The shares of Snowflake Inc. were broken in a long trade on Wednesday after the software company predicted that product sales would slow this year.
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reported fourth-quarter losses of $ 132.2 million, or 43 cents a share, on sales of $ 383.8 million, after losing 70 cents a share on revenue of $ 190 million a year ago. Analysts had expected an average earnings of 3 cents per share of sales of $ 373 million, although many analysts seem to be modeling for adjusted earnings that the software company does not provide.
Snowflake’s revenue for the year nearly doubled to $ 1.14 billion from $ 554 million last year, but executives predicted that growth would slow to less than 70% this year from their annual forecast. Shares of Snowflake fell to less than $ 185 in after-hours trading immediately after the announcement of the results, after closing 1.1% profit at $ 266.03.
The high-flying stocks settled after the huge Wall Street welcome in late 2020, which included investments from Berkshire Hathaway Inc. BRK.A,
BRK.B,
and Salesforce.com Inc. CRM,
and has led to the cloud-based database for the software company becoming the most expensive technology share in some respects. Shares fell 25.6% in the last three months, but were still easily more than twice the $ 120 share price ordered in the initial public offering at Wednesday’s closing price.
Because Snowflake is a young software company, investors tend to focus on indicators other than profitability, including net revenue retention, which measures how much existing customers spend on volume bidding, and remaining performance commitments, which measures the amount of costs that have been contracted but not yet recognized.
Snowflake reported a net revenue retention rate of 178% at the end of the quarter on January 31 and a remaining $ 2.6 billion performance commitment, which is 99% more than last year and exceeds analysts’ average estimates of $ 2.29 billion dollars. Snowflake also reported that the number of customers rose to 5,944 from 4,139 a year ago, and 184 of those customers have spent more than $ 1 million with the company in the past 12 months.
For the first quarter, Snowflake executives forecast product revenue of $ 383 million to $ 388 million, while analysts modeled an average of $ 382 million, according to FactSet. For the full year, they expect revenue from the company’s products in San Francisco to reach $ 1.88 billion to $ 1.9 billion, while analysts forecast $ 1.87 billion.
However, many analysts expected the company to easily exceed these expectations.
“Given strong demand, we believe Snowflake’s prospects for fiscal year 23 may be well above consensus, as some of its latest product innovations and investments have a wider penetration,” wrote JP Morgan analysts. before the edition.
“We expect management to follow historical models and lead conservatively at both the top and bottom, but we expect current revenue forecasts for fiscal 23/24 to rise after printing,” Stifel analysts wrote in a preliminary review of the report. .
Snowflake also announced the acquisition of Streamlit on Wednesday afternoon. The conditions were not disclosed.