Snowflake Inc. (NYSE: $SNOW) is an American cloud computing company that offers customers cloud-based data storage, and analytics solutions. Corporate customers can store their data, and analyze it on the cloud.
The company’s fourth-quarter result of 2024 beat Wall Street’s estimate. However, 2025 guidance came below the expected estimates, triggering a 21% price slump on pre-marketing trading on Thursday from Wednesday’s close of $229.89.
CEO Steps Down
The CEO’s departure was one of the reasons behind the stock slump in pre-market trading on Thursday. Snowflake announced that Frank Slootman is no longer CEO but will remain chairman of the Board.
Snowflake announced that Sridhar Ramaswamy, who was the former top executive at Alphatbets’s (GOOGL) Google, will be the new CEO of the company.
Bank of America Analyst Brad Sills said, “Ramaswamy is likely to focus on accelerating Snowflake’s AI offerings currently being built into the Snowpark development offering, which is likely to improve Snowflake’s position in the emerging market over time.”
He added, “The good news is that Ramaswamy will focus on accelerating these capabilities in existing offerings such as the Snowpark, rather than starting over. Ramaswamy has an impressive background leading engineering-oriented cultures at Neeva and Google. We believe he will bring needed engineering rigor to an already strong sales culture at Snowflake.”
Snowflake (SNOW) Beats Q4 Earnings Expectations, Reports Poor 2025 Guidance
The company’s fourth quarter results topped estimates with a non-GAAP EPS of 35cents per share, beating Zacks’s consensus estimates of 17 cents per share. Moreover, the revenue also surpasses consensus by 1.95% and rose 32% year-over-year to $774.7 million in the quarter, beating analyst expectations of $760M. The revenue contributions from the Americas, EMEA, and APJ regions were 80%, 15%, and 5%, respectively.
Furthermore, Snowflake now has 461 customers with trailing 12-month product revenue amounting to $1 million, a gain of 39% year-over-year. It also has 691 Forbes customers, an increase of 8% Y/Y.
Chairman of the Board of Snowflake, Frank Slootman, said, “Snowflake finished fiscal 2024 with a 38% year-over-year product revenue growth, totaling $2.67 billion. Non-GAAP adjusted free cash flow was $810 million, representing 56% year-over-year growth.”
He further added, “We are successfully campaigning the largest enterprises globally, as more companies and institutions make Snowflake’s Data Cloud the platform of their AI and data strategy.”
In the Fiscal 2025 guidance, the company anticipates a product revenue growth of 22%, approximately $3.25 billion less than the estimated 30% growth to $3.43 billion.
Jason Ader, an analyst of William Blair, said, “For fiscal 2025, management is forecasting 22% growth (below 30% consensus growth expectations), while 6% margin was below the 9.5% consensus.”
The analyst added, “For fiscal 2025, management is forecasting 22% growth (below 30% consensus growth expectations), while 6% margin was below the 9.5% consensus.”
Stock Update: $SNOW
$SNOW is currently trading at $188.28, an 18.14% slump due to below-expected guidance for fiscal 2025. Year-to-date, leading up to the earnings report, SNOW stock had increased by 15%. Over the past year, Snowflake stock had gained 54%. At the time of writing, the market cap is $61.906 billion, with a volume of 42,098,699.
Should you buy $SNOW?
Snowflake performed well for 2024, although the recent announcement regarding the retirement of the CEO and unexpected guidance for 2025 resulted in a decline in the stock price. However, the new CEO will focus on boosting AI advancement in the company and improving its offerings, as analysts report. Therefore, it is a good stock to buy for the long term.
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