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Snowflake raised its guidance after revenue jumped 34% in fiscal Q1
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The company believes new tools slated for general availability later this year could help juice growth
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Demand for its Cortex AI platform and Iceberg tables is already strong
Let the good times roll! Snowflake bumped up its revenue guidance for the company’s full fiscal year, citing strong demand for its core data storage products as well as healthy interest in its new and forthcoming artificial intelligence (AI) and interoperability tools.
It now expects sales totaling $3.3 billion for fiscal 2025, which runs from February 1, 2024 through January 31, 2025.
Earlier this month, the company pushed its Cortex AI platform into general availability. During an earnings call, CEO Sridhar Ramaswamy said it’s also working toward general availability of new Iceberg, Snowpark Container Services and Hybrid Tables tools later this year.
Iceberg is a table format that allows Snowflake customers to tap into data stored in third party data lakes, including Microsoft’s. Snowpark is a fully managed container service for AI and app deployments, while Hybrid Tables are designed to facilitate transactional workloads.
During an earnings call, Ramaswamy pointed to “strong” demand for Snowflake’s core platform, stating “in the first quarter alone, we saw some of our largest customers meaningfully increase their usage of our core offering.” But its new toolsets are also already gaining traction, he added.
Though it only just came out, more than 750 customers are using Snowflake’s Cortex capabilities. And while both are still in preview, the CEO said “50% of customers are using Snowpark as of Q1” and “more than 300 customers are using Iceberg.”
Ramaswamy flagged Iceberg in particular as the key that could “unlock” accelerated growth for the company.
“Iceberg is enabling us to play offense and address a larger data footprint,” Ramaswamy said. “Many of our larger customers have indicated that they will now leverage Snowflake for more workloads as a result of this functionality.”
And for Snowflake, more consumption means more money.
How big is the opportunity? Well, Ramaswamy also noted that most customers have a volume of data that is “often 100 or 200 times the amount of data that is sitting inside Snowflake.” With Iceberg, they suddenly “can run workloads with Snowflake directly on top of this data. And we don't have to wait for, you know, some future time in order to be able to pitch and win these use cases.”
Those use cases are likely to include a huge helping of AI. A recent survey of 1,200 IT decision-makers worldwide conducted by cloud storage company Wasabi found 90% of organizations plan to increase their cloud storage budgets in 2024 and 99% of companies are planning to deploy AI or machine learning. But 44% of respondents said they're worried storage migration or movement requirements will prove to be a key challenge to these efforts.
Financials
Snowflake’s revenue rose 34% to $789.6 million in its fiscal Q1 2025 (ended April 30, 2024) and it ended the period with a $5 billion pipeline of remaining performance obligations. However, it posted an operating loss of nearly $349 million.
In its fiscal Q2, it expects revenue to rise 26-27% year on year to between $805 million and $810 million.