Shares of Snowflake surged over 20% in pre-market trading Thursday after the database company reported product revenue for its fiscal second quarter ended July 31 that exceeded guidance by more than $70 million. The beat was driven by a growing number of customers embracing its suite of AI offerings, including the Cortex Code (CoCo) AI coding tool and data analysis services designed to answer business questions.

Adoption of these AI-powered products is proving to be a key growth catalyst. The company now counts over 9,100 customer accounts using its AI coding tool, Cortex Code, a notable jump from the 7,100 accounts recorded in the previous quarter. This increased usage is translating directly into stronger financial performance.

Total product revenue for the quarter reached $1.49 billion, a 37% increase year-over-year, accelerating from the 34% growth rate posted in the prior quarter. Buoyed by this momentum, Snowflake has raised its full-year product revenue outlook by $230 million, now targeting $6.07 billion. This implies an expected annual growth rate of 36%, a significant upgrade from the 31% growth forecast provided just last quarter.

Looking ahead, management projects product revenue growth to land in the 37% to 38% range for the current fiscal quarter. While the company has not recently broken out specific revenue figures attributable to its AI products, Snowflake set an annual recurring revenue (ARR) target for its AI business earlier this spring. During the December earnings call, CEO Sridhar Ramaswamy indicated that this goal had already been achieved.