Snowflake Increases Revenue Forecast and Share Buyback

Data cloud analytics firm Snowflake announced an increase in its full-year product revenue forecast on Wednesday, driven by a growing client base attracted to its cloud platform due to advancements in artificial intelligence. The company now anticipates product revenue of $3.36 billion for fiscal 2025, up from a previous estimate of $3.30 billion. Despite this positive outlook, Snowflake's shares fell over 7% in extended trading, a decline attributed by D.A. Davidson analyst Gil Luria to the lack of an accompanying increase in margin forecasts. In addition to the revenue forecast adjustment, Snowflake has authorized an additional $2.5 billion for its share buyback program, which is set to run through March 2027. This move is seen as a strategy to enhance shareholder value, even as the company navigates challenges stemming from a data breach earlier this year that compromised customer data from major firms, including Ticketmaster-parent Live Nation and telecom giant AT&T. The demand for Snowflake's Data Cloud platform has surged, particularly as AI integration allows enterprises to manage their data more efficiently. For the second quarter ending July 31, the company reported product revenue of $829.3 million, surpassing estimates of $808.4 million, according to LSEG data. Snowflake is actively investing in AI technologies, having developed its own large language model, Snowflake Arctic, and formed a partnership with Meta to leverage its Llama models, further enhancing the appeal of its cloud offerings.