Snowflake shares are up 15% after-hours: what happened?

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Written on Dec 1, 2021

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Snowflake says its revenue more than doubled in its fiscal third quarter.
The cloud company raised its sales guidance for the full financial year.
Shares of the U.S. firm are up nearly 15% after-hours on Wednesday.

Snowflake Inc (NYSE: SNOW) shares jumped nearly 15% in extended trading on revenue that more than doubled in Q3 and expectations that it will double again in the current quarter.

Key takeaways in the Q3 report

Snowflake reported $334.4 million in revenue for the third quarter versus the year-ago figure of $160 million. But its quarterly loss still ballooned 51 cents a share from last year’s 28 cents a share.

The cloud-based data warehousing company said its product revenue stood at $312.5 million, with professional services accounting for the rest. According to FactSet, experts had forecast $284 million product sales for total revenue of $306 million but a much narrower 6 cents of per-share loss.

Other notable figures include $1.8 billion in remaining performance obligation, representing a 94% annualised increase – roughly in line with what experts anticipated. Net revenue-retention rate printed at 173%.

Snowflake now has 5,416 customers versus 3,554 in the same quarter of fiscal 2021. 148 of these, the NYSE-listed company revealed, spent over $1.0 million in the trailing twelve months.

Guidance for the future

For the fiscal fourth quarter, Snowflake forecasts up to $350 million in product revenue. Analysts, in comparison, were calling for $316 million. The U.S. company raised its sales guidance for the full year to $1.13 billion.

In the earnings press release, CEO Frank Slootman said:

Snowflake saw momentum accelerate in Q3, with product revenue up 110%. Continued international expansion resulted in product revenue from the EMEA and APJ regions up 174% and 219%, respectively. Our vertical industry focus is an important evolution of our selling motion, and Snowflake continues to see broad industry adoption.

The stock had closed the regular session down nearly 9.0% on Wednesday. While it’s still down over 10% from its year-to-date high of $402 on November 16^th, Credit Suisse has a price target of $455 on Snowflake that represents another 30% upside from here.