Snowflake shares spiked 19% in extended trading on Wednesday after the data analytics software maker reported fiscal third-quarter earnings that beat estimates.
Here’s how the company did, compared to LSEG analysts’ expectations:
- Earnings per share: 20 cents, adjusted vs. 15 cents expected
- Revenue: $942 million vs. $897 million expected
Snowflake’s revenue rose 28% year over year in the quarter, which ended on Oct. 31, according to a statement. The company’s net loss of $324.3 million, or 98 cents per share, widened from $214.3 million, or 65 cents per share, in the same quarter a year earlier.
Product revenue represented around 96% of total sales. Snowflake called for $3.43 billion in fiscal 2025 product revenue, implying 29% growth. That’s up from the $3.36 billion forecast management gave three months ago.
The full-year view also includes an adjusted operating margin of 5%, up from the 3% guidance in August.
Snowflake is focusing more on saving money, CEO Sridhar Ramaswamy told analysts on a conference call.
“We’ve been creating centralized, more efficient teams for some areas and removing redundant management layers, which enables us to make decisions faster,” he said.
But the company is not doing a major round of layoffs, Chief Financial Officer Mike Scarpelli said.
Snowflake had 10,618 customers at the end of October, having added 369 in the latest quarter. Analysts polled by StreetAccount had expected 10,601 customers.
While the U.S. government is a very small part of Snowflake’s business today, Scarpelli said there are opportunities for growth.
“We feel good about what we’re doing, and we think there’s a lot of upside in the federal space over the next couple of years,” Scarpelli said. In September, Snowflake announced it had acquired Night Shift Development, a company that targeted the public sector in the U.S.
For years, Snowflake has competed with cloud providers such as Amazon and Microsoft, but they also are key partners that provide the company with underlying computing resources.
“Through our collaboration with AWS, we have booked over $3.9 billion over the past four quarters,” Ramaswamy said.
Also on Wednesday, Snowflake announced a multiyear partnership with Anthropic, the Amazon-backed artificial intelligence startup and OpenAI competitor. It also said it had agreed to buy startup Datavolo for an undisclosed sum.
As of Wednesday’s close, Snowflake’s stock was down 35% so far in 2024, while the S&P 500 index was up 24%.
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