Snowflake Earnings Rise on AI Adoption, Guidance
Snowflake earnings tie AI-driven product revenue acceleration to a $6.07B guidance lift that tightens growth outlook and bolsters margin narratives.
KEY TAKEAWAYS
- Revenue $1.55 billion and product revenue $1.49 billion showed accelerating growth tied to AI adoption.
- Company raised full-year product revenue guidance to $6.07 billion, reframing near-term growth expectations.
- Non-GAAP operating margin 15.3% and free cash flow $83.8 million signaled improving unit economics.
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Snowflake Inc. (SNOW) said in an earnings release on Sept. 2, 2026, that its fiscal second-quarter 2027 results reflected accelerating product revenue and AI adoption. The company raised full-year product-revenue guidance and reported stronger margins and cash flow.
Revenue Growth and Margin Expansion
For the quarter ended July 31, 2026, Snowflake reported revenue of $1.55 billion, a 35% increase year over year. Product revenue reached $1.49 billion, up 37%, outpacing overall growth.
Non-GAAP operating income was $237.0 million, producing a non-GAAP operating margin of 15.3%. Non-GAAP diluted earnings per share were $0.62, while GAAP net loss totaled $191.7 million.
Cash flow improved, with net cash from operating activities at $91.4 million and free cash flow of $83.8 million, representing a free-cash-flow margin of 5.4%.
Guidance Lift and AI Adoption
Snowflake raised its full-year fiscal 2027 product-revenue guidance to $6.07 billion, implying about 36% growth. The company also increased its full-year non-GAAP operating margin outlook to 14.5% from 13.5% and maintained an adjusted free-cash-flow margin forecast of 23%.
Remaining performance obligations rose 30% year over year to $9.0 billion, while net revenue retention stood at 126%, signaling durable enterprise demand and upsell within existing customers.
Management highlighted adoption of its AI coding agent Coco, which had 9,100 accounts, an increase of more than 2,000 during the quarter.
The company’s filings and earnings materials indicate that AI-related demand contributed significantly to the quarter’s outperformance, aligning with management’s view that AI workloads are reshaping enterprise demand for Snowflake’s platform.
