Snowflake Inc., whose software helps businesses organize data, provided a worse-then-expected sales outlook as many corporations scrutinize their cloud spending.
(Bloomberg) — Snowflake Inc., whose software helps businesses organize data, provided a worse-then-expected sales outlook as many corporations scrutinize their cloud spending.Â
Product revenue will grow about 45% to $568 million to $573 million in the fiscal first quarter, which ends in April, the company said Wednesday in a statement. Analysts, on average, estimated $582.1 million, according to data compiled by Bloomberg. Product sales make up the majority of Snowflake’s total revenue and are watched closely by investors.
Analysts have been concerned about a potential slowdown in growth at the software maker due to its signature pricing model, which charges customers based on how much they use its products. Consumption-priced cloud offerings from companies like Microsoft Corp. and Amazon.com Inc. have seen deceleration in recent quarters.
Snowflake also provided an outlook for the full fiscal year, saying product revenue will grow about 40% to $2.7 billion. Analysts predicted product revenue of about $2.8 billion. Operating income margin will be about 6%, the company said.
In the fiscal fourth quarter, product revenue increased 54% to $555.3 million. Analysts, on average, estimated $540.3 million.Â
Snowflake shares were down 6.6% in premarket trading.Â
(Updates with premarket shares in sixth paragraph.)
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