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.
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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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