The solid outlook for growth in product sales Snowflake Rg-A presented have been better than Wall Street analysts expected. Reflecting a strong reception of the same by their clients, according to Brody Ford en Yahoo Finance.
“Los product revenuewhich make up the majority of Snowflake’s business, will be from 906 to 911 million dollars in the period ending in January,” the company said Wednesday in a statement. Analysts, on average, predicted $890.7 million, according to data compiled by Bloomberg. He adjusted operating margin will be around 4%while analysts expected 1.7%.
Snowflake software extracts, organizes and analyzes data from a variety of sources. Under the direction of CEO Sridhar Ramaswamythe company has introduced products that use Generative AI and they allow people to analyze more types of data. “Product cohesion and ease of use are leading us to earn new logo after new logo, expand within our customer base and displace our competition time and time again,” Ramaswamy said in the statement.
As part of this effort, Snowflake announced that it has agreed to acquire Datavolo Inc. a startup that enables easier ingestion of unstructured data, which is unorganized information from other sources that is often used to power generative AI.
“The deal will make it easier for customers to analyze more data within Snowflake and create AI-based applications on top of that data,” Ramaswamy added in an interview. Earlier this year, Datavolo announced more than $21 million in funding from investors such as General Catalyst, Citi Ventures y Rob Beardenthe former CEO of Cloudera. Terms of the acquisition were not disclosed.
“The great language models made by the AI company Anthropic They will now be available on the Snowflake platform,” the company said Wednesday in a separate statement. “While basic models are good for many uses, advanced efforts, such as creating AI agent products, are best done with powerful models from OpenAI or Anthropic,” Ramaswamy added.
Shares hit a high of $155.44 in pre-market trading on Thursday, after closing at $129.12 in New York. If gains hold, Snowflake will be on track for its biggest gain since August 2022. “The stock had plummeted 35% this year until the close, with investor sentiment frigid,” he wrote Brent Bracelin, analista de Piper Sandlerbefore the results. “That is due to concerns about slowing consumption on the platform, recent leadership changes, competition and broader economic pressures,” Bracelin added.
The earnings report seemed to ease those fears. “The demand environment has stabilized and is starting to show signs of improvement,” he wrote Kirk Materne, analyst at Evercore ISIin a note. “Snowflake’s AI products are likely seeing strong initial traction.”
The company’s expansion strategy is driven in part by increased pressure from rivals, including Databricks and cloud infrastructure providers such as Microsoft. Snowflake often touts its ease of use as a competitive advantage. “Our competition is a bunch of things linked together where customers have to spend a lot, a lot on engineers to make it all work,” Ramaswamy said when asked about Databricks.
Los fiscal third quarter product revenue increased by 29% to 900.3 million dollarscompared to the average estimate of $856.6 million. The revenueexcluding some articles, was $0.20 per sharebeating the average analyst estimate of 0. 15 dollars per share.
“Snowflake has worked to improve its margins through a rigorous process of reevaluating our cost structure,” said the CFO Mike Scarpelli during a call with analysts after the results. Ramaswamy added that the company has removed layers of management and completed some internal projects.
Snowflake now has 542 customers who spent more than $1 million over a 12-month periodcompared to 510 in the previous quarter. The performance obligations remaining, another key growth parameter, were 5.7 billion dollars in the period ended July 31, beating analysts’ average estimate of about $5.2 billion.
Snowflake Rg-AIt is trading higher on Thursday afternoon with a bullish gap to $169.58. The 200-period moving average within the aforementioned gap, RSI rising at 84 points and the MACD lines above the zero level.