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Investing.com - Snowflake unveiled a fourth-quarter product revenue forecast which underwhelmed analysts’ heightened expectations, sending shares in the cloud data analysts firm lower by more than 8% in premarket trading on Thursday.
Current-quarter product revenue is projected to be between $1.195 billion to $1.200 billion, representing about 27% growth compared to the same period a year ago. Wall Street had anticipated an outlook of $1.19 billion, according to Bloomberg consensus estimates.
However, analysts suggested that the figures were not enough to live up to lofty expectations fueled by a more than 68% gain in Snowflake’s share price so far this year.
In a note cited by Reuters, analysts at D.A. Davidson suggested that, given the steep appreciation in the stock, investors were anticipating "guidance of more than 30%."
For the quarter ended on October 31, Montana-based Snowflake reported adjusted earnings of $0.39 per diluted share on revenue of $1.21 billion, topping analyst estimates of $0.35 on revenue of $1.18 billion.
Product revenue for the period grew by 29% to $1.21 billion, as the company’s new artificial intelligence-led offerings continued to drive customer wins. As part of a bid to harness a spike in demand for AI tools by businesses looking to streamline their operations, Snowflake has unveiled ties with a number of firms -- including Anthropic, maker of AI model Claude, cloud giant Amazon Web Services, and Google’s Gemini AI.
Analysts at BNP Parbias flaged that while the third-quarter results were "solid," product revenue growth decelerated versus the second quarter and was "likely below the 30%+ levels investors were expecting."
(Yasin Ebrahim contributed reporting.)