Snowflake (NYSE:SNOW) delivered fourth-quarter earnings and revenue that topped Wall Street expectations, supported by rising enterprise demand for cloud data platforms and artificial intelligence workloads, although the stock moved slightly lower in premarket trading on Thursday.
The muted market reaction came despite solid financial performance, as investors weighed management’s forward outlook against elevated expectations.
“Snowflake produced fourth-quarter results with upside to consensus. However, shares traded off slightly after hours as we believe management set higher expectations when they articulated their methodology on the third-quarter call,” analysts at Truist Securities said in a note.
Earnings and product revenue beat forecasts
Adjusted earnings per share reached $0.34 for the quarter, exceeding analyst estimates of $0.27. Revenue climbed to $1.28 billion, ahead of consensus projections of $1.26 billion.
Product revenue — a key metric that excludes professional services — increased roughly 30% year over year to $1.23 billion, also surpassing expectations of $1.18 billion.
Looking ahead, Snowflake projected fiscal 2027 product revenue of $5.66 billion. For the upcoming first quarter, the company expects product revenue between $1.26 billion and $1.27 billion.
Cloud migration and AI adoption support demand
Corporate customers continue to increase spending as they migrate data workloads to cloud environments and develop AI-driven applications, trends that are underpinning demand for Snowflake’s platform.
The company operates under a consumption-based pricing model, meaning revenue fluctuates depending on how much computing power and storage customers use. While this structure allows Snowflake to benefit from expanding workloads, it also exposes the company to competition from privately held rival Databricks, which recently secured $5 billion in funding.
Expanding AI partnerships
As part of efforts to strengthen its artificial intelligence offering, Snowflake has entered into separate multi-year agreements worth $200 million each with OpenAI and Anthropic, enabling integration of their AI models directly into its data platform.
The partnerships are intended to deepen Snowflake’s positioning at the intersection of enterprise data infrastructure and generative AI adoption.