Investing.com -- Snowflake Inc (NYSE:SNOW) saw its shares jump over 10% in premarket trading Thursday after the AI Data Cloud company reported fourth-quarter earnings that exceeded analyst expectations and issued a better-than-expected product revenue guide for the fiscal 2026.
The software maker also announced an expanded partnership with Microsoft (NASDAQ:MSFT) to integrate OpenAI models.
The company reported adjusted earnings per share of $0.30, surpassing the analyst estimate of $0.17 by $0.13. Revenue for the quarter came in at $986.8 million, beating the consensus estimate of $956.22 million and representing a 27% increase YoY.
Product revenue, a key metric for Snowflake, reached $943.3 million, up 28% YoY. The company's net revenue retention rate stood at 126% as of January 31, 2025.
"We delivered another strong quarter, with product revenue of $943 million, up a strong 28% year-over-year," said Sridhar Ramaswamy, CEO of Snowflake. "Today, Snowflake is the most consequential data and AI company in the world."
Snowflake reported 580 customers with trailing 12-month product revenue greater than $1 million, a 27% YoY increase. The company also noted that it now serves 745 Forbes Global 2000 customers, up 5% YoY.
Looking ahead, Snowflake expects product revenue in the first quarter of fiscal 2026 to grow 21-22% YoY to between $955 million and $960 million.
For the full fiscal 2026, the software maker expects product revenue of $4,28 billion, reflecting a YoY growth of 24%, and compared to the previous consensus of $4,23 billion.
RBC Capital Markets described the full-year guide as "bullish."
"We believe growth could approach 30% on building trends into the 2H/26," analysts led by Matthew Hedberg added. They lifted their SNOW target price to $221 from $210.
Similarly, Jefferies analysts believe that many of Snowflake's product and go-to-market (GTM) initiatives from last year "are expected to bear fruit" in the second half of the year.
"We believe SNOW is back on track towards an acceleration narrative and view the story as a key AI play investors need to continue to be long in '25," they noted.
Alongside earnings, Snowflake also announced an expanded partnership with Microsoft to integrate OpenAI's models directly into Snowflake Cortex AI, its fully managed AI service, on Microsoft Azure AI Foundry.