Snowflake Reports Accelerating Growth Driven by AI Adoption
On September 2, Snowflake (NYSE:SNOW) reported strong second-quarter fiscal 2027 results showing an unusual acceleration in growth. Product revenue reached $1.49 billion, up 37% year over year, marking the third consecutive quarter of increasing growth rates. Total revenue hit $1.55 billion, a 35% increase from last year. The company's AI initiatives are driving this momentum, with net revenue retention at 126%, indicating strong customer spending increases due to new migrations and use cases. Snowflake added 692 net new customers in the quarter—a 32% annual growth rate—and its high-value customer base grew by 27%. Two key AI products, CoCo and CoWork, are central to this shift. Despite strong revenue performance, CFO Brian Robins noted that fast-growing but lower-margin AI workloads are affecting gross margins. The company raised full-year product revenue guidance to $6.07 billion from $5.84 billion while expanding non-GAAP operating margin expectations.
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