Snowflake Stock Is Falling Thursday: What's Going On?

Snowflake Inc SNOW shares are falling Thursday after the company reported fourth-quarter results and announced a CEO transition. One analyst downgraded the stock following the print.

• Q4 Revenue: 774.7 million, beat estimates of $759.1 million

• Q4 EPS: 35 cents, beat estimates of 18 cents

Total revenues were up 32% on a year-over-year basis. Product revenue came in at $738.1 million, up 33% year-over-year, and remaining performance obligations totaled $5.2 billion, up 41% year-over-year.

The company ended the quarter with 461 customers with trailing 12-month product revenue of more than $1 million.

Snowflake also announced that CEO Frank Slootman has decided to retire from his role as CEO, but will continue to serve as chairman of the board. Sridhar Ramaswamy has been appointed as CEO and a member of the board, effective immediately.

"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," Slootman said.

"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."

Outlook: Snowflake sees first-quarter product revenue in a range of $745 million to $750 million, up 26% to 27% on a year-over-year basis. The company expects full-year product revenue of $3.25 billion, up 22% year-over-year.

Following the company’s quarterly results, Morgan Stanley analyst Keith Weiss downgraded Snowflake from Overweight to Equal-Weight and slashed the price target from $230 to $175. Piper Sandler maintained an Overweight rating and lowered the price target from $250 to $240.

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SNOW Price Action: Snowflake shares were down 22.3% at $178.80 at the time of writing, according to Benzinga Pro.

Photo: courtesy of Snowflake.