Snowflake, a data cloud analytics company, recently released its fiscal second-quarter 2025 earnings, reporting $869 million in revenue. This figure surpassed the $851 million expected by analysts, showing strong performance in terms of top-line growth.
However, despite beating Wall Street’s estimates, Snowflake experienced decelerating product revenue growth compared to previous quarters. The company reported $829.3 million in product revenue, up 30% year over year. While this growth is positive, it represents a slowdown from the 34% year-over-year increase seen in the fiscal first quarter.
Snowflake also saw its net loss widen to $317 million, or a loss of 95 cents per share, from $227 million, or a loss of 69 cents per share, in the same period a year earlier. This increase in net loss may raise concerns among investors about the company’s profitability and overall financial health.
Analysts at Morgan Stanley considered Snowflake’s results to be good but not sufficient to drive significant investor enthusiasm. They highlighted the company’s smaller product revenue beat and deceleration in growth as potential areas of concern. Additionally, they noted that Snowflake’s new generative artificial intelligence portfolio could play a key role in driving future growth.
Following the earnings report, shares of Snowflake dropped by 13%, indicating that investors may have been disappointed with the results. Analysts at Barclays maintained an equal weight rating on the stock, suggesting that the second-quarter results were not a major catalyst either positively or negatively for Snowflake’s investment case.
Overall, Snowflake’s second-quarter earnings report showed both strengths and weaknesses. While the company exceeded revenue expectations, the deceleration in product revenue growth and increased net loss may have dampened investor sentiment. Moving forward, Snowflake will need to address these concerns and demonstrate its ability to sustain growth in order to regain investor confidence.
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