Snowflake Reported 8% Shares Meltdown

On Wednesday, May 26, the shares of Snowflake plummeted 8% in extended trading.

This barely met analysts’ forecast for product revenue, which is the firm’s full fiscal year’s main source of total revenue.

Snowflake Inc. is a data warehouse company that is based on cloud computing. The firm is located in California, USA.

Its earnings per share loss was 70 cents per share, while its revenue marked $228.9 million compared to the $212.9 million analyst forecast.

The business’ revenue increased 110% year over year in the fiscal first year that ended last April 30.

In addition, its revenue also spiked by 117% from the previous quarter. 

However, the firm’s net loss expanded to $203.2 million from only $93.6 million.

Snowflakes’ finance chief stated that the renegotiations with cloud suppliers eased the company’s gross margin.

He also added that in April, the firm administered a storage compression change that will help in widening the margins.

Moreover, the corporation is currently working on new chip technologies that could lead to performance gains.

For the fiscal second quarter, Snowflake expects to produce $235 million to $240 million in product revenue.

For the full 2022 fiscal year, the company is expected to generate $1.020 billion to $1.035 billion in product revenue.

At the middle of the range, this implied 86% growth and it exceeds the $1.02 billion analysts consensus. 

In March, the firm’s full-year guidance was $1.00 billion to $1.02 billion in product revenue.

It also raised the prediction for the adjusted operating margin from -23% to -17%.

Excluding the movement on after-hours, Snowflake’s shares plunged about 17% year to date.

Stock Market Movement

In comparison to Snowflake, the movement of the stock market shares are quite impressive.

The chip giant Nvidia’s shares slightly sank even after a flat quarterly report.

However, its earnings and sales for the first quarter both defeated Wall Street’s expectations, with 88% revenue growth compared to last year.

This year, the company’s stock rallied by about 20% during the period.

Also, the home furnishing retailer, Williams-Sonoma tweaked 3% in extended trading after it released better-than-expected earnings and revenue for the first quarter.

Its earnings per share were reported to be $2.93 per share, ahead of the forecasted $1.83.

Additionally, the shares of the movie theater chain AMC Entertainment soared another 2% in extended trading following a rally of nearly 20%.