Snowflake Inc. shares declined in after-hours trading Wednesday, after the software company reported a wider loss than expected even as sales more than doubled.
Snowflake
SNOW,
+0.85%
reported second-quarter losses of $189.7 million, or 64 cents a share, after losing $77.6 million a year ago. Revenue totaled $272.2 million, more than doubling from $133.1 million in the same quarter a year prior.
Analysts on average expected a loss of 15 cents a share on sales of $256.1 million, according to FactSet. Shares fell about 3% in after-hours trading following the release of the report, after closing with 0.9% gain at $283.76.
Snowflake is a database-software company that focuses on the cloud, looking to take the core business of Oracle Corp.
ORCL,
+0.08%
to new places. Because it is a young software company, investors tend to focus on other metrics besides profitability, including net revenue-retention rate, which measures how much existing customers are spending on the volume-priced offering, and remaining performance obligations, which measures the amount of spending that has been agreed to under contracts but not realized yet.
For more: Five things to know about Snowflake
Snowflake reported a net revenue-retention rate of 169% as of the end of the quarter on July 31, and a remaining performance obligation of $1.5 billion, up 122% from last year. Snowflake also reported that the number of customers rose to 4,990 from 3,117 a year ago, and 116 of those customers have spent more than $1 million with the company in the past 12 months.
“Snowflake saw continued momentum in Q2 with triple-digit growth in product revenue, reflecting strength in customer consumption,” Chief Executive Frank Slootman said in a statement.
Snowflake projected product revenue of $280 million to $285 million for the fiscal third quarter, and stated a full-year target of $1.06 to $1.07 billion for the slice of its sales. Analysts on average were expecting third-quarter product revenue of $272 million and annual product revenue of $1.02 billion heading into the report, according to FactSet.
Snowflake stock has slowed down after a big beginning on Wall Street, gaining just 0.8% in 2021 as the S&P 500 index
SPX,
+0.22%
has increased 19.4%, but is still trading for more than double the $120 price charged in its initial public offering.
