TLDR
- Snowflake posted Q3 earnings of 35 cents per share and $1.21 billion revenue, crushing analyst forecasts of 31 cents and $1.18 billion.
- The stock dropped 8-9% after hours despite the beat as Q4 product revenue guidance suggests 27% growth versus investor hopes for 30%+.
- A $200 million Anthropic partnership will bring Claude AI models to more than 12,600 Snowflake customers across the platform.
- Remaining performance obligations jumped 37% to $7.88 billion, well above the $7.43 billion Wall Street estimate.
- Shares had surged 72% year-to-date heading into the earnings report, setting an elevated bar for results.
Snowflake knocked its third-quarter earnings out of the park Wednesday night. Wall Street still wasn’t impressed.
The cloud data analytics firm reported adjusted earnings of 35 cents per share. Analysts expected 31 cents.
Revenue came in at $1.21 billion versus consensus estimates of $1.18 billion. Product revenue hit $1.16 billion against the $1.13 billion forecast.
CEO Sridhar Ramaswamy described Snowflake as the cornerstone for customer data and AI strategies. He said the company drives real business impact at scale.
Remaining performance obligations rose 37% from last year to $7.88 billion. This metric shows contracted future revenue waiting to be recognized. Analysts wanted $7.43 billion.
Every single number beat expectations. The stock still fell hard.
Why the Selloff Happened
The answer lies in forward guidance. Snowflake expects fourth-quarter product revenue between $1.195 billion and $1.2 billion.
That’s above analyst estimates of $1.18 billion. But it translates to roughly 27% growth.
The stock had already rocketed 72% this year before earnings. Investors were betting on something closer to 30% growth or higher.
“Given the dramatic appreciation in share price this year, investors were expecting guidance of more than 30%,” said D.A. Davidson analyst Gil Luria. He believes that growth will materialize in the next quarter.
Shares closed Wednesday up 2.1% at $171.81. After the report dropped, the stock plunged between 8% and 9.3% in extended trading.
Full-year product revenue guidance stands at $4.45 billion. That beats the $4.41 billion consensus but failed to excite investors.
Big Moves in AI Partnerships
Snowflake didn’t just report numbers. The company announced a major AI deal worth watching.
A multiyear $200 million partnership with Anthropic will integrate Claude AI models into Snowflake’s platform. More than 12,600 global customers will gain access.
Anthropic launched Claude Opus 4.5 on November 24. It’s their most powerful AI model to date.
The company also strengthened its Accenture partnership to help businesses scale generative AI innovation. Snowflake crossed $2 billion in AWS Marketplace sales this year and unveiled new Amazon Web Services integrations.
Google’s Gemini AI is another collaboration partner. Snowflake is embedding large language models into its tools so customers can build AI applications directly on their managed data.
The Growth Story Continues
Businesses are racing to deploy generative AI strategies. They’re using large language models for analytics, automation and customer engagement.
That creates demand for cloud data platforms like Snowflake. Companies need somewhere to organize, store and secure their data for AI applications.
The third-quarter results prove the business model works. Revenue keeps climbing and customer commitments are growing.
But when a stock runs up 72% in a year, the bar gets set higher. Snowflake cleared almost every hurdle but stumbled on the one that mattered most to investors right now.
The Montana-based company beat on earnings, beat on revenue, beat on future bookings, and announced a massive AI partnership. Sometimes that’s still not enough when expectations run this hot.
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