Snowflake Surges After Q2 Earnings Beat Estimates with 32% Revenue Increase

Snowflake (SNOW) Q2 earnings beat estimates with adjusted earnings of $0.38 per share and a 32% increase in revenue to $1.1 billion. The company reported a 33% increase in remaining performance obligations to $6.9 billion and a net revenue retention rate of 125%. Snowflake's CEO highlighted strong product revenue growth and a significant customer base. The company expects product revenue to reach $4.395 billion in FY26 and anticipates a 9% operating margin for the full year. Analysts have a Strong Buy consensus rating on SNOW stock with an average price target of $234.10 per share, implying 16% upside potential.

Snowflake Inc. (SNOW) has reported its second-quarter fiscal 2026 earnings, which beat analyst estimates. The company announced adjusted earnings per share (EPS) of $0.38, surpassing the Zacks Consensus Estimate of $0.26 per share [1]. This represents a 44.4% year-over-year growth in earnings. Additionally, Snowflake's revenue surged 32% to $1.1 billion, exceeding the Zacks Consensus Estimate of $1.09 billion [1].

The company also reported a 33% increase in remaining performance obligations to $6.9 billion, highlighting its strong product revenue growth. The net revenue retention rate stood at 125%, indicating robust customer loyalty and usage of its platform. The company's CEO emphasized the significant customer base, with 11,961 total customers and 634 customers with trailing 12-month product revenues greater than $1 million [1].

Snowflake expects product revenue to reach $4.395 billion in the fiscal year 2026 and anticipates a 9% operating margin for the full year. Analysts have a Strong Buy consensus rating on SNOW stock with an average price target of $234.10 per share, implying 16% upside potential [2].

Despite the strong financial performance, Snowflake faces stiff competition from major cloud providers such as Amazon Web Services, Azure, and Google Cloud. The company's valuation is considered stretched, with the stock trading at a premium compared to the industry average [1].

Overall, Snowflake's Q2 results reflect robust growth and customer adoption, positioning the company for continued success. However, investors should be mindful of the competitive landscape and stretched valuation when considering the stock.

References:
[1] https://www.tradingview.com/news/zacks:48970af98094b:0-buy-sell-or-hold-snowflake-stock-key-tips-ahead-of-q2-earnings/
[2] https://finance.yahoo.com/news/buy-sell-hold-snowflake-stock-163300911.html