Snowflake Inc.
SNOW · NYSE
Next quarter
Expected to report Dec 2, 2026 — estimated from last year’s reporting date.
Consensus is -$0.36 EPS for Oct 2026 across 11 estimates, ranging -$0.75 to -$0.22.
SNOW Jul 2026
- 13.73%
- +16.55%
- -$0.51
- -$0.44
- —
- $1.55B
Reported results
- $1.55B
- 67.02%
- -$262.97M
- -17.00%
- -$191.72M
- -$0.55
Highlights
- Revenue growth: Q2 FY2027 revenue was $1.55 billion, up 35% year over year and approximately 11% from $1.39 billion in Q1; product revenue rose 37% to $1.49 billion.
- Earnings beat: Reported EPS was -$0.44 versus consensus of -$0.51, a 13.73% surprise; GAAP diluted EPS was -$0.55, improved from -$0.86 in Q1 and -$0.89 a year ago.
- Raised outlook: Snowflake lifted fiscal 2027 product revenue guidance to $6.07 billion, or 36% growth, from $5.84 billion and 31% growth previously.
- AI adoption: CoCo surpassed 9,100 accounts after adding more than 2,000 in the quarter, while CoWork expanded to 5,800 accounts.
- Operating leverage: GAAP operating loss narrowed to $263.0 million from $326.2 million in Q1 and $340.3 million a year ago; non-GAAP operating income was $237.0 million, or a 15.3% margin.
- Customer expansion: Snowflake added 692 net new customers, up 32% year over year, including 14 Forbes Global 2000 customers; 828 customers now generate more than $1 million in trailing-12-month product revenue.
- Forward demand: Remaining performance obligations reached $9.00 billion, up 30% year over year, while net revenue retention was 126%.
- Cash generation: Net cash from operating activities was $91.4 million and adjusted free cash flow was $92.3 million, equal to a 6.0% margin.
Analysis
Snowflake’s second quarter of fiscal 2027 was a growth reacceleration and profitability-discipline print. Revenue of $1.55 billion increased 35% year over year from $1.14 billion and rose approximately 11% sequentially from $1.39 billion in Q1. Product revenue was stronger still at $1.49 billion, up 37%. Reported EPS of -$0.44 beat the -$0.51 consensus by 13.73%, while GAAP diluted EPS of -$0.55 compared with -$0.89 a year ago and -$0.86 in the prior quarter.
The defining feature was the combination of AI-led consumption growth and improved operating leverage. Management cited CoCo adoption across more than 9,100 accounts and CoWork adoption across 5,800, alongside a 126% net revenue retention rate and $9.00 billion of RPO. GAAP operating loss narrowed to $263.0 million from $340.3 million a year ago, while non-GAAP operating margin reached 15.3%. Snowflake raised full-year product revenue growth guidance to 36% from 31% and increased its non-GAAP operating margin outlook to 14.5% from 13.5%. Cash generation remained positive, although quarterly adjusted free cash flow was $92.3 million, or 6.0% of revenue.
AI-driven consumption
Snowflake positioned AI as the main catalyst behind the third consecutive quarter of product revenue growth acceleration. Product revenue reached $1.49 billion, up 37% year over year, ahead of total revenue growth of 35%. Management attributed the improvement to strength in the core data platform and a meaningful step-up in AI revenue.
- CoCo: The product surpassed 9,100 accounts, adding more than 2,000 accounts during the quarter.
- CoWork: Adoption expanded to 5,800 accounts.
- Product velocity: Snowflake launched more than 330 capabilities into general availability during the first half of fiscal 2027, up 35% year over year.
- Customer use cases: Sayari reported cutting costs by more than half while using CoCo to accelerate migration of 12 billion records; 1Password and Indeed selected Snowflake for data and AI transformation.
Raised fiscal outlook
The stronger product revenue trajectory led Snowflake to raise its full-year fiscal 2027 outlook materially. The new forecast implies continued growth at roughly the Q2 rate, while also embedding better profitability.
- Revenue: Full-year product revenue guidance increased to $6.07 billion, representing 36% year-over-year growth, from $5.84 billion and 31% growth previously.
- Margin: Full-year non-GAAP operating margin guidance rose to 14.5% from 13.5%; non-GAAP product gross margin is expected to be 74.0%.
- Cash flow: Adjusted free cash flow margin guidance is 23.0% for the year.
- Next quarter: Q3 product revenue is expected at $1.588 billion to $1.593 billion, or 37% to 38% year-over-year growth, with a 15.5% non-GAAP operating margin.
Operating leverage
Snowflake expanded non-GAAP profitability while continuing to invest in sales and research. Non-GAAP operating income was $237.0 million, equal to a 15.3% margin, versus $1.7 million of non-GAAP operating income and a margin of approximately 0.1% in the year-ago quarter based on the supplied reconciliation figures.
- GAAP result: Operating loss was $263.0 million, or negative 17.0% of revenue, compared with a $340.3 million loss in Q2 FY2026 and a $326.2 million loss in Q1 FY2027.
- Gross margin: GAAP product gross margin was 70.9%, while non-GAAP product gross margin was 74.7%.
- Cost structure: Sales and marketing expense increased to $611.6 million and research and development expense to $567.5 million, but combined operating expenses grew more slowly than revenue.
- Stock compensation: Stock-based compensation was $423.6 million in the quarter, compared with $404.2 million a year earlier, remaining a significant adjustment between GAAP and non-GAAP results.
Customer expansion
The customer base continued to broaden while existing customers expanded consumption. Snowflake added 692 net new customers in Q2, up 32% year over year, and ended the quarter with more than 14,500 customers globally.
- Large customers: 828 customers generated more than $1 million in trailing-12-month product revenue, up 27% year over year.
- Enterprise penetration: Forbes Global 2000 customers totaled 829, including 14 net additions during the quarter.
- Retention: Net revenue retention was 126%, indicating continued expansion within the measured customer cohort.
- Contracted demand: RPO was $9.00 billion, up 30% year over year, though Snowflake notes that consumption timing means RPO does not directly determine near-term product revenue.
Cash and balance sheet
The quarter remained cash generative despite the GAAP net loss and continued investment in the business. Net cash provided by operating activities was $91.4 million, compared with $74.9 million a year earlier. Free cash flow was $83.8 million, while adjusted free cash flow was $92.3 million.
- Margins: Operating cash flow margin was 5.9%, free cash flow margin was 5.4%, and adjusted free cash flow margin was 6.0%.
- Liquidity: Cash and cash equivalents were $1.71 billion at July 31, 2026, with short- and long-term investments totaling approximately $2.62 billion.
- GAAP loss: Net loss was $191.7 million, narrower than the $297.9 million loss in the year-ago quarter and the $295.6 million loss in Q1.
