Snowflake (SNOW) Soars 19% After Q3 Earnings Beat Expectations
Snowflake, the data analytics software giant, saw its stock price skyrocket by 19% in after-hours trading following an impressive fiscal third-quarter earnings report. This surge reflects strong growth in both revenue and earnings, signaling that Snowflake is continuing its momentum despite challenges faced by many in the tech sector.
For the quarter ending October 31, Snowflake posted earnings of 20 cents per share, adjusted for certain items, surpassing analysts’ expectations of 15 cents per share. Revenue also exceeded forecasts, coming in at $942 million, well above the $897 million anticipated. These results reflect a remarkable 28% year-over-year increase in total revenue, underscoring the company’s steady expansion within the cloud data industry. Despite these strong top-line figures, Snowflake reported a net loss of $324.3 million, or 98 cents per share, which is wider than the loss of $214.3 million, or 65 cents per share, recorded during the same period last year. However, this net loss didn’t seem to dampen investor enthusiasm, as the stock surged in after-hours trading.
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A key highlight of Snowflake’s performance is its product revenue, which represented a massive 96% of the company’s total revenue, amounting to $900.3 million. Looking ahead, Snowflake raised its forecast for fiscal 2025 product revenue to $3.43 billion, indicating a robust 29% growth rate, up from the previous prediction of 26%. This revision further demonstrates the company's confidence in its ability to maintain growth in the highly competitive data analytics space.
The company also disclosed that it added 369 new customers during the third quarter, bringing its total customer count to 10,618 by the end of October. This growth suggests that Snowflake’s products continue to attract new business, which is a positive indicator for future expansion.
Additionally, Snowflake announced an exciting multi-year partnership with Anthropic, an AI startup backed by Amazon and a competitor to OpenAI. The partnership is expected to bolster Snowflake's position in the rapidly growing AI market, which is becoming an increasingly important area of focus for the company. Furthermore, Snowflake revealed it had acquired the startup Datavolo, though financial terms of the deal were not disclosed.
Despite the positive quarterly results, Snowflake’s stock had fallen by 35% year-to-date as of the end of trading on Wednesday, in contrast to the broader S&P 500’s 24% gain. This reflects some of the broader challenges facing tech stocks in 2024, but with the latest earnings performance and optimistic forecast, Snowflake appears poised to regain investor confidence moving forward. As the company continues to grow its customer base and expand its product offerings, it could be on track for an exciting future in the data analytics and AI markets.
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