Snowflake shares surged more than 23% in premarket trading on Thursday after the company reported stronger-than-expected second-quarter results and raised its full-year outlook.
The AI-focused cloud data company posted adjusted earnings per share of $0.62, comfortably beating analyst expectations of $0.45.
Revenue reached $1.55 billion, above the estimated $1.48 billion, while rising 35% year over year.
Snowflake Earnings Beat Wall Street Estimates
Snowflake’s second-quarter results exceeded expectations across several key metrics.
Product revenue climbed to $1.49 billion, representing 37% annual growth. This marked the company’s third consecutive quarter of accelerating product revenue growth.
CEO Sridhar Ramaswamy said artificial intelligence continues to strengthen Snowflake’s competitive position and support growth across the business.
The company has increasingly positioned its AI Data Cloud platform as a key tool for enterprises building and deploying artificial intelligence applications.
Snowflake Raises Fiscal 2027 Guidance
Snowflake also delivered an upbeat outlook for the third quarter of fiscal 2027.
The company expects product revenue between $1.588 billion and $1.593 billion, representing year-over-year growth of between 37% and 38%.
The midpoint of approximately $1.59 billion is above the analyst consensus estimate of $1.57 billion.
Snowflake also increased its full-year fiscal 2027 product revenue forecast to $6.07 billion. That would represent annual growth of roughly 36%.
The previous guidance stood at $5.84 billion.
Analysts Point to Broad-Based Growth
BTIG analyst Gray Powell described the results as another strong quarter of accelerating growth.
Importantly, the company’s expansion appears to be spread across a broad range of customers rather than being concentrated in a single industry or among AI-native companies.
That diversification could make the current growth cycle more sustainable compared with previous periods when demand was concentrated in fewer areas.
AI Products Continue to Gain Traction
Snowflake’s artificial intelligence products also showed strong adoption during the quarter.
CoCo surpassed 9,100 accounts after adding more than 2,000 accounts during the period. Meanwhile, CoWork expanded to approximately 5,800 accounts.
The company also added 692 net new customers, a 32% increase from a year earlier.
Snowflake now serves 829 Forbes Global 2000 companies, highlighting its growing presence among large enterprise customers.
Profitability Outlook Improves
Snowflake’s improving growth was accompanied by stronger profitability expectations.
Chief Financial Officer Brian Robins said the company continued to accelerate revenue growth while expanding its operating margin.
Snowflake raised its full-year adjusted operating margin forecast to 14.5%, up from its previous guidance of 13.5%.
The combination of faster growth, improving margins and stronger AI product adoption helped fuel the sharp rally in Snowflake stock following the earnings release.
Snowflake Stock Jumps After Strong Quarter
Overall, Snowflake’s latest earnings report delivered a combination of stronger revenue growth, higher profitability and improved guidance.
The company’s growing exposure to enterprise AI also appears to be supporting demand across its customer base.
With product revenue accelerating and full-year forecasts moving higher, investors responded positively, sending Snowflake shares sharply higher in premarket trading.
