Snowflake shares Spike as sales increase. Management is more optimistic.

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Snowflake shares gained ground late in the day after the company posted better-than-expected growth for its fiscal second quarter ended July 31. Management has raised its annual forecast for product sales for the second time.

Snowflake

the stock (ticker: SNOW) rose 5.5% to $ 299.28 at the end of the session.

For the quarter, the cloud-based data warehouse software company reported revenue of $ 272.2 million, up 104% from a year ago, and ahead of Street’s consensus at $ 256.5 million. Product revenue was $ 254.6 million, up 103%, and exceeded the company’s forecast by $ 235 million to $ 240 million.

Snowflake recorded an operating loss for the quarter of $ 21.9 million on a non-GAAP basis, resulting in a non-GAAP operating margin of -8%, better than the company’s projection of -19 %. Adjusted free cash flow was $ 2.8 million, the third consecutive quarter that this metric has been in the dark. On a GAAP basis, the company lost 64 cents per share in the quarter.

The company ended the quarter with remaining performance bonds, a measure of future work, of $ 1.5 billion, up 122% from a year ago.

Snowflake (ticker: SNOW) said it now has 4,990 total customers, 116 with 12-month product revenue of over $ 1 million.

“Snowflake enjoyed continued momentum in the second quarter with triple-digit product revenue growth, reflecting strength in customer consumption,” Snowflake Chairman and CEO Frank Slootman said in a statement. . Slootman noted that net income retention, a measure of recurring activities, was 169%, down from 168% in the April quarter and 158% a year ago.

For the October quarter, Snowflake reported product revenue of between $ 280 million and $ 285 million, up 89% to 92% from a year ago, with a non-GAAP operating margin of – 7%.

For the full year ending January 2022, the company now sees product revenue ranging from $ 1.06 billion to $ 1.07 billion, up 91% to 93% per share, above its previous forecast of $ 1.02 billion to $ 1.035 billion, the second time it has lifted guidance for the year.

Snowflake posted a non-GAAP operating margin of -9%, a significant improvement over its previous forecast of -17%. The company sees an adjusted free cash flow margin of 7%. Snowflake expects a gross margin for non-GAAP products of 73%, compared to 69% for fiscal 2021 and 63% for fiscal 2020.

Write to Eric J. Savitz at [email protected]