Snowflake posts 37% product revenue growth, raises FY27 guidance for 2027

Snowflake (NYSE: SNOW ) released second-quarter financial results and hosted an earnings call on Wednesday. Read the complete transcript below. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

View the webcast at Watch the full earnings call below: Summary Snowflake Inc reported a 37% year-over-year growth in product revenue, reaching $1.49 billion, with a notable acceleration in growth over the past two quarters. The company's non-GAAP operating margin expanded by over 400 basis points year-over-year to 15%, reflecting strong financial performance and operational discipline. Snowflake is leveraging AI to drive new workloads onto its platform, with products like Coco and Cowork seeing rapid adoption and contributing significantly to revenue growth.

The company added 692 net new customers, including 14 from the Global 2000, and now supports 14,554 customers worldwide. Snowflake has raised its FY27 product revenue guidance to $6.07 billion, representing 36% year-over-year growth, and expects continued margin expansion. AI is driving increased platform consumption, with a structural multiplier effect seen as customers integrate AI into their operations. Cortex AI Gateway and other AI innovations are enhancing Snowflake's capability to provide cost-effective, scalable AI solutions to its customers.

Management emphasized the importance of model neutrality and flexibility in AI offerings, noting benefits in cost optimization and competitive advantage. The company is focused on innovation, launching over 330 product capabilities in the first half of the year, demonstrating a commitment to platform expansion. Snowflake aims to achieve GAAP profitability by Q4 fiscal 28, with strong operational leverage supporting long-term growth ambitions. Full Transcript OPERATOR Good afternoon and thank you for joining us on Snowflake's second quarter fiscal 2027 earnings call.

Joining me on the call today are Sridhar Ramaswamy, our Chief Executive Officer; Brian Robins, our Chief Financial Officer; and Christian Kleinerman, our Executive Vice President of Product, who will participate in the Q&A session. During today's call, we will review our financial results for the second quarter fiscal 2027 and discuss our guidance for the third quarter and full year fiscal 2027. During today's call we will make forward-looking statements, including statements related to our business operations and financial performance. These statements are subject to risks and uncertainties which could cause them to differ materially from our actual results.

Information concerning these risks and uncertainties is available in our earnings press release, our most recent Forms 10-K and 10-Q, and our other SEC reports. All our statements are made as of today based on information currently available to us. Except as required by law, we assume no obligation to update any such statements. During today's call we will also discuss certain non-GAAP financial measures.

See our investor presentation for the definition of the non-GAAP financial measures and a reconciliation of GAAP to non-GAAP measures and business metric definitions, including customer count and adoption. The earnings press release and investor presentation are available on our website at investors.snowflake.com. A replay of today's call will also be posted on the website. With that, I would now like to turn the call over to Sridhar.

Sridhar Ramaswamy — CEO Thank you, Kathryn, and thank you all for joining us today. We are in the midst of a once-in-a-lifetime technology shift, and Snowflake remains at the center of the enterprise AI revolution. AI is fundamentally changing how enterprises build, operate, and make decisions to stay competitive. Every organization faces a new imperative: become an agentic enterprise and do it quickly, safely, and cost efficiently.

Snowflake is making this transformation a reality. We bring together the core elements of an agentic enterprise: a governed data foundation, access to leading AI models, deep application workflows, and the unifying agent control plane that orchestrates across these elements to turn intent into governed action. By putting intelligence to work at scale, our customers are building faster, executing more efficiently, and reimagining their businesses in ways that weren't possible before. Put simply, the agentic enterprise runs on Snowflake, and the traction is translating into strong business performance as evidenced by our Q2 results.

Product revenue came in at $1.49 billion with growth accelerating to 37% year over year, marking our second consecutive quarter of record sequential dollar growth after exiting Q4 of last fiscal year at 30% year over year growth. We have now added seven points of acceleration in just two quarters, and with our continued focus on executing with discipline and operational rigor, our Q2 non-GAAP operating margin expanded by more than 400 basis points year over year to 15%. Thank you to all of our Snowflakes for the hard work and dedication that made this performance possible.

As these results convincingly demonstrate, AI is compounding Snowflake's advantage across three reinforcing dynamics. First, AI is bringing new workloads onto the platform to power their AI initiatives. Enterprises need a governed, unified foundation for data and context, and companies across industries are turning to Snowflake to power that foundation. Second, our first-party AI products, Coco and Cowork, continue to see rapid adoption.

As customers build and deploy agents on Snowflake, we are expanding our role into the agentic control plane and creating new opportunities for growth. Third, AI activation continues to lift overall platform consumption. Customers using AI on Snowflake consume more across the data platform, creating a structural multiplier for our business. Together these dynamics show how the agentic enterprise has created a powerful flywheel across our business, and that flywheel is accelerating.

At the heart of this momentum is the continued strength of our core business. Snowflake now provides the Data and AI foundation for 14,554 customers around the world. Customers continue to turn to Snowflake because our AI Data Cloud is easy to use, seamlessly connected for collaboration, and trusted with enterprise-grade governance and security. This quarter we added 692 net new customers, including 14 from the Global 2000, representing a 32% increase in net new customer additions year over year.

At the same time, some of the world's most recognizable enterprises are deepening their relationships with Snowflake. Companies like BlackRock and Block are running more of their mission-critical work on Snowflake and, in several cases, adopting Coco to move faster. The pattern is consistent: the more our customers build on Snowflake, the more they lean in. In fact, 65 customers have now crossed $10 million in trailing twelve-month product revenue, demonstrating how our largest customers continue to go all in on Snowflake.

Part of our strength is in extending our customers' reach to the critical data that sits outside of their organization. Currently, 43% of our customers share data on Snowflake, with at least one stable edge, demonstrating Snowflake's role as the circulatory system of the modern enterprise. We enable data applications and AI agents to move securely and seamlessly not just within but across organizations. In fact, credit chose Snowflake for our data sharing capabilities, which now facilitate privacy-safe ads measurement.

And as customers move quickly to modernize their data estates and establish a strong context layer for AI, more and more customers are migrating workloads to our platform, a process now massively accelerated with AI. For example, one of the largest Australian banks migrated its financial crime platform to Snowflake, processing 17 billion transactions and delivering 10x faster query performance. Now they're building AI agents on Snowflake to accelerate the migration of the rest of their data estate and automate legacy data discovery and mapping.

As AI strengthens demand for our core platform, it is also expanding Snowflake's opportunity to deliver a new generation of AI-powered products and experiences. Because Snowflake sits at the center of our customers' data, business context, AI models, and workflows, we're uniquely positioned to become the governed control plane for the agentic enterprise. Our breakout AI products, Cowork and Coco, bring that vision to life. They provide a governed layer where users across the business—from knowledge workers to builders—can put the full power of their enterprise context to work, all with simple conversational language.

With Cowork and Coco, customers are reimagining some of their most critical business processes, from supply chain operations to enterprise-wide sales motions. Sayari, whose risk intelligence supports Fortune 100 enterprises and national security agencies, chose Snowflake to rebuild its global data infrastructure and cut costs by more than half. Its engineers are now using Coco to accelerate the migration of 12 billion records into an AI-ready foundation. And as more customers see what's possible with this technology, adoption continues to build.

Cowork expanded to 5,800 accounts, up nearly 11% quarter over quarter. Meanwhile, Coco continues to see rapid adoption, surpassing 9,100 accounts and adding more than 2,000 net new accounts in this quarter alone. We have customers like 1Password, the security company trusted by more than 200,000 businesses, who chose Snowflake for our Coco capabilities. Coco enabled their team to move key data pipelines into Snowflake quickly, laying the foundation for their data and AI work.

On the world's number one job site, Indeed has rolled Cowork and Coco across its data teams and integrated Snowflake into its core data architecture, citing lower cost and greater efficiency, which compounds at the scale that they operate in over 60 countries and 28 languages. But the opportunity goes beyond adoption. By making it possible to build, collaborate, and interact with enterprise data through conversational language, Cowork and Coco are bringing entirely new users to Snowflake. Within accounts adopting these products, we see a step change in user growth as Snowflake reaches new lines of business and expands its footprint within existing teams.

As we continue to develop Cowork and Coco as agency control planes, we are also building out the broader platform enterprises need to put AI to work at scale. Model choice gives customers the flexibility to select from leading frontier and open models and evolve their approach as the market changes. Post-training lets them adapt models to their specific data and business context. And agent observability and analytics give customers full visibility into what their AI is doing, how it's performing, and what it costs.

And to help our customers optimize cost, performance, and speed, we've introduced Cortex AI Gateway, which dynamically routes each task to the right model based on customer-defined policies and real-world performance data, with cost and governance controls built in. As those economics improve, customers can deploy AI more broadly and with greater confidence, creating another catalyst for adoption and consumption. On Snowflake, Cortex AI Gateway also extends AI from insight to action. Through its integration of natoma, users can now send emails, summarize Slack conversations, open JIRA tickets, and act across their business, all without leaving Cowork or Coco.

We've also continued to advance how our agents understand the unique context of a business. At Snowflake Summit we introduced Cortex Sense, which captures the business definitions and institutional knowledge an AI agent needs and provides that context at the moment it answers the question. This means Snowflake is giving AI both the context to understand a business and the ability to act on its behalf, with enterprise security, governance, and observability built in. As we drive this AI transformation for our customers, we are leading from the front, using Coco and Cowork throughout our own business to accelerate productivity and efficiency.

For example, in our marketing organization, Coco has helped bring search optimization in-house, eliminating $400,000 in annual agency spend, reducing keyword research from approximately 10 hours to 20 minutes, and content production from an estimated 24 hours down to just 2. In finance, our long-range planning used to require a three-person team and more than 50 spreadsheets. It now runs with one analyst and a series of models that reflect our pricing structure and consumption dynamics.

Within our sales teams, we have automated prospecting for over 125,000 contacts and leads, with 70% of initial outreach emails for inbound leads now being generated automatically before SDR involvement. We are bringing these proven use cases directly to market while applying our operational learnings to continuously upgrade our platform, moving with speed to capture the AI opportunity in front of us. In the first half of this year alone, we have launched over 330 product capabilities to general availability, 35% more than we did in the first half of last year, underscoring both the pace of our innovation and the breadth of platform expansion underway across Snowflake.

Our go-to-market organization also continues to execute, as reflected in strong new customer growth. We have deployed Coco and Cowork across the sales team to analyze pipelines, prepare for customer conversations, and accelerate the onboarding of new reps. Our teams are using these products every day, learning firsthand what they can do, and taking those insights directly to our customers. We're seeing the results in how quickly customers are putting Snowflake to work.

The number of use cases—individual customer projects—deployed on Snowflake increased 89% year over year as customers moved more workloads into production. At the same time, use cases won per account executive increased 43% year over year, demonstrating both growing customer demand and strong sales productivity. And we are pairing this investment in growth with continued operational discipline. We remain on track for GAAP profitability in Q4 fiscal 28, and the operating leverage we build along the way strengthens the durability of that outcome.

Taken together, our rapid pace of innovation, better go-to-market execution, and operational discipline positions us well to capture the huge opportunity ahead. This fiscal quarter demonstrated that the transition to the agentic enterprise is accelerating, and Snowflake is at the center of it. AI agents are only as powerful as the data and business context they reason from and the governance surrounding them. Snowflake provides that trusted foundation while bringing together model choice and flexibility, access to critical applications, and the agentic control plane that connects intelligence to action across the enterprise.

Cowork and Coco demonstrate what a governed architecture makes possible, enabling business users and builders to work with greater speed and intelligence while Snowflake manages the complexity underneath. And, importantly, our customers' success with AI translates directly into growth for Snowflake. AI brings new workloads to the platform, extends our reach to new users, and drives greater consumption across the business. We are entering the second half of fiscal 27 with strong product momentum, and we see a long runway for durable high growth and continued margin expansion.

The agentic enterprise runs on Snowflake, and we're just getting started. With that, I'll pass it to Brian to go through the financial details. Brian Robins — Chief Financial Officer Thank you, Sridhar. In Q2, product revenue once again accelerated to reach 37% year-over-year growth.

This marks our third straight quarter of acceleration. Q2 benefited from continued strength in our core data platform business and a meaningful step up in AI revenue. Our AI revenue reflects a broadening portfolio of AI capabilities. Coco delivered another standout quarter.

Consumption of Cowork is scaling and driving revenue contribution alongside a diverse set of AI tools, from AI functions and document processing to machine learning and notebooks. Our go-to-market teams continue to execute well against a strong demand environment. As Sridhar mentioned, net new customer additions increased 32% year over year. We added 14 net new Global 2000 customers, bringing our total to 829.

Our AI Data Cloud now supports over 41% of the Global 2000 within our existing base. Customer expansion is healthy as evidenced by our net revenue retention rate of 126%. This expansion is underpinned by growth in both migrations and AI use cases. In Q2, 48 net new customers surpassed 1 million in trailing 12-month spend.

We now have 828 customers spending above the 1 million threshold. Remaining performance obligations grew 30% year over year, totaling 9 billion. As a reminder, we continue to see customers favor Q4 renewals. As a result, we expect bookings to be increasingly weighted towards the fourth quarter.

Of the 9 billion RPO, we expect approximately 54% to be recognized as revenue in the next 12 months. This represents approximately 42% year-over-year growth compared to our estimate in the same quarter last year. Our Q2 results reinforce our commitment to delivering both growth and margin expansion. In Q2, non-GAAP operating margin expanded over 400 basis points year over year to reach 15%.

Our outperformance was driven by strong revenue growth and disciplined headcount management. Year to date we've added 334 employees, which includes 173 from our Observe acquisition. This compares to 935 added in the year-ago period.