Frank Slootman, CEO of Snowflake
Source: CNBC
Snowflake shares fell to 7% and rebounded on Tuesday after the data analytics software company issued year-round guidelines that were met but did not exceed analysts’ estimates, and they announced the end of their dual-share class structure, which could allow newer investors to have more control over the company’s management.
Shares had already fallen about 9% during Wednesday’s regular trading, amid a broad sell-off of technology stocks.
Here’s how the company did it:
- Earnings: Loss of 70 cents per share
- Income: $ 190.5 million, up from $ 178.5 million, as analysts expected, according to Refinitiv.
According to a statement, the company’s revenue rose 117% annually in the fourth fiscal quarter, which ended Jan. 31. The previous quarter had grown 119%. The company’s net loss expanded to about $ 199 million, up from $ 83 million in the previous quarter.
“We have implemented operations that will help us show more profitability,” Chief Financial Officer 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 eliminated its dual-class structure, in which Class A shares got one vote per share and Class B shares had 10 votes per share. The structure has existed since September, when Snowflake shares were released on the New York Stock Exchange. Now, all Class B shares will be converted to Class A shares.
Dual-class structures have become commonplace in tech companies, including Google, Facebook and Snap, as a way to let founders and early investors stay in control and block acquisitions from activist investors.
As for guidance, Snowflake said it expects revenue of $ 195 million to $ 200 million in the first fiscal quarter, which would increase from 92% to 96% year-over-year. Analysts surveyed by FactSet were looking for product revenue of $ 196.3 million. Nearly 94% of Snowflake’s revenue came from revenue for fourth-quarter revenue.
Throughout fiscal year 2022, the company recorded revenue of $ 1.00 million to $ 1.02 million, representing growth of 81% to 84%, a 116% decline in product revenue growth in the fourth fiscal quarter. Analysts surveyed by FactSet had expected $ 1.01 million in product revenue.
Excluding off-schedule commuting, snowflake stocks have fallen 11% since early 2021, while the S&P 500 index has risen 2% over the same period.
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