May 27 - Snowflake, the cloud data analytics platform, updated its annual product revenue outlook on Wednesday, signaling stronger-than-expected demand for its core data warehousing offerings and rising adoption of its AI toolset. The company said enterprise migrations from legacy systems and expanded use of machine learning tools have helped drive momentum.
Snowflake facilitates the storage, analysis and sharing of large datasets across applications and users. Management highlighted increasing customer engagement with AI capabilities such as Cortex Code and Snowpark - products the company promotes as enablers for building generative AI applications and for deploying machine learning models on customer data.
On the top-line guidance front, Snowflake raised its product revenue forecast for fiscal 2027 to $5.84 billion, up from the prior projection of $5.66 billion. The company also provided a second-quarter product revenue range of $1.415 billion to $1.420 billion, outpacing the consensus analyst estimate of $1.37 billion based on data compiled by LSEG.
"We now have 779 customers spending more than $1 million on a trailing 12-month basis," said finance chief Brian Robins.
For the first quarter, Snowflake reported total revenue of $1.39 billion, which exceeded the average analyst estimate of $1.32 billion. Company commentary attributes the stronger results to a combination of legacy-system migrations and growing enterprise use of machine learning and AI-driven workloads on Snowflake's platform.
The company emphasized that tools like Cortex Code and Snowpark are being used by customers to accelerate the development of generative AI applications and to operationalize machine learning models directly on their data. These product-level trends were cited as contributors to the upward revision of the 2027 product revenue target.
Investors and market participants will be watching whether the cited trends in enterprise cloud migrations and AI tool adoption persist and continue to support Snowflake's revenue trajectory in the quarters ahead.