Earnings To Watch: Snowflake (SNOW) Reports Q1 Results Tomorrow

Jabin Bastian /
2022/05/24 7:00 am EDT

Data warehouse-as-a-service Snowflake (NYSE:SNOW) will be reporting earnings tomorrow afternoon. Here's what investors should know.

Last quarter Snowflake reported revenues of $383.7 million, up 101% year on year, beating analyst revenue expectations by 2.92%. It was a very strong quarter for the company, with an exceptional revenue growth and a meaningful improvement in net revenue retention rate. The company added 36 enterprise customers paying more than $1m annually to a total of 184.

Is Snowflake buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Snowflake's revenue to grow 80.4% year on year to $413 million, slowing down from the 110% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at breakeven.

Snowflake Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 6.71%.

Looking at Snowflake's peers in the data and analytics software segment, some of them have already reported Q1 earnings results, giving us a hint of what we can expect. DigitalOcean delivered top-line growth of 35.9% year on year, beating analyst estimates by 0.87% and Commvault Systems reported revenues up 7.63% year on year, exceeding estimates by 1.96%. DigitalOcean traded down 5.51% on the results, and Commvault Systems was flat on the results. Read our full analysis of DigitalOcean's results here and Commvault Systems's results here.

Tech stocks have had a rocky start in 2022 and software stocks have not been spared, with share price down on average 19% over the last month. Snowflake is down 27.2% during the same time, and is heading into the earnings with analyst price target of $277.8, compared to share price of $135.99.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.