Snowflake Q2 Earnings Call Highlights

Snowflake accelerated growth: Fiscal Q2 product revenue rose 37% year over year to $1.49 billion, helped by stronger demand for its data platform and AI offerings. The company raised its fiscal 2027 product revenue outlook to $6.07 billion, or 36% growth. AI adoption is expanding platform usage: AI products including CoWork and CoCo continued gaining customers, while management said AI workloads contributed about half of the growth acceleration and encouraged broader consumption of Snowflake’s core platform. Net revenue retention was 126%, and remaining performance obligations increased 30% to $9 billion. Profitability guidance improved: Non-GAAP operating margin expanded to 15% in Q2, prompting Snowflake to raise its full-year margin forecast to 14.5% from 13.5%. The company maintained its 23% adjusted free-cash-flow margin outlook and reiterated its goal of reaching GAAP profitability in fiscal Q4 2028.

Snowflake NYSE: SNOW reported accelerating second-quarter fiscal 2027 growth as demand for its core data platform and AI products increased, while the company also expanded its non-GAAP operating margin and raised its full-year product revenue outlook. Product revenue totaled $1.49 billion, up 37% from a year earlier. Chief Executive Officer Sridhar Ramaswamy said the result marked Snowflake’s second consecutive quarter of record sequential dollar growth and represented a seven-percentage-point acceleration from the 30% year-over-year growth rate reported at the end of fiscal 2026.

“AI is compounding Snowflake’s advantage” by bringing new workloads to the platform, increasing adoption of first-party AI products and lifting broader platform consumption, Ramaswamy said. The company described its strategy as providing a governed data foundation, access to AI models, application workflows and an “agentic control plane” for enterprise customers.

Snowflake ended the quarter with 14,554 customers worldwide after adding 692 net new customers, a 32% year-over-year increase in net additions. The company added 14 Forbes Global 2000 customers during the period, bringing its total in that category to 829. Snowflake said its AI Data Cloud now supports more than 41% of the Forbes Global 2000. The company’s largest customers continued to expand their use of the platform. Snowflake said 65 customers generated more than $10 million in trailing 12-month product revenue, while 828 customers spent more than $1 million over the same period, following 48 net new additions above that threshold in the quarter. Net revenue retention was 126%, CFO Brian Robins said, supported by customer expansions involving migrations and AI-related use cases. Remaining performance obligations rose 30% year over year to $9 billion. About 54% of that amount is expected to be recognized as revenue over the next 12 months, representing approximately 42% growth compared with the company’s estimate in the year-earlier quarter. Snowflake said 43% of customers now share data with at least one “Stable Edge,” reflecting the company’s data-sharing capabilities across organizations. Ramaswamy cited examples including a large Australian bank that migrated its financial-crime platform to Snowflake, processing 17 billion transactions and achieving 10 times faster query performance, according to the company. Snowflake highlighted growing adoption of its CoWork and CoCo AI products. CoWork expanded to 5,800 accounts, up nearly 11% ...