(Bloomberg) — Snowflake Inc., the software company with the largest IPO in the US for 2020, delivered better-than-expected results and a rosy forecast for the current quarter.
Product sales, which make up more than 90% of Snowflake’s revenue, will reach $280 million to $285 million this quarter, the company said Wednesday. Analysts expected an average of $271.4 million. Sales also exceeded projections in the second quarter and Snowflake posted a smaller loss than forecast.
Snowflake, which makes software for storing data in the cloud, is benefiting from the modernization of their business applications and networks by companies. Customers are also looking for ways to manage and analyze increasing amounts of information from multiple locations. And Snowflake is less threatened by a rival Amazon Web Services product called Redshift, according to UBS AG.
Snowflake makes software that retrieves, stores and analyzes information from multiple systems. Clients include BlackRock Inc. and McKesson Corp. Product sales rose to $254.6 million in the quarter, compared to an average analyst estimate of $240.1 million. Snowflake reported a loss of 64 cents a share, less than the expected 70 cents.
On analyst day in June, Snowflake said it aims to reach $10 billion in revenue by fiscal 2029. Analysts expect annual revenue to exceed $1 billion in current fiscal 2022.
Snowflake made the largest IPO ever for a software maker on the New York Stock Exchange in September. Since then, the stock has more than doubled. It climbed a whopping 5.3% to $298.75 in late trading Wednesday, before wiping out gains.
The former Silicon Valley company said in May it no longer has its headquarters because its workforce has been divided. It currently lists Bozeman, Montana — home to Chief Executive Officer Frank Slootman and Chief Financial Officer Mike Scarpelli — as its principal executive office.
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