Snowflake Inc. SNOW CEO Sridhar Ramaswamy has assured that the recent cyberattack on the company has not affected its core business, despite a drop in stock prices following the announcement of the latest earnings.
What Happened: Ramaswamy assured that the cyberattack earlier this year had minimal impact on Snowflake's operations. In his interview with CNBC's Jim Cramer on Wednesday, he highlighted the strength and security of the Snowflake platform.
"These headlines, and that's what they are, have not really affected our core business with existing or new customers," Ramaswamy said.
He also clarified that the breach was not due to any fault on Snowflake’s part, attributing it to customers with “user IDs and passwords without things like multifactor authentication.” The attack, which took place in May, affected several Snowflake clients, including AT&T and Live Nation.
Ramaswamy also addressed concerns about a lower operating margin, explaining that the company is investing in areas like engineering and sales to drive future revenue. He dismissed worries about the decline, stating it is not a long-term issue.
Why It Matters: Despite the breach, Snowflake’s earnings, released after the market close on Wednesday, exceeded Wall Street’s expectations, leading to an increase in the full-year product revenue forecast. However, the stock experienced an 8% drop in after-hours trading, partly due to the company’s lower operating margin guidance for the upcoming quarter.
Snowflake reported second-quarter revenue of $868.823 million, surpassing the consensus estimate of $849.704 million. The company also posted adjusted earnings of 18 cents per share, beating analyst predictions of 16 cents per share.
Snowflake’s strong earnings report and raised guidance, coupled with a $2.5 billion buyback program, highlight the company’s resilience and growth potential.
Price Action: Snowflake’s stock closed at $135.06 on Wednesday, up 2.38%. However, in after-hours trading, the stock dropped significantly by 8.02%. Year to date, Snowflake has seen a sharp decline of 28.59%, according to data from Benzinga Pro.
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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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