Can Snowflake Keep Up Its Staggering Growth Rate?

Disruptive data cloud provider Snowflake (NYSE: SNOW) has a lot to prove this week. The fast-growing tech company is scheduled to report its fiscal second-quarter results on Wednesday. Since its initial public offering in September 2020, the company has consistently posted staggeringly high year-over-year revenue growth rates.

Going into Snowflake's fiscal second-quarter update, however, many investors may be concerned that growth could decelerate materially. After all, while Snowflake's fiscal first-quarter top-line growth rate was high at 85%, it was far below the 101% growth rate the data cloud platform provider posted in the fourth quarter of the previous fiscal year.

What to expect

Investors can get an idea of what to expect from Snowflake management's product revenue guidance for fiscal Q2. While the company doesn't provide its consolidated top-line expectations, it does provide guidance for its product revenue -- which accounts for the bulk of the company's sales and generally trends closely in line with its growth rates for its total revenue.

Snowflake said it expects its product revenue to grow at a rate between 71% and 73% year over year, representing a significant deceleration from its 84% product revenue growth rate in fiscal Q1.