Snowflake, a data cloud analytics company, reported $869 million in revenue for its fiscal second quarter, surpassing Wall Street’s expectations of $851 million. The company’s product revenue stood at $829.3 million, representing a 30% year-over-year increase. However, there was a slight deceleration in growth compared to the previous quarter, when product revenue had increased by 34%.
Despite beating revenue expectations, Snowflake reported a widened net loss of $317 million, translating to a loss of 95 cents per share. This was an increase from the $227 million loss, or 69 cents per share, recorded in the same period the previous year. The financial results left some analysts feeling that while the numbers were positive, they may not have been enough to impress investors.
Analysts at Morgan Stanley noted that Snowflake’s performance was good but not exceptional. The slightly lower product revenue beat and the slowdown in growth were concerning factors for investors. They believed that Snowflake’s new generative artificial intelligence portfolio could potentially drive future growth, but for now, the company would have to rely on its core data warehousing business to maintain momentum.
Investor Reaction
The market responded to Snowflake’s earnings report by causing a 13% drop in the company’s stock price. While some analysts, like those at Barclays, maintained a neutral stance on the stock, others were more critical. The concerns regarding the deceleration in product revenue growth and the overall financial performance raised doubts among investors. The fear of potential headwinds stemming from cyberattacks and service outages also impacted market sentiment.
Snowflake’s fiscal second-quarter 2025 earnings report revealed strong revenue numbers but raised concerns about decelerating growth and increased losses. The market reaction was mixed, with some analysts highlighting the company’s potential for future growth through new product offerings. However, the overall sentiment was cautious, with investors closely monitoring Snowflake’s ability to maintain its growth trajectory amidst evolving market conditions.