Snowflake (NYSE: SNOW), the cloud-based data platform, saw its shares soar more than 20% in after-hours trading after the company beat second-quarter estimates and raised its full-year guidance on accelerating demand for its AI products.
The move followed yesterday’s (Wednesday) regular-session close of $305.84, itself down 4.37% from the prior close of $319.80. 24/7 Wall St. reported that the pre-earnings decline reflected a broader software-sector rotation, with no company-specific negative catalyst behind it. The shares sit within their 52-week range of $118.30 to $341.95.
Snowflake’s fiscal second-quarter revenue reached $1.547bn, up 35% year-on-year and above the Zacks consensus estimate of $1.47bn. Product revenue, the company’s core cloud-data subscription business, rose 37% year-on-year to $1.49bn, marking a third consecutive quarter of accelerating growth. Non-GAAP earnings per share came in at $0.62 versus a $0.45 consensus estimate and $0.35 a year earlier, though on a GAAP basis Snowflake reported a net loss of $0.55 per share.
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Chief executive Sridhar Ramaswamy said AI products accounted for roughly half of the quarter’s revenue acceleration, with its CoCo AI coding assistant growing to more than 9,100 accounts and CoWork reaching 5,800. “Snowflake delivered another strong quarter, with product revenue of $1.49 billion, up 37% year-over-year, as Snowflake continues to power the enterprise AI revolution. AI continues to compound our advantages, creating a flywheel effect across the business,” Ramaswamy said. On the back of that momentum, Snowflake lifted its full-year product revenue guidance to $6.07bn, implying 36% growth, from a prior $5.84bn, and raised its non-GAAP operating margin guidance to 14.5% from 13.5%.
Bloomberg headlined the move as a reaction to the raised revenue outlook and uptake of Snowflake’s AI assistant, while Investing.com tied the surge to the earnings beat and raised guidance together.
