In a surprising turn of events, Snowflake Inc.’s stock took a nosedive of over 20% during Wednesday’s extended session following the announcement of the departure of its chief executive and underwhelming outlook.
Forecast Disappointment
For the fiscal first quarter, Snowflake anticipates product revenue to fall between $745 million to $750 million, falling short of analysts’ expectations set at $759 million. Looking ahead at the full fiscal year, Snowflake is forecasting $3.25 billion in product revenue, considerably lower than analysts’ projections of $3.43 billion.
Financial Overview
Despite a fourth-quarter net loss of $169.9 million or 51 cents a share, compared to $207.2 million or 64 cents a share in the previous year, Snowflake managed an adjusted earnings per share of 35 cents, a significant improvement from the 14 cents reported a year earlier.
Revenue Growth
Snowflake’s revenue grew to $774 million from $589 million the year before, surpassing analysts’ estimate of $760 million. The company’s product revenue reached $738 million, exceeding the FactSet consensus of $716 million.
Leadership Transition
Chairman Frank Slootman addressed the ongoing success in engaging major enterprises globally and establishing Snowflake’s Data Cloud as the go-to platform for AI and data strategy. In a separate announcement, Slootman stepped down as CEO, with Sridhar Ramaswamy taking over the position after serving as the company’s senior vice president of AI.
Strong Performance
Despite the changes, Snowflake reported $5.2 billion in remaining performance obligations, marking a 41% increase from the previous year. Notably, 461 customers were identified as generating more than $1 million in trailing-12-month product revenue.
