Latest News

Snowflake Stock Is Tumbling on a Disappointing Forecast. The CEO Has an Explanation.

Text size

Shares of cloud-based data-software firm Snowflake are falling in late trading.



stock is sharply lower in late trading Wednesday after the cloud-based data-software company posted disappointing fiscal 2023 guidance that overshadowed strong results for the fiscal fourth quarter ended Jan. 31.

One of the most-expensive cloud-software stocks by almost any measure—and one of the sector’s fastest growers—in the current environment, highflying Snowflake stock was vulnerable to even a modest disappointment. In late trading, Snowflake shares are down 20%, to about $210. Snowflake (ticker: SNOW) went public in September 2020 at $120 a share, but doubled on its first trade.

For the quarter, Snowflake posted revenue of $383.8 million, up 101%, and ahead of the Street consensus forecast of $372.6 million. Product revenue in the quarter was $359.6 million, up 102%, and ahead of the company’s guidance range for $345 million to $350 million. (Snowflake does not provide overall revenue guidance.) Non-GAAP product gross margin was 75% in the quarter. Adjusted free cash flow was $102.1 million, or 27% of revenue.

The company said its net revenue retention rate, a measure of repeat business, was 178%, which was up from 173% in the October quarter. Remaining performance obligations were $2.6 billion, up 99% year-over-year, and accelerating from 94% growth one quarter earlier. The company now has 5,944 customers, including 184 with trailing revenue of more than $1 million—up from 116 just one quarter earlier.

For the full year, product revenue was $1.14 billion, up 106%, while adjusted free cash flow was $149.8 million, up 12%.

For the April quarter, the company sees product revenue of $383 million to $388 million, up between 79% and 81% from a year ago, about flat sequentially, but a little above the Street consensus at $382 million. The company expects an operating margin in the quarter on a non-GAAP basis of negative 2%, which compares to positive 5% in the latest quarter on the same basis.

For the full year, Snowflake is projecting product revenue of $1.88 billion to $1.90 billion, up 65% to 67%, falling short of the Street consensus estimate for $2 billion, with operating margin of 1%, and an adjusted free-cash-flow margin of 15%.

Even with the stock’s late-trading drop, shares are trading at about 34 times the guided current-year sales, a valuation that few other companies can match.

Write to Eric J. Savitz at

Fitch, Moody’s slash Russia’s sovereign rating to junk

Previous article

Asian Stocks Up, Powell Hints at Interest Rate Hikes

Next article

You may also like


Leave a reply

Your email address will not be published. Required fields are marked *

More in Latest News