Snowflake Inc., a major player in the software industry, experienced its most significant stock decline since going public in 2020 after announcing a disappointing sales forecast and the departure of CEO Frank Slootman. The company's product revenue forecast for the first quarter fell short of analyst expectations at $745 million to $750 million, compared to the predicted $769.5 million. Consequently, Snowflake's shares plummeted by 18% to approximately $188 on February 29, 2024, reflecting concerns about the company's growth trajectory amid a slowdown in revenue growth observed in 2023.
The CEO transition places Sridhar Ramaswamy, Snowflake's Senior Vice President of AI, at the helm, effective immediately. The departure of Slootman, credited with taking Snowflake public and turning it into a major force in the software industry, has raised eyebrows in the tech community. Despite the weaker sales outlook, Snowflake's fiscal fourth-quarter results exceeded expectations, with product revenue increasing by 33% to $738 million, and profit outpacing analyst projections at 35 cents a share. Ramaswamy, known for his expertise in AI, highlighted the pivotal role of AI spending in Snowflake's future strategy during a call with analysts, signaling a strategic shift for the company.
