Snowflake shares are on the rise after the cloud data warehouse software company reported better-than-expected results for the quarter ended Oct. 31. This is a positive indicator for the cloud computing market.
In late trading, Snowflake shares were up 6.9% at $187.32. Other cloud plays, such as MongoDB and Datadog, also experienced an increase.
Snowflake reported revenue of $734.2 million for the quarter, a 32% increase from the previous year. This exceeded the Street consensus forecast of $714 million tracked by FactSet. Product revenue reached $698.5 million, up 34%, surpassing both the company’s guidance range and the Street consensus.
On an adjusted basis, the company earned 27 cents per share in the quarter, surpassing the consensus of 16 cents.
Snowflake now boasts 432 customers with trailing 12-month product revenue over $1 million, reflecting a 52% increase from a year ago. The measure of work signed but not yet completed, known as remaining performance obligations, reached $3.7 billion, a 23% increase.
Non-GAAP adjusted free cash flow outperformed expectations at $111 million, compared to the Street forecast of $90.3 million. Non-GAAP operating income stood at 10%, well above the company’s forecast of 4%.
CEO Frank Slootman stated that these results demonstrate strong execution in a stabilizing macro environment.
Looking ahead to the fiscal fourth quarter ending in January, Snowflake projects product sales between $716 million and $721 million, a 29% to 30% increase, exceeding the Street consensus of $696 million. The company anticipates a non-GAAP operating margin of 4% for the quarter.
For the fiscal year ending in January 2024, Snowflake expects product revenue of $2.65 billion, a 37% increase from the previous forecast of $2.6 billion. The company also revised its operating income and adjusted free cash flow margin, now projecting 7% and 27%, respectively, up from 5% and 26%.