Shares of Snowflake (SNOW) surged in after-hours trading after the data warehousing giant reported third-quarter results. Adjusted earnings of $0.20 per share beat analysts’ consensus estimate of $0.15 per share. Furthermore, the company saw a 28.3% increase in revenue to $942.09 million, which beat estimates of $899.31 million. This could be attributable to a 55% increase in remaining performance obligations to $5.7 billion and a net revenue retention rate of 127%.
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In addition, the company bought back $1.02 billion worth of shares during the third quarter. The board previously approved an additional $2.5 billion for stock buybacks in the previous quarter and extended the program’s expiration date from March 2025 to March 2027. Interestingly, the company only started repurchasing shares in 2023, as pictured below, and this most recent quarter’s buybacks are so far the largest the firm has ever engaged in.
Outlook for 2025
Looking forward, the company anticipates its product revenue to come in at $3,430 billion in Fiscal Year 2025. Meanwhile, for the upcoming quarter, Snowflake expects its product revenue to range between $906 million and $911 million.
In addition, Snowflake expects an operating margin of 4% during the fourth quarter. Furthermore, it anticipates a 5% operating margin for the full year, along with a 26% adjusted free cash flow margin.
Is SNOW a Good Buy Right Now?
After a 22% decline in SNOW shares over the past year, analysts have a Moderate Buy consensus rating on SNOW stock based on 24 Buys, 10 Holds, and zero Sells with an average price target of $166.24 per share. However, it’s worth noting that estimates will likely change following today’s earnings report.
