Snowflake is a ray of sunshine during a week that has seen Wall Street witness dismal earnings reports. The company’s earnings report showed it more than doubled revenue in the most recent quarter while offering strong guidance.
Snowflake is a cloud data warehousing company whose revenue of $334.4 million in its fiscal Q3 indicates a 110% increase from a year ago.
Analyst estimates placed the number at $305.6 million, far below the company’s performance. However, Snowflake is yet to be profitable, even though its adjusted free cash flow of $21.5 million shows the business is healthy and growing.
Guidance
The company said it expects the current quarter’s revenue to hit $345 million, topping analysts forecasts. The guidance also said that the sales for the year should more than double to hit $1.13 billion. That shows a growth of about 95%.
Investors were happy, given that Wall Street has had a bad week, in the wake of the Omicron coronavirus outbreak.
After dropping 8.6% for the day, Snowflake stock rose nearly 16% in after-hours trading, recovering nearly all the losses from the week. The company said it capitalized on accelerated digital transformation initiatives driven by the pandemic.
Snowflake’s monumental success
The company staged one of the most successful initial public offerings in history a year ago. Earlier this year, Snowflake said that it expects annual revenue will reach $10 billion by 2029, signalling the likelihood of an eightfold increase.
Chief Executive Frank Slootman said that data is ‘the beating heart of the modern enterprise.’ The race, he added, is to lay a foundation for a data-driven infrastructure, something Snowflake will deliver.
Slootman went on a call with analysts to try and temper expectations by saying, “I am actually disappointed we outperformed so much.” That’s the pain of success, we suppose, in a finance ecosystem that irrationally and greedily demands never-ending growth.
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