What happened
Shares of Snowflake (NYSE: SNOW) plunged on Thursday after the data analytics company's revenue forecast fell short of investors' lofty expectations. By the close of trading, Snowflake's stock price was down 15.6%.
So what
Snowflake's revenue soared 101% year over year to $383.8 million in its fiscal 2022 fourth quarter, which ended on Jan. 31. While impressive at first glance, that marked a deceleration from the 110% growth Snowflake experienced in the third quarter and 124% growth in fiscal 2021.
Still, it's clear that Snowflake's customers are finding value in its products. The cloud software provider's net revenue retention rate checked in at a remarkable 178%. Essentially, this means that Snowflake's existing clients increased their spending on its platform by 78% from the prior-year period. CEO Frank Slootman said the gains were "driven by continued growth from our largest customers."
Snowflake is also doing an admirable job of attracting new clients. It ended the fourth quarter with 5,944 customers, up from 4,139 at the end of fiscal 2021.
Snowflake is helping more companies harness valuable insights from their cloud data. Image source: Getty Images.
Yet Snowflake remains unprofitable. It generated an operating loss of $152 million, compared to a loss of $200.4 million in the year-ago quarter.
Now what
Management sees a further deceleration in growth in the coming year. Snowflake guided for its full-year product revenue to grow by 65% to 67% in fiscal 2023, to approximately $1.9 billion.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool owns and recommends Snowflake Inc. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
