Snowflake Inc.
SNOW · NYSE
Next quarter
Reports Sep 2, 2026, after the close.
Consensus is -$0.51 EPS for Jul 2026 across 11 estimates, ranging -$0.78 to -$0.32.
SNOW Apr 2026
- 18.64%
- +36.48%
- -$0.59
- -$0.70
- —
- $1.39B
Reported results
- $1.39B
- 66.61%
- -$326.15M
- -23.45%
- -$295.57M
- -$0.86
Highlights
- Revenue: Total revenue was $1.39 billion, up 33% year over year, while product revenue rose 34% to $1.33 billion.
- Guidance: Snowflake raised fiscal 2027 product-revenue guidance to $5.84 billion, or 31% growth, from $5.66 billion and 27% growth previously; full-year non-GAAP operating-margin guidance increased to 13.5% from 12.5%.
- AI adoption: More than 13,600 accounts were using Snowflake AI capabilities, while Snowflake Intelligence users more than doubled sequentially and Cortex Code reached more than 7,100 accounts.
- Customer expansion: Net revenue retention was 126%; 779 customers generated more than $1 million of trailing-12-month product revenue, up 29% year over year, including 46 customers crossing the threshold this quarter.
- Contracted demand: Remaining performance obligations increased 38% year over year to $9.21 billion, with approximately 50% expected to be recognized as revenue over the next 12 months based on historical consumption patterns.
- Profitability: GAAP operating loss narrowed to $326.2 million from $447.3 million a year ago, but reported EPS of -$0.70 missed the -$0.59 consensus estimate by 18.64%; GAAP diluted EPS was -$0.86.
- Cash generation: Operating cash flow was $243.2 million, free cash flow was $232.8 million, and adjusted free cash flow was $265.5 million, equal to margins of 17%, 17%, and 19%, respectively.
- Strategic investment: Snowflake completed its $595.8 million acquisition of Observe, including $285.7 million in cash and $285.3 million in stock, and agreed to acquire Natoma to strengthen governance for AI-agent workflows.
- Partnerships: Snowflake expanded its AWS relationship through a new $6 billion multi-year agreement and deepened its partnership with OpenAI.
Analysis
Snowflake's first quarter of fiscal 2027 was a growth and outlook-reacceleration print, led by consumption of its core platform and rising AI usage. Revenue of $1.39 billion increased 33% year over year from $1.04 billion and rose from the $1.21 billion reported in Q3 fiscal 2026, the latest prior quarter supplied. Product revenue growth was stronger at 34%, reaching $1.33 billion, while the company's reported EPS of -$0.70 was below the -$0.59 consensus estimate; the filing shows GAAP diluted EPS of -$0.86. The GAAP operating loss improved from $447.3 million a year ago to $326.2 million, though Snowflake remained materially loss-making.
The defining feature was management's claim that AI is now accelerating both platform consumption and adoption of first-party products. More than 13,600 accounts used Snowflake AI capabilities, Snowflake Intelligence adoption more than doubled sequentially, and Cortex Code reached more than 7,100 accounts. Customer expansion remained healthy, with 126% net revenue retention, 616 net new customers, and 779 million-dollar customers. Snowflake also raised full-year product-revenue guidance by $180 million to $5.84 billion and lifted its non-GAAP operating-margin target by 100 basis points to 13.5%. Cash generation was positive, with $232.8 million of free cash flow, although the quarter included $252.5 million of cash paid for the Observe acquisition and $300 million of share repurchases.
AI-driven platform momentum
Management positioned AI as the central change in the quarter, arguing that customer urgency around AI is driving greater use of Snowflake's underlying data platform as well as demand for new products. The company said more than 13,600 accounts were using Snowflake AI capabilities, Snowflake Intelligence users more than doubled sequentially, and Cortex Code was in use across more than 7,100 accounts. Snowflake also delivered more than 20% more product capabilities than a year ago.
- Core consumption: Product revenue increased 34% year over year to $1.334 billion, described by management as the strongest sequential dollar growth in company history.
- New AI products: Cortex Code and Snowflake Intelligence are intended to extend Snowflake from a governed data platform toward an AI-agent control plane, but the release does not quantify the revenue contribution of these products separately.
- Commercial traction: Holiday Inn Club Vacations and Houzz selected Snowflake for data and AI transformations, providing examples of new workload adoption rather than a standalone AI revenue metric.
Customer expansion and backlog
The customer metrics showed continued expansion despite Snowflake's consumption-based model, where revenue timing depends on customer usage rather than simply contracted value. Net revenue retention remained 126%, and the company added 616 net new customers, up 38% year over year.
- Large customers: 779 customers generated more than $1 million of trailing-12-month product revenue, up 29% year over year. Forty-six customers crossed that threshold in Q1, compared with 26 a year earlier.
- Enterprise penetration: Snowflake ended the quarter with 813 Forbes Global 2000 customers, including 13 net new additions.
- Contract visibility: RPO rose 38% year over year to $9.21 billion. Snowflake expects approximately 50% of that balance to be recognized in the 12 months ending April 30, 2027, although actual timing remains dependent on consumption.
Raised fiscal outlook
The quarter prompted a material increase to the full-year revenue outlook and a smaller improvement in the profitability framework. The raise reflects management's view that momentum spans both the established platform and AI-related workloads.
- Fiscal 2027 product revenue: Guidance increased to $5.840 billion, representing 31% growth, from $5.660 billion and 27% growth previously.
- Margins: Full-year non-GAAP product gross margin is expected at 75.0%, while non-GAAP operating margin is now expected at 13.5%, up from 12.5%. Adjusted free cash flow margin guidance remains 23.0%.
- Near-term outlook: Second-quarter product revenue guidance is $1.415 billion to $1.420 billion, implying 30% year-over-year growth, with a 12.5% non-GAAP operating margin.
Losses and cash flow
Snowflake improved its GAAP loss profile but did not approach GAAP profitability. Revenue growth outpaced the increase in total operating expenses, while the prior-year comparison benefited from a much larger office-facility impairment charge.
- GAAP results: Gross profit was $926.5 million, or a 67% margin, versus $693.3 million and 67% a year ago. Operating loss narrowed to $326.2 million from $447.3 million, and net loss narrowed to $295.6 million from $430.0 million.
- Non-GAAP results: Non-GAAP operating income was $165.8 million, or an 11.9% margin; non-GAAP product gross margin was 75.1%, down from 76% a year ago.
- Cash generation: Operating cash flow increased to $243.2 million from $228.4 million. Free cash flow was $232.8 million and adjusted free cash flow was $265.5 million, despite $528.5 million of deferred-revenue outflows in operating working capital.
Acquisitions and partnerships
Snowflake continued to expand its AI ecosystem through both capital deployment and strategic cloud and model-provider relationships. These initiatives increase the breadth of the platform but also add integration, execution, and dilution considerations.
- Observe acquisition: Snowflake acquired AI observability company Observe on February 2 for preliminary consideration of $595.8 million, including $285.7 million of cash, $285.3 million of stock, and $342.8 million of recorded goodwill. Observe's contribution to quarterly results was not material.
- Natoma agreement: In May, Snowflake signed a definitive agreement to acquire Natoma, an enterprise Model Context Protocol platform intended to help customers securely connect AI agents to business tools and workflows.
- Cloud and model partners: A new AWS agreement has a stated multi-year value of $6 billion, while the OpenAI relationship adds co-innovation and joint go-to-market efforts. Snowflake also made capabilities from its SAP partnership generally available.
