Snowflake (SNOW) Earnings Date & Reports

Key Takeaways

• Snowflake reported total revenue of $1.55 billion, up 35% year over year, beating analyst estimates of roughly $1.48 billion.
• Product revenue rose 37% to $1.49 billion, marking a third consecutive quarter of accelerating growth.
• Non-GAAP adjusted earnings per share (EPS) came in at $0.62, well above the consensus estimate of $0.45.
• Non-GAAP operating margin widened to 15.3%, up from 11% a year earlier, as growth and profitability improved together.
• Management raised its full-year fiscal 2027 product revenue guidance to $6.07 billion, implying 36% growth, and lifted its operating margin outlook to 14.5%.
• Shares surged more than 20% in extended trading following the announcement.

Earnings Context and Why It Matters

Snowflake's fiscal second-quarter report is a pivotal checkpoint in the company's transformation from a cloud data warehouse provider into what it calls an "AI Data Cloud." Investors have been closely watching whether momentum in artificial intelligence (AI) products—including the CoCo coding agent and the CoWork knowledge-worker assistant—can translate into durable, consumption-based revenue growth. The report matters because Snowflake trades at a premium valuation, meaning the market is already pricing in sustained AI-fueled expansion. A beat-and-raise quarter would help validate that premium, while any sign of slowing adoption or margin pressure could challenge it. The results landed against a backdrop of intense competition in enterprise AI infrastructure.

Reported Results

For its second quarter of fiscal 2027, ended July 31, 2026, Snowflake reported total revenue of $1.55 billion, a 35% increase year over year and above the consensus estimate of about $1.48 billion. Product revenue—the core consumption-based metric—climbed 37% to $1.49 billion, exceeding the roughly $1.42 billion analysts had anticipated and representing a third straight quarter of accelerating growth.

Non-GAAP adjusted diluted EPS was $0.62, comfortably ahead of the $0.45 consensus. On a GAAP (Generally Accepted Accounting Principles) basis, the company posted an operating loss of $263 million and a net loss of about $192 million, or $0.55 per share. Non-GAAP operating income reached $237 million, producing an operating margin of 15.3% compared with 11% a year earlier.

Key operating metrics also showed strength. Net revenue retention rate held at 126%, meaning existing customers continue to expand their spending. Snowflake ended the quarter with 828 customers generating more than $1 million in trailing 12-month product revenue (up 27% year over year), 829 Forbes Global 2000 customers, and remaining performance obligations (RPO) of $9.0 billion, up 30%.

Management also raised guidance. For the third quarter, Snowflake expects product revenue of $1.588 billion to $1.593 billion (37% to 38% growth). For the full fiscal year, it lifted its product revenue outlook to $6.07 billion (36% growth) from $5.84 billion previously, and raised its non-GAAP operating margin target to 14.5% from 13.5%.

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Market Reaction and Investor Sentiment

Snowflake shares jumped more than 20% in extended trading after the results, reflecting investor enthusiasm for a quarter that delivered both faster growth and better profitability. The reaction was driven primarily by the raised full-year guidance, which signaled that AI-driven consumption is proving durable rather than experimental. Momentum in the CoCo coding agent—which surpassed 9,100 accounts and added more than 2,000 accounts in the quarter—reinforced the narrative that Snowflake is becoming a meaningful beneficiary of enterprise AI adoption. The company also added 692 net new customers, up 32% year over year.

Forward Outlook and Key Factors to Monitor

Following this beat-and-raise quarter, investors will be watching several factors that could shape Snowflake's trajectory. First is the durability of AI consumption growth. The raised guidance implies product revenue growth accelerates to 37% to 38% in the third quarter and 36% for the full year, so sustained momentum in AI workloads will be essential.

Second is margin execution. Snowflake lifted its full-year non-GAAP operating margin outlook to 14.5%, and management has emphasized balancing growth with cost discipline. Investors will monitor whether the company can maintain this profitability trajectory while continuing to invest heavily in AI product development.

Third is adoption of its newer AI tools. Continued growth in CoCo and CoWork accounts, along with early traction from the recently introduced Cortex AI Gateway, will be key indicators of whether Snowflake can convert AI experimentation into lasting platform consumption.

Finally, competitive dynamics in the AI data infrastructure market remain a key watch point, as Snowflake competes with major cloud providers and other data platform vendors for enterprise AI budgets. The company's ability to sustain customer expansion—evidenced by its 126% net revenue retention rate and growing RPO—will be central to the investment thesis over the coming quarters.

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