Snowflake stock jumped late Wednesday after the data analytics company gave a mixed first-quarter report. Earnings came in below analyst expectations, but revenue exceeded consensus. Snowflake (SNOW) boosted its sales outlook for the rest of the year.
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The software firm said that it earned an adjusted 14 cents per share on sales of $828.7 million for the April-ending quarter. On average, analysts projected that Bozeman, Mont.-based Snowflake would post adjusted earnings of 18 cents per share on sales of $787 million, according to FactSet.
Adjusted earnings decreased 6% year over year while sales increased 33%.
On the stock market today, Snowflake stock is up 6% at 173 in recent after-hours action.
Snowflake Boosts Guidance
For the current quarter, Snowflake guided for product revenue of $807.5 million at the midpoint of its range. Analysts were projecting the firm would tally $793 million in product revenue for the July-ending quarter, according to FactSet.
Snowflake also upped its guidance for full-year product revenue to $3.3 billion, from a previously given $3.25 billion. Product revenue comprises the majority of Snowflake’s overall revenue.
“Our core business is very strong,” Snowflake Chief Executive Sridhar Ramaswamy said in a news release. “Our AI products, now generally available, are generating strong customer interest. They will help our customers deliver effective and efficient AI-powered experiences faster than ever.”
In Q1, Snowflake’s product revenue increased 34% to $789.6 million.
Raimo Lenschow, a software stock analyst with Barclays, called it a strong Q1 for Snowflake. He holds a neutral equal-weight rating on the stock.
“Guidance for Q1 was very conservative so a beat was expected, but the over $50 million in new product revenue added is better than expected and helped to beat consensus by (roughly) 5%, which is something we have not seen for a while,” Lenschow wrote to clients.
Meanwhile, Snowflake said it now has 485 customers that each generate more than $1 million in annual product revenue for the company, up 30% from a year earlier.
This marks Snowflake’s first report under Ramaswamy. Shares sank following the company’s fourth-quarter earnings report in February, when former Chief Executive Frank Slootman announced plans to retire and Snowflake lowered its sales guidance for its current fiscal 2025.
Snowflake Stock: Technical Ratings
In 2023, Snowflake gained 38%, outpacing the S&P 500. The company is pushing to offer a broad suite of enterprise services to prepare and harness data for generative artificial intelligence.
Coming into the report, Snowflake stock had a meager IBD Composite Rating of 52 out of 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.
Further, Snowflake’s IBD Relative Strength Rating was 18 out of 99.
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