Snowflake Inc.

Q2 product revenue was $1.49 billion, up 37% year over year. Non-GAAP operating margin was 15%, up more than 400 basis points year over year. Remaining performance obligations were $9 billion, up 30% year over year, with about 54% expected to convert to revenue in the next 12 months. Guidance: FY2027 product revenue is now expected to be $6.07 billion, representing 36% year over year growth; Q3 product revenue is guided to $1.588 billion to $1.593 billion, or 37% to 38% growth. FY2027 non-GAAP product gross margin is expected to be 74%, FY2027 non-GAAP operating margin is now guided to 14.5%, Q3 operating margin to 15.5%, and full-year adjusted free cash flow margin is reiterated at 23%.

Sridhar Ramaswamy framed Snowflake as central to the “agentic enterprise” and said AI is bringing new workloads, more users, and higher platform consumption. He emphasized broad-based demand rather than concentration in AI-native customers, and highlighted that Cortex Code and CoWork are expanding Snowflake’s role from data platform to governed control plane. His tone was confident and upbeat, with repeated comments that the company is still early in a long runway of AI-driven growth.

Brian Robins said Q2 growth accelerated on both the core data platform and AI business, and that the quarter benefited from a “meaningful step up in AI revenue.” He cited 126% net revenue retention, 828 customers spending above $1 million, 48 net new $1 million customers, and $4.3 billion in cash, cash equivalents, short-term and long-term investments. He also explained that FY2027 gross margin guidance of 74% reflects a higher mix of lower-contribution AI workloads, while operating margin guidance was raised to 14.5% due to revenue strength and slower headcount growth.

Analysts focused on the quality and durability of the acceleration, the mix between core and AI, model neutrality, regional performance, and whether AI is pulling forward demand or expanding lifetime consumption. Management said the acceleration is broad-based, that AI products and the core are both contributing, and that gross retention has been relatively flat while customers using Cortex Code and CoWork also consume more of the core platform. On model strategy, management said neutrality is a competitive advantage because it lets customers switch among frontier, open, and Snowflake models, while Snowflake will keep using its own models for narrower tasks where it can offer higher accuracy and efficiency.