Revenue climbed 35% while product revenue grew 37%, prompting Snowflake to raise its full-year growth and operating margin forecasts.
Snowflake (SNOW) delivered stronger-than-expected fiscal second-quarter 2027 results, powered by accelerating product growth and increasing demand for artificial intelligence workloads across its cloud data platform.
Revenue reached $1.55 billion, topping Wall Street’s $1.48 billion estimate and increasing 35% year over year. Adjusted earnings per share came in at $0.62, well ahead of the $0.45 consensus estimate.
Product revenue, Snowflake’s closely watched growth metric, increased 37% to $1.49 billion. Non-GAAP operating income reached $237 million, also comfortably exceeding analysts’ $187 million forecast.
The strong performance prompted management to raise its fiscal 2027 outlook. Snowflake now expects $6.07 billion in product revenue, up from its previous forecast of $5.84 billion, representing 36% year-over-year growth. The company also increased its expected non-GAAP operating margin to 14.5% from 13.5%.
Customer metrics remained healthy. Snowflake reported a 126% net revenue retention rate, while remaining performance obligations increased 30% year over year to $9 billion. The number of customers generating more than $1 million in trailing 12-month product revenue increased 27% to 828.
One weaker area was free cash flow, which came in at $83.8 million versus the $104 million analysts expected. However, Snowflake maintained its full-year adjusted free cash flow margin outlook of 23%.
For the third quarter, Snowflake expects product revenue between $1.588 billion and $1.593 billion and a non-GAAP operating margin of 15.5%.
Management highlighted AI as an increasingly important contributor to growth, saying the quarter marked Snowflake’s third consecutive period of accelerating product revenue growth.
The company attributed the momentum to strength across its core data platform alongside a “meaningful step-up in AI revenue.”
With product growth accelerating and profitability expectations rising, Snowflake’s results suggest enterprise AI adoption is increasingly translating into meaningful revenue for the cloud data company.
