Snowflake gains momentum with solid earnings and revenue beats – News

Snowflake Inc. added to its momentum as it delivered its first-quarter financial results for the new fiscal year today, beating expectations on earnings and revenue to send its stock higher in late trading.

The company, which sells cloud-based data warehouse tools for businesses, delivered first-quarter earnings before certain costs such as stock compensation of 24 cents per share, beating the analyst consensus estimate of 21 cents. Quarterly revenue topped $1 billion for the first time, coming in at $1.04 billion, up 26% from a year earlier. That was above the Street’s view of $1.01 billion.

Product revenue, which is derived from Snowflake’s customer’s consumption of compute, storage and data bandwidth, reached $996.8 million, also up 26% from a year ago and above the forecast of $962 million.

Despite being profitable after adjustments, Snowflake is still losing money overall, and it posted a net loss of $429.9 million in the quarter.

Snowflake Chief Executive Sridhar Ramaswamy (pictured) said the company remains focused on making its platform easy to use to enable fluid access to date wherever it sits and trusted for enterprise-grade performance. “We see an enormous opportunity ahead as we extend this value throughout the full data lifecycle,” he added.

For the current quarter, Snowflake is targeting product revenue of between $1.035 billion and $1.04 billion, which would of course be another milestone. The analyst consensus view sits at $1.02 billion.

Snowflake’s full-year forecast calls for revenue of $4.325 billion at the midpoint, also ahead of the consensus of $4.28 billion. It would represent growth of 25% from the previous year.

In a note to clients, Evercore ISI analyst Kirk Materne said the forecast revenue bump, which comes despite ongoing macroeconomic uncertainty, illustrates that Snowflake’s management has a lot of confidence in the durability of near-term demand.

Snowflake has been making good progress on the product front too. During the quarter, the company announced it’s adding full support for the popular Apache Iceberg table format to its platform. It’s a key move that allows businesses to work with Iceberg tables on Snowflake’s platform without data migration, supporting artificial intelligence development and advanced data analytics.

The company also took a key step toward fulfilling its ambitions to compete in the government sector when it achieved Department of Defense Impact Level 5 Provisional Authorization in April. That was a key certification that enables its platform to be used by DOD agencies such as the U.S. Army, Navy, Air Force and Space Force, as well as DOD partners and contractors.

It all adds up to some solid momentum for Snowflake and its investors were appreciative, with the company’s stock gaining more than 7% in late trading today. In the year to date, Snowflake’s share price has climbed 16%, going against the grain with regard to the broader S&P 500, which is flat over the same period.

Jeffries analyst Brent Thill believes there’s even better to come from Snowflake. “We favor Snowflake as our top AI breakout play, with more meaningful AI upside in the back half of the year,” he said in a note to clients prior to today’s report.

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