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Snowflake prefers to give conservative guidance because of its “consumption model” for revenue, CEO Frank Slootman told CNBC’s Jim Cramer on Wednesday.
Shares of the data-analytics firm were down sharply after it reported full-year results and issued its fiscal 2023 forecast.

Snowflake CEO Frank Slootman told CNBC’s Jim Cramer on Wednesday the company prefers to give conservative guidance, saying the way it recognizes revenue creates a considerable amount of uncertainty when putting together a forecast.
Slootman’s comments in a “Mad Money” interview came after the data-analytics firm reported fourth-quarter and fiscal 2022 results. Its stock was getting crushed in extending trading, falling 30% at one point before recovering somewhat to be down roughly 22%.

Investors were processing the company’s slowest revenue growth since at least 2019, as well as its guidance for fiscal 2023. Snowflake said it expects product revenue to increase between 65% to 67% in the fiscal year, right around the 66% growth analysts expected, according to FactSet. That would represent a sizable slowdown from previous years.
“We take a data-driven approach, which you would expect from a data management company. We don’t put the wet finger in the wind and go, ‘Well, we think it’s going to be this,'” Slootman said. “That’s not how we do things, so we’d rather come from a conservative posture and be able to walk things up.”
In fiscal 2022, Snowflake’s product revenue — which accounts for most of its overall sales — jumped nearly 106%, according to its earnings presentation Wednesday.
Slootman noted that Snowflake ended up blowing past the fiscal 2022 product revenue forecast the company provided on March 3, 2021. In that quarterly report, Snowflake projected product revenue growth of 82% on a -year-over-year basis.

‘Consumption model’

Frank Slootman, CEO of Snowflake, on the day of its 2020 IPO. He is known as a demanding leader, and straight shooter. “I’ve often been in board meetings at other companies and the CEO will put up a list of 10 priorities … well, that’s the same as having no priorities,” he recently told CNBC.

Snowflake books its revenue using a “consumption model,” Slootman said, rather than a typical subscription model that’s common across software industry. It may take time for investors to understand how that impacts its results and ability to forecast multiple quarters down the road, Slootman said.

“We report revenue on what people are actually consuming during the quarter. We have tons and tons of customers that we have zero history with that we somehow have to project exactly what they’re going to do and how they’re going to grow,” he said.
Snowflake’s cloud-based software allows customers to search and analyze large amounts of data, with the ability to scale up capacity as they need. Snowflake had 5,944 total customers at the end of its fiscal 2022, up 44% from a year earlier.
“In a consumption model, it’s not the same as a [software-as-a-service] model where things are under contract, and it has a very different cadence. Over time, people will get it. They’ll grow up with it, get used to it, I hope,” said Slootman, a tech industry veteran who previously helmed ServiceNow.
He helped take Snowflake public in September 2020, in what at the time was the largest software IPO ever.
Shares of Snowflake are down roughly 22% year to date, excluding Wednesday’s after-hours move. The stock’s struggles come as Wall Street shifted its focus to more defensive parts of the market and away from unprofitable, growth-oriented firms like Snowflake.
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Russian oligarch Roman Abramovich said he will sell the Chelsea soccer club in England, a dramatic move that comes in response to outrage over Russia’s invasion of Ukraine.
Abramovich at the same time announced that he has instructed the renowned team to set up a foundation that will use all net proceeds from the sale of Chelsea to “benefit all victims of the war in Ukraine.”

Russian oligarch Roman Abramovich said Wednesday that he will sell the Chelsea soccer club in England, a dramatic move that comes in response to outrage over Russia’s invasion of Ukraine.
Abramovich at the same time announced he has instructed the renowned team to set up a foundation that will use all net proceeds from the sale of Chelsea to “benefit all victims of the war in Ukraine.”

The sale announcement came less than a week after the billionaire said that he was transferring stewardship of the club to the trustees of a charitable foundation, and after calls that Abramovich face sanctions from the United Kingdom.

Roman Abramovich, owner of Chelsea smiles following his team’s victory during the UEFA Champions League Final between Manchester City and Chelsea FC at Estadio do Dragao on May 29, 2021 in Porto, Portugal.
Alexander Hassenstein | Uefa | Getty Images

“As I have stated before, I have always taken decisions with the Club’s best interest at heart,” Abramovich said in a statement. “In the current situation, I have therefore taken the decision to sell the Club, as I believe this is in the best interest of the Club, the fans, the employees, as well as the Club’s sponsors and partners.”
“Please know that this has been an incredibly difficult decision to make, and it pains me to part with the Club in this manner,” he added.
On Tuesday a Ukrainian advocate confronted United Kingdom Prime Minister Boris Johnson about the lack of sanctions on Abramovich.

“You’re talking about more sanctions, prime minister. But Roman Abramovich is not sanctioned. He is in London. His children are not in the bombardments. His children are there, in London,” said the advocate, Daria Kaleniuk, executive director of the Anti-Corruption Action Center.

Also on Tuesday, Johnson’s government introduced legislation in Parliament targeted at what the government called “dirty money from Russia and elsewhere” that has been parked in U.K. assets.

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Abramovich bought Chelsea, which is based in London, in 2003. During his tenure, Chelsea has won the season title in England’s top soccer division, the Premier League, and the prestigious FA Cup five times each. The club also won the UEFA Champions League title twice. Chelsea is currently in third place in the Premier League, behind the leader Manchester City and Liverpool.
Earlier Wednesday, the Biden administration said it was forming a new task force to enforce U.S. and allied sanctions imposed on Russian officials and oligarchs who have helped the war in Ukraine, which was launched by President Vladimir Putin.

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CNBC’s Jim Cramer on Wednesday offered investors a list of stocks with sizable dividend yields that he believes should be on their shopping list.
“Even after today’s big bounce, it’s not too late to start putting in some money in some of these things. Find one you like,” the “Mad Money” host said.

CNBC’s Jim Cramer on Wednesday offered investors a list of stocks with sizable dividend yields that he believes should be on their shopping list.
Investors may turn to dividend-paying stocks during periods of market turbulence, viewing their tangible payouts as a place of safety, the “Mad Money” host said. And Wall Street has been volatile to start the year, as investors balance inflation fears with, more recently, Russia’s invasion of Ukraine.

“All of this indiscriminate selling has created many stocks with what I think are absurdly high yields that also happen to be dirt-cheap on the earnings,” Cramer said, calling the stocks “accidentally high-yielders.”
A stock’s dividend yield increases as its share price falls. As a result, sometimes companies with high-yielding stocks may have an underlying business problem that’s contributed to their share price declining.
In attempt to screen out struggling companies with unsustainable dividends, Cramer’s list of stocks all meet the following criteria:

Has yields above 3%
Price is cut down more than 20% from its high
Price doesn’t exceed 25 times its earnings
Price exceeds 8 times earnings
Market capitalization is larger than $2 billion

Using the above criteria, Cramer shrunk the list of hundreds of stocks listed in the S&P 500, the S&P MidCap 400, and the small-cap S&P 600 to 39, and then narrowed the list further to 10 stocks he believes could be buying opportunities.
Here’s the list:

Simon Property Group Inc
Dow Inc
International Paper Co
Walgreens Boots Alliance Inc
Kontoor Brands Inc
Newell Brands Inc
American Eagle Outfitters Inc
Pfizer Inc
Innovative Industrial Properties Inc
Morgan Stanley

“Even after today’s big bounce, it’s not too late to start putting in some money in some of these things. Find one you like,” Cramer said. “Given the current backdrop, I wouldn’t be surprised if you can buy even more at lower levels, because the market is so choppy.”
Disclosure: Cramer’s charitable trust owns shares of American Eagle Outfitters and Morgan Stanley.
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Victoria’s Secret seesawed in after-hours trading Wednesday after the lingerie retailer issued a downbeat outlook for the coming quarter, cautioning that it still sees challenges ahead.
Those issues include inflation and “global unrest,” a reference to Russia’s war on Ukraine.

Shoppers are seen inside a shopping mall in Bethesda, Maryland on February 17, 2022.
Mandel Ngan | AFP | Getty Images

Victoria’s Secret seesawed in after-hours trading Wednesday after the lingerie retailer issued a downbeat outlook for the coming quarter, cautioning that it still sees challenges ahead — including inflation and “global unrest,” a reference to Russia’s war on Ukraine.
It reported fiscal fourth-quarter profits and sales that slightly outpaced analysts’ expectations, after it reaffirmed a forecast in December for its holiday performance.

Its performance in the near future, though, could prove to be clouded by global headwinds. Victoria’s Secret said the first half of this year may be more difficult to operate in, given ongoing supply chain issues, but that it should return to operating income growth in the back half. Victoria’s Secret called the third quarter an expected inflection point.
Here’s how Victoria’s Secret did in its fiscal fourth quarter compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

Earnings per share: $2.70 vs. $2.63 expected
Revenue: $2.18 billion vs. $2.14 billion expected

Net income for the three-month period ended Jan. 29 fell to $246 million from $282 million a year earlier. Revenue grew about 4% to $2.18 billion from $2.1 billion a year earlier.
The company said its beauty merchandise helped to drive customers online and into its brick-and-mortar stores, while its international business reported outsize growth compared with North American operations. Victoria’s Secret also said it has been pleased with the recent launch of a new collection called Love Cloud that is centered around comfort and inclusivity.
To be sure, in the coming months, Victoria’s Secret sees a challenging retail environment with rising inflation and “the potential for consumer uncertainty with the recent global unrest.”

The company expects to incur incremental supply chain costs and expenses related to inflation in the first half of the year of about $140 million, roughly similar to what it reported in the back half of 2021. Oil prices have surged during Russia’s invasion of Ukraine, stoking fears that already-high inflation will persist and rise by even hotter rates.
The retailer sees first-quarter sales in a range of $1.43 billion to $1.5 billion, which would represent a decrease of 4% to 8% from the prior year. That’s also short of analysts’ estimates for $1.52 billion.
It sees first-quarter earnings per share in a range of 70 cents to 95 cents. Analysts had been looking for $1.32 a share, according to Refinitiv.
The retailer said in prepared remarks that it expects to face ongoing supply chain cost pressures, and it’s also lapping stimulus benefits of roughly $50 million in the first quarter of 2021.
It anticipates 2022 revenue to be flat to up low-single digits compared with 2021 levels. Analysts had been projecting a 2.9% increase year over year.
Victoria’s Secret said it continues to evaluate the size of its real estate footprint, as it tests an off-mall concept and remodels existing shops to make them lighter and more inviting for shoppers. It anticipates closing anywhere between 10 and 30 shops in 2022.
“We continue to see positive response to newness and being able to sustain a lower level of promotional activity,” management said in prepared remarks.
Victoria’s Secret shares are down about 2% this year, as of Wednesday’s market close. That brings the retailer’s market cap to $4.8 billion.
Read the full earnings release from Victoria’s Secret here. The company is set to hold a live conference call with analysts on Thursday morning.

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There are signs of relief for stocks that could individually, or together, result in a sustained rally, CNBC’s Jim Cramer said Wednesday, as Russia’s invasion of Ukraine and soaring inflation continue to roil markets.
“You do not need the whole parade of positives to play out, because we only have so many stocks that are in bear market mode,” the “Mad Money” host said.

There are signs of relief for stocks that could individually, or together, result in a sustained rally, CNBC’s Jim Cramer said Wednesday, as Russia’s invasion of Ukraine and soaring inflation continue to roil markets.
“You do not need the whole parade of positives to play out, because we only have so many stocks that are in bear market mode,” the “Mad Money” host said. “That’s what matters. In fact, you only need one or two positives to ignite a sustained rally. If we get more, with this level of negativity, the market could be like a coiled spring.”

Cramer referred to several “positives” in his analysis, including Federal Reserve Chairman Jerome Powell’s statement on Wednesday that he expects to institute quarter-percentage-point rate increases, but that the Fed will be monitoring Russia’s moves.
Other positives include a healthy consumer, evidenced by better-than-expected fourth-quarter results from retailers including Walmart and Nordstrom, Cramer said. Pandemic restrictions that are expected to loosen in both China and the United States are also leading to “very visible stocks that are humming,” he added.
Wednesday marked yet another turbulent day on Wall Street. The Dow Jones Industrial Average rose around 1.79%, while the S&P 500 gained 1.86%. The Nasdaq Composite increased 1.62%. The broad rally reversed losses from Tuesday’s trading session, even as oil prices continue to climb.
Cramer said that the market’s resilience is indicative of a possible rally.
“One thing’s for certain: if a market rallies when nothing seems good … that means there’s something good lurking over the horizon, it’s just that we haven’t recognized or factored it in yet,” he said.

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