Key Takeaways
- Q4 earnings per share reached $0.34, surpassing analyst predictions by $0.07
- Total revenue achieved $1.28B, exceeding the $1.26B Wall Street forecast
- Product revenue climbed approximately 30% from the prior year to $1.23B
- Major $200M multi-year partnerships announced with both OpenAI and Anthropic
- Shares declined in extended trading despite earnings beat; down 32.65% in three-month period
Snowflake delivered impressive fourth-quarter numbers that exceeded Wall Street’s expectations — yet investors weren’t convinced.
The cloud data platform reported adjusted earnings per share of $0.34, comfortably above the Street’s $0.27 target by $0.07. Total revenue landed at $1.28 billion, surpassing the consensus figure of $1.26 billion.
The company’s product revenue metric, which analysts track closely, jumped approximately 30% compared to last year, hitting $1.23 billion and beating the expected $1.18 billion. By traditional standards, these are impressive growth figures.
Yet Snowflake’s shares edged lower in after-hours action following the earnings release. The stock continued trading modestly down in Thursday’s premarket session.
Truist Securities analysts identified the issue in their research note: inflated expectations. “Snowflake produced fourth-quarter results with upside to consensus,” the analysts explained. “However, shares traded off slightly after hours as we believe management set higher expectations when they articulated their methodology on the third-quarter call.”
Essentially, while the company exceeded estimates, it didn’t surpass them by a wide enough margin to satisfy a market anticipating even stronger results.
Snowflake’s shares ended regular trading at $169.21 on earnings day. The stock has tumbled 32.65% during the previous three months, though it maintains a modest 1.82% gain over the past year.
Analyst sentiment heading into earnings was notably cautious. Over the preceding 90 days, Snowflake received just 6 upward EPS revisions compared to 31 downward adjustments, indicating Wall Street had been lowering its bar.
Strategic AI Partnerships and Growing Demand
Enterprise customers continue expanding their investments in cloud data infrastructure and artificial intelligence workloads, which directly benefits Snowflake’s consumption-driven revenue model. The platform earns more as customers increase their compute and storage usage.
Snowflake announced significant moves into AI territory with two separate multi-year contracts valued at $200 million each — one with OpenAI and another with Anthropic. These partnerships aim to embed advanced AI capabilities directly within Snowflake’s data ecosystem.
Competitive Landscape and Forward Outlook
Snowflake’s consumption-based business model is facing intensifying competition. Databricks, still operating as a private company, recently secured $5 billion in funding and is aggressively pursuing the same market opportunities.
Looking ahead to fiscal 2027, Snowflake projects product revenue will reach $5.66 billion. For the upcoming first quarter, management expects product revenue between $1.26 billion and $1.27 billion.
Snowflake’s most recent closing price stood at $169.21.
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