Shares of cloud computing-based data cloud company Snowflake declined more than 5 percent in Wednesday’s extended training after the company issued its results for the third quarter that ended in October. Although the results were impressive, shares were down on the weak forecast for product revenue guidance.
The company reported earnings of 11 cents per share, beating analysts’ estimate of 4 cents, according to data from Refinitiv. Revenue for the quarter came in at $557 million, surpassing analysts’ estimate of $539 million, according to data from Refinitiv.
Snowflake’s revenue was up 67 percent year-over-year. This growth was, however, lower than the 83 percent reported last quarter. The company’s biggest share of revenue, Product revenue, went up 67 percent year over year to $523 million. Product revenue is an important growth indicator for the company as it recognizes revenue based on platform consumption.
The company expects product revenue for the ongoing fourth quarter to come in between $535 million and $540 million. This range is below analysts’ estimate of $553 million, according to StreetAccount. The company also issued guidance for the full year in the range of $1.919 billion and $1.924 billion.
The company expects a gross profit margin of 75 percent, an operating income margin of 3 percent, and an adjusted cash flow of 21 percent for the full year. For the quarter that ended October 31st, the company reported 7,292 customers.
Snowflake was founded in July 2012 and was publicly launched in October 2014 after spending two years in stealth mode. It offers cloud-based data storage and analytics services popularly referred to as ‘data-as-a-service.’ Although it is based in Bozeman, Montana, Snowflake is a globally-distributed enterprise, with more than 3,000 employees working in 20 countries.