Sridhar Ramaswamy, CEO of Snowflake and former co-founder and CEO of startup Neeva, speaks on the Collision convention in Toronto on June 21, 2022.
Eóin Noonan | Sports activities file | Collision | Getty Photographs
Shares of Snowflake closed up greater than 14% on Thursday after the information cloud analytics firm reported second-quarter 2025 earnings numbers that beat Wall Road estimates however confirmed slowing product income progress in comparison with current quarters.
Snowflake reported income of $869 million, above the $851 million anticipated by analysts polled by LSEG. The corporate reported $829.3 million in product income, which makes up nearly all of Snowflake’s income, up 30% yr over yr. However that marked a slowdown from the 34% year-over-year improve reported in the course of the first fiscal quarter.
The corporate’s web loss widened to $317 million, or a lack of 95 cents per share, in contrast with $227 million, or a lack of 69 cents per share, in the identical interval a yr earlier.
Morgan Stanley analysts mentioned Snowflake’s outcomes had been good, “however perhaps not sufficient.” They mentioned the corporate’s smaller product revenues and slowdown in progress will not encourage weary traders.
The analysts consider that Snowflake’s new generative synthetic intelligence portfolio will finally contribute to outperformance. Within the meantime, the corporate should depend on its core information warehousing enterprise.
“A 2% gross sales decline within the second quarter, in comparison with 5% within the first quarter, with product gross sales progress declining additional to 29.5% year-over-year,” is prone to “sow sufficient doubt within the investor dialog to maintain the shares on the short-term stress.” the analysts wrote in a notice on Thursday.
Analysts at Barclays mentioned Snowflake’s second-quarter outcomes “should not be a significant catalyst anyway” for the corporate’s funding plans. They maintained their equal weight ranking on the inventory.
The analysts mentioned traders had been carefully watching whether or not the corporate’s product revenues took a cloth hit because of the fallout from a cyberattack and the CrowdStrike outage that occurred in the course of the quarter. They believed that these potential main headwinds wouldn’t materialize, which is constructive for the corporate.
“It is true that 30% year-over-year product progress is slower than the 33-34% stage we have seen during the last two quarters. However regardless of all of the worry going into these outcomes, we contemplate the 30% stage and elevated steerage as extremely respectable, particularly given the decrease valuation,” the analysts wrote in a notice on Wednesday.
— CNBC’s Michael Bloom contributed to this report.
