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Snowflake reported strong revenue growth of 30 percent in the second quarter of the current fiscal year. The number of key customers also grew. However, growth is expected
Snowflake reported strong revenue growth of 30 percent in the second quarter of the current fiscal year. The number of key customers also grew. However, growth is expected to slow down in the next quarter.
Snowflake reported strong results for the second quarter of its fiscal year 2025. Unfortunately, they are not enough to completely calm nervous investors. However, the company reported strong growth in both revenue and customer retention for the second quarter, indicating increasing demand for the data cloud specialist’s services.
Snowflake reported total revenue of $868.8 million in the second quarter of FY25, representing 29 percent growth over the same quarter last year. Product revenue increased to $829.3 million, representing a 30 percent increase.
A key indicator of Snowflake’s success is its net revenue retention rate, which was 127 percent in the second quarter. This percentage indicates that existing customers have significantly expanded their use of the Snowflake platform, indicating customer satisfaction and continued growth.
The number of customers generating more than $1 million in product revenue over the last twelve months increased to 510, a 28 percent increase year over year, demonstrating Snowflake’s ability to attract and retain valuable customers.
In addition, Snowflake now serves 736 companies from the Forbes Global 2000 list, which is also an increase of five percent annually. Snowflake has a strong focus on large enterprise customers, and this seems to be resonating with the market.
However, shareholders are not unanimously satisfied. Snowflake expects third-quarter sales of around $850 million, representing growth of 22 percent compared to the previous year. Annual sales are expected to reach $3.35 billion, representing growth of 26 percent. Investors see this as a disappointing development: the growth figures are high, but the rate of growth is slowing.
Now that investors are wary of the value of technology stocks, their standards are higher. Slowing growth is a warning sign for many, which is why Snowflake’s stock took a slight dip when it released its results over the weekend.
From an engineering perspective, the numbers are certainly nice. They show that Snowflake is able to both attract new customers and encourage existing customers to use the platform more. Concerns about the security of the platform don’t seem to have had any real impact.
Source: IT Daily
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