Snowflake Rallies 16% on 37% Revenue Growth and a Raised Full-Year Outlook

Snowflake shares climbed 16.5% on Thursday, closing at $356.47, after the cloud-data company reported quarterly product revenue that grew 37% from a year earlier and raised its forecast for the rest of the fiscal year. Trading volume ran more than five times the stock’s 20-day average. The close set a fresh high.

The quarter beat, and the guidance rose

For its fiscal second quarter, which ended July 31, Snowflake reported product revenue of $1.49 billion, up 37% from a year earlier, and total revenue of $1.55 billion, up 35%. Adjusted earnings came to $0.62 a share. Analysts had modeled adjusted earnings near $0.45 and revenue of about $1.48 billion, according to consensus figures cited by CNBC and MarketScreener, so the results cleared both bars. On a reported basis the company still ran an operating loss; its non-GAAP operating margin, which strips out stock-based compensation and other items, was 15.3%.

Two forward-looking numbers did more for the stock than the quarter itself. Snowflake lifted its full-year product-revenue forecast to $6.07 billion, or 36% growth, up from the $5.84 billion it guided to in May. It also raised its full-year adjusted operating-margin target to 14.5% from 13.5%. For the current quarter, management guided to product revenue of about $1.59 billion, which would be 37% to 38% growth.

The demand signals underneath the headline numbers pointed the same way. Remaining performance obligations, a measure of contracted future revenue, reached $9.00 billion, up 30% from a year earlier. The company counted 828 customers spending more than $1 million on its products over the trailing 12 months, up 27%. Its net revenue retention rate, which tracks how much existing customers expand their spending, held at 126%.

A new high after a long climb back

The move extended a run that was already underway. Snowflake had gained 12.5% over the prior 30 days heading into the report. Thursday’s close of $356.47 pushed past its previous 90-day high of $337.38, and the stock now sits well above the 90-day low of $136.47 set earlier in the summer. Volume told the same story. The surge to more than five times the recent daily average points to broad participation rather than a thin move on light trading.

The report landed during a strong stretch for enterprise-software and AI-linked names. ServiceNow and Oracle each rose more than 5% the same day, and several other software names in the group closed higher. Investors have rewarded companies that can tie rising demand to their artificial-intelligence products, and Snowflake used its results to point at that mix.

The forecast sets the bar for next quarter

Snowflake’s own guidance now frames the next report. The company told investors to expect product revenue of $1.59 billion in the current quarter and reaffirmed the $6.07 billion full-year target. Both figures build in continued growth near the pace of the quarter just reported. The bar is now higher.

Whether usage of its newer AI features keeps pace with that guide is the open question the next quarter will answer. For now, the company has committed to numbers that assume the demand it just reported does not fade.

This is a general-market summary for information only — not investment advice, and not a recommendation regarding any security.