Snowflake CEO says pent-up demand and macro trends fueled results
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- Snowflake CEO Frank Slootman said Thursday that pent-up demand from the pandemic and the general trend toward data created "a potent cocktail for growth" in its latest quarter, fueling the Street-beating results that sent its stock higher by 13%.
- Speaking to CNBC, the head of cloud-based data warehousing firm Snowflake (NYSE:SNOW) reported that the pandemic "really suffocated" demand and that this has been unleashed in the last several months.
- In addition, Slootman pointed to macro trends, arguing that SNOW will continue to benefit as data operations become central to the way most companies operate.
- Late Wednesday, Snowflake (SNOW) reported quarterly results that beat expectations on both the top and bottom lines. Revenues more than doubled from last year to reach more than $334M.
- The company also predicted strong results for its current quarter. It issued a top-line forecast of $345M-$350M, nearly double last year's total and above the mark set during the previous quarter.
- Slootman said that larger enterprise customers have increasingly seen the benefits of its offerings, migrating more of their operations into the cloud.
- Commenting about SNOW's culture, Slootman criticized the attitude he sometimes sees at Silicon Valley companies, saying that many tech execs become too enamored of early successes and aren't able to build on initial innovations.
- "In Silicon Valley, as companies grow, they become very, very easily distracted. Pretty soon, they're a mile wide and an inch deep and their employees are swimming in glue, moving like molasses and before you know it, you're in decline," he said.
- "Clearly, something culturally is amiss and you want to fight that on a day-to-day basis," he added.
- SNOW jumped $40.68 in Thursday's intraday action, rising to $351.68 at about noon ET.
- Going into the results, SNOW had experienced some profit-taking. In mid-November, shares reached a 52-week high of $429.00 and closed above $400. However, they have generally lost ground since.
- Overall, SNOW has had trouble outperforming the broader market throughout 2021. Going into the earnings report, shares had climbed about 11% for the year as a whole, compared to a 22% advance in the S&P 500:
