Shares of cloud-based data-software firm Snowflake are falling in late trading.
stock is sharply lower in late trading Wednesday after the cloud-based data-software company posted disappointing fiscal 2023 guidance that overshadowed strong results for the fiscal fourth quarter ended Jan. 31.
One of the most-expensive cloud-software stocks by almost any measure and one of the sector’s fastest growers, highflying Snowflake stock was vulnerable to even a modest disappointment. In late trading, Snowflake shares are down 20%, to about $210. Snowflake (ticker: SNOW) went public in September 2020 at $120 a share, but doubled on its first trade.
For the quarter, Snowflake posted revenue of $383.8 million, up 101%, and ahead of the Wall Street consensus forecast of $372.6 million. Product revenue in the quarter was $359.6 million, up 102%, and ahead of the company’s guidance range for $345 million to $350 million. (Snowflake does not provide overall revenue guidance.) Non-GAAP product gross margin was 75% in the quarter. Adjusted free cash flow was $102.1 million, or 27% of revenue.
Snowflake CEO Frank Slootman said in an interview with Barron’s that the quarter was “exceptional,” but he conceded that revenue beat guidance by a little less than in other recent quarters.
Slootman said one reason that is tied to the company’s unusual consumption-based revenue model—customers pay for the compute time they use, no more, no less. And Slootman notes that a tweak to the software in January allowed customers to do the same workloads with less resources—he said the adjustment cost the…