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Snowflake Shares Slide Despite Earnings Beat, Falling Below 2020 IPO Price

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Snowflake shares have tumbled sharply since last fall.

Gabby Jones/Bloomberg


shares are trading sharply lower late Wednesday, on apparent investor disappointment with the financial outlook provided by the cloud-based data warehousing company. 

With the late afternoon slide, Snowflake shares have fallen below their $120 September 2020 IPO price. The stock peaked above the $400 level last fall.

For the fiscal first quarter ended April 30, Snowflake (ticker: SNOW) posted product revenue of $394.4 million, up 84% from a year ago, and ahead of the company’s guidance range of $383 million to $388 million. Overall revenue was $422.3 million, above the Street consensus forecast at $412.8 million. Operating income in the quarter was $1.7 million, which is a little better than the Street’s guidance range for an operating profit margin of between zero and -2%. On a GAAP basis, product gross margin was 84%, up from 75% one quarter earlier.

Snowflake’s operating metrics were strong. The company said remaining performance obligations were $2.6 billion, up 82%. Net retention rate, a measure of repeat business, was 174%. The company now has 206 customers with trailing 12 months product revenue of more than $1 million.

For the July quarter, Snowflake sees product revenue of $435 million to $440 million, up between 71% and 73%, with a non-GAAP operating margin of -2%.

For the full year ending in January 2023, Snowflake’s guidance is little changed from the previous quarter. The company now sees product revenue of $1.885 billion to $1.9 billion, slightly increasing the bottom of the range from a previous $1.88 billion. The company reiterated its forecast for both product gross margin—74.5%–and operating margin—1%. Snowflake inched up its full-year forecast for adjusted free cash flow to 16%, from 15%%.

Earlier this week, Rosenblatt Securities analyst Blair Abernethy had upgraded his rating on Snowflake shares to Buy from Neutral, in part in anticipation that the company would boost its outlook for the full year—but guidance remained substantially the same.

In late trading, Snowflake is off 12.2%, to $116.50.

Write to Eric J. Savitz at

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