Snowflake (SNOW) Reports Earnings Tomorrow. What To Expect

Adam Hejl /
2023/11/28 2:01 am EST

Data warehouse-as-a-service Snowflake (NYSE:SNOW) will be announcing earnings results tomorrow after market hours. Here's what you need to know.

Last quarter Snowflake reported revenues of $674 million, up 35.5% year on year, beating analyst revenue expectations by 1.8%. It was a slower quarter for the company, with a decline in its net revenue retention rate. On the other hand, revenue narrowly outperformed Wall Street's estimates, driven by an increase in Forbes Global 2000 customers. The company added 29 enterprise customers paying more than $1m annually to a total of 402.

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 28.1% year on year to $713.4 million, slowing down from the 66.6% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.16 per share.

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 3.8%.

Looking at Snowflake's peers in the data and analytics software segment, some of them have already reported Q3 earnings results, giving us a hint of what we can expect. Commvault Systems delivered top-line growth of 6.9% year on year, beating analyst estimates by 3% and DigitalOcean reported revenues up 16.4% year on year, exceeding estimates by 2.1%. Commvault Systems traded flat on the results, and DigitalOcean was up 14.3%.

Read our full analysis of Commvault Systems's results here and DigitalOcean's results here.

There has been positive sentiment among investors in the data and analytics software segment, with the stocks up on average 11.9% over the last month. Snowflake is up 18.5% during the same time, and is heading into the earnings with analyst price target of $197.8, compared to share price of $170.8.

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.

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