How does CoCo change customers' ability to extract data faster, and how does it influence Snowflake's go-to-market model, especially with the new CRO?

CoCo, a general-purpose coding agent specialized for Snowflake, significantly speeds up coding transformations and migrations, enabling partners to charge for outcomes rather than time. It simplifies agent creation workflows, making it accessible even for non-developers. In go-to-market, CoCo and Snowflake Intelligence make the sales team AI-native, allowing them to demonstrate Snowflake's power more effectively and create relevant prototypes quickly. Internal teams also use CoCo for efficiency, fostering rapid iteration. “CoCo is a is a general-purpose coating agent that has a set of features that are specialized for Snowflake and data platforms. We have published benchmarks that show that CoCo can outperform even the frontier model when it comes to doing operations within Snowflake.”

Are customers likely to throttle CoCo usage due to cost concerns, and how does CoCo's lower gross margin impact the overall product gross margin guidance?

While cost is always a consideration, CoCo provides immense value by enabling tasks previously impossible or significantly faster. Snowflake is building cost governance features like limits at account or agent levels, and optimizing model usage for efficiency (e.g., using smaller models for simpler tasks). Brian confirmed AI products have lower gross margins but stated the 75% full-year product gross margin guidance is maintained by offsetting this with efficiencies like lower bandwidth costs from the AWS contract. “Our AI products have a lower gross margin than our core platform. The one thing that we want to do with our AI products when we launch a new product like CoCo is make sure that we develop a great product that we get massive adoption.”

Given the significant beat in Q1, how should investors think about Snowflake's guidance philosophy going forward, especially with CoCo's contribution?

There is no change to Snowflake's guidance philosophy, which considers a 3% beat as very solid. The difference in Q1 was that CoCo was launched during the quarter, and guidance is based on observed behavior. Since CoCo's behavior could be observed for a full quarter, it was layered into the full-year forecast, along with the acceleration seen in the core business. “Let me emphasize that there's been no change in guidance philosophy and we view a 3% beat is a very solid beat. The difference that happened this quarter was CoCo was launched in the quarter.”

SNOW

Snowflake (SNOW) Q1 FY27 earnings call: guidance and Q&A

Earnings call· Apr 2026 (Q1 FY27)· Information Technology· May 27, 2026

Source: earnings call transcript

Executive summary

Snowflake Inc. Q1 FY27 — AI-Driven Growth Acceleration and Strong Outlook Increase

Snowflake delivered a strong quarter, driven by accelerating product revenue growth and expanding margins, fueled by the powerful flywheel effect of AI. The company's core data platform business is benefiting from increased customer urgency to migrate workloads for AI, while new AI products like Snowflake Intelligence and Cortex Code are seeing rapid adoption and contributing meaningfully to revenue. This momentum has led to a significant increase in the full-year outlook, underscoring confidence in the agentic enterprise vision and continued operational discipline.

Highlights

Product revenue grew 34% year-over-year to $1.334 billion, accelerating from 30% last quarter.
Net revenue retention rate increased to 126%.
Non-GAAP operating margin expanded over 300 basis points year-over-year to 12%.
Added 616 net new customers, a 38% year-over-year increase, including 13 Global 2000 customers.
Increased FY27 product revenue outlook to $5.84 billion, representing 31% year-over-year growth.

Guidance & targets

Category	Target	Timeline	Confidence
Full-year FY27 Product Revenue	$5.84 billion high materiality	FY27	High
Full-year FY27 Product Revenue Growth	31% year-over-year growth high materiality	FY27	High
Q2 FY27 Product Revenue	$1.415 billion to $1.42 billion medium materiality	Q2 · FY27	High
Q2 FY27 Product Revenue Growth	30% year-over-year growth medium materiality	Q2 · FY27	High
Full-year FY27 Non-GAAP Product Gross Margin	75% medium materiality	FY27	High
Q2 FY27 Non-GAAP Operating Margin	12.5% medium materiality	Q2 · FY27	High
Full-year FY27 Non-GAAP Operating Margin	13.5% high materiality	FY27	High
Full-year FY27 Non-GAAP Adjusted Free Cash Flow Margin	23% high materiality	FY27	High
Observe Acquisition Product Revenue Growth Contribution	approximately 1 percentage point low materiality	FY27	High
Observe Acquisition Margin Headwind	approximately 150 basis points low materiality	FY27	High

SNOW operating KPIs by quarter

SNOW operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Jan 2025 Q4 FY25	Jul 2025 Q2 FY26	Oct 2025 Q3 FY26	Jan 2026 Q4 FY26	This call Apr 2026 Q1 FY27	Jul 2026 Q2 FY27	Change vs prior quarter
Remaining performance obligation (RPO)	$6.9B Remaining performance obligations totaled $6.9 billion with year-over-year growth of 33%. Source: earnings call transcript	$6.9B Remaining performance obligations totaled $6.9 billion with year-over-year growth of 33%. Source: earnings call transcript	$7.88B Remaining performance obligations totaled $7.88 billion, with year-over-year growth accelerating to 37%. Source: earnings call transcript	$9.77B Remaining performance obligations totaled $9.77 billion with year-over-year growth accelerating to 42%. Source: earnings call transcript	—	$9B Remaining performance obligations grew 30% year-over-year, totaling $9 billion. Source: earnings call transcript	—
Net revenue retention rate	126% Our net revenue retention was a very healthy 126%. Source: earnings call transcript	125% Our net revenue retention rate was a very healthy 125%. Source: earnings call transcript	125% Our net revenue retention remained stable at a very healthy 125% and we added a record 615 new customers this quarter. Source: earnings call transcript	125% Our net revenue retention was at a healthy 125%. Source: earnings call transcript	—	126% Within our existing base, customer expansion is healthy, as evidenced by our net revenue retention rate of 126%. Source: earnings call transcript	—
Customers AI and ML technology weekly users	4,000+ We now have over 4,000 customers using our AI and ML technology on a weekly basis. Source: earnings call transcript	6,100+ And once they are on our platform, AI becomes a cornerstone of their strategy, powering 25% of all deployed use cases with over 6,100 accounts using Snowflake's AI every week. Source: earnings call transcript	7,300+ In Q3, more than 7,300 accounts are using our AI capabilities every week. Source: earnings call transcript	—	—	—	—
Customers	—	—	—	13.3K+ This year's results are a testament that the AI Data Cloud continues to deliver tremendous value to our more than 13,300 customers across every stage of the data life cycle. Source: earnings call transcript	13.912K Our 13,912 customers start to Snowflake because our AI data cloud is easy to use, seamlessly connected for collaboration, entrusted with enterprise-grade governance and security. Source: earnings call transcript	14.554K Snowflake now provides the data and AI foundation for 14,554 customers around the world. Source: earnings call transcript	+4.6%
Customers Global 2000	—	—	776 Our Global 2000 customers now totaled 776 with each of these accounts spending, on average, $2.3 million on a trailing 12-month basis. Source: earnings call transcript	—	—	829 We added 14 net new Global 2000 customers, bringing our total to 829. Source: earnings call transcript	—
Customers Cortex Code	—	—	—	4,400+ It's a truly transformational coding agent that's already helping over 4,400 customers build and scale AI-powered applications and massively accelerating their ability to deploy production-grade AI. Source: earnings call transcript	7,100+ And CoCo is already in use with more than 7,100 accounts, giving builders a natural language way to create applications, pipelines, agents and workloads directly in Snowflake. Source: earnings call transcript	—	—
Customers above an annual spend threshold >$1M TTM	—	—	—	733 We now have 733 customers spending more than $1 million on a trailing 12-month basis, growing 27% year-over-year and a record number of customers crossed $10 million in trailing 12-month spend, bringing a total of 56 customers above this $10 million threshold, growing 56% year-over-year. Source: earnings call transcript	79 We now have 79 customers spending more than $1 million on a trailing 12-month basis. Source: earnings call transcript	828 We now have 828 customers spending above the $1 million threshold. Source: earnings call transcript	+948.1%
Customers above an annual spend threshold >$10M TTM	—	—	—	56 We now have 733 customers spending more than $1 million on a trailing 12-month basis, growing 27% year-over-year and a record number of customers crossed $10 million in trailing 12-month spend, bringing a total of 56 customers above this $10 million threshold, growing 56% year-over-year. Source: earnings call transcript	64 We now have 64 customers spending more than $10 million on a trailing 12-month basis. Source: earnings call transcript	65 In fact, 65 customers have now crossed $10 million in trailing 12-month product revenue, demonstrating how our largest customers continue to go all in on Snowflake. Source: earnings call transcript	+1.6%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Orderbook & backlog

Remaining Performance Obligations (RPO) 38% year-over-year growth Q1 FY27

Compared to 34% in Q1 of last year. Customers continue to favor Q4 renewals, leading to bookings increasingly weighted towards the fourth quarter.

Product announcements

Product	Type	Timeline
Snowflake Intelligence	launch	—
Cortex Code (CoCo)	launch	GA on February 5, Q1 FY27
SAP Joint Capability	expansion	General Availability

Deals & partnerships

AWS Expanded Collaboration Agreement $6 billion 5-year

Multiyear agreement to accelerate enterprise AI adoption globally, leveraging Graviton compute and AI services. Snowflake surpassed $7 billion in lifetime AWS Marketplace sales.

OpenAI Partnership $200 million

Expanding partnership to enhance AI capabilities.

Natoma Intended Acquisition

Extends the Snowflake agentic control plane beyond data workflows into everyday applications (e.g., email, Slack, Jira), enhancing AI governance and actionability.

SAP Joint Capability Partnership

Enables customers to unite mission-critical business data across their core data systems within Snowflake's AI data cloud.

Q&A highlights

What inflected in Q1 to drive the strong sequential dollar growth and raised guidance, specifically regarding market demand and the contribution of AI capabilities versus core data platform expansion?

AI is accelerating the value customers get from data in Snowflake, acting as a healthy secular tailwind for the core data platform. Agentic products like Snowflake Intelligence and Cortex Code (CoCo), launched in Q1, saw strong traction and are driving more consumption on the core platform by making projects easier and faster. CoCo was the largest driver to the increased forecast, as it was layered into the model based on observed behavior post-launch, alongside acceleration in the core business.

“AI is accelerating the value that people can get from the data that they have put into Snowflake or that they can put into Snowflake. So we saw like a healthy secular tailwind for our core data platform. And part two is really that agentic products, the control plane products like Snowflake Intelligence, and Cortex Code, CoCo, came into their own in Q1.”

asked by Sanjit Singh · answered by Sridhar Ramaswamy

2 min read 6 chapters

Detailed narrative

AI as a Catalyst for Core Platform Growth

AI is fundamentally reshaping how work gets done, with Snowflake at the center of this transformation. The company observes that AI is accelerating consumption in its core platform as customers migrate workloads to Snowflake faster to access the necessary data context and governance.

This tailwind is evident in the pace of new customer additions, with net new customer additions increasing 38% year-over-year and 13 Global 2000s added in Q1 FY27.

Agentic Enterprise Vision and Product Adoption

Snowflake is uniquely positioned to help customers become 'agentic enterprises' by providing a unified, governed data foundation, access to leading AI models, and connectivity across enterprise applications. Snowflake Intelligence offers a natural language interface for business users, while Cortex Code (CoCo) provides builders with a natural language way to create applications and workflows directly on Snowflake.

Both products are seeing the fastest adoption of any new products in the company's history, with accounts using Snowflake Intelligence more than doubling quarter-over-quarter and CoCo in use with over 7,100 accounts.

Customer Success and Expansion

Customers continue to expand their use of Snowflake, with examples including Holiday Inn Club Vacations, Health, and a large US bank completing a complex Teradata migration. Nestle is expanding its use for enterprise digital transformation, enabling real-time connected views of its business.

A wealth management firm built a Cortex-powered agent, 'Osteo data,' which answers over 60% of business inquiries previously routed to analysts. This expansion is reflected in large customer growth, with 64 customers now spending over $10 million in TTM revenue.

Internal AI Transformation and Efficiency Gains

Snowflake is leveraging AI internally to drive productivity. CoCo now analyzes incoming customer cases for the global support organization, leading to over 25% faster case resolution times and a 25% increase in throughput per engineer. The SRE team has reduced complex case resolution time by nearly 30% and engineering time per ticket by roughly 40%.

Internal data teams have doubled developer productivity and automated over 100 workflows across various departments, demonstrating significant operational transformation.

Go-to-Market and Ecosystem Expansion

The company is strengthening its go-to-market organization under new CRO Jonathan Boulier, seeing increased use cases won (up 114% YoY) and use cases per account executive (up 86% YoY). Snowflake announced an expanded $6 billion multiyear agreement with AWS to accelerate enterprise AI adoption, building on over $7 billion in lifetime AWS Marketplace sales.

A $200 million partnership with OpenAI was also announced, and a joint capability with SAP reached general availability, further extending the AI data cloud's reach.

Strategic Acquisition and Future Vision

Snowflake announced the intended acquisition of Natoma, which will extend the agentic control plane beyond data workflows into everyday applications like email, Slack, and Jira. This acquisition aims to enhance AI governance by allowing companies to safely manage actions AI agents take across business workflows.

This move reinforces Snowflake's vision of becoming the 'agentic control plane' where intent becomes governed action, connecting data, models, applications, and workflows in a trusted environment.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.