Snowflake Earnings, Revenue Top Estimates As Cloud Spending Rebounds

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Snowflake (SNOW) on Wednesday reported third quarter earnings and revenue that topped estimates amid stabilizing growth at cloud computing partner Amazon.com (AMZN). Guidance for SNOW stock came in above expectations.

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The company released its Snowflake earnings report after the market close. Revenue climbed 32% to $734.2 million, the enterprise software maker said. Analysts projected Q3 revenue of $713.8 million.

Snowflake reported a loss of 65 cents using generally accepted accounting principles, or GAAP. That compares with a loss of 63 cents a year earlier. Analysts polled by FactSet expected Snowflake to report a loss of 76 cents on a GAAP basis.

On an adjusted basis, analysts estimated Snowflake would report a profit of 16 cents per share. But the company does not break out adjusted earnings in its releases.

SNOW Stock: Q4 Outlook Above Views

For the current quarter ending in January, Snowflake expects product revenue in the range of $716 million to $721 million. Analysts had expected $696 million.

On the stock market today, SNOW stock popped 9.5% to near 192 in extended trading.

SNOW stock had advanced 19% in 2023 heading into the Snowflake earnings report. Most of the gain came after Nov. 7 following Datadog‘s (DDOG) better-than-expected Q3 results. Datadog also is a cloud partner of Amazon.

Because Snowflake’s business model is consumption-based rather than subscription-based, investors have raised concerns over a slowing U.S. economy curbing demand.

Snowflake garners about 95% of total sales from product revenue. That’s revenue that comes from cloud-based data analytical and storage services. Snowflake also generates revenue from professional services, such as consulting and training.

SNOW stock holds a Relative Strength Rating of 87 out of a best-possible 99, according to IBD Stock Checkup.

Follow Reinhardt Krause on X,  formerly called Twitter,  @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.

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