TLDR
- Snowflake stock jumps 21% as product revenue growth accelerates sharply to 37%
- Snowflake raises fiscal 2027 product revenue guidance sharply to $6.07 billion
- AI demand helps Snowflake add 692 new customers and expand platform usage rapidly
- Snowflake beats Q2 estimates as total revenue climbs 35% to $1.55 billion sharply
- Stronger margins and faster AI growth drive Snowflake shares higher after earnings
Snowflake (SNOW) shares rebounded sharply after the company reported faster product revenue growth and stronger fiscal 2027 guidance. SNOW rose 21.63% to $372.00 after hours, reversing a 4.37% decline during regular trading. The move followed stronger revenue, earnings, customer growth, and improved operating forecasts.
Snowflake Inc., SNOW
Snowflake Product Revenue Growth Reaches 37%
Snowflake reported second-quarter revenue of $1.55 billion, up 35% from the same period last year. Product revenue reached $1.49 billion, increasing 37% and marking another quarter of accelerating growth. Adjusted earnings reached 62 cents per share, topping the expected 45 cents.
The company also reported a smaller quarterly net loss compared with the same period last year. Snowflake posted a $191.7 million net loss, versus a $297.9 million loss one year earlier. Meanwhile, management continued expanding margins while maintaining stronger revenue growth across the business.
Remaining performance obligations reached $9.00 billion, representing 30% annual growth and supporting future contracted demand. Net revenue retention stood at 126%, showing continued spending growth among existing customers. Snowflake also counted 828 customers generating more than $1 million in trailing product revenue.
AI Growth Supports Customer Expansion
Snowflake continued expanding its artificial intelligence business as more customers added new workloads to its platform. The company reported stronger usage from coding, data processing, and automation tools during the quarter. This growth helped lift platform consumption while supporting new customer additions.
Snowflake added 692 net new customers during the quarter, representing 32% growth from the prior year. The company also reached 829 Forbes Global 2000 customers after adding 14 during the period. Large customer growth remained strong as enterprises increased spending on data and artificial intelligence projects.
Management launched more than 330 generally available product capabilities during the first half of fiscal 2027. That total increased 35% from the same period last year and expanded Snowflake’s broader product offering. The faster release cycle supported adoption across existing accounts and helped create additional workloads.
Snowflake Raises Full-Year Product Revenue Guidance
Snowflake expects third-quarter product revenue between $1.588 billion and $1.593 billion. That range represents annual growth between 37% and 38%, extending the recent acceleration. The forecast also exceeded the $1.50 billion analyst consensus cited before the earnings release.
For fiscal 2027, Snowflake raised expected product revenue to $6.07 billion from $5.84 billion. The new outlook implies 36% annual growth, compared with the previous forecast for 31% growth. Management also lifted its adjusted operating margin forecast to 14.5% from 13.5%.
Snowflake expects a 74% adjusted product gross margin and a 23% adjusted free cash flow margin. These targets show management aims to balance faster growth with stronger operating discipline. The improved outlook helped drive SNOW stock higher after the earnings announcement.
The post Snowflake (SNOW) Stock: Rebounds as Product Revenue Growth Accelerates to 37% and AI Growth Strengthens appeared first on Blockonomi.
Be the first to comment