By Emily Dattilo

Winter may be wrapping up, but Snowflake stock sure isn't melting following strong results from the cloud-based storage company after markets closed Wednesday.

Snowflake stock gained 13% to $187.56 in premarket trading Thursday.

BTIG analysts Gray Powell and Trevor Rambo, who rate shares at Buy with a price target of $220, weighed in on the quarter. "All in, we thought it was a very good report," analysts wrote. "Core data warehouse consumption trends remain strong and new product initiatives appear to gaining momentum."

"Our fieldwork leads us to believe that the demand environment is improving this year," they continued. "And we see potential for incremental upside in 2H'F26 as more AI workloads move into production."

The company reported fourth-quarter earnings of 30 cents a share on revenue of $986.8 million. Analysts surveyed by FactSet were expecting earnings of 18 cents a share on revenue of $957 million.

The company also reported product revenue -- derived from Snowflake customers' consumption of compute, storage, and data transfer -- of $943.3 million, beating estimates of $914 million.

Snowflake also shared some nonfinancial information.

First, the company announced an expanded partnership with Microsoft to integrate OpenAI's models directly into Snowflake Cortex AI.

And second, Chief Financial Officer Michael Scarpelli notified the company of his intention to retire after a successor is found.

"We were surprised that the stock held up on this news," Guggenheim analysts led by John DiFucci, who rate shares at Neutral wrote. "We view this as a testament to the traction the current team (led by CEO Sridhar Ramaswamy, who took the reins one year ago) has demonstrated, along with the confidence that Mr. Scarpelli's legacy at Snowflake is likely reflected in those he'll leave behind, and we see this as encouraging for the business going forward."

Snowflake also forecast first-quarter product revenue to be between $955 million to $960 million, compared with the $961 million expected by analysts. For the year, the company expects product revenue of $4.28 billion, beating Wall Street estimates of $4.23 billion.

Wedbush analysts led by Daniel Ives, who rate Snowflake at Outperform with a price target of $210, weighed in on the financial guidance.

"The company provided relatively conservative FY26 guidance as the company looks to stabilize growth across its core businesses despite baking in performance headwinds with product improvements impacting sales motions," they wrote.

Write to Emily Dattilo at emily.dattilo@dowjones.com

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February 27, 2025 08:29 ET (13:29 GMT)

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