Snowflake shares sink 14% on decelerating product revenue growth

Shares of Snowflake closed down more than 14% on Thursday after the data cloud analytics company released fiscal second-quarter 2025 earnings that beat Wall Street's estimates but showed decelerating product revenue growth compared to past quarters.

Snowflake reported $869 million in revenue, above the $851 million expected by analysts polled by LSEG. The company reported $829.3 million in product revenue, which accounts for most of Snowflake's sales, up 30% year over year. But that marked a slowdown from the 34% year-over-year bump reported during the fiscal first quarter.

The company's net loss widened to $317 million, or a 95 cent loss per share, from $227 million, or a loss of 69 cents per share, during the same period a year earlier.

Morgan Stanley analysts said Snowflake's results were good, "but perhaps not enough." They said the company's smaller product revenue beat and deceleration in growth will not inspire weary investors.

The analysts think Snowflake's new generative artificial intelligence portfolio will eventually contribute to topline outperformance. In the meantime, it will have to rely on its core data warehousing business.

"A 2% product revenue beat in Q2, down from 5% in Q1, with product revenue growth dipping further to 29.5% YoY," likely sows "enough doubt in the investor conversation to keep shares under pressure in the near-term," the analysts wrote in a note Thursday.

Analysts at Barclays said Snowflake's second-quarter results should "not be a major catalyst either way" for the company's investment case. They maintained their equal weight rating on the stock.

The analysts said investors were watching closely to see whether the company's product revenue took a material hit because of fallout from a