Snowflake Product Revenue Growth Reaches 37%
The AI Data Cloud company lifted full-year product revenue guidance to $6.07 billion after a third straight quarter of faster growth.
Snowflake (SNOW) posted product revenue of $1.49 billion in the second quarter of fiscal 2027, up 37% from a year earlier, after 34% growth in the first quarter and 30% in the fourth quarter of fiscal 2026. Chief Financial Officer Brian Robins said the period marked the third consecutive quarter of product revenue growth acceleration, driven by strength in the core data platform and a step-up in AI revenue.
Total revenue was $1.55 billion, up 35% year-over-year, after 33% growth in the prior quarter. The company said it delivered the faster product-revenue pace while expanding operating margin.
GAAP operating loss was $263.0 million, or 17.0% of product revenue. Non-GAAP operating income was $237.0 million, a 15.3% margin on product revenue. Non-GAAP product gross profit was $1.11 billion, or 74.7% of product revenue. Free cash flow was $83.8 million, or 5.4% of revenue; adjusted free cash flow was $92.3 million, or 6.0% of revenue.
Net revenue retention held at 126%. Customers with trailing 12-month product revenue greater than $1 million rose to 828, up 27% year-over-year, from 779 in the first quarter. Forbes Global 2000 customers numbered 829. Remaining performance obligations were $9.00 billion, up 30% year-over-year, after $9.21 billion, up 38%, in the first quarter.
The company added 692 net new customers, up 32% year-over-year, including 14 net new Forbes Global 2000 accounts. That followed 616 net new customers, up 38%, in the first quarter.
CoCo surpassed 9,100 accounts, adding more than 2,000 accounts in the quarter, and CoWork expanded to 5,800 accounts. In the first half of fiscal 2027, the company launched more than 330 product capabilities to general availability, up 35% year-over-year, and introduced Cortex Sense and Cortex AI Gateway, the latter integrating Natoma. Customers named in the release included 1Password, Indeed and Sayari.
For the third quarter of fiscal 2027, Snowflake expects product revenue of $1,588 million to $1,593 million, representing 37% to 38% year-over-year growth, and a non-GAAP operating margin of 15.5%.
For the full year of fiscal 2027, the company now expects product revenue of $6,070 million, or 36% year-over-year growth, up from previous guidance of $5,840 million, or 31% year-over-year growth. Non-GAAP product gross margin is expected at 74.0%. Non-GAAP operating margin guidance was raised to 14.5% from 13.5%. Adjusted free cash flow margin is expected at 23.0%.
Robins said balancing growth with discipline remains a top priority. Chief Executive Sridhar Ramaswamy said CoWork and CoCo are driving outcomes for customers and fueling adoption, user growth, new workloads and platform consumption, and that the company is positioned to capture the opportunity ahead.