Snowflake shares fell Wednesday after the data warehouse startup posted a larger-than-expected loss in its first quarterly earnings report as a public company.

For the third quarter, Snowflake’s revenue increased 119% year over year to $159.6 million while its net loss declined to $1.01 per share from $1.92 per share. Analysts had expected a loss of $0.26 per share on revenue of $147.7 million.

“We are pleased with our performance this first quarter as a public company,” Snowflake CEO Frank Slootman said in a news release. “The period was marked by continued strong revenue growth coupled with improving unit economics, cash flow, and operating efficiencies.”

“Our vision of the Snowflake Data Cloud mobilizing the world’s data is clearly resonating across our customer base,” he added.

But in Wednesday’s extended trading session, Snowflake shares dropped 3.65% to $282, bringing the total losses for the day to 7.7%. “Expectations for the company have been sky high, leaving the stock vulnerable to a bout of profit-taking,” Barron’s said.

Snowflake’s software allows businesses to store and manage data in the cloud rather than on legacy databases, making it easier for customers to quickly access and analyze critical information across the enterprise.

The company’s IPO raised nearly $3.4 billion, the most ever for a software offering. According to the prospectus, it has more than 3,100 customers, including Capital One, Sony, Office Depot, Adobe, and Dropbox.

Snowflake reported “remaining performance obligations” of $927.9 million, up 240%, for the third quarter, with a “net revenue retention rate,” a measure of repeat business, of 162%.

Gross margin fell to 58.2% from 59.6% but CFO Mike Scarpelli told analysts that Snowflake could widen its margins to the mid-70% range over time by receiving more favorable pricing from cloud providers such as Amazon and Microsoft and cutting back on discounts.

Snowflake is projecting fourth-quarter product revenue of $162 million to $167 million, up between 97% and 103%, and full-year product revenue of $538 million to $543 million, with a product gross margin of 68%.

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