© Reuters. The company logo for Snowflake Inc. is displayed on a banner to celebrate the company’s IPO at the New York Stock Exchange (NYSE) in New York, U.S., September 16, 2020. REUTERS/Brendan McDermid
(Reuters) -Snowflake forecast first-quarter product revenue below Wall Street estimates on Wednesday on expectations that customers would cut back on spending in an uncertain economy, sending its shares plunging more than 20% in extended trading.
The cloud data analytics company also appointed Sridhar Ramaswamy as its chief executive, succeeding Frank Slootman who retired on Feb. 27.
Spending on cloud and technology is expected to slow down as clients grapple with high interest rates and sticky inflation in an uncertain economy, hitting firms such as Snowflake (NYSE:).
Peer Salesforce (NYSE:) forecast fiscal 2025 revenue below estimates.
Bozeman, Montana-based Snowflake forecast current-quarter product revenue between $745 million and $750 million, below analysts’ average estimates of $765 million, according to LSEG data.
The company’s product revenue accounted for 95% of its total revenue in the fourth quarter ended Jan. 31.
Snowflake posted total revenue of $774.7 million in the reported quarter, beating analysts’ estimate of $759.3 million.
Its adjusted profit per share came in at 35 cents, also beating estimate of 18 cents.
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