Snowflake, a data cloud analytics company, reported its fiscal second-quarter 2025 earnings, which surpassed Wall Street’s estimates. However, despite beating expectations, the company experienced a deceleration in product revenue growth compared to previous quarters. The company reported $829.3 million in product revenue, reflecting a 30% increase year over year. While this growth is substantial, it marked a slowdown from the 34% year-over-year growth reported in the fiscal first quarter.
Following the release of Snowflake’s earnings report, analysts at Morgan Stanley expressed a positive but cautious outlook. They acknowledged that the results were good but noted that they might not be enough to rally investor confidence. The analysts highlighted concerns about the company’s smaller-than-expected product revenue beat and the deceleration in growth. They suggested that Snowflake’s new generative artificial intelligence portfolio could eventually lead to top-line outperformance, but for now, the company will need to rely on its core data warehousing business.
Barclays analysts also weighed in on Snowflake’s second-quarter results, maintaining an equal weight rating on the stock. They noted that investors were particularly interested in whether the company’s product revenue had been impacted by external factors such as a cyberattack and the CrowdStrike outage. Despite these potential challenges, Snowflake managed to maintain a 30% year-over-year product growth rate, which is slightly lower than previous quarters but still deemed respectable given the circumstances.
The market response to Snowflake’s earnings report was significant, with shares falling 13% on Thursday. The company’s net loss widened to $317 million, or a loss of 95 cents per share, compared to $227 million, or a loss of 69 cents per share, in the same period the previous year. While some analysts remain optimistic about Snowflake’s long-term prospects, the deceleration in product revenue growth and the widening net loss have caused concern among investors.
Snowflake’s second-quarter earnings report presented a mixed picture for the company. While it managed to beat revenue expectations, the deceleration in product revenue growth and widening net loss have raised questions about its future performance. As Snowflake navigates these challenges, investors will be closely monitoring its ability to innovate and adapt to a rapidly changing market landscape.
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