Tech Earnings: Salesforce, C3.ai, Snowflake, and Others Set to Report Today
![Tech Earnings Salesforce C3ai Snowflake and Others Set to Report Today](/thumb/phpThumb.php?src=%2Fuploads%2Fnews%2F55%2F5511%2F5%2F5511594-tech-earnings-salesforce-c3ai-snowflake-and-others-set-to-report-today.jpg&w=750&hash=1842fa8fabb0bfbb5906ddf1e70b9f04)
Snowflake shares are down sharply in late trading Wednesday after the cloud-based data warehouse software company posted solid results for the January quarter, but offered disappointing guidance for its January 2025 fiscal year.
The company also announced that CEO Frank Slootman is retiring immediately, and will be replaced by Sridhar Ramaswamy, who has been senior VP of AI at Snowflake. Slootman will remain chairman of the company.
The soft guidance is likely to weigh heavily on the rest of the cloud software sector.
Snowflake shares are down 22% in late trading, to $179.
For the January quarter, Snowflake reported product revenue of $738.1 million, above the company's forecast range of $716 million to $721 million. Overall revenue was $774.7 million, up 32%, and ahead of the Street consensus as tracked by FactSet of $761 million.
Snowflake had non-GAAP operating income for the quarter of $71 million, resulting in an adjusted operating margin of 9%, above the company's forecast of 4%. Adjusted free cash flow in the quarter was $324.3 million, resulting in a margin of 42%.
The issue for Snowflake is the guidance. For the April quarter, the company's forecast is for product revenue of between $745 million and $750 million, up between 26% and 27%, but below the Street consensus at $768 million. The company sees non-GAAP operating margin in the quarter contracting to 3%.
For the January 2024 fiscal year, the company is projecting product revenue of $3.25 billion, up 22%, but well below Street consensus at $3.43 billion. The company sees an operating margin for the full year on an adjusted basis of 6%, well below the consensus forecast at 9.5%.
As for the management change, the company said that Slootman "has decided to retire." In a statement, he said that "there is no better person than Sridhar to lead Snowflake into this next phase of growth and deliver on the opportunity ahead in AI and machine learning.
Ramaswamy joined Snowflake in May 2023 in connection with the company's acquisition of Neeva, an AI-powered search engine, which he co-founded in 2019. He previously spent 15 years at Google, where he led all Google advertising products.