Snowflake Q2 FY2027 Earnings: Revenue, Guidance, Stock

Snowflake delivered a blowout quarter and raised its full-year outlook, and investors rewarded it. On September 2, 2026, the data cloud company reported financial results for the second quarter of fiscal 2027, ended July 31, 2026, with product revenue of $1.49 billion, up 37% year over year — a beat that accelerated growth and lifted guidance. Shares of Snowflake (SNOW) jumped more than 20% in the session that followed, one of the standout moves in a broad tech rally on September 3.

The result marked Snowflake’s second consecutive quarter of record sequential dollar growth in product revenue and represented a seven-percentage-point acceleration from the 30% year-over-year rate the company posted exiting fiscal 2026 — a reversal of the deceleration narrative that had shadowed the stock through much of last year.

The headline numbers

Product revenue, the metric Wall Street watches most closely for a consumption-based business, came in at $1.49 billion, up 37% from a year earlier. Management paired the beat with a raise: full-year product revenue guidance climbed to $6.07 billion, or about 36% growth, up from the prior forecast of $5.84 billion (31% growth).

Profitability guidance moved higher too. Snowflake lifted its full-year non-GAAP operating margin outlook to 14.5%, up from 13.5%, and pointed to a full-year non-GAAP product gross margin of about 74%. For the current period, the company guided third-quarter product revenue to between $1.588 billion and $1.593 billion, implying 37% to 38% year-over-year growth — a signal that management sees the acceleration holding rather than fading.

The forward-looking indicators backed up the top line. Remaining performance obligations (RPO) — contracted revenue not yet recognized, a proxy for future demand — reached $9.00 billion, up 30% year over year. And the count of large customers kept climbing: 828 customers now spend more than $1 million in trailing-twelve-month product revenue, the cohort that drives most of Snowflake’s growth.

What’s driving the reacceleration

Snowflake’s core business is a cloud platform where customers pay for the compute and storage they consume to run analytics and, increasingly, AI workloads on their data. That consumption model means growth tracks how much work customers actually push through the platform — and management pointed to AI-related workloads as a growing share of that demand, from data engineering pipelines that feed models to the analytics and retrieval work that sits around them.

The setup matters because Snowflake sells the layer where enterprise data lives, and the surge in AI spending has made that layer more strategic, not less. As companies build agents and applications on top of their own data, the warehouse-versus-lake distinction that once defined the category has blurred into a broader contest to be the default home for governed enterprise data — and the platform that data teams reach for first tends to capture the AI workloads that follow.

That reacceleration also lands against a specific competitive backdrop. Databricks, Snowflake’s closest rival, has pushed aggressively into agentic tooling — including its Omnigent harness for AI agents — and the two are increasingly fighting over the same AI-era budgets. Snowflake’s raised guidance is, in part, an argument that it is holding its share of that spend rather than ceding it.

The market reaction

The 20%-plus pop reflected more than a single-quarter beat. Consumption businesses are valued heavily on the durability of growth, and a raise to full-year guidance — especially one that widens rather than narrows the growth rate — resets expectations for the trajectory, not just the trailing number. The combination of accelerating product revenue, an RPO base up 30%, and improving margins is the mix that consumption-software investors most want to see: demand and discipline moving in the same direction.

The move also came on a strong day for the broader market. The Nasdaq Composite climbed about 1.4% on September 3, its best session in a month, as bond yields eased and megacap technology names rallied. Snowflake’s surge was the sharpest individual move among the large-cap software and AI-infrastructure names, and it fed the day’s dominant theme: that the AI buildout is showing up in real revenue for the companies selling the underlying data and compute infrastructure, not just in the headline capital-expenditure budgets of the hyperscalers.

What it means

Snowflake’s quarter is a data point in a debate that has hung over the software sector all year: whether the AI boom would lift the application and data-platform layer, or mostly flow to chipmakers and cloud landlords.

For Snowflake, this is evidence the consumption engine is re-accelerating, not just stabilizing. The most important figure is not the 37% product-revenue growth — it is the raise to full-year guidance combined with a Q3 outlook that implies the rate holds. A consumption business can beat on a quarter through timing; guiding the full year higher is a statement about demand the company expects to keep landing. The RPO base and the growing $1M-plus customer count give that statement a foundation.

For the competitive picture, it complicates the “Databricks is winning the AI layer” narrative. Both companies can grow fast at once if AI genuinely expands the total budget for governed enterprise data — and this quarter suggests that is happening. The tell to watch over the next several quarters is whether Snowflake’s AI-related consumption keeps compounding or plateaus once the initial wave of pipeline and experimentation work is built; durable AI demand looks different from a one-time migration.

For investors, the risk shifts from growth to expectations. After a 20%-plus move, Snowflake carries a valuation that assumes the reacceleration continues. That raises the bar: the next report will be judged against the new guidance, and any hint that consumption is softening — or that AI workloads are not converting into recurring spend — would land harder than it would have before this beat. The story now is less “can Snowflake grow” and more “can it keep beating a bar it just raised.”

The things to watch next are the durability of AI-driven consumption, whether the margin expansion holds as the company invests to defend its position, and how the Snowflake-versus-Databricks contest resolves as both race to be the platform enterprises build their AI on. For one quarter, at least, Snowflake answered the growth question emphatically.