(Updated - May 23, 2024 5:10 AM EDT)
Snowflake (NYSE:SNOW) reported a solid start to the fiscal year with first-quarter revenue exceeding analyst expectations, sending shares up 4% in premarket trading Thursday.
The cloud-based data warehousing company announced that its revenue for the quarter reached $828.7 million, a 33% increase from the same period last year, and well above the consensus estimate of $786.82 million.
The company's adjusted earnings per share (EPS) came in at $0.14, which was $0.04 below the analyst estimate of $0.18. Despite the EPS miss, investors focused on the company's robust revenue performance, which was driven by a 34% year-over-year (YoY) growth in product revenue, totaling nearly $790 million.
The company guided for product revenue for the second quarter to be between $805 million and $810 million, surpassing analysts' consensus estimate of $785 million.
For 2025, Snowflake has raised its product revenue forecast to $3.30 billion, up from the previous estimate of $3.25 billion.
Snowflake's net revenue retention rate stood at 128%, indicating strong customer satisfaction and expanded usage.
The company also reported significant growth in its customer base, with 485 customers now generating over $1 million in trailing 12-month product revenue, marking a 30% increase YoY.
Remaining performance obligations surged to $5.0 billion, a 46% YoY increase, signaling future revenue potential. The company's CEO, Sridhar Ramaswamy, attributed the strong quarterly performance to the company's core business strength and the growing interest in its AI products.
In addition to its financial results, Snowflake announced its plans to acquire technology assets and key personnel from TruEra, an AI observability platform, further emphasizing its commitment to innovation in the AI space.
In the wake of the report's release, analysts at Goldman Sachs reiterated a Buy rating and the $220 target price on SNOW as they believe the company "is favorably positioned to deliver leading product innovations while addressing large, durable market opportunities like GenAI, ML/AI, and OLTP."
"We point to Snowflake Summit as a near-term catalyst (June 3 - 6), where we expect more details on the company’s AI product roadmap, longer-term growth strategy, and competitive positioning that can help underpin durable growth," they added.
Elsewhere, analysts at Stifel said they view Snowflake's guidance as conservative, expecting upside to the upper 20% range throughout this fiscal year.
"We continue to view SNOW as a core long-term holding as we believe its unique positioning within the modern
data stack positions it to be a key AI beneficiary," they added.