Snowflake shares sink on weak forecast, surprise CEO retirement

Feb 29 (Reuters) - Snowflake (SNOW.N) shares slid 23% on Thursday after the cloud data storage services provider projected annual revenue below Wall Street estimates and disclosed a surprise retirement of long-time CEO Frank Slootman. The company, valued at $75.7 billion as of Wednesday close, was on track to lose more than $17 billion in market capitalization, if premarket losses hold. Snowflake expects product revenue of $3.25 billion in fiscal year 2025, and between $745 million and $750 million for the quarter ending April, both below Wall Street expectations. Analysts highlighted that a stronger adoption of the company’s Iceberg Tables product that allows users to store data in external services not managed by Snowflake could hit storage sales. Still, some analysts said the revenue projection may be conservative, given growth trends seen for data storage and analytics products, enhanced by AI. “While guidance for the full fiscal year product revenue growth at 22% Y/Y growth is conservative, we note that the guide does not include assumed consumption from recently released products,” D.A. Davidson senior software analyst Gil Luria said. Cloud services providers such as Microsoft (MSFT.O) , Amazon.com (AMZN.O) and Alphabet’s (GOOGL.O) Google have signaled stabilization of cloud services growth this year after customers optimized spending last year. The results came alongside Snowflake’s “surprise” announcement that insider Sridhar Ramaswamy took over as chief executive after Slootman retired on Feb. 27. “Investors are never thrilled with a surprise CEO succession,” Morningstar analyst Eric Compton said in a note, adding the top level change and a disappointing forecast create a challenging quarter. Slootman was instrumental in Snowflake’s initial public offering in 2020, and virtually rang the opening bell at the New York Stock Exchange in the middle of the pandemic. The data storage provider was the third company he took public after ServiceNow and Data Domain. Snowflake’s stock trades at 196.30 times profit expectations, compared with 129.16 for competitors MongoDB (MDB.O) and 85.16 for DataDog (DDOG.O) . Meanwhile, shares of Salesforce (CRM.N) , which once backed Snowflake, were down about 2% after it forecast annual revenue below estimates. Snowflake underperforms rivals Datadog and MongoDB