According to the financial report, Snowflake (SNOW.US) announced its performance report for the second quarter of the 2025 fiscal year on Wednesday. The company's revenue increased by 29% year-on-year to reach $0.8688 billion, marking the first time since going public that its revenue growth rate has fallen below 30%, but still surpassing the market's expectation of $0.8507 billion. Among them, product revenue grew by 30% to reach $0.829 billion, exceeding the analyst's expectation of $0.813 billion. Adjusted earnings per share were $0.18, slightly higher than the average expectation of $0.16. Despite the better-than-expected performance, Snowflake's prospects in the AI software tool market did not receive full recognition from investors, leading to an after-hours trading drop of more than 8% in its stock price. The company expects product revenue for October to be between $0.85 billion and $0.855 billion, which is higher than the analyst's average forecast of $0.848 billion. In addition, the company has raised its fiscal year product sales forecast from $3.3 billion to $3.36 billion.

It is understood that Snowflake's stock price has fallen by 32% this year, reflecting investor concerns about its competitiveness in the field of AI. Under the leadership of CEO Sridhar Ramaswamy, the company has launched new products that focus on generative AI and big data analysis to counter fierce competition from rivals such as Databricks Inc. and cloud infrastructure providers like Microsoft.

Ramaswamy praised the company's product delivery and the early appeal of its new AI products. However, Derrick Wood, an analyst at TD Cowen, pointed out that Snowflake is facing a challenging market environment, including CEO changes, customer security vulnerabilities, and a shift in the market's expectations beyond its traditional business scope.

In May of this year, Snowflake accounts of clients including AT&T (T.US), Live Nation Entertainment (LYV.US), which owns Ticketmaster, and LendingTree Inc. were hacked. Snowflake responded by stating that its systems were not compromised and that it had added security features for its clients.

When discussing instances of customers' misconduct during the financial conference call, Ramaswamy stated that, this quarter, they encountered some challenging issues, but the problems are not on Snowflake's side. Currently, Snowflake has 510 customers who have spent over $1 million in the past 12 months, which is higher than the previous quarter's 485. As of July 31st, the company's remaining contractual obligations amount to $5.2 billion, surpassing the analyst's average estimate of $5 billion.

It's worth mentioning that last year, while many peers were choosing to lay off employees or selectively hire, Snowflake added approximately 1,000 new employees. As of the second quarter, the total number of employees in the company reached 7,630.

Overall, Snowflake's performance report exceeded market expectations, but investors remain cautious about its long-term competitiveness and market prospects in the field of artificial intelligence. The company needs to continue to consolidate its product advantages in the fierce market competition and strengthen customer trust and security.