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SNOW
Earnings call · Jul 2026 (Q2 FY27)

Snowflake Q2 FY27 earnings call SNOW

Sep 2, 2026 Source

Executive summary

Snowflake Q2 FY27 — Product Revenue Accelerates to 37% YoY, Driven by AI and Core Platform Strength

Snowflake's Q2 FY27 performance demonstrates strong acceleration in product revenue, driven by the increasing adoption of AI capabilities and the core data platform. The company is leveraging its AI Data Cloud to enable "Agentic Enterprises," expanding its customer base and deepening existing relationships, while maintaining operational discipline and margin expansion. The flywheel effect of AI bringing new workloads and driving consumption is accelerating.

Highlights

5

  • Product revenue accelerated to 37% year-over-year growth, reaching $1.49 billion.

  • Non-GAAP operating margin expanded by over 400 basis points year-over-year to 15%.

  • Net new customer additions increased 32% year-over-year, with 692 new customers.

  • Net revenue retention rate remained healthy at 126%.

  • 65 customers now exceed $10 million in trailing 12-month product revenue.

Concerns

1

  • Revised FY27 non-GAAP product gross margin outlook to 74% due to a higher revenue mix from fast-growing AI workloads, which carry a lower contribution margin today.

Guidance & targets

CategoryTargetConfidence
FY27 Product Revenue
$6.07 billion
high materiality
High
FY27 Product Revenue Growth
36% year-over-year growth
high materiality
High
Q3 Product Revenue
$1.588 billion and $1.593 billion
medium materiality
High
Q3 Product Revenue Growth
37% to 38% year-over-year growth
medium materiality
High
FY27 Non-GAAP Product Gross Margin
74%
medium materiality
Medium
FY27 Non-GAAP Operating Margin
14.5%
high materiality
High
Q3 Non-GAAP Operating Margin
15.5%
medium materiality
High
FY27 Non-GAAP Adjusted Free Cash Flow Margin
23%
medium materiality
High
GAAP profitability
GAAP profitability
high materiality
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 Apr 2026 Q1 FY27This call Jul 2026 Q2 FY27Change vs prior quarter
Remaining performance obligation (RPO)
$6.9B Remaining performance obligations totaled $6.9 billion with year-over-year growth of 33%. Source transcript
$6.9B Remaining performance obligations totaled $6.9 billion with year-over-year growth of 33%. Source transcript
$7.88B Remaining performance obligations totaled $7.88 billion, with year-over-year growth accelerating to 37%. Source transcript
$9.77B Remaining performance obligations totaled $9.77 billion with year-over-year growth accelerating to 42%. Source transcript
—
$9B Remaining performance obligations grew 30% year-over-year, totaling $9 billion. Source transcript
—
Net revenue retention rate
126% Our net revenue retention was a very healthy 126%. Source transcript
125% Our net revenue retention rate was a very healthy 125%. Source transcript
125% Our net revenue retention remained stable at a very healthy 125% and we added a record 615 new customers this quarter. Source transcript
125% Our net revenue retention was at a healthy 125%. Source transcript
—
126% Within our existing base, customer expansion is healthy, as evidenced by our net revenue retention rate of 126%. Source 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 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 transcript
7,300+ In Q3, more than 7,300 accounts are using our AI capabilities every week. Source 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 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 transcript
14.554K Snowflake now provides the data and AI foundation for 14,554 customers around the world. Source 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 transcript
——
829 We added 14 net new Global 2000 customers, bringing our total to 829. Source 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 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 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 transcript
79 We now have 79 customers spending more than $1 million on a trailing 12-month basis. Source transcript
828 We now have 828 customers spending above the $1 million threshold. Source 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 transcript
64 We now have 64 customers spending more than $10 million on a trailing 12-month basis. Source 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 transcript
+1.6%

Operating figures the company states on every call, 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) $9 billion Q2 FY27

30% year-over-year growth

Approximately 54% expected to be recognized as revenue in the next 12 months, representing approximately 42% year-over-year growth compared to the estimate in the same quarter last year. Bookings are increasingly weighted towards the fourth quarter due to customer preference for Q4 renewals.

Product announcements

ProductTypeDetails
Cortex AI Gatewaylaunch
Cortex Senselaunch
Hybrid Tables and Postgresroadmap

Deals & partnerships

BlackRock Deepening relationship with Snowflake, adopting CoCo.

BlackRock is running more mission-critical work on Snowflake and adopting CoCo to move faster.

Block Deepening relationship with Snowflake, adopting CoCo.

Block is running more mission-critical work on Snowflake and adopting CoCo to move faster.

Reddit Chose Snowflake for data sharing capabilities.

Reddit chose Snowflake for its data sharing capabilities, which now facilitate privacy-safe ads measurement.

Sayari Chose Snowflake to rebuild global data infrastructure and cut costs.

Sayari, a risk intelligence provider, chose Snowflake to rebuild its global data infrastructure, cutting costs by more than half. Its engineers are using CoCo to accelerate the migration of 12 billion records into an AI-ready foundation.

1Password Chose Snowflake for CoCo capabilities.

1Password, a security company, chose Snowflake for its CoCo capabilities, which enabled their team to move key data pipelines into Snowflake quickly, laying the foundation for their data and AI work.

Indeed Rolled out CoWork and CoCo and integrated Snowflake into its core data architecture.

Indeed, the #1 job site, rolled out CoWork and CoCo across its data teams and integrated Snowflake into its core data architecture, citing lower cost and greater efficiency at scale across 60 countries and 28 languages.

Australian bank Migrated financial crime platform to Snowflake and building AI agents.

One of the largest Australian banks migrated its financial crime platform to Snowflake, processing 17 billion transactions and delivering 10x faster query performance. They are now building AI agents on Snowflake to accelerate the migration of the rest of their data estate.

Network equipment manufacturer Performing a Teradata migration to Snowflake. <3 quarters

A large network equipment manufacturer is doing a Teradata migration in less than 3 quarters this year, a process that would have previously taken 2 to 3 years.

Sanofi Working with Snowflake's Frontier Engineering program.

Sanofi is working with Snowflake's Frontier Engineering program, potentially for better support systems.

Financial institution Working with Snowflake's Frontier Engineering program to overhaul digital and data strategy.

A big financial institution is being helped by Snowflake's Frontier Engineering program to effectively overhaul their digital and data strategy.

Risks & headwinds

Lower contribution margin from fast-growing AI workloads FY27

AI workloads carry a lower contribution margin today.

Mitigation:Offsetting growing cloud costs with slowing headcount expense to deliver continued operating margin expansion. The FY27 non-GAAP operating margin guidance was increased from 13.5% to 14.5%.

What to watch in Q3 FY27

Product Revenue Growth

Q3 FY27
Current 37% YoY (Q2 FY27)
Target Continued acceleration or sustained high growth

Why it matters

This is a core indicator of business momentum and the effectiveness of AI monetization.

Based on this strength, we have increased our fiscal '27 product revenue guidance by over 500 basis points to 36% year-over-year growth.

Q&A highlights

Can you elaborate on the quality of the acceleration, particularly regarding CoCo's effectiveness in new use cases beyond traditional analytics and whether the growth is sustainable without poor operational hygiene in consumption?

The acceleration is broad-based, not concentrated in AI-native companies. CoCo facilitates optimization, with cost management being a top 10 skill. Management emphasizes efficient spend. The company is now selling to a wider range of personas, including CFOs, CROs, and CMOs, indicating broader adoption. The growth is based on observed behavior and strong new logo additions.

“I'm pretty happy with both the fact that our growth is coming from a very broad swath of our customers without a whole lot of concentration in any one particular sector, and also about the fact that the very tools that make it possible to do things quickly also come with a set of functions that make it pretty easy to optimize.”

asked by Sanjit Singh · answered by Sridhar Ramaswamy

2 min read 7 chapters

Detailed narrative

AI as a Growth Flywheel

Snowflake is experiencing a powerful and accelerating flywheel effect driven by AI. This includes AI bringing new workloads onto the platform, rapid adoption of first-party AI products like CoCo and CoWork, and increased overall platform consumption by customers using AI. These dynamics are translating into strong business performance, with product revenue growth accelerating for the third consecutive quarter.

Customer Expansion and Adoption

The company continues to expand its customer base, adding 692 net new customers in Q2 FY27, including 14 from the Global 2000, bringing the total to 14,554 customers. Existing customers are also deepening their relationships, with 65 customers now exceeding $10 million in trailing 12-month product revenue and 48 net new customers surpassing $1 million in TTM spend this quarter. The net revenue retention rate stands at 126%.

CoCo and CoWork Traction

Snowflake's breakout AI products, CoWork and CoCo, are seeing rapid adoption. CoWork expanded to 5,800 accounts, an 11% quarter-over-quarter increase, while CoCo surpassed 9,100 accounts, adding over 2,000 net new accounts in the quarter. These products are bringing entirely new users to Snowflake and driving a 'step change' in user growth within adopting accounts by enabling conversational interaction with enterprise data.

Operational Efficiency and Internal AI Use

Snowflake is leveraging CoCo and CoWork internally to enhance productivity and efficiency across its own business. Examples include eliminating $400,000 in annual marketing agency spend, reducing financial planning time from a three-person team and 50 spreadsheets to one analyst and models, and automating sales prospecting for over 125,000 contacts. This internal application informs product development and strengthens go-to-market credibility.

Product Innovation and Go-to-Market Execution

The company demonstrated a rapid pace of innovation, launching over 330 product capabilities to general availability in the first half of FY27, a 35% increase year-over-year. This innovation, coupled with tighter go-to-market execution, is driving strong new customer growth and increased sales productivity, with use cases won per account executive increasing 43% year-over-year.

Model Neutrality and Optimization

Snowflake maintains a model-neutral stance, offering customers flexibility to choose from leading frontier and open models, and optimize costs. The Cortex AI Gateway dynamically routes tasks to the most appropriate model based on customer-defined policies and real-world performance data, with built-in cost and governance controls. This approach is seen as a strong competitive advantage, allowing customers to adapt as the market evolves.

Frontier Engineering and Business Outcomes

Snowflake's Frontier Engineering team is focused on driving meaningful business outcomes for customers by combining platform capabilities with industry expertise. These engagements often involve outcome-based payment models and address complex challenges like overhauling digital strategies for financial institutions or optimizing supply chains. The company emphasizes delivering these outcomes on an open, well-understood architecture that empowers customer data teams.

AI-generated summary of the company's earnings call. Not investment advice.