Snowflake

Snowflake Inc. (NYSE:SNOW) Q2 2025 Earnings Conference Call August 21, 2024 5:00 PM ET Company Participants Jimmy Sexton – Head of IR Sridhar Ramaswamy – CEO Mike Scarpelli – CFO Christian Kleinerman – EVP of Product Conference Call Participants Keith Weiss – Morgan Stanley Raimo Lenschow – Barclays Mark Murphy – JPMorgan Kirk Materne – Evercore Kash Rangan – Goldman Karl Keirstead – UBS Brent Thill – Jefferies Brad Zelnick – Deutsche Bank Mike Cikos – Needham & Company Joel Fishbein – Truist Patrick Colville – Scotiabank Michael Turrin – Wells Fargo Tyler Radke – Citi Matt Hedberg – RBC Alex Zukin – Wolfe Research Operator Good afternoon. Thank you for attending today’s Snowflake Q2 and Fiscal Year 2025 Earnings Call. My name is Cole, and I will the moderator for today’s call. All lines will be muted during the presentation portion of the call with an opportunity for questions […]

The following is a summary of the Snowflake Inc. (SNOW) Q2 2025 Earnings Call Transcript: Financial Performance: Snowflake reported Q2 FY 2025 product revenue of $829 million, a 30% increase year-over-year. Non-GAAP product gross margin was 76%, slightly down year-over-year. Non-GAAP operating margin exceeded expectations at 5%. Non-GAAP adjusted free cash flow margin was reported at 8%. Remaining performance obligations (RPO) grew 48% year-on-year to reach more than $5.2 billion. Business Progress: Launched significant product innovations including Snowflake Cortex AI and Iceberg. Executed two nine-figure deals emphasizing robust customer expansion. Over 2,500 accounts are using Snowflake AI weekly, highlighting increased product adoption. Expanded presence and adoption in international markets with strategic customer engagements. Opportunities: Accelerated adoption of AI and machine learning tools, alongside broad product expansion and enhancements. Strategic focus on increasing customer base and product usage, particularly through new product features like Snowpark. Risks: Continued challenges from cybersecurity threats

Snowflake (SNOW) shares dropped early Thursday as the company issued a downbeat fiscal third-quarter product revenue outlook despite raising its full-year view for the key metric and beating Wall Street estimates for the second quarter. Product revenue, which comprises the majority of the company’s overall revenue, is anticipated to be in a range of $850 million to $855 million for the fiscal third quarter, the cloud-based data platform company said late Wednesday. The consensus on Visible Alpha is for $855.4 million. The stock fell 9.4% in recent premarket activity. “We forecast product revenue based on observed behavior,” Chief Financial Officer Michael Scarpelli said during an earnings call, according to a Capital IQ transcript. “Our forecast does include revenue headwinds associated with performance improvements.” The company reported adjusted earnings of $0.18 per share for the three-month period ended July 31, down from $0.22 the year before, but ahead of the Capital

Snowflake’s (SNOW) shares fell nearly 13% in recent Thursday trading after the company reported non-GAAP fiscal Q2 net income of $0.18 per diluted share, down from $0.22 a year earlier. Analysts polled by Capital IQ expected $0.16. Revenue for the quarter ended July 31 was $868.8 million, compared with $674 million a year earlier. Analysts expected $850.7 million. The company’s board approved its stock buyback program by another $2.5 billion, in addition to the $491.9 million remaining under the existing program. The board also extended the expiration date for the program by an extra two years to March 2027.

Snowflake (SNOW) posed strong product revenue growth in fiscal Q2 due to “stable demand and improving large customer consumption,” Oppenheimer said Wednesday in a report. Investor concerns about competition and Snowflake’s ability to execute in artificial intelligence are likely to persist with revenue upside smaller than the previous quarter, Oppenheimer said. Increased compute revenue from Iceberg adoption, growing traction for products such as Cortex and Snowpark, improving execution and closing rates and leadership in serving analytical workloads are expected to contribute to an improved growth outlook in fiscal 2026, the report said. Snowflake faces challenges from declining net revenue retention and margin pressures from graphics processing units and AI investments, while potential headwinds from the availability of Iceberg Tables affect product revenue growth, the report said. Oppenheimer reiterated its outperform rating on Snowflake’s stock and kept the price target at $180. On Wednesday, the company projected fiscal Q3 revenue of

Analyst Kash Rangan reaffirmed a Buy rating and price target of $220. Snowflake reported solid quarterly results, but its guidance fell short of high expectations, Rangan said. The stock came under pressure due to the “lack of beat flow-through” on operating and free cash flow margins and a “growing dispersion between cRPO / RPO and forward revenue growth,” he added. “Snowflake’s true beat-and-raise in a still constrained spending environment underscores the stability of consumption and optimization trends through mid-August,” the analyst wrote. The company’s NNR “displayed the lowest rate of sequential deceleration in the past 2+ years,” he further stated.

Analysts say Snowflake didn’t do enough to articulate its strategy, address competition concerns or reassure on growth outlook Investors and analysts wanted more from Snowflake Inc., beyond the company’s latest earnings beat and outlook hike. While Snowflake’s (SNOW) results came in better than expected Wednesday afternoon, the data-software company didn’t deliver the same magnitude of a sales beat as it has in the past. Morgan Stanley analyst Keith Weiss noted that the company topped expectations by about 2%, whereas a quarter before it had logged a 5% beat. From Weiss’s perspective, “the trajectory of decelerating growth likely fails to address existing bear cases around rising competitive intensity.” He wrote: “Waning optimization headwinds and emerging new product initiatives should support growth, but investors may need more concrete signals to get onboard.” Weiss has an equal-weight rating and $175 target price on the stock. Snowflake shares are down 13.7% in afternoon trading

Snowflake Shares up 2.6% Premarket After Goldman Sachs Adds Stock to US Conviction List

Snowflake’s (SNOW) Sridhar Ramaswamy is on the lookout for deals in artificial intelligence to gain an edge over competitors, Bloomberg reported Tuesday, citing an interview with the new chief executive. Ramaswamy, who took the reins of the company in February, told the publication that the company would look for acquisitions “opportunistically.” The company had previously tried to acquire Reka AI for over $1 billion but discussions collapsed last month.

By Emily Bary Bernstein worries that ‘expectations may creep too high for next quarter’ and says the AI messaging looks murky Trends are improving at Snowflake Inc., but perhaps not enough to settle the investor debate over the controversial software stock. One highlight of Snowflake’s (SNOW) latest earnings report was that the company upped its full-year forecast for product revenue, having disappointed big time with its initial guidance three months back. But some analysts aren’t yet convinced that Snowflake shares are primed for a major rally. The new outlook and growth in remaining performance obligations “might overly inflate investor expectations,” according to Bernstein’s Mark Moerdler, who added that Snowflake’s artificial-intelligence strategy seemed murky. He and his team “worry that confidence in growth durability and management’s credibility in estimating the revenue/growth opportunity are tenuous, and expectations may creep too high for next quarter,” he wrote. “More importantly, the company’s long-term strategy

We lower our price target by $9 to $199, using an EV/Sales ratio of 20x our FY 25 (Jan.) sales view, above peers on superior growth metrics but below SNOW’s 3-year average (~28x) on growth deceleration and a delayed path to meaningful profitability. We raise our FY 25 sales view by $25M to $3.49B and lower FY 26’s by $75M to $4.47B. SNOW posts above-consensus Apr-Q sales of $829M (+33% Y/Y) but below-consensus EPS of $0.14 (-7% Y/Y) as rising GPU costs weigh on profitability, which should constrain EPS growth this year. NRR of 128% fell by 300 bps Q/Q, the smallest decline in seven quarters, and we expect further stabilization this year on the 2H rollout of new products like Iceberg and Snowpark Container Services. Growth deceleration should be aided by SNOW’s significant RPO balance of $5.0B (-4% Q/Q, +46% Y/Y), including another large existing customer win ($100M) during

Snowflake (NYSE:SNOW) reported quarterly earnings of $0.14 per share which missed the analyst consensus estimate of $0.18 by 22.22 percent. This is a 6.67 percent decrease over earnings of $0.15 per share from the same period last year. The company reported quarterly sales of $828.71 million which beat the analyst consensus estimate of $785.87 million by 5.45 percent. This is a 32.89 percent increase over sales of $623.60 million the same period last year.