What happened
Snowflake's stock rallied sharply in extended trading Wednesday, climbing more than 20% and later advancing as much as 23% in the night session, after the company raised its full-year product sales guidance substantially above Wall Street expectations.
For the fiscal second quarter ended July, product revenue rose 37% year over year to $1.49 billion, beating the $1.42 billion consensus, while total revenue grew 35% to $1.55 billion. Remaining performance obligations stood at $9.0 billion, slightly trailing the $9.37 billion forecast.
The company reported 692 net new customers during the quarter and highlighted that its AI-assisted coding tool CoCo added more than 2,000 enterprise accounts, bringing cumulative usage to 9,100 accounts.
Why it matters
Snowflake's updated guidance signals that its generative AI investments, particularly CoCo, are moving from experimentation to production, with management noting consumption accelerated quarter over quarter.
The update comes amid intense competition in data infrastructure, with rival Databricks recently reaching a $190 billion valuation and touting rapid growth. Investors are watching whether AI-driven consumption durability can justify Snowflake's premium valuation.
Key facts
Snowflake raised its full-year product revenue outlook to approximately $6.07 billion for the fiscal year ending January 2026, up from its May prior guidance and above the $5.86 billion consensus.
Product revenue in the fiscal second quarter reached $1.49 billion, up 37% year over year and above the $1.42 billion analyst estimate.
CoCo, Snowflake's AI programming assistant, gained over 2,000 enterprise customer accounts in the quarter, bringing total accounts to 9,100.
The stock jumped over 20% in after-hours trading and traded around $370 after closing at $305.84.
What to watch next
Investors will focus on whether CoCo adoption translates into sustained consumption growth in the coming quarters, which analysts call more decisive than a single-quarter beat.
The market will also watch for signs of demand stability after the RPO miss, which some analysts attribute to contract renewal timing and a shift toward on-demand consumption rather than weak demand.