Key facts
- Snowflake shares surged 25% following an increase in its annual revenue forecast.
- Product revenue reached $1.49 billion, a 37% year-over-year increase.
- The company's AI coding agent, CoCo, added over 2,000 accounts in the quarter.
- Snowflake raised its full-year product revenue growth guidance to 36% year-over-year.
Snowflake shares jumped as much as 26% on Thursday, reaching a high of $384.55, following a strong second-quarter earnings report that exceeded Wall Street's estimates. The software maker's stock is up 68% year to date.
Product revenue for the quarter reached $1.49 billion, marking a 37% increase year-over-year. The company also raised its revenue guidance for the current quarter and the full fiscal year. A significant driver of this growth was the adoption of Snowflake's AI coding agent, CoCo, which added over 2,000 new accounts in the quarter, bringing the total to 9,100.
This marks the second consecutive quarter of strong results and significant post-earnings gains for Snowflake. The company's CFO, Brian Robins, stated that Q2 represented the third consecutive quarter of product revenue growth acceleration, fueled by both the core data platform and a notable increase in AI revenue. The company has raised its full-year product revenue growth guidance to 36% year-over-year.
Analysts view Snowflake's performance, particularly the accelerating adoption of its AI tools, as a positive indicator for the broader enterprise AI market. UBS analyst Karl Keirstead commented that Snowflake's results, alongside similar accelerations at peers like Palantir and Databricks, provide strong evidence of enterprise AI adoption, a key component of the 'long-AI trade'.