Snowflake shares sink 21% on weak forecast, surprise CEO retirement
Snowflake shares slid 21% on Thursday after the cloud data storage services provider projected annual revenue below Wall Street estimates and disclosed a surprise retirement of long-time CEO Frank Slootman.
The company, valued at $75.7 billion as of Wednesday close, was on track to about $16 billion in market capitalization, if losses hold.
Snowflake expects product revenue of $3.25 billion in fiscal year 2025, and between $745 million and $750 million for the quarter ending April, both below Wall Street expectations.
Analysts highlighted that a stronger adoption of the company's Iceberg Tables product that allows users to store data in external services not managed by Snowflake could hit storage sales.
Still, some analysts said the revenue projection may be conservative, given growth trends seen for data storage and analytics products, enhanced by AI.
«While guidance for the full fiscal year product revenue growth at 22% Y/Y growth is conservative, we note that the guide does not include assumed consumption from recently released products,» D.A. Davidson senior software analyst Gil Luria said.
Cloud services providers such as Microsoft, Amazon.com and Alphabet's Google have signaled stabilization of cloud services growth this year after customers optimized spending last year.
The results came alongside Snowflake's «surprise» announcement that insider Sridhar Ramaswamy took over as chief executive after Slootman retired on Feb. 27.
«Investors are never thrilled with a surprise CEO succession,» Morningstar
