European Investor
03 Sep 2026, 15:19
Snowflake Shares Surge 21% After Blowout Q2 Results, Raised Guidance
Shares of Snowflake (NYSE: SNOW) jumped 21% Wednesday after the AI Data Cloud company posted second-quarter fiscal 2027 results that beat expectations and raised its full-year outlook, sending a strong signal about enterprise demand for its AI-driven data platform.
The company, which reported results after markets closed Wednesday, posted total revenue of $1.55 billion for the quarter ended July 31, up 35% year-over-year. Product revenue — Snowflake's core growth metric — came in at $1.49 billion, up 37% year-over-year and marking the company's third consecutive quarter of accelerating product revenue growth.
Strong Retention and Customer Growth
Snowflake's net revenue retention rate stood at 126%, indicating existing customers are meaningfully expanding their spending on the platform. The company added 692 net new customers during the quarter, up 32% year-over-year, including 14 new Forbes Global 2000 customers, bringing its total Forbes Global 2000 customer base to 829. The number of customers generating more than $1 million in trailing 12-month product revenue climbed to 828, up 27% year-over-year.
Remaining performance obligations — a measure of contracted future revenue — reached $9.00 billion, up 30% year-over-year, pointing to a healthy sales pipeline heading into the back half of the fiscal year.
AI Products Driving the Acceleration
CEO Sridhar Ramaswamy credited the company's AI initiatives for fueling the growth, pointing to strong adoption of Snowflake's CoWork and CoCo products. CoCo surpassed 9,100 accounts during the quarter, adding more than 2,000 new accounts alone, while CoWork grew to 5,800 accounts. The company also launched Cortex Sense and Cortex AI Gateway, new tools aimed at extending AI capabilities from insight generation into direct action.
Notable customer wins during the quarter included 1Password and Indeed, while data intelligence firm Sayari said it cut costs by more than half using CoCo to migrate 12 billion records onto the platform.
Raised Guidance Fuels the Rally
CFO Brian Robins said the company is raising its full-year product revenue growth guidance to 36% year-over-year, up from prior guidance of 31%. For the full fiscal year, Snowflake now expects product revenue of $6.07 billion, up from a previous forecast of $5.84 billion. The company also lifted its non-GAAP operating margin guidance to 14.5% from 13.5%.
For the third quarter, Snowflake guided for product revenue between $1.588 billion and $1.593 billion, representing 37% to 38% year-over-year growth, alongside a non-GAAP operating margin target of 15.5%.
Robins emphasized that the company delivered accelerating growth while simultaneously expanding operating margin, calling the balance between growth and profitability "a top priority" going forward.
The results appear to have resolved lingering investor questions about whether Snowflake's AI-related products could translate into durable revenue growth, with today's rally suggesting the market is rewarding both the acceleration in product revenue and the improved profitability outlook.
Shares of Snowflake (NYSE: SNOW) jumped 21% Wednesday after the AI Data Cloud company posted second-quarter fiscal 2027 results that beat expectations and raised its full-year outlook, sending a strong signal about enterprise demand for its AI-driven data platform.
The company, which reported results after markets closed Wednesday, posted total revenue of $1.55 billion for the quarter ended July 31, up 35% year-over-year. Product revenue — Snowflake's core growth metric — came in at $1.49 billion, up 37% year-over-year and marking the company's third consecutive quarter of accelerating product revenue growth.
Strong Retention and Customer Growth
Snowflake's net revenue retention rate stood at 126%, indicating existing customers are meaningfully expanding their spending on the platform. The company added 692 net new customers during the quarter, up 32% year-over-year, including 14 new Forbes Global 2000 customers, bringing its total Forbes Global 2000 customer base to 829. The number of customers generating more than $1 million in trailing 12-month product revenue climbed to 828, up 27% year-over-year.
Remaining performance obligations — a measure of contracted future revenue — reached $9.00 billion, up 30% year-over-year, pointing to a healthy sales pipeline heading into the back half of the fiscal year.
AI Products Driving the Acceleration
CEO Sridhar Ramaswamy credited the company's AI initiatives for fueling the growth, pointing to strong adoption of Snowflake's CoWork and CoCo products. CoCo surpassed 9,100 accounts during the quarter, adding more than 2,000 new accounts alone, while CoWork grew to 5,800 accounts. The company also launched Cortex Sense and Cortex AI Gateway, new tools aimed at extending AI capabilities from insight generation into direct action.
Notable customer wins during the quarter included 1Password and Indeed, while data intelligence firm Sayari said it cut costs by more than half using CoCo to migrate 12 billion records onto the platform.
Raised Guidance Fuels the Rally
CFO Brian Robins said the company is raising its full-year product revenue growth guidance to 36% year-over-year, up from prior guidance of 31%. For the full fiscal year, Snowflake now expects product revenue of $6.07 billion, up from a previous forecast of $5.84 billion. The company also lifted its non-GAAP operating margin guidance to 14.5% from 13.5%.
For the third quarter, Snowflake guided for product revenue between $1.588 billion and $1.593 billion, representing 37% to 38% year-over-year growth, alongside a non-GAAP operating margin target of 15.5%.
Robins emphasized that the company delivered accelerating growth while simultaneously expanding operating margin, calling the balance between growth and profitability "a top priority" going forward.
The results appear to have resolved lingering investor questions about whether Snowflake's AI-related products could translate into durable revenue growth, with today's rally suggesting the market is rewarding both the acceleration in product revenue and the improved profitability outlook.
