Snowflake Shares Shed 5% Value On Wednesday, Investors Disappointed With Guidance

The latest stock trading session has been a low ride for Snowflake share prices. The provider of the cloud data platform suffered from a share price dip in Wednesday’s trading session.

The latest reports reveal that the executives recently shared the earnings for Snowflake’s third quarter.

Things went smoothly and quite well with the Q3 earnings but the investors were not happy with the guidance part. As the investors felt disappointed with the guidance, the only outcome was a share price dip.

For the third quarter, Snowflake officials were glad to confirm that they had beaten the estimations from the analysts.

Their claim of beating the third quarterly earnings estimations had already set higher expectations among the investors for the fourth quarter.

However, the high expectations of the investors soon turned into disappointment as the guidance figures shared by Snowflake were very light.

With the investors not feeling happy with the guidance figures, they decided to lower their support for Snowflake. After the posting of earnings and guidance, Snowflake shares dipped 5%.

Snowflake Earnings for Q3 2022

The officials claimed that their actual earnings beat the estimations made by the analysts for the third quarter.

For the third quarter, Snowflake officials confirmed that the estimations for earnings were 4 cents per share. Their actual earnings were almost three times higher than the estimations.

Snowflake generated 11 cents per share earnings in the third quarter of 2022. Their actual earnings were 7 cents higher than the top estimation, 175% higher than 4 cents.

The revenue they have generated in the same quarter is worth $557 million. Whereas, the estimation set by the analysts for the third quarter for revenue was $539 million.

Snowflake reportedly generated $18 million more than the estimation translating to 3.33% higher than the estimation.

Year over Year Growth

The officials were also very glad in sharing the year-over-year earnings results with the investors.

According to the statistics, their revenue has recorded a year-over-year increase that is 67%. However, the growth of revenue compared to the past quarter has been lower.

In the past quarter, the revenue growth recorded was 83% but the figure has lowered in the recent quarter.

The company officials also praised the product revenue, which is their largest part of revenue. They stated that compared to the same quarter from last year, their product revenue has surged by 67%.

In the third quarter of 2022, their revenue growth has been worth $523 million. For Snowflake, product revenue is the key metric it refers to when it has to report its actual revenue.

Guidance for Q4 and 2022

The company then went on to share its estimations for the fourth quarter of 2022. They also shared the earnings expectations for the entire year 2022.

For the fourth quarter, the Snowflake executives mentioned they expect the minimum revenue they aim to generate is $535 million. The top estimation they set for the fourth quarter revenue is worth $540 million.

Prior to sharing the guidance in the latest posting, the officials had set the revenue guidance for the fourth quarter to be $553 million.

Now, their top estimation for the revenue is $13 million less than their previous revenue estimation for the same quarter.

As for the entire year, the company now expects that its revenue would fall somewhere between $1.919 billion and $1.924 billion.

In addition to the above, Snowflake officials have also shared the expected growth rates for three major metrics. These are the adjusted free cash flow, operating income margins, and product gross profit margins.

According to their estimations, these three key metrics would experience 21%, 3%, and 75% growths respectively in the entire year.

Snowflake officials also revealed that in the third quarter, they served a total of 7,292 customers. The particular quarter started on August 01 and ended on October 31.

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