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 $422.3 million, up 84.5% year on year, beating analyst revenue expectations by 2.26%. It was a mixed quarter for the company, with an exceptional revenue growth but decelerating customer growth. The company added 22 enterprise customers paying more than $1m annually to a total of 206.
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 71.6% year on year to $467.3 million, slowing down from the 104% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted loss is expected to come in at -$0.01 per share.
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 6.07%.
Looking at Snowflake's peers in the data and analytics software segment, some of them have already reported Q2 earnings results, giving us a hint of what we can expect. Commvault Systems delivered top-line growth of 7.93% year on year, beating analyst estimates by 1.41% and DigitalOcean reported revenues up 28.9% year on year, missing analyst estimates by 0.44%. Commvault Systems traded flat on the results, and DigitalOcean was down 2.42%. Read our full analysis of Commvault Systems's results here and DigitalOcean's results here.
There has been positive sentiment among investors in the software segment, with the stocks up on average 4.62% over the last month. Snowflake is up 8.67% during the same time, and is heading into the earnings with analyst price target of $198.4, compared to share price of $152.53.
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.