Feb 24 (Reuters) - Snowflake forecast fiscal 2027 product revenue above Wall Street estimates on Wednesday, a sign that new clients are turning to the company's cloud-based data analytics platform driven by booming adoption of artificial intelligence tools.
Enterprise clients are stepping up investments in shifting their workloads to the cloud while looking to develop AI applications, driving up demand for companies like Snowflake.
Founded in 2012, Snowflake offers a platform where clients store and integrate their data in one place to generate business insights, build AI tools and solve crucial operational problems.
The company made its Snowflake Intelligence agentic platform available in November last year. It is now adopted by more than 2,500 customers, CEO Sridhar Ramaswamy told Reuters.
"We also signed the largest deal in our history of over $400 million," Ramaswamy said, without disclosing the client name.
Snowflake expects product revenue of $5.66 billion for thefiscal year ending January 31, 2027, above analysts' average estimate of $5.50 billion, according to data compiled by LSEG.
First-quarter product revenue forecast of $1.26 billion to $1.27 billion came in above estimates of $1.23 billion.
Snowflake's business model hinges on the number of customers using its storage and compute through its consumption-based pricing amid intense competition from companies such as Databricks, which raised $5 billion earlier this month.
Shares of Snowflake fell around 3% in extended trading.
The company has struck two separate multi-year $200 million deals with both OpenAI and Anthropic to integrate their advanced models into its platform for boosting enterprise AI adoption.
Snowflake bought app-monitoring platform Observe for an undisclosed amount recently, as it looks to enhance its ability to troubleshoot software, system and data performance issues.
The company, which has more than 13,000 clients including names such as Figma and BlackRock, said its fourth-quarter product revenue rose about 30% to $1.23 billion, beating estimates of $1.18 billion.
Adjusted earnings per share of 32 cents beat estimates of 27 cents per share.
(Reporting by Jaspreet Singh in Bengaluru; Editing by Alan Barona)
