Snowflake (SNOW, Financials) reported fourth-quarter earnings that exceeded market expectations, driven by strong product revenue growth and expanding artificial intelligence offerings.

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The firm exceeded analysts' projections by $0.12 by posting adjusted earnings per share of $0.30 for the quarter of Jan. 31. Rising 27.4% annually to $986.77 million, revenue exceeded estimates by $30.51 million. Comprising most of Snowflake's income, product sales grew 28% to $943 million.

Snowflake said that, compared to last year, its 9% non-GAAP operating margin for the quarter shows progress. Reflecting operational effectiveness, non-GAAP adjusted free cash flow margin came at 43%. Measuring contractual income yet to be recorded, the company's outstanding performance obligations increased 33% to $6.9 billion.

Snowflake is positioned itself as a leader in data and artificial intelligence, CEO Sridhar Ramaswamy said, noting rising acceptance of its AI and data-sharing features. Adding OpenAI models from Microsoft 365 Copilot and Teams, the business enlarged its Cortex AI platform. These advances, according to Ramaswamy, will let business users of Microsoft's ecosystem create AI-driven insights. With companies like ExxonMobil (XOM, Financials), Honeywell (HON, Financials), and the London Stock Exchange Group adopting Snowflake's data-sharing platform, he also underlined great client uptake.

While supply chain provider Blue Yonder handles more than 20 billion predictions daily using Snowflake's AI capabilities to assist retailers and logistics organizations manage operations, financial technology company Fiserv (FISV, Financials) is employing Snowflake to provide analytics solutions for its customers. Weekly use of Snowflake's AI and machine-learning capabilities by more than 4,000 clients is already very high.

Reflecting a 21% year-over-year increase, Snowflake forecasts product sales for the first quarter of fiscal 2026 between $955 million and $960 million. Rising 24% from the year before, full-year product sales are forecast to reach around $4.28 billion. With intentions to increase efficiency via recruiting practices and AI-driven automation, the business projects a non-GAAP product gross margin of 75%.

Once a replacement is in place, CFO Mike Scarpelli declared intentions to retire. Snowflake is well-positioned for future expansion, he added, and the change would be controlled carefully to guarantee consistency. Scarpelli will stay in his post until a new CFO is appointed; the corporation has started looking for one.

Snowflake said its development plan still centers on AI-driven innovation, data-sharing expansion, and effectively scaled operations. The business intends to go over further advances at its investor presentation in June and anticipates ongoing demand for its AI solutions.