$Snowflake (SNOW.US)$ Announced a better-than-expected sales outlook, indicating that the newly launched products have been warmly received by customers. Financial reports show that Snowflake's revenue for the third quarter of fiscal year 2025 was $0.942 billion, a year-on-year increase of 28%, exceeding the market expectation of $0.898 billion; under non-GAAP, the eps was $0.20, higher than the market expectation of $0.15.

The company's product revenue grew 29% in the third fiscal quarter, reaching $0.9 billion, while the average expectation was $0.857 billion.

Snowflake currently has 542 customers who have spent over $1 million in the past 12 months, up from 510 last quarter. As of July 31, the remaining performance obligations (another key growth benchmark) were $5.7 billion, exceeding the analyst average estimate of about $5.2 billion.

Snowflake expects product revenue for the fiscal quarter ending in January to be between $0.906 billion and $0.911 billion, well above the expectation of $0.8907 billion. The company expects total product revenue for the year to reach $3.43 billion, while the expectation was $3.36 billion.

Snowflake CEO Sridhar Ramaswamy stated, "Snowflake's third quarter performance was strong, with product revenue reaching $0.9 billion, a year-on-year increase of 29%, and remaining performance obligations of $5.7 billion, with year-on-year growth accelerating to 55%."

After the financial report was released, Snowflake's stock price surged nearly 20%.

Can it break out of the slump?

The company's stock price rose by about 16% in after-hours trade. Analyst Brent Bracelin from Piper Sandler wrote before the earnings report that the company's stock price had fallen 35% this year as of Wednesday's close, and investor sentiment was "low." He added that this was due to concerns over a slowdown in consumer spending on the platform, recent leadership changes, competition, and broader economic pressures.

Snowflake's product expansion strategy is somewhat pressured by competition from rivals including Databricks and cloud infrastructure providers like Microsoft. Snowflake often boasts that its ease of use is its competitive advantage. When asked about Databricks, the company stated, "Our competitors are a patchwork of things, and customers have to spend a lot of money hiring engineers to make everything work properly."

Snowflake's software can extract, organize, and analyze data from various sources. Under the leadership of CEO Sridhar Ramaswamy, the company launched products using generative ai, allowing customers to analyze more types of data.

As part of this effort, Snowflake has announced the acquisition of Datavolo, a startup that makes it easier to access unstructured data, unstructured data is disorganized information from other sources, often used for generative artificial intelligence.

Ramaswamy stated that this trade will make it easier for customers to analyze more information in Snowflake and build ai-based applications based on that data.

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