Snowflake's Q2 2025 earnings report showcased robust growth and solidified its position in the cloud data warehousing market. The company's revenue exceeded expectations, but its earnings per share (EPS) fell slightly short of predictions. Here's a detailed analysis of the earnings surprise:
- Revenue Performance:
- Snowflake's estimated revenue for Q2 2025 was $851.58 million1.
- The actual revenue reported was $868.8 million, surpassing estimates by approximately 2.3%23.
- This marked a 29% year-over-year growth in revenue23.
- Earnings Per Share (EPS) Analysis:
- Analysts had anticipated an EPS of $0.16 for the quarter4.
- Snowflake reported an EPS of $0.18, which was a slight improvement from the previous year's $0.165.
- This EPS exceeded expectations by approximately 12.5%5.
- Innovation and Market Strategy:
- Snowflake's focus on AI and data engineering innovation was evident, with over 2,500 accounts weekly adopting its Cortex AI product6.
- The company's Remaining Performance Obligations (RPO) increased by 48% to $5.2 billion, indicating strong future revenue potential6.
- Stock Performance and Analyst Reaction:
- Despite the earnings beat, Snowflake's stock experienced a decline, which was attributed to a bearish market reaction to a decrease in EPS marginality5.
- Analysts maintained a positive outlook, with a Strong Buy consensus rating and an average price target of $203.95, suggesting a 59.3% upside potential4.
In conclusion, Snowflake's Q2 2025 earnings surprise was significant, with the company exceeding revenue expectations and delivering a stronger-than-expected EPS. This performance underscores Snowflake's continued growth trajectory, driven by innovation in AI and data products, despite a challenging market environment.
3/29/2025 05:23am
