- Fourth Quarter Product Revenue Forecast: Snowflake projects product revenue between $906 million and $911 million, surpassing the estimate of $890.7 million.
- Operating Margin Expectations: The adjusted operating margin is forecasted to be 4%.
- Third Quarter Revenue: Total revenue reached $942.1 million, marking a 28% increase year-over-year, and exceeding the estimated $898.6 million.
- Third Quarter Product Revenue: Product revenue grew by 29% year-over-year to $900.3 million, beating the forecasted $856.6 million.
- Professional Services Growth: Revenue from professional services and other sectors rose by 17% year-over-year to $41.8 million, surpassing the estimate of $40.8 million.
- Loss Per Share: Snowflake reported a loss per share of 98 cents, compared to 65 cents in the previous year.
- Net Revenue Retention Rate: The retention rate was 127%, down from 135% year-over-year, but higher than the projected 124.2%.
- Performance Obligation: The current remaining performance obligation stands at $5.7 billion, a 54% increase year-over-year, beating the estimate of $5.22 billion.
- Adjusted Gross Margin: Achieved an adjusted gross margin of 73%, slightly down from 75% last year but above the expected 71.8%.
- Adjusted Diluted EPS: Reported adjusted diluted earnings per share of 20 cents, compared to 25 cents year-over-year, yet surpassing the estimated 15 cents.
- Stock Recommendations: Current analyst ratings include 33 buys, 13 holds, and 1 sell recommendation.
Snowflake on Smartkarma
Analysts at Baptista Research have been closely following Snowflake Inc.’s recent financial performances and strategic moves. In one report titled “Can Snowflake Truly Capitalize On The AI-Linked Opportunities That Lie Ahead? – Major Drivers,” Snowflake Inc. was praised for its solid financial showing in the fiscal second quarter of 2024, where product revenue surged by 30% year-over-year to $829 million, surpassing analyst expectations. Despite the positive results, concerns over Snowflake’s stock arose as it faced a 7% drop in extended trading, attributed to doubts about the company’s ability to fully capitalize on AI-related opportunities.
In another insightful report by Baptista Research titled “Snowflake Inc.: Broadened Scope and Usability of Products & Other Major Drivers,” the analysts commended Snowflake Inc.’s strong performance in Q1 of fiscal year 2025. The CEO, Sridhar Ramaswamy, emphasized key priorities including learning from customers, enhancing go-to-market operations, and driving innovation. The results showcased a robust core business, with product revenue for the quarter soaring by 34% year-over-year to $790 million. These reports highlight the ongoing scrutiny and positive outlook surrounding Snowflake’s growth trajectory and market positioning.
A look at Snowflake Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 2 | |
| Dividend | 1 | |
| Growth | 3 | |
| Resilience | 5 | |
| Momentum | 3 | |
| OVERALL SMART SCORE | 2.8 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
Analysts at Smartkarma have assessed Snowflake Inc.’s long-term outlook using their Smart Scores system. With a Value score of 2, Snowflake may not be considered undervalued compared to its peers. The low Dividend score of 1 indicates that the company does not prioritize paying dividends to its shareholders. However, Snowflake’s strong Growth score of 3 suggests that the company is positioned for expansion and increasing market share. In terms of Resilience, Snowflake impresses with a top score of 5, indicating the company’s ability to weather economic challenges. With a Momentum score of 3, Snowflake shows moderate positive market momentum in the near term.
Snowflake Inc. is a software solutions provider specializing in database architecture, data warehouses, query optimization, and parallelization solutions. The company’s global reach underscores its commitment to serving customers worldwide. Overall, while Snowflake demonstrates promising growth potential and resilience to economic headwinds, its valuation and dividend policies may warrant closer scrutiny from investors looking at the long-term picture.
Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
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