Snowflake (SNOW) Q2 2027 earnings summary

Executive summary

• Achieved Q2 FY27 product revenue of $1.49 billion, up 37% year-over-year, with total revenue of $1.55 billion, and 14,554 total customers, including 692 net new and 14 Forbes Global 2000 clients.

• AI-driven products (CoCo, CoWork) are fueling rapid adoption, with CoCo surpassing 9,100 accounts and CoWork reaching 5,800 accounts.

• Net revenue retention rate reached 126%, with 828 customers generating over $1 million in trailing 12-month product revenue, up 27% year-over-year.

• Remaining performance obligations grew 30% year-over-year to $9.0 billion, with 54% expected to be recognized as revenue in the next 12 months.

• Completed acquisitions of Observe, Inc. and Natoma Labs, Inc., strengthening AI and observability capabilities.

Financial highlights

• Q2 FY27 product revenue grew 37% year-over-year to $1.49 billion.

• Non-GAAP product gross margin was 74.7% in Q2 FY27; GAAP product gross margin was 70.9%.

• Non-GAAP operating margin expanded to 15.3% in Q2 FY27; GAAP operating loss was $263 million.

• Adjusted free cash flow margin was 6% for Q2 FY27.

• Ended the quarter with $4.3 billion in cash, equivalents, and investments.

Outlook and guidance

• FY27 product revenue guidance raised to $6.07 billion (36% year-over-year growth), with Q3 product revenue expected between $1.588 billion and $1.593 billion (37–38% growth).

• FY27 non-GAAP product gross margin expected at 74%, non-GAAP operating margin at 14.5%, and adjusted free cash flow margin at 23%.

• Management expects continued revenue growth but notes potential for fluctuations due to macroeconomic uncertainty and customer optimization efforts.