Snowflake Inc (NYSE:SNOW) stock fell 1.19% (As on August 22, 11:32:11 AM UTC-4, Source: Google Finance) after the company reported second-quarter financial results that topped analyst expectations. Product revenue for the quarter was $829.3 million, representing 30% year-over-year growth. Net revenue retention rate was 127% as of July 31, 2024. The company now has 510 customers with trailing 12-month product revenue greater than $1 million and 736 Forbes Global 2000 customers, representing 28% and 5% year-over-year growth, respectively. Remaining performance obligations were $5.2 billion, representing 48% year-over-year growth. The quarter was hallmarked by innovation and product delivery, and great traction in the early stages of the new AI products. Snowflake has launched products focused on generative AI and other new ways to analyze large sets of data. The strategy is fueled in part by increased pressure from rivals including Databricks Inc. and cloud infrastructure providers like Microsoft Corp. Snowflake offers software that helps customers find, organize and use huge amounts of information from a variety of sources. However, Snowflake is navigating a challenging environment between a recent CEO change, security breaches of its customers and some market shift to products outside its traditional wheelhouse. Clients including AT&T Inc., Live Nation Entertainment Inc.’s Ticketmaster and LendingTree Inc. had their Snowflake accounts breached as part of a hacking campaign beginning in May. Snowflake has said its own systems weren’t infiltrated and has added features for customers to implement better security settings.
SNOW in the second quarter of FY 25 has reported the adjusted earnings per share of 18 cents, beating the analysts’ estimates for the adjusted earnings per share of 16 cents. The company had reported the adjusted revenue growth of 29 percent to $868.82 million in the second quarter of FY 25, beating the analysts’ estimates for revenue of $849.70 million.
Additionally, as of July 31, 2024, $491.9 million remained available for future repurchases under the stock repurchase program. In August 2024, the board of directors authorized the repurchase of an additional $2.5 billion of the outstanding common stock under the stock repurchase program and extended the expiration date of the stock repurchase program from March 2025 to March 2027.
Snowflake sees third-quarter product revenue in the range of $850 million to $855 million, up approximately 22% on a year-over-year basis. Analysts, on average, predicted $848 million, according to data compiled by Bloomberg.
The company also raised its full-year product revenue expectations. Snowflake now expects full-year product revenue of $3.356 billion, up 26% year-over-year.