The AI coding assistant ignites growth! Snowflake (SNOW.US) generously raises its full-year guidance beyond expectations, surging over 20% after hours.

Cloud data platform Snowflake (SNOW.US) saw a significant rise in after-hours trading on Wednesday, with its stock price soaring over 20%. This surge came after the company announced an upward revision of its full-year product sales guidance, exceeding Wall Street consensus expectations, and prominently showcased the rapid penetration capabilities of its AI-assisted coding tool, CoCo. In terms of quarterly performance details: For the second fiscal quarter ending in July, product revenue grew 37% year-on-year to $1.49 billion, surpassing Bloomberg's consensus expectation of $1.42 billion. Total revenue reached $1.55 billion, a 35% year-on-year increase; however, Remaining Performance Obligations (RPO), a metric for future contract amounts, recorded $9 billion, slightly below market expectations of $9.37 billion. The Non-GAAP operating profit margin reached 15.3%, with operating profit at $237 million. Free cash flow was $83.8 million (profit margin of 5.4%), while adjusted free cash flow reached $92.3 million (profit margin of 6.0%). The company added 692 net customers (a year-on-year increase of 32%), bringing the total number of customers generating over $1 million in product revenue over the past 12 months to 828 (up 27% year-on-year). The number of customers from the Forbes Global 2000 increased to 829. Some analysts noted that the brief lag in RPO could be attributed to contract renewal rhythms and some large customers shifting to an on-demand consumption model, rather than a signal of weak demand. The company also emphasized that the number of new large enterprise customers in the current period continued to grow at a double-digit rate, with customer retention rates and net revenue retention rates remaining in a healthy range. According to the company's second-quarter financial report for the fiscal year 2026 (ending July 2025), Snowflake expects its full-year product revenue by January 2026 to reach approximately $6.07 billion, an increase from the previous projection made in May, significantly exceeding the average analyst forecast of $5.86 billion. Product revenue, which mainly includes subscriptions for cloud data warehouses, data lakes, and AI platform services, accounts for about 95% of the company's total revenue, serving as a key gauge of its core business growth. The AI product line was the biggest highlight of the season. The company revealed that its embedded AI programming assistant, CoCo, added over 2,000 new enterprise customer accounts during the quarter, bringing the total number of accounts in use to 9,100. Snowflake is deeply integrating generative AI into data governance, query optimization, and automated development processes, aimed at enabling non-technical users to conduct complex data analysis through natural language interactions. Management emphasized in the earnings call that the adoption rate of CoCo is reflected not only in the number of customers but also in the acceleration of consumption growth, proving that AI functionality has transitioned from "trial" to actual production-level deployment. Market context and competitive landscape: This upward revision of guidance comes at a time of intensifying competition in the data infrastructure sector. Snowflake's biggest competitor, Databricks, completed a new round of financing last month, reaching a valuation of $190 billion, and announced an annualized revenue run rate that has exceeded $7 billion, with over 80% year-on-year growth in the second quarter. In comparison, Snowflake's current annualized product revenue guidance of approximately $6.07 billion appears to be in "catch-up" mode, but its focus on platform usability, multi-cloud deployment, and AI-native ecosystems continues to be favored by most institutions. Benchmark Co. analyst Yi Fu Lee wrote in a pre-earnings preview report: Market expectations for Snowflake have significantly increased, and investors will closely watch the sustainability of AI-driven consumption trendsthis is more decisive than a one-quarter earnings beat. As of the close of regular trading hours, Snowflake's stock was priced at $305.84, reflecting a year-to-date increase of approximately 39%. In after-hours trading, the stock price quickly surpassed $370, indicating market recognition of management's AI monetization logic at this stage. The company's CFO stated during the Q&A that, despite uncertainties in the macro environment, enterprise customers' budget priority for integrated "data + AI" platforms continues to rise, providing support for the seasonal peak in the second half of the year.