BOZEMAN, Mont. - Snowflake Inc . (NYSE: NYSE:SNOW), a leader in the AI Data Cloud space, has announced the definitive agreement to acquire Datavolo, a company known for expediting the development of multimodal data pipelines for enterprise AI. This strategic move is poised to enhance Snowflake's capabilities in the 'bronze layer' of the data lifecycle, offering customers a streamlined approach to integrate their enterprise systems with Snowflake’s platform.
Datavolo, powered by Apache NiFi, provides a unified platform for automating data workflows, including both structured and unstructured data. This integration is expected to simplify the data engineering process, enabling seamless data movement from various sources to Snowflake's AI Data Cloud, while also reducing complexity and maintenance challenges associated with data connectors.
According to Snowflake CEO Sridhar Ramaswamy, the acquisition aligns with the company’s commitment to simplicity and value, expanding the scope of data lifecycle stages Snowflake can address. He anticipates that the inclusion of Datavolo will bring simplicity and cost savings to customers, without compromising data extensibility.
Joe Witt, Co-founder and CEO of Datavolo and co-creator of Apache NiFi, expressed that the merger with Snowflake will provide customers with the scale and simplicity of Snowflake’s platform, enhancing data engineering accessibility.
The acquisition is not only expected to bolster Snowflake's offerings but also to strengthen its position in the public sector, given Datavolo's widespread use in federal organizations. Snowflake plans to continue supporting the Apache NiFi project, ensuring interoperability and contributing to the open-source community.
This transaction is subject to customary closing conditions, and the terms of the deal have not been disclosed.
The announcement is based on a press release statement and provides a glimpse into Snowflake's strategy to stay at the forefront of data engineering innovation, reaffirming its role in the enterprise AI landscape.
In other recent news, Snowflake Inc. reported a 30% year-over-year increase in product revenue, reaching $829 million for the second quarter of fiscal year 2025. The company also raised its full-year product revenue outlook and completed a substantial $2.3 billion convertible debt offering. In terms of analyst ratings, Loop Capital and Rosenblatt Securities maintained their Buy ratings for Snowflake, with Loop Capital suggesting that the company's performance may surpass the product revenue estimate of $856 million.
On the other hand, Citi and Piper Sandler maintained their Buy and Overweight ratings respectively, but adjusted their price targets to $183 and $165. Monness Crespi Hardt upgraded Snowflake from Neutral to Buy with a new price target of $140. In terms of product innovation, Snowflake announced several enhancements to its data platform and new AI features.
Additionally, Snowflake unveiled a new Power Platform connector in collaboration with Microsoft (NASDAQ:MSFT), enhancing data sharing capabilities for enterprise AI application development. This development aims to streamline the creation of custom applications on the Microsoft Power Platform, allowing for more efficient resource management and infrastructure handling. These are all recent developments showcasing Snowflake's commitment to innovation and growth.
InvestingPro Insights
Snowflake's acquisition of Datavolo aligns with its growth strategy, as reflected in its recent financial performance. According to InvestingPro data, Snowflake has demonstrated strong revenue growth, with a 31.21% increase over the last twelve months as of Q1 2023, reaching $3.21 billion. This acquisition is likely to further boost the company's revenue and market position in the AI Data Cloud space.
Despite the impressive top-line growth, InvestingPro Tips reveal that Snowflake is not currently profitable over the last twelve months. This is evident in the company's negative operating income margin of -38.89%. However, analysts predict that the company will become profitable this year, which could be accelerated by the strategic integration of Datavolo's technology.
Another InvestingPro Tip highlights that Snowflake holds more cash than debt on its balance sheet. This strong financial position likely enabled the company to pursue this acquisition without compromising its financial stability. It also suggests that Snowflake has the resources to continue investing in growth initiatives and potential future acquisitions.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights. Currently, there are 7 more InvestingPro Tips available for Snowflake, providing a deeper understanding of the company's financial health and market position.
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