Snowflake Up 16% on Solid Q3 Revenue & Guidance

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.

Quarterly Results

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.

Management Comments

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.”

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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.  

Analysts’ Consensus

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.

Blogger Opinion

TipRanks data shows that financial blogger opinions are 77% Bullish on SNOW, compared to a sector average of 69%.

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