Snowflake Stock Jumps Over 21% In Premarket Following Beat-and-Raise Q3: Retail Braces For ‘Parabolic’ Run

Artificial intelligence data cloud company Snowflake, Inc. ($SNOW) reported Wednesday after the market close fiscal year third-quarter results that exceeded estimates and upped its product revenue guidance for the year. The company also announced a deal to buy Datavolo.

Bozeman, Montana-based Snowflake reported third-quarter non-GAAP earnings per share (EPS) of $0.20, down from $0.25 earned a year-ago. The bottom-line result exceeded the consensus estimate of $0.15 per share.

Quarterly revenue climbed 28% year-on-year (YoY) from $734.17 million to $942.09 million, surpassing the $899.31-million consensus estimate. Product revenue accounted for over 95% of the total and improved 29%.

Among the key operating metrics, the number of customers with trailing 12-month product revenue greater than $1 million, was 542 at the end of the third quarter, up 55% YoY. Forbes Global 500 customers climbed 8% to 754.

Net revenue retention rate was 127% as of Oct. 31.

Sridhar Ramaswamy, CEO of Snowflake said, "Snowflake delivered a strong third quarter, with product revenue of $900 million, up 29% year-over-year, and remaining performance obligations of $5.7 billion, with year-over-year growth accelerating to 55%."

Remaining performance obligations refers to the amount of contracted future revenue that hasn’t been recognized yet.

"Our obsessive drive to produce product cohesion and ease of use has built Snowflake into the easiest and most cost effective enterprise data platform. That is what’s leading us to win new logo after new logo, expand within our customer base, and displace our competition over and over again."

For the fourth quarter, the company expects product revenue of $906 million to $911 million, representing 23% YoY growth, and operating income margin of 4%.

The company upped its full-year 2025 product revenue guidance from $3.36 billion to $3.43 billion.

Separately, the company announced a definitive agreement to acquire open data integration platform Datavolo. "Together, Datavolo and Snowflake will both simplify data engineering workloads and deliver unmatched data interoperability and extensibility – a building block for effective enterprise AI," Snowflake said.

SNOW sentiment and message volume November 21, 2024, premarket as of 6:27  am ET | Source: Stocktwits

On Stocktwits, retail sentiment toward Snowflake stock improved from ‘bullish’ a day ago (58/100) to ‘extremely bullish’ (95/100), with message volume staying ‘extremely high.’ The stock was among the top 10 trending stocks on the platform.

Following the results, analysts at JPMorgan, Barclays and Jefferies raised their price targets for the stock, according to the Fly. Analysts at Jeffries welcomed the beat-and-raise quarter and said the company has a “massive runway” even as iceberg headwinds were “better than feared.”

Stocktwits platform users were bracing for a “parabolic” day, with the analysts’ reratings.

In premarket trading on Thursday, as of 6:27 am ET, Snowflake shares were up 21.74% at $157.20, marking the highest level since late-May. The stock has underperformed the broader market this year, having lost over 35%.