Frank Slootman, CEO of Snowflake
Source: CNBC
Snowflake shares fell as much as 7% and then rallied in extended trading on Wednesday after the data analytics software company gave full-year guidance that it met but did not beat analyst estimates, and announced the end of its dual share class structure, which could allow newer investors more control over the direction of the company.
The stock was already down about 9% during regular trading on Wednesday, amid a broad sell-off of tech stocks.
Here’s how the company did it:
- Profits: Loss of 70 cents per share
- Income: $ 190.5 million, compared to $ 178.5 million as analysts expected, according to Refinitiv.
The company’s revenue increased 117% on an annualized basis in the fiscal fourth quarter, which ended January 31, according to a statement. In the previous quarter it had grown 119%. The company’s net loss increased to approximately $ 199 million from $ 83 million in the prior year quarter.
“We have implemented operations that will help us show greater profitability,” CFO Mike Scarpelli said during a conference call with analysts. “We continue to invest heavily in the business.”
The company also said in a regulatory filing that as of Monday it had shed its dual class structure, in which class A shares got one vote per share and class B shares got 10 votes per share. The structure had been in place since September, when Snowflake’s shares debuted on the New York Stock Exchange. Now, all Class B shares will be converted to Class A shares.
Dual-class structures have become common at tech companies, including Google, Facebook, and Snap, as a way to allow founders and early investors to stay in control and block acquisitions by activist investors.
Regarding guidance, Snowflake said it expects $ 195 million to $ 200 million in product revenue in the fiscal first quarter, which would increase from 92% to 96% year-over-year. Analysts surveyed by FactSet were looking for $ 196.3 million in product revenue. Nearly 94% of Snowflake’s revenue came from product revenue in the fiscal fourth quarter.
For the full fiscal year 2022, the company expects product revenue of between $ 1 billion and $ 1.02 billion, representing growth from 81% to 84%, a decrease in product revenue growth of 116% in the quarter. fiscal quarter. Analysts surveyed by FactSet expected $ 1.01 billion in product revenue.
Excluding the after-hours movement, Snowflake shares have fallen 11% since the start of 2021, while the S&P 500 Index has risen 2% over the same period.
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