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Snowflake shares popped more than 6% Thursday after the data analytics software company posted stronger-than-expected fourth-quarter results.
The company reported adjusted earnings of 30 cents per share on $987 million in revenue, surpassing the 17 cents per share and $956 million in sales expected by analysts polled by LSEG. That reflected 27% year-over-year revenue growth.
CEO Sridhar Ramaswamy called Snowflake the “essential enterprise data and AI company on the planet right now” during an interview with CNBC’s Jon Fortt on Wednesday.
Like its peers, Snowflake has pushed to offer new artificial intelligence tools to its customers as the race for advanced large language models and AI capabilities accelerates. It announced an expanded partnership with Microsoft Azure to offer access to OpenAI models on Wednesday.
Last quarter, the company announced a multiyear partnership with Anthropic and said it had agreed to buy startup Datavolo for an undisclosed sum.
‘”It’s a step up,” Ramaswamy said. “Both these companies really represent the cutting edge of what AI can do and having those accessible … all on top of the data that sits on Snowflake, I think uniquely distinguishes us.”
Product revenue also topped analyst estimates, growing 28% to $943 million. That came in ahead of the roughly $914 million LSEG estimate. The company also said it anticipates $4.28 billion in product revenue for the year, ahead of a $4.21 billion estimate.
Guidance for the current quarter, however, came up short of estimates. Snowflake said it expects product revenues to range between $955 million to $961 million, versus a StreetAccount estimate of $961 million.
Goldman Sachs analyst Kash Rangan said the results further boosted the firm’s confidence in the revenue add from new products in the second half of the fiscal year for Snowflake and he views the company as set to become a long-term generative AI winner.
“By expanding the reach and accessibility of its core data platform to more avenues such as [large language models], Hyperscalers, etc., Snowflake can become core to the development of AI applications, evidenced by 4,000+ accounts using Snowflake AI/ML and Cortex AI’s early momentum,” he wrote.
Snowflake said it had 11,159 customers during the period, up from 10,618. Analysts polled by FactSet had expected 10,987. The company also said that Chief Financial Officer Michael Scarpelli will retire, but remain in the role until a successor is found.
— CNBC’s Jordan Novet contributed reporting
