Q2 results top Wall Street estimates
Snowflake reported fiscal 2027 second-quarter revenue of $1.55 billion, up 35.1% year on year, beating the $1.48 billion consensus. Adjusted earnings per share came in at $0.62, compared with the $0.45 analysts had expected. Product revenue, the company's main sales line, rose 37% year on year to $1.49 billion.
Non-GAAP operating income reached $237 million, well ahead of the $187 million estimate. Non-GAAP product gross margin was 75%. Free cash flow totaled $83.8 million, below the $104 million analysts had forecast. Net revenue retention stood at 126%, in line with the prior quarter.
Stock jumps after-hours on beat-and-raise
Shares of Snowflake jumped roughly 22–23% in after-hours trading on Wednesday after the company posted the quarterly beat and raised its full-year outlook. The move built on a 90% gain over the prior six months and tracked a recent pattern in which the stock has averaged a 12.8% post-earnings swing over the last seven reports, including a 36% jump the prior quarter.
Fiscal 2027 guidance raised
Snowflake lifted its fiscal 2027 product revenue guidance to $6.07 billion at the midpoint, up from a prior forecast of $5.84 billion. The company also raised its non-GAAP operating margin guidance to 14.5% from 13.5%, guided to a non-GAAP product gross margin of 74%, and projected an adjusted free cash flow margin of 23%.
For the third quarter, Snowflake guided to product revenue of $1.588 billion to $1.593 billion, with a non-GAAP operating margin of 15.5% and diluted shares of 382 million. Remaining performance obligations were $9.0 billion, up 30% year on year, and 828 customers were generating more than $1 million in trailing 12-month product revenue, a 27% increase year on year.
CEO ties results to AI and new products
Chief Executive Sridhar Ramaswamy attributed the quarter's momentum to AI adoption across the platform. "AI continues to compound our advantages, creating a flywheel effect across the business," Ramaswamy said, adding that products including CoWork and CoCo are driving adoption and platform consumption. He said the company's "rapid pace of innovation, tight go-to-market execution, and operational discipline position us well to capture the opportunity ahead."
Analysts had been watching whether Snowflake could show that products such as Cortex AI and the recently launched Cortex AI Gateway were translating into consumption growth, with one analyst raising a price target from $285 to $345 ahead of the report.
Other developments
Separately, an earnings call presentation was published by Snowflake on September 2, 2026, and additional reporting recapped key metrics from the quarter ended July 2026, including the 4.91% revenue surprise and 37.78% earnings surprise versus consensus.
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