Snowflake (SNOW) on Wednesday reported third quarter earnings and revenue that topped estimates amid stabilizing growth at cloud computing partner Amazon.com (AMZN). Guidance for SNOW stock came in above expectations.
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The company released its Snowflake earnings report after the market close. Revenue climbed 32% to $734.2 million, the enterprise software maker said. Analysts projected Q3 revenue of $713.8 million.
Snowflake reported a loss of 65 cents using generally accepted accounting principles, or GAAP. That compares with a loss of 63 cents a year earlier. Analysts polled by FactSet expected Snowflake to report a loss of 76 cents on a GAAP basis.
On an adjusted basis, analysts expected Snowflake to report a profit of 16 cents per share. But the company does not break out adjusted earnings in its releases.
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. Analysts had expected $696 million.
On the stock market today, SNOW stock popped 7.5% to 188.49 in extended trading.
In the Q3 earnings release, the company stated: “(Snowflake) now has 436 customers with trailing 12-month product revenue greater than $1 million and 647 Forbes Global 2000 customers, representing 52% and 10% year-over-year growth, respectively.”
SNOW stock had advanced 19% in 2023 heading into the Snowflake earnings report. Most of the gain came after Nov. 7 following Datadog‘s (DDOG) better-than-expected Q3 results. Datadog also is a cloud partner of Amazon.
Because Snowflake’s business model is consumption-based rather than subscription-based, investors have raised concerns over a slowing U.S. economy curbing demand.
Snowflake garners about 95% of total sales from product revenue. That’s revenue that comes from cloud-based data analytical and storage services. Snowflake also generates revenue from professional services, such as 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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