Snowflake bumped its full-year product revenue target to about $6.07 billion, an increase from its May guidance and above the $5.86 billion average forecast. Product revenue for the quarter ended in July grew 37% to $1.49 billion, beating the $1.42 billion analyst average compiled by Bloomberg. Roughly 95% of Snowflake's total revenue comes from product sales.
The company develops cloud software that lets enterprises manage and make sense of their data, and it is infusing AI across the platform. One showcase is CoCo, its AI-assisted coding tool. During the quarter, more than 2,000 customer accounts started using CoCo, lifting the total to 9,100. Investors have grown optimistic that these AI add-ons can help Snowflake's customers boost their own businesses.
After finishing the session at $305.84, the shares surged by more than 20% in after-hours trading. As of that close, the stock had risen 39% for the year. Remaining performance obligations came in at $9 billion, compared with the $9.37 billion average estimate.
On the competitive front, Databricks, widely seen as Snowflake's chief rival, closed a funding round last month valuing it at $190 billion. The San Francisco startup also said it surpassed a $7 billion revenue run-rate, with second-quarter year-over-year growth exceeding 80%.
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Benchmark Co.'s Yi Fu Lee wrote ahead of earnings that Wall Street's expectations for Snowflake "have increased materially and investors are likely to focus on the durability of AI-driven consumption trends." Translation: the market is watching whether AI-fueled usage holds up. With CoCo adoption climbing, strong top-line beats, and a heavyweight rival scaling fast, the next few quarters will show if Snowflake's AI push turns curiosity into sustained customer spend.