Snowflake (SNOW, Financial) has reported a robust sales forecast, driven by enthusiastic customer reception of its new products. In its fiscal third-quarter earnings report, Snowflake posted a revenue of $942 million, marking a 28.3% year-over-year increase and surpassing the expected $898 million. The non-GAAP earnings per share stood at $0.20, exceeding market expectations of $0.15.
The company's product revenue grew by 29% to $900.3 million, outperforming the anticipated $856.6 million. Snowflake now boasts 542 customers who have spent over $1 million in the past year, up from 510 in the previous quarter. As of July 31, the remaining performance obligations, a crucial growth metric, reached $5.7 billion, surpassing the analysts' average estimate of $5.2 billion.
Looking ahead, Snowflake projects product revenue between $906 million and $911 million for the fiscal quarter ending in January, significantly above the expected $890.7 million. The company anticipates full-year product revenue to reach $3.43 billion, compared to the forecasted $3.36 billion.
CEO Sridhar Ramaswamy highlighted the strong performance in the third quarter, with product revenue hitting $900 million and a 55% year-over-year increase in remaining performance obligations. Following the earnings announcement, Snowflake's stock price surged by approximately 16% in after-hours trading.
Despite a 35% decline in the stock price this year, attributed to concerns over platform consumption slowdown, leadership changes, competition, and broader economic pressures, Snowflake's strategic product expansion is underway. The company faces competitive pressure from rivals like Databricks and cloud infrastructure providers such as Microsoft. Snowflake emphasizes its ease of use as a competitive edge.
Under Ramaswamy's leadership, Snowflake has introduced products utilizing generative AI, enabling customers to analyze diverse data types. As part of this initiative, Snowflake announced its agreement to acquire Datavolo, a startup specializing in unstructured data, which often fuels generative AI. This acquisition aims to simplify data analysis within Snowflake and support the development of AI-based applications.
