Snowflake (SNOW) has announced third-quarter earnings and revenue that exceeded expectations, driven by steady growth at cloud computing partner Amazon.com (AMZN). SNOW stock’s guidance also surpassed expectations.
The company released its Snowflake earnings report after the market close, citing a 32% increase in revenue to $734.2 million. This figure exceeded analysts’ Q3 revenue projection of $713.8 million.
Snowflake reported a loss of 65 cents using generally accepted accounting principles, or GAAP, compared to a 63-cent loss a year earlier. On an adjusted basis, analysts estimated the company would report a profit of 16 cents per share.
SNOW Stock: Q4 Outlook Above Views
For the current quarter ending in January, Snowflake expects product revenue in the range of $716 million to $721 million, surpassing analysts’ expectations. Following the earnings report, SNOW stock surged 9.5% to near 192 in extended trading.
As of the latest market data, SNOW stock had advanced 19% in 2023, with most of the gain following better-than-expected Q3 results from Datadog (DDOG), which is also a cloud partner of Amazon.
Concerns have been raised about Snowflake’s consumption-based business model and its dependency on cloud-based data analytical and storage services, given the potential impact of a slowing U.S. economy. Despite this, Snowflake garners about 95% of total sales from product revenue, generated from cloud-based services as well as professional consulting and training.
SNOW stock holds a Relative Strength Rating of 87 out of a best-possible 99, according to IBD Stock Checkup.
Follow Reinhardt Krause on X, formerly called Twitter, @reinhardtk_tech
for updates on artificial intelligence, cybersecurity, and cloud computing.
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