Shares of Snowflake (SNOW) surged in after-hours trading after the data warehousing giant reported second-quarter results for Fiscal Year 2026. Adjusted earnings of $0.38 per share beat analysts’ consensus estimate of $0.27 per share. Furthermore, the company saw a 32% increase in revenue to $1.1 billion, which beat estimates of $1.09 billion. This could be attributable to a 33% increase in remaining performance obligations to $6.9 billion and a net revenue retention rate of 125%.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Interestingly, Snowflake’s CEO, Sridhar Ramaswamy, highlighted the firm’s strong product revenue growth of 32% from the previous year and its significant customer base, which includes over 6,100 accounts that are using Snowflake’s AI every day. In addition, the company reported that it had 654 customers with trailing 12-month product revenue that exceeded $1 million. This is greater than last quarter’s figure of 606 and continues the firm’s trend of steadily growing this metric, as shown below.
Outlook for 2026
Looking forward, the company anticipates its product revenue to come in at $4,395 million in Fiscal Year 2026, which is above the previous estimate of $4,325 million. At the same time, for the upcoming quarter, Snowflake expects its product revenue to range between $1,125 million and $1,130 million. This is above the previous $1,040 million estimate at the high end. Furthermore, it anticipates a 9% operating margin for the full year.
Is SNOW a Good Buy Right Now?
Turning to Wall Street, analysts have a Strong Buy consensus rating on SNOW stock based on 31 Buys, three Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average SNOW price target of $234.10 per share implies 16% upside potential. However, it’s worth noting that estimates will likely change following today’s earnings report.
