Shares of cloud-based computing company Snowflake Inc. (SNOW) jumped 16.2% during the extended trading session on December 1, after the company reported 110% revenue growth and guidance above expectations.
The company reported a mixed bag of third-quarter results with revenue exceeding and earnings missing estimates.
Snowflake’s revenue jumped 110% year-over-year to $334.44 million, significantly outpacing analysts’ estimates of $305.5 million. The robust revenue growth was driven by 110% year-over-year Product revenue growth.
However, the company posted a quarterly loss of $0.51 per share against the consensus estimated loss of $0.06 per share. In Q3FY20, SNOW posted a quarterly loss of $1.01 per share.
Meanwhile, compared to the prior-year quarter, Snowflake’s remaining performance obligations (RPO) rose 94% to $1.8 billion, and its net revenue retention rate increased 173%. As of October 31, SNOW has a total of 5,416 customers, and 148 customers with trailing 12-month product revenue greater than $1 million.
Chairman and CEO of Snowflake, Frank Slootman, said, “Continued international expansion during the quarter resulted in product revenue from the EMEA and APJ regions up 174% and 219% year-on-year, respectively… Our vertical industry focus is an important evolution of our selling motion and Snowflake continues to see broad industry adoption.”
Based on the current business momentum, Snowflake forecasts Q4 Product revenue to fall in the range of $345 million to $350 million, much higher than the consensus estimate of $339.59 million.
Additionally, full-year fiscal 2022 product revenue is expected to be between $1.126 billion and $1.131 billion.
The Wall Street community is cautiously optimistic about the stock with a Moderate Buy consensus rating based on 9 Buys and 6 Holds. The average Snowflake price target of $381.62 implies 22.7% upside potential to current levels. Shares have gained 6.3% over the past year.
TipRanks data shows that financial blogger opinions are 77% Bullish on SNOW, compared to a sector average of 69%.