snowflake Shares soared 19% in after-hours trading Wednesday after the data analytics software maker reported better-than-expected fiscal third-quarter profits.
Here’s how the company performed compared to LSEG analysts’ expectations:
Earnings per share: 20 cents adjusted, 15 cents expected Earnings: $942 million vs. $897 million expected
Snowflake’s sales increased 28% year-over-year in the quarter ended Oct. 31, according to the announcement. The company’s net loss was $324.3 million, or 98 cents per share, widening from $214.3 million, or 65 cents per share, in the year-ago period.
Product revenue accounted for approximately 96% of total sales. Snowflake expects 2025 product revenue to be $3.43 billion, representing 29% growth. This is an increase from management’s forecast of $3.36 billion three months ago.
The full-year outlook also includes an adjusted operating profit margin of 5%, up from the 3% forecast in August.
Snowflake is more focused on saving money, CEO Sridhar Ramaswamy told analysts on a conference call.
“We have created centralized and more efficient teams in some areas and removed redundant management layers, which will enable faster decision-making,” he said.
But the company hasn’t made any major layoffs, Chief Financial Officer Mike Scarpelli said.
Snowflake had 10,618 customers at the end of October and added 369 customers in the latest quarter. Analysts’ estimate of the number of customers compiled by Street Account was 10,601.
Although the U.S. government currently makes up a very small portion of Snowflake’s business, Scarpelli said there are opportunities for growth.
“We feel good about what we’re doing and think there’s a lot of upside in the federal space over the next few years,” Scarpelli said. In September, Snowflake announced it had acquired Night Shift Development, a company targeting the U.S. public sector.
For years, Snowflake has competed with cloud providers such as: Amazon and microsoftIt is also an important partner in providing foundational computing resources to enterprises.
“Through our collaboration with AWS, we have generated over $3.9 billion in revenue over the past four quarters,” Ramaswamy said.
Also Wednesday, Snowflake announced a multi-year partnership with Anthropic. Amazon-A backed artificial intelligence startup and OpenAI competitor. The company also announced that it has agreed to acquire startup Datavolo for an undisclosed amount.
As of Wednesday’s close, Snowflake stock is down 35% so far in 2024, while the S&P 500 is up 24%.
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