Shares of Snowflake (SNOW) sank in after-hours trading after the data warehousing giant reported second-quarter results. Adjusted earnings of $0.18 per share beat analysts’ consensus estimate of $0.16 per share. Furthermore, the company saw a 28.9% increase in revenue to $868.82 million, which beat estimates of $850.2 million. This could be attributable to a 48% increase in remaining performance obligations to $5.2 billion and a net revenue retention rate of 127%.
The company anticipates its product revenue to come in at $3.356 billion in Fiscal Year 2025. Meanwhile, for the upcoming quarter, Snowflake expects its product revenue to range between $850 million and $855 million. Both forecast periods are expected to have an operating income margin of 3%.
In addition, the company bought back $400 million worth of shares during the second quarter and had $491.9 million still available for future repurchases. As a result, the board approved an additional $2.5 billion for stock buybacks and extended the program’s expiration date from March 2025 to March 2027. Interestingly, the company only started repurchasing shares in 2023, as pictured below.
Is SNOW a Good Buy Right Now?
After a 12% decline in SNOW shares over the past year, analysts have a Strong Buy consensus rating on SNOW stock based on 25 Buys, eight Holds, and zero Sells with an average price target of $200.97 per share. However, it’s worth noting that estimates will likely change following today’s earnings report.
