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Snowflake reports widening losses but raises full-year guidance

Mount Equity Group Tokyo, Japan > News > Tech > Snowflake reports widening losses but raises full-year guidance

Snowflake banners decorate the New York Stock Exchange to market the debut of the software company’s shares in New York on Sept. 16, 2020.Source: Snowflake

Snowflake shares fell as much as 8% in extended trading on Wednesday after the data-analytics software company barely met analysts’ expectations for product revenue, the company’s main source of total revenue, for the full fiscal year.

Here’s how the company did:

Earnings: Loss of 70 cents per shareRevenue: $228.9 million, vs. $212.9 million expected by analysts, according to Refinitiv.

Revenue grew 110% year over year in the fiscal first quarter, which ended on April 30, according to a statement. In the previous quarter revenue increased by 117%. The company’s net loss swelled to $203.2 million from $93.6 million.

Renegotiations with cloud providers benefited the company’s gross margin, Mike Scarpelli, the company’s finance chief, said on a conference call with analysts. He said that in April Snowflake implemented a storage compression change that will widen margins.

He also said the company is working on new chip technologies that could bring performance gains. “That’s more next year,” Scarpelli said.

With respect to guidance, Snowflake said in the fiscal second quarter it expects to generate $235 million to $240 million in product revenue, which delivered