What happened 

Shares of Snowflake (SNOW 1.21%) surged 22.8% on Thursday after the cloud data leader delivered blockbuster growth metrics.

So what

Snowflake's revenue rocketed 83% year over year to $497.2 million in its fiscal 2023 second quarter, which ended on July 31. That was well above Wall Street's estimates, which had called for revenue of $467 million. 

Companies are flocking to Snowflake's data platform. Its total customer count jumped 36% to 6,808. Many of these customers are also ramping up their spending on Snowflake's software, as can be seen in its extraordinary net revenue retention rate of 171%. This dynamic contributed to a 112% increase in large customers -- those spending over $1 million on Snowflake's products -- to 246. 

It should be noted that Snowflake is not yet profitable; it produced an operating loss of $207.7 million in Q2. However, it did generate $53.8 million in free cash flow, an impressive feat for a young, fast-growing tech company. 

Now what 

Snowflake's consumption-based pricing model is clearly resonating with businesses, at a time when cost discipline is paramount. Moreover, Snowflake's performance improvements are helping to reduce its customers' data-related expenses, thereby giving them a powerful tool to battle inflation. Management, in turn, expects Snowflake's product revenue to grow by 60% to 62% in its fiscal third quarter to between $500 million and $505 million. 

Looking further ahead, Snowflake pegs its total addressable market at a staggering $248 billion. 

"Snowflake's next frontier of innovation is aimed at transforming how cloud applications are built, deployed, sold, and transacted," chairman and CEO Frank Slootman said in a press release. "We look forward to executing against this growth opportunity."