Due to executive personnel changes and earnings guidance falling short of expectations, the stock price of cloud computing company Snowflake plummeted by one-fifth.
Overnight, following a 1.72% decline, Snowflake plunged over 20% after hours, currently trading at $184.2 per share, with a market value of approximately $75 billion.
Snowflake released its 2024 Q4 earnings report after the U.S. stock market closed on Wednesday. Although revenue and earnings per share exceeded expectations, the product revenue guidance for the first quarter and the next fiscal year fell short of expectations.
According to the financial report, Snowflake expects product revenue for the next quarter to be between $7.45-7.5 billion, lower than the analysts' consensus of $7.59 billion. The projected full-year product revenue for the next fiscal year is $32.5 billion, also below the expected $34.3 billion.
Furthermore, the operating loss for the fourth quarter increased slightly, rising from $2.398 billion in the same quarter of the previous fiscal year to $2.755 billion.
Another factor contributing to the negative impact on the stock price is an unexpected change in personnel. According to media reports, former CEO Frank Slootman has decided to step down, and Sridhar Ramaswamy, who previously served as Senior Vice President of Artificial Intelligence, has been appointed as the new CEO. Slootman will continue to serve as the Chairman of the Board.
Slootman, 65, joined Snowflake in 2019 and led the company to the largest software company IPO in history on the NYSE in 2020.
Sridhar Ramaswamy, 57, spent 15 years at Google and founded Neeva, a search engine product similar to Google, before joining Snowflake. Neeva was acquired by Snowflake for $185 million in June last year.
In a statement, Snowflake mentioned:
<blockquote>
&#34;Sridhar is better suited than anyone else to lead Snowflake into the next phase of growth, seizing opportunities in artificial intelligence and machine learning.&#34;
&#34;He is a visionary technology expert with a strong track record in operating and expanding successful enterprises.&#34;
</blockquote>

SNOW

Snowflake's revenue guidance in the financial report is lower than expected, leading to the original CEO's decision to resign. The position will be taken over by the former Senior Vice President of Artificial Intelligence.

The CEO unexpectedly retired, performance guidance was weak, and cloud computing giant Snowflake plummeted 20% after hours.