NEWS | Snowflake reported 1.55 billion dollars in revenue for its fiscal second quarter, up 35 percent from last year and beating what analysts expected. Product revenue alone hit 1.49 billion dollars, up 37 percent, marking three straight quarters where growth kept speeding up instead of slowing down. Shares jumped more than 22 percent after the results came out.
The growth is coming straight from AI tools built into Snowflake's platform. Its AI coding assistant, called CoCo, grew past 9,000 customer accounts, while another AI product, CoWork, expanded to nearly 6,000 accounts. One customer is already using CoCo to move 12 billion records at half the usual cost, and companies like 1Password and Indeed picked Snowflake specifically to help run their own AI systems. Snowflake also raised its full year revenue guidance, now expecting 36 percent growth instead of the 31 percent it predicted just one quarter ago.
BMN sees this as proof that AI spending inside big companies is still very much alive, not slowing down like some had worried. Snowflake makes money based on how much customers actually use its platform, so this growth reflects real usage, not just contracts signed on paper.
There is one number worth watching closely though. Snowflake's profit margin guidance actually got trimmed slightly even as revenue guidance went up, meaning the company may be spending more to keep this AI growth going.
If Snowflake needs to spend more just to keep this AI growth accelerating, how long can revenue keep climbing before profit starts paying the price?
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