Snowflake Inc. (SNOW): Results of Operations and Financial Condition
Snowflake Inc. (SNOW) filed an SEC Form 8-K — Results of Operations and Financial Condition. Snowflake Reports Financial Results for the Second Quarter of Fiscal 2027 Product revenue of $1.49 billion in the second quarter, representing 37% year-over-year growth Financial Highlights: • Revenue of $1.55 billion in the second quarter, representing 35% year-over-year growth
How this was made
The 30-second read
Why it matters
The raised guidance suggests continued momentum, likely prompting analysts to upgrade forecasts and investors to increase exposure.
Market read
First‑report earnings and guidance lift for a major cloud data platform; high relevance for traders focused on tech growth stocks.
What to watch
Potential margin pressure from increased operating expenses and stock‑based compensation could temper upside.
Snowflake Reports Financial Results for the Second Quarter of Fiscal 2027
Product revenue grew 37% year-over-year, total revenue grew 35%, non-GAAP operating margin expanded to 15%, and the company raised full-year product revenue growth guidance to 36% year-over-year.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $1,546,793 (in thousands) | – | 35% |
| Product revenueother | $1,491,861 (in thousands) | – | 37% |
| Professional services and other revenueGAAP | $54,932 (in thousands) | – | – |
| GAAP gross profitGAAP | $1,036,718 (in thousands) | – | – |
| GAAP gross marginGAAP | 67% | – | – |
| GAAP product gross profitGAAP | $1,057,443 (in thousands) | – | – |
| GAAP product gross marginGAAP | 71% | – | – |
| Non-GAAP product gross profitnon-GAAP | $1,114,084 (in thousands) | – | – |
| Non-GAAP product gross marginnon-GAAP | 75% | – | – |
| GAAP sales and marketing expenseGAAP | $611,615 (in thousands) | – | – |
| GAAP research and development expenseGAAP | $567,476 (in thousands) | – | – |
| GAAP general and administrative expenseGAAP | $120,594 (in thousands) | – | – |
| GAAP total operating expensesGAAP | $1,299,685 (in thousands) | – | – |
| Non-GAAP total operating expensesnon-GAAP | $872,861 (in thousands) | – | – |
| GAAP operating lossGAAP | $(262,967) (in thousands) | – | – |
| GAAP operating marginGAAP | (17%) | – | – |
| Non-GAAP operating incomenon-GAAP | $236,985 (in thousands) | – | – |
| Non-GAAP operating marginnon-GAAP | 15% | – | – |
| GAAP net lossGAAP | $(191,720) (in thousands) | – | – |
| Non-GAAP net incomenon-GAAP | $235,308 (in thousands) | – | – |
| GAAP net loss per share attributable to Snowflake Inc. common stockholders—basic and dilutedGAAP | $(0.55) | – | – |
| Non-GAAP net income per share attributable to Snowflake Inc. common stockholders—basicnon-GAAP | $0.67 | – | – |
| Non-GAAP net income per share attributable to Snowflake Inc. common stockholders—dilutednon-GAAP | $0.62 | – | – |
| Net cash provided by operating activitiesGAAP | $91,357 (in thousands) | – | – |
| Free cash flownon-GAAP | $83,803 (in thousands) | – | – |
| Adjusted free cash flownon-GAAP | $92,303 (in thousands) | – | – |
| Net revenue retention rateother | 126% | – | – |
| Customers with trailing 12-month product revenue greater than $1 millionother | 828 customers | – | 27% year-over-year growth |
| Forbes Global 2000 customersother | 829 Forbes Global 2000 customers | – | – |
| Remaining performance obligationsother | $9.00 billion | – | 30% year-over-year growth |
third quarter of fiscal 2027 and full-year of fiscal 2027 outlook
- RevenueThird quarter product revenue of $1,588 million to $1,593 million, representing 37% to 38% year-over-year growth; full-year product revenue of $6,070 million, representing 36% year-over-year growth
- Gross marginFull-year non-GAAP product gross margin of 74.0%
- NoteThird quarter non-GAAP operating margin of 15.5%
- NoteThird quarter non-GAAP weighted-average shares used in computing net income per share attributable to common stockholders—diluted of 382 million
- NoteFull-year non-GAAP operating margin of 14.5%, up from previous guidance of 13.5%
- NoteFull-year non-GAAP adjusted free cash flow margin of 23.0%
- NoteFull-year non-GAAP weighted-average shares used in computing net income per share attributable to common stockholders—diluted of 380 million
Capital returns
- Repurchases of common stock were $0 for the three months ended July 31, 2026.
- Repurchases of common stock were $(300,003) (in thousands) for the six months ended July 31, 2026.
What drove it
- Product revenue was $1,491,861 (in thousands), representing 37% year-over-year growth.
- CoCo surpassed 9,100 accounts, adding more than 2,000 accounts in the quarter alone, while CoWork expanded to 5,800 accounts.
- The company added 692 net new customers in the quarter, up 32% year-over-year, including 14 net new Forbes Global 2000 customers.
- The company launched over 330 product capabilities to general availability in the first half of fiscal 2027, up 35% year-over-year.
- Management cited strength in both the core data platform and a meaningful step-up in AI revenue.
Concerns
- The company reported a GAAP operating loss of $(262,967) (in thousands) and a GAAP net loss of $(191,720) (in thousands).
- Stock-based compensation-related charges were $456,363 (in thousands) in the reconciliation from GAAP operating loss to non-GAAP operating income.
- GAAP product gross margin was 71%, compared with 72% in the prior-year period.
- Deferred revenue, current was $2,568,489 (in thousands) as of July 31, 2026, compared with $3,346,997 (in thousands) as of January 31, 2026.
What to watch
- Third-quarter product revenue guidance of $1,588 million to $1,593 million, representing 37% to 38% year-over-year growth.
- The full-year product revenue target of $6,070 million, representing 36% year-over-year growth and up from previous guidance of $5,840 million, or 31% year-over-year growth.
- Third-quarter non-GAAP operating margin guidance of 15.5% and full-year non-GAAP operating margin guidance of 14.5%.
- Full-year non-GAAP product gross margin guidance of 74.0% and non-GAAP adjusted free cash flow margin guidance of 23.0%.
- Net revenue retention rate, remaining performance obligations, and adoption of CoCo and CoWork.
Balance sheet and cash flow
- Cash and cash equivalents were $1,707,187 (in thousands) as of July 31, 2026, versus $2,828,163 (in thousands) as of January 31, 2026.
- Short-term investments were $637,508 (in thousands) and long-term investments were $1,984,482 (in thousands) as of July 31, 2026.
- Convertible senior notes, net were $2,283,985 (in thousands) as of July 31, 2026, versus $2,279,827 (in thousands) as of January 31, 2026.
- Deferred revenue, current was $2,568,489 (in thousands) and deferred revenue, non-current was $27,756 (in thousands) as of July 31, 2026.
- Net cash used in investing activities was $(349,437) (in thousands) for the three months ended July 31, 2026.
- Net cash used in financing activities was $(117,051) (in thousands) for the three months ended July 31, 2026.
- Purchases of property and equipment were $(7,554) (in thousands) for the three months ended July 31, 2026.
Analysis
Snowflake reported $1,546,793 (in thousands) of GAAP revenue, up 35%, led by $1,491,861 (in thousands) of product revenue, up 37%. The company described this as its third consecutive quarter of product revenue growth acceleration. Its consumption platform also reported a 126% net revenue retention rate, $9.00 billion of remaining performance obligations, and 828 customers with trailing 12-month product revenue greater than $1 million.
The operating result improved materially from the prior-year period on both reported bases. GAAP operating loss was $(262,967) (in thousands), compared with $(340,276) (in thousands), while GAAP operating margin was (17%), compared with (30%). Non-GAAP operating income was $236,985 (in thousands), compared with $127,572 (in thousands), and non-GAAP operating margin was 15%, compared with 11%. The GAAP-to-non-GAAP reconciliation included $456,363 (in thousands) of stock-based compensation-related charges.
Gross-profit mix remained a point of attention. GAAP product gross margin was 71%, compared with 72%, while non-GAAP product gross margin was 75%, compared with 76%. Professional services and other revenue was $54,932 (in thousands), and its GAAP gross loss was $(20,725) (in thousands). Cash generation increased year over year, with $91,357 (in thousands) of operating cash flow, $83,803 (in thousands) of free cash flow, and $92,303 (in thousands) of adjusted free cash flow.
The balance sheet showed $1,707,187 (in thousands) of cash and cash equivalents, $637,508 (in thousands) of short-term investments, and $1,984,482 (in thousands) of long-term investments at July 31, 2026. Convertible senior notes, net were $2,283,985 (in thousands). The company made no repurchases in the quarter, although repurchases of common stock totaled $(300,003) (in thousands) for the six months ended July 31, 2026.
The guide calls for third-quarter product revenue of $1,588 million to $1,593 million, representing 37% to 38% year-over-year growth, with a 15.5% non-GAAP operating margin. For the full year, Snowflake raised product revenue guidance to $6,070 million, representing 36% year-over-year growth, from previous guidance of $5,840 million, or 31% year-over-year growth. It also raised full-year non-GAAP operating margin guidance to 14.5% from 13.5%, while maintaining a full-year non-GAAP product gross margin target of 74.0% and setting a 23.0% adjusted free cash flow margin target.
Management, verbatim
Snowflake delivered another strong quarter, with product revenue of $1.49 billion, up 37% year-over-year, as Snowflake continues to power the enterprise AI revolution.
Sridhar Ramaswamy, CEO of Snowflake
Q2 marks our third consecutive quarter of product revenue growth acceleration, driven by strength in both our core data platform and a meaningful step-up in AI revenue.
Brian Robins, CFO of Snowflake
Importantly, we delivered this accelerating growth while expanding operating margin. Balancing growth with discipline remains a top priority, and we are raising our full-year product revenue growth guidance to 36% year-over-year.
Brian Robins, CFO of Snowflake
Not in the filing
stated, not guessed- Previous-release outlook was not provided, so comparisons of actual results with prior guidance are unavailable.
- Prior-quarter comparisons for reported financial metrics were not provided.
- GAAP revenue, gross-margin, operating-expense, tax-rate, cash-flow, and earnings-per-share guidance were not provided.
- Dividend information was not reported.
- No reportable operating segments were presented in the filing.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Snowflake's Q2 FY2027 results show 37% YoY product revenue growth and a net revenue retention of 126%, highlighting strong AI adoption.
Ticker impact
Snowflake filed an 8‑K reporting Q2 FY2027 results and raised full‑year product revenue guidance to $6.07B, up from $5.84B.
Potential upside of 5‑10% in the near term as market digests the raised guidance.
Guidance lift for a large‑cap growth company is material and new; market typically reacts positively to higher revenue outlook.
Market effects
Positive signal for the cloud/data‑analytics sector, supporting peers with AI‑driven growth narratives.
U.S. tech market may see modest lift; limited direct impact outside North America.
Reinforces broader AI investment theme, potentially influencing global AI‑focused funds.
Counterpoint
If guidance already priced in, the stock may face a sell‑off on profit‑taking.
Key entities
- ExecutiveSridhar Ramaswamy
CEO of Snowflake, quoted on AI momentum and growth.
- ExecutiveBrian Robins
CFO of Snowflake, provided financial highlights and guidance.
