Shares of Snowflake (NYSE: SNOW) are down over 3% in pre-open trading Wednesday after the company reported a swelling quarterly loss but topped the market’s estimates for sales and guidance.

The company reported a loss of $0.70 per share or $203.2 million for its first quarter, much higher than the $93.6 million from a prior quarter. However, revenue exploded 110% to $228.9 million to top the $212.9 million expected from market analysts.

“Snowflake reported strong Q1 results with triple-digit growth in product revenue, reflecting strength in customer consumption. Remaining performance obligations showed a robust increase year-on-year, indicating strength in sales across the board,” said Snowflake CEO Frank Slootman.

As for the guidance, SNOW said it is projecting to generate sales between $235 million and $240 million in product revenue with the midpoint of $237.5 million coming in higher than the $235.4 million.

For the full year, the company is looking for $1.02 billion to $1.035 billion in product revenue with the midpoint again higher than the $1.02 billion consensus.

Rosenblatt analyst Blair Abernethy cut the price target on SNOW to $270.00 per share from $285.00 per share given recent comparable software multiple compression. The analyst reiterated the “Buy” rating on the stock as the digital transformation wave continues.

“The Company continues to grow at scale as customers migrating their data warehouses to Snowflake’s Data Cloud drive an impressive 168% net revenue retention rate. With this note, we review the quarter and are marginally increasing our forecast,” Abernethy said in a note.

“For Q2 and FY22, Snowflake provided guidance that was above our prior expectations for revenue and in-line for operating margins. We now expect Snowflake to be in an 80-90% revenue growth range for the remaining quarters of FY22.”
UBS analyst Karl Keirstead reiterated the “Buy” rating and a $275.00 per share price target on SNOW after witnessing “outstanding” sales growth.

“Snowflake posted outstanding 110% product revs growth to $214m, the 2nd consecutive 7% beat versus the high end of guidance, with most other growth metrics (net retention of 168%, RPO/backlog growth of 206% and a more than 2x increase in the number of $1m+ paying customers) coming in-line with or better than our expectations. While the guide for 92% growth to $240m of product revs in 2QF22/Jul represents an 18-point deceleration, growth could again end up at 100%+ with a “normal” beat and we aren’t picking up anything from our checks to suggest any loss of momentum,” Keirstead wrote in a note sent to clients.