(Bloomberg) -- Snowflake Inc.’s stock had its worst day ever after the company gave a quarterly sales outlook that fell short of expectations, suggesting that customers have continued trimming their spending for cloud software amid uncertain economic conditions. 

The shares fell 17% to $147.91 at the close Thursday in New York, the steepest one-day decline since Snowflake began public trading on Sept. 16, 2020. The stock had rallied 24% in the last month before Wednesday’s earnings report as positive results by cloud infrastructure providers Microsoft Corp. and Alphabet Inc. made investors expect positive trends. 

Snowflake’s software helps business organize data in the cloud. The company is known for its consumption pricing model, which charges customers based on how much they use its products. Analysts had feared that a slowdown in demand for cloud services would dent Snowflake’s pay-as-you-go model.

Product revenue will increase about 34% to as much as $625 million in the period ending in July, the company said Wednesday in a statement. Analysts, on average, estimated $646.3 million, according to data compiled by Bloomberg. Product sales make up the majority of Snowflake’s total revenue and are watched closely by investors. 

Snowflake also cut its outlook for the fiscal year, saying product revenue will be about $2.6 billion. In March, the company predicted annual product sales of $2.7 billion.

The forecast reduction is tied to the broader slowdown in spending for information technology seen across the economy, said Mandeep Singh, an analyst at Bloomberg Intelligence.

Several analysts on Thursday downgraded the stock and cut their price targets.

“Despite some solid Q1 upside, overall results were again marred by a significant cut to the full year outlook as Snow’s customers continue to face optimization trends,” wrote Tyler Radke, an analyst at Citigroup.

Fiscal first-quarter product revenue increased 50% to $590.1 million. Analysts, on average, projected $571.9 million. Profit, excluding some items, was 15 cents a share in the period ended April 30, compared with an average estimate of 5 cents.

The company said in a presentation that it had 8,167 customers at the end of the quarter. Of those, 373 were large clients who generated trailing 12-month product revenue of more than $1 million, an 80% increase compared with the period a year earlier.

(Updates with closing shares in the second paragraph.)

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