Snowflake plunges almost 30% on slowing revenue growth

Snowflake shares dropped as much as 30% in extended trading on Wednesday after the data-analytics software company reported the slowest revenue growth since at least 2019.

Here's how the company did:

Snowflake's revenue grew 101% year over year in the fiscal fourth quarter, which ended Jan. 31, according to a statement. In the previous quarter growth reached 110%. The company reported a $132 million net loss, narrowing from almost $199 million in the year-earlier quarter.

The company said it had almost 6,000 customers at the end of the fiscal fourth quarter.

Its adjusted gross margin of 70% came in below the StreetAccount consensus of 70.9%, although it's up from 62% two years ago, in part thanks to discounts on the third-party cloud infrastructure it relies on to deliver its service to customers.

The headcount — a priority of CEO Frank Slootman — soared 60% during the past year, nearing 4,000 at the end of the quarter.

Executives said engineers have been rolling out efficiency improvements to the company's software that have lowered consumption of customers credits.

"This is not philanthropy," Slootman said on a conference call with analysts. As economics improve, customers might be inclined to move more workloads to Snowflake, executives said.

The vast majority of Snowflake's revenue comes from product revenue, which reflects the use of its service for storing and running queries on a variety of data. Other revenue sources include consulting and training.

Snowflake said it expects 79% to 81% product revenue growth in the fiscal first quarter. Analysts polled by StreetAccount had predicted 78% product revenue growth. In the fiscal fourth quarter, product revenue increased by 102%.

For the 2023 fiscal year, management called for 65% to 67% product revenue growth. Analysts on average were expecting growth of 66%, according to FactSet.

Also on Wednesday, Snowflake said it was acquiring data start-up Streamlit. Snowflake agreed to pay $800 million for Streamlit, a spokesperson told CNBC in an email.

Prior to the after-hours move, Snowflake stock has declined 21% since the start of 2022, while the S&P 500 was off about 8% over the same period.

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