Snowflake Inc (NYSE:SNOW) stock rallies 19.04% (As on August 25, 11:13:51 AM UTC-4, Source: Google Finance) after the company posted mixed results for the second quarter of FY 22. Product revenue grew 83% year-over-year to $466.3 million in Q2. The remaining performance obligations increased 78% year-over-year to $2.7 billion. The company now has 6,808 total customers and that was above the FactSet consensus estimate of 6,739, acording to StreetAccount. Out of which 246 customers with a trailing 12-month product revenue of more than $1 million. Net revenue retention rate was 171% as of July 31, 2022. While all verticals are growing rapidly, financial services drove the most product revenue growth sequentially. Advertising, media and entertainment, and technology verticals grew in line with the overall company. In the quarter, the company has added 12 new Global 2000 customers. The  product gross margin was 75%. Scale in the public cloud data centers and enterprise customer success contribute to the year-over-year gross margin improvement. Operating margin was 4%, benefiting from revenue outperformance. The adjusted free cash flow margin was 12%, positively impacted by strong collections. SNOW has ended the quarter in a strong cash position with approximately $5 billion in cash, cash equivalents, and short-term and long-term investments.

SNOW in the second quarter of FY 22 has reported the adjusted loss per share of 70 cents, missing the analysts’ estimates for the adjusted loss per share of 1 cents. The company had reported the adjusted revenue growth of 83 percent to $497 million in the second quarter of FY 22, beating the analysts’ estimates for revenue of $467 million, according to Refinitiv.

Snowflake anticipates product revenue will be between $500 and $505 million in its third quarter, and between $1.91 billion and $1.92 billion for the full year. In Q3, the company expects $4 million of expenses associated with the Data Cloud World Tour. Product gross profit margins, operating income margins and adjusted free cash flow are expected to be 75%, 2% and 17% respectively for the full year. For the full 2023-year, the company expects product revenue in the range of $1.905-$1.915 billion, representing a 67-68% growth. for the full year fiscal 2023, the company expects, on a non-GAAP basis, approximately 75% product gross margin, 2% operating margin, and 17% adjusted free cash flow margin.