Snowflake Reports Q2 2027 Earnings with Strong Revenue Growth and AI Adoption
Snowflake (SNOW) reported strong financial results for the second quarter of fiscal year 2027, driven by continued growth in product revenue. Product revenue reached $1.49 billion, reflecting a 37% increase compared to the prior year and marking three consecutive quarters of accelerated growth. Total revenue grew 35%, reaching $1.55 billion, with a net revenue retention rate of 126%. The company also raised its full-year product revenue guidance from $5.84 billion to $6.07 billion due to strong performance across customer segments and AI adoption. Snowflake's non-GAAP operating margin expanded to 15.3%, up from 11% in the prior year, attributed to disciplined cost management and increased sales productivity driven by internal AI tools. The company reported a growing base of high-value customers (828 with over $1 million annual product revenue) and added nearly 700 net new accounts during Q2. Adoption rates for key products like CoCo and CoWork also rose significantly, indicating strong engagement across customer teams. Despite these gains, Snowflake warned that the shift toward AI workloads may temporarily reduce contribution margins due to lower profitability in this segment. Additionally, bookings are expected to be weighted more heavily towards Q4, which could impact remaining performance obligations seasonally.
Tickers: $SNOW
Topics: AI adoption customer retention growth revenue