AI coding assistants trigger explosive growth! Snowflake (SNOW.US) exceeds annual guidance expectations with massive boost, surges over 20% after hours

According to Zhitong Finance APP, cloud data platform Snowflake (SNOW.US) surged in after-hours trading on Wednesday, with its share price soaring over 20% at one point, as the company raised its full-year product sales guidance, significantly surpassing Wall Street consensus expectations and highlighting the rapid penetration of its AI-assisted coding tool CoCo.

Quarterly results details: For the second fiscal quarter ending in July, product revenue grew 37% year-over-year to $1.49 billion, exceeding the Bloomberg-compiled consensus of $1.42 billion. Total revenue reached $1.55 billion, up 35% year-over-year; however, Remaining Performance Obligations (RPO—a measure of future contract value) recorded $9.0 billion, slightly below the market expectation of $9.37 billion. Non-GAAP operating profit margin stood at 15.3% with an operating profit of $237 million. Free cash flow was $83.8 million (margin of 5.4%), and adjusted free cash flow reached $92.3 million (margin of 6.0%). The company added 692 net new customers (up 32% year-over-year), bringing the total number of customers with product revenue exceeding $1 million in the past 12 months to 828 (up 27% year-over-year), with Forbes Global 2000 customers increasing to 829.

Some analysts pointed out that the temporary RPO miss might be related to contract renewal rhythms and some major clients shifting to on-demand consumption models, rather than signaling weak demand. The company also emphasized that the number of new large enterprise customers added remained in double-digit growth, with both customer retention rate and net revenue retention rate staying within healthy ranges.

According to the company’s Q2 fiscal 2026 earnings report (ending July 2025), Snowflake expects full-year product revenue to reach approximately $6.07 billion by January 2026, up from the prior guidance in May and well above analysts’ average forecast of $5.86 billion. Product revenue (mainly including cloud data warehouse, data lake, and AI platform subscription services) accounts for about 95% of the company’s total revenue and is a key indicator for measuring its core business growth.

The AI product line emerged as the biggest highlight this quarter. The company revealed that its embedded AI programming assistant CoCo was adopted by over 2,000 new enterprise customer accounts during the quarter, bringing the total number of accounts using CoCo to 9,100. Snowflake is deeply integrating generative AI into data governance, query optimization, and automated development processes, aiming to enable non-technical users to complete complex data analysis through natural language interaction. Management emphasized during the earnings call that CoCo’s adoption is reflected not only in customer numbers but also in the sequential acceleration of consumption volume, proving the AI functionality has moved from “early trial” to real production-grade deployment.

Market context and competitive landscape: The upgraded guidance comes amid increasingly fierce competition in the data infrastructure sector. Snowflake’s biggest rival, Databricks, completed a new financing round last month with a valuation reaching $190 billion, and announced its annualized revenue run rate has exceeded $7 billion, growing over 80% year-over-year in the second quarter. By comparison, while Snowflake’s current $6.07 billion annualized product revenue guidance shows a 'catch-up' trend, its focus on platform usability, multi-cloud deployment, and AI-native ecosystem continues to be favored by most institutions. Benchmark Co. analyst Yi Fu Lee wrote in a pre-earnings report: “Expectations for Snowflake have materially increased, and investors will now be focusing heavily on the sustainability of AI-driven consumption trends — which is far more decisive than a single quarter’s beat.”

As of the close of regular trading, Snowflake ended at $305.84, up about 39% year-to-date. In after-hours trading, the stock quickly broke above $370, reflecting interim market approval of management’s AI monetization strategy. The CFO stated during the Q&A session that despite ongoing macro uncertainties, enterprise customers’ budgeting priorities for an integrated “data+AI” platform continue to rise, providing support for the seasonally strong second half.