Data Company Stocks Snowflake (NYSE: SNOW) soared Thursday after investors were pleasantly surprised by financial results released for its fiscal third quarter 2025. As of 2:25 p.m. ET, Snowflake stock was up 32%.

Snowflake adoption is increasing

I think investors today are more interested in Snowflake’s business trends than its headline numbers. The company won some big customers in the third quarter, which is an encouraging sign. Like most enterprise software companies, its customers sign longer-term contracts, which are recorded as remaining performance obligations.

And in the third quarter, Snowflake’s customer growth translated into significant gains in remaining performance obligations. These jumped 10% from one quarter to the next to reach $5.7 billion. For perspective, there was only a 4% jump between the second and third quarters of its 2024 fiscal year.

Of course, the Snowflake headlines were also important. Management had only forecast third-quarter product revenue of at most $855 million, when it ended up generating $900 million. And it reported an adjusted operating profit margin of 6% in the third quarter, compared to only 3% expected.

These numbers were also good, but I think investors were more excited about the customer wins because it’s something that will continue to provide strong financial results in the years to come.

Snowflake’s outlook improves

With optimistic third-quarter results, Snowflake management raised its outlook for the remainder of the fiscal year. Overall, the company estimates it is on pace to increase its product revenue by 29% from its 2024 fiscal year, which is an increase from its previous forecast of 26% growth. . Profit margin forecasts are also on the rise.

In recent years, corporate clients have been reluctant to spend money. But it appears the outlook is now improving for Snowflake, and investors are understandably excited about it.