AMZN - Snowflake likely to show 'softer seasonality' strong product growth in Q2: analyst

2023-08-14 09:51:23 ET

Snowflake ( NYSE: SNOW ) is slated to report second-quarter results on August 23 and investment firm Monness, Crespi, Hardt is expecting strong product growth, albeit "softer seasonality" when it reports.

Analyst Brian White, who has a neutral rating on Snowflake ( SNOW ) shares, said he is expecting the company to generate 37% year-over-year growth to $682.8M in revenue, with earnings of 14 cents per share. Included in that estimate is $645.5 in product-related revenue, which would be up 38% year-over-year and above the company's own estimate of $620M to $625M.

Deferred revenue is expected to rise 46% year-over-year to $1685B, while billings are expected to jump 56% year-over-year during the period, White added.

A consensus of analysts expect Snowflake ( SNOW ) to earn 10 cents per share on $662.13M in revenue.

Despite the strong product growth, White believes this will be the company's seventh consecutive quarter of slowing growth, notable given that the largest public cloud vendors have also seen slowing growth.

"That said, Amazon ( AMZN ) indicated that growth at AWS began to stabilize in [the second-quarter] and this continued into July," White pointed out.

Looking ahead White expects the company to give third-quarter guidance of $751M in revenue, $710.1M in product revenue and 8.2% in operating margins.

More on Snowflake

• Snowflake: Why The Partnership With Microsoft Is A Game Changer
• Snowflake: Unique Growth Prospects Justify Current Valuation
• Snowflake: Huge Market Opportunity, But Not Without Risks

For further details see: