Snowflake shares drop on light product revenue guidance

Shares of the cloud data platform provider Snowflake fell more than 12% in extended trading on Wednesday after the company released third-quarter results that beat estimates but offered light product revenue guidance.

Here’s how the company did:

Earnings per share: 11 cents, adjusted,vs.4 cents expected by analysts, according to RefinitivRevenue: $557 million vs. $539 million expected by analysts, according to Refinitiv

The company’s revenue was up 67% year over year, but that growth was lower than the 83% increase last quarter. The largest part of revenue, product revenue, also grew 67% year over year to $523 million. Product revenue is a key metric for Snowflake since it recognizes revenue based on platform consumption.

Snowflake said it anticipates product revenue will be between $535 million and $540 million in its fourth quarter, short of the $553 million expected by analysts estimates according to StreetAccount. The company expects to report between $1.919 billion and $1.924 billion for the full year.

Product gross profit margins, operating income margins and adjusted free cash flow are expected to be 75%, 3% and 21% respectively for the full year.

Snowflake said it had 7,292 customers in the quarter, which ended Oct. 31.

The company will hold its quarterly call with investors Wednesday at 5 p.m. ET.