Quick Facts
- Snowflake reported Q2 FY2027 product revenue of $1.49 billion, up 37% year-over-year, beating analyst estimates and marking three straight quarters of growth acceleration.
- The company raised full-year product revenue guidance to $6.07 billion, representing 36% year-over-year growth, up from prior guidance of $5.84 billion.
- Shares surged 22.37% in after-hours trading to $374.25, pushing the stock above its 52-week high and extending year-to-date gains to 39%.
Snowflake Inc. reported fiscal second-quarter results on September 2 that topped Wall Street expectations across every major metric, sending shares to their highest level since the company went public in 2020. Adjusted earnings came in at $0.62 per share on total revenue of $1.55 billion, against analyst forecasts of $0.45 per share and $1.48 billion.
Product revenue reached $1.49 billion, up 37% year-over-year. Chief Financial Officer Brian Robins called it the company’s third consecutive quarter of product revenue growth acceleration, driven by strength in both the core data platform and a step-up in AI revenue.
CEO Sridhar Ramaswamy said AI products are creating a compounding effect across the business. He attributed roughly half of the growth acceleration to AI products and the other half to faster customer migrations from legacy platforms, including a large network-equipment manufacturer that completed a Teradata migration in less than three quarters, a process that previously took two to three years.
AI Product Adoption
Snowflake’s two primary AI offerings showed strong adoption in the quarter. CoCo surpassed 9,100 accounts and added more than 2,000 accounts during the period. CoWork expanded to 5,800 accounts. The company launched more than 330 product capabilities to general availability in the first half of fiscal 2027, up 35% year-over-year.
Customer wins included 1Password, Indeed, and Sayari, which cut costs by more than half while using CoCo to migrate 12 billion records. Snowflake also introduced Cortex Sense and Cortex AI Gateway during the period.
Ramaswamy said on the earnings call that internal use of the AI tools is generating measurable productivity gains, citing examples such as reducing keyword research time from 10 hours to 20 minutes and cutting external agency spend by $400,000 annually.
Financial Health and Customer Metrics
Snowflake’s net revenue retention rate held at 126%. The company counted 828 customers with trailing 12-month product revenue greater than $1 million, up 27% year-over-year. It also reported 829 Forbes Global 2000 customers.
Remaining performance obligations reached $9.00 billion, up 30% year-over-year, signaling strong contracted future revenue. The non-GAAP operating margin expanded by more than 400 basis points year-over-year to 15%.
Net loss narrowed to $191.7 million, or $0.55 per share, compared with a net loss of $297.9 million, or $0.89 per share, in the same quarter a year ago.
Guidance and Outlook
For the fiscal third quarter, Snowflake guided product revenue of $1.588 billion to $1.593 billion, representing 37% to 38% year-over-year growth. The midpoint of $1.59 billion exceeded the analyst consensus of $1.57 billion.
The company raised its full-year fiscal 2027 product revenue guidance to $6.07 billion from $5.84 billion, well above the prior analyst consensus. It also increased its adjusted operating margin forecast to 14.5%, up from 13.5% projected in May. Snowflake maintained its 23% adjusted free-cash-flow margin outlook and reiterated its goal of reaching GAAP profitability in fiscal Q4 2028.
The after-hours move would rank as the fourth-largest single-session gain for Snowflake since its 2020 IPO if sustained through Thursday’s open. Shares were up 39% year-to-date as of Wednesday’s close, against a roughly 12% gain for the S&P 500 over the same period.
Read more: Snowflake knocks it out the park with a stellar earnings and revenue beat
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