Snowflake focuses on — was $590.1 million, up 50%, and ahead of the company’s guidance range of $568 million to $573 million.
On a generally accepted accounting principles basis, the company lost 70 cents on its stock. Adjusted earnings were 15 cents a share, a ten cent higher than Wall’s estimate.
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Snowflake said the net retention rate, a measure that shows existing customers are expanding their use of the company’s software, was 151%. The remaining performance obligations were $3.4 billion, up 31%.
The problem with the Snowflake stock, though, is that the steering disappointed the Street.
For the July quarter, Snowflake sees product revenue of $620 million to $625 million, missing the Street consensus of $649 million. The company expects non-GAAP operating margin for the quarter to be 2%.
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For the full year, Snowflake now sees product revenue of $2.6 billion, up 34%, below the previous guidance target of $2.7 billion. The company now sees non-GAAP operating margin of 5% for the full year, down from a previous forecast of 6%. Snowflake increased its forecast for adjusted free cash flow margin to 26% from 25%.
Write to Eric J. Savitz at [email protected]
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