Snowflake Reports Strong Revenue Growth Amid AI Expansion and Margin Pressures
Snowflake (NYSE:SNOW) reported strong financial results for its second quarter of fiscal year 2027, with revenue reaching $1.55 billion—up 35% year over year—and product revenue growing by 37%. Non-GAAP earnings per share came in at $0.62, surpassing estimates by nearly 40%, marking the third consecutive quarter of accelerated growth. Despite these gains, management revised its FY27 non-GAAP product gross margin guidance downward to 74% from 75%, citing pressure from lower-margin AI products like CoCo and Cortex AI. CEO Sridhar Ramaswamy emphasized that AI is driving a flywheel effect through increased adoption and platform usage across key offerings, with customer accounts for these tools growing significantly. The company raised its FY27 operating margin guidance to 14.5% from 13.5%, but investors remain cautious about the long-term impact of shifting product mix on profitability.
Tickers: $SNOW
Topics: AI enterprise software margins revenue growth