Snowflake is predicting product revenue of $5.66 billion for fiscal year 2027, exceeding Wall Street's consensus estimate of $5.50 billion. This projection reflects a growing demand for its cloud-based data analytics services, particularly as businesses increasingly adopt artificial intelligence (AI) technologies. The company’s first-quarter revenue forecast also surpassed expectations, with estimates ranging from $1.26 billion to $1.27 billion, compared to the predicted $1.23 billion.
CEO Sridhar Ramaswamy highlighted the success of the Snowflake Intelligence platform, launched in November, which has attracted over 2,500 customers. The firm has secured its largest deal to date, valued at over $400 million, although details about the client remain undisclosed. In addition, Snowflake has formed two multi-year agreements, each worth $200 million, with AI companies OpenAI and Anthropic to enhance its platform’s capabilities.
Despite these positive developments, Snowflake's shares fell approximately 3% in after-hours trading. The company faces stiff competition from rivals like Databricks, which recently raised $5 billion, intensifying the competitive landscape within the data analytics industry. Additionally, Snowflake's recent acquisition of Observe, an app-monitoring platform, is expected to improve its service offerings by enhancing troubleshooting capabilities.