Snowflake reported fourth-quarter financials that came in well above Wall Street estimates, helping to push up shares of the cloud-based data storage company.
Snowflake reported fourth-quarter earnings of 30 cents a share on revenue of $986.8 million. Analysts surveyed by FactSet were expecting earnings of 18 cents a share on revenue of $957 million.
The company also reported product revenue -- derived from Snowflake customers' consumption of compute, storage, and data transfer -- of $943.3 million, beating estimates of $914 million.
Shares jumped 12% in after-hours trading following the results.
In the same period last year, Snowflake posted earnings of 35 cents a share on revenue of $775 million. Product revenue was $738 million.
Snowflake also forecast first-quarter product revenue to be between $955 million to $960 million, compared to the $961 million expected by analysts. For the year, the company expects product revenue of $4.28 billion, beating Wall Street estimates of $4.23 billion.
"Despite positive indications, guidance of 21-22% product revenue growth issued for Q1 FY26 alludes to potential near-term headwinds to come," Jordan Berger, analyst at Third Bridge wrote on Wednesday. "While our experts indicate Snowflake remains a leader in the rapidly growing data warehousing market, there is significant uncertainty surrounding the materiality of near-term AI tailwinds."
Shares of Snowflake have risen 7.6% this year, but are down 28% over the last 12 months. A hefty valuation, CEO departure, and ongoing competition has weighed on the stock.
Shares are still expensive by traditional valuation metrics, trading at 161 times earnings expected over the next 12 months.
Snowflake continues to benefit from enterprises that are willing to spend on artificial intelligence software to increase productivity. Ramaswamy said on the previous earnings call that "our AI feature family Snowflake Cortex is showing significant adoption."
On Wednesday, Snowflake announced an expanded partnership with Microsoft to integrate OpenAI's models directly into Snowflake Cortex AI.
"Today, Snowflake is the most consequential data and AI company in the world. More than 11,000 customers are already betting their business on our easy-to-use, efficient, and trusted platform," CEO Sridhar Ramaswamy said in the earnings release Wednesday.
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