(Bloomberg) -- Snowflake Inc., whose software helps businesses organize data in the cloud, fell 10% in late trading after giving a disappointing sales forecast, a sign that corporate customers are slowing technology investments in an uncertain economy.
Product revenue will be as much as $540 million in the fourth quarter, which ends in January, the company said Wednesday in a statement. Analysts, on average, estimated $551.8 million, according to data compiled by Bloomberg. Product sales make up the majority of Snowflake’s total revenue and are watched closely by investors and analysts.
Snowflake’s signature consumption pricing model, which charges customers based on how much they use its products, has been controversial among some analysts, who say it’s vulnerable to quick pullback during recessions. Growth of consumption-based cloud offerings from Amazon.com Inc. and Microsoft Corp. slowed “significantly” recently, Mark R Murphy, an analyst at JPMorgan Chase & Co., said before the Snowflake results were released.
Read more: Snowflake’s consumption-model pricing is taking off
In the fiscal third quarter, product revenue increased 67% to $522.8 million. Analysts, on average, estimated $505.7 million.
The shares had closed at $142.90 in New York, down 58% this year -- part of a broader tech rout that has punished less profitable companies.
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