Summary
Snowflake closed fiscal 2027 first quarter with total revenue of $1.39 billion, up 33.5% from the prior-year quarter. Product revenue grew 34% year over year, and the company said it marked the strongest sequential dollar growth in its history. Gross profit rose 33.6% to $926.45 million, while gross margin held flat at 66.6%. The operating loss narrowed to $326.15 million from $447.26 million a year earlier, lifting operating margin to negative 23.4% from negative 42.9%. Net loss narrowed to $295.57 million from $430.09 million. Diluted loss per share improved to $0.86 from $1.29. On a non-GAAP basis, operating income was $165.8 million, or 11.9% of revenue, and non-GAAP product gross profit was $1,002.7 million, or 75.1% of product revenue.
Cash generation held steady. Operating cash flow was $243.2 million, up 6.5% year over year. Capital expenditures fell 76.8% to $10.45 million. Non-GAAP free cash flow was $232.8 million, a 16.7% margin, and non-GAAP adjusted free cash flow was $265.5 million, a 19.1% margin. Deferred revenue, current portion, rose 23.5% to $2.85 billion. Remaining performance obligations increased 37.3% to $9.20 billion. Net revenue retention rate was 126%, up from 125% at the end of the prior quarter. The company had 779 customers with trailing 12-month product revenue greater than $1 million, up 29% year over year. It added 616 net new customers, up 38% year over year, including 13 new Forbes Global 2000 customers. Total customers reached 13,912, up from 13,296 as of January 31, 2026. AI adoption metrics were notable: more than 13,600 accounts used Snowflake AI capabilities, accounts using Snowflake Intelligence more than doubled quarter over quarter, and Cortex Code was in use across over 7,100 accounts.
Guidance points to continued growth but slower product revenue expansion. For the second quarter of fiscal 2027, management expects product revenue of $1,415 million to $1,420 million, representing 30% year-over-year growth. It also guided to a non-GAAP operating margin of 12.5% and non-GAAP diluted shares of 375 million for the quarter. For the full fiscal year 2027, the company raised its product revenue outlook to $5,840 million, or 31% year-over-year growth, up from previous guidance of $5,660 million, or 27% growth. Full-year guidance also includes a non-GAAP product gross margin of 75.0%, a non-GAAP operating margin of 13.5% (up from 12.5%), a non-GAAP adjusted free cash flow margin of 23.0%, and non-GAAP diluted shares of 376 million.
The quarter included several strategic moves. Snowflake expanded its AWS collaboration with a new $6 billion multi-year agreement, deepened its OpenAI partnership, and brought its SAP partnership capabilities to general availability. It closed the Observe acquisition on February 2, 2026 for $595.8 million and agreed in May 2026 to acquire Natoma for approximately $110.0 million, expected to close in June 2026. The company repurchased 1.7 million shares for $300.0 million at a weighted-average price of $178.95, leaving $802.7 million available under the program. Risks remain significant. Macroeconomic conditions, customer budget rationalization, consumption optimization, and shortened contract durations could pressure results. The company also faces competition, execution risk on AI products, and security threats. Customer concentration is a factor: Forbes Global 2000 customers contributed approximately 43% of revenue for the three months ended April 30, 2026, and existing customers under capacity arrangements represented about 97% of revenue. RPO is not necessarily indicative of future product revenue growth because it does not account for the timing of customer consumption. The company also committed to a cumulative minimum spend of $6.0 billion over a five-year cloud infrastructure agreement ending March 31, 2031, with minimum annual spend ranging from $900.0 million to $1.25 billion.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2027 | Q4 FY2026 | QoQ | Q1 FY2026 | YoY |
|---|---|---|---|---|---|
| Revenue | $1.39B | $1.28B | +8.3% | $1.04B | +33.5% |
| Gross profit | $926.5M | $857.7M | +8.0% | $693.3M | +33.6% |
| Gross margin | 66.6% | 66.8% | -0.2 pp | 66.5% | +0.1 pp |
| Research & development | $534.9M | $511.0M | +4.7% | $472.4M | +13.2% |
| Sales & marketing | $589.0M | $551.3M | +6.8% | $458.6M | +28.4% |
| General & administrative | $128.7M | $113.5M | +13.4% | $209.6M | -38.6% |
| Total operating expenses | $1.25B | $1.18B | +6.5% | $1.14B | +9.8% |
| Operating income (loss) | -$326.2M | -$318.2M | -2.5% | -$447.3M | +27.1% |
| Operating margin | -23.4% | -24.8% | +1.3 pp | -42.9% | +19.5 pp |
| Net income (loss) | -$295.6M | -$309.6M | +4.5% | -$430.0M | +31.3% |
| Net margin | -21.3% | -24.1% | +2.9 pp | -41.3% | +20.0 pp |
| Diluted EPS | -$0.86 | -$0.92 | +$0.06 | -$1.29 | +$0.43 |
Risks
Customers continue to optimize consumption, rationalize budgets, and prioritize cash flow management, including by reducing storage through shorter data retention policies and shortening committed contract durations. Snowflake states its revenue growth rate has slowed in recent periods; total revenue for FY2027 Q1 was $1.39B, up 33.5% versus the prior-year quarter, but these customer behaviors can pressure future growth.
Frontier AI model providers may vertically integrate into data storage and management and develop competing database solutions, while companies increasingly use AI to build their own software, reducing demand for third-party platforms. Snowflake also competes with AWS, Azure, and GCP, which are also its public cloud providers and have greater resources.
Snowflake is investing significantly in AI Technology but depends on third-party large language model components, access to GPUs, and AI-skilled personnel, all in high demand; competitors may develop and adopt AI faster. Customer adoption of AI features also depends on regulatory clearances and internal compliance reviews.
A substantial majority of the business runs on AWS, and AWS, Azure, and GCP are also primary competitors that could bundle competing products or provide unfavorable pricing. In April 2026, Snowflake amended a cloud infrastructure agreement with cumulative minimum spend of $6.0B over five years ending March 31, 2031, with annual minimums of $900.0M to $1.25B; failure to meet commitments requires paying the difference.
Cybersecurity threat actors accessed a number of customer Snowflake accounts in May 2024 via customer failures under the shared responsibility model, and additional similar attacks have occurred. The company faces lawsuits, regulatory investigations, and lawmaker inquiries, with potential reputational harm, customer loss, and diversion of resources.
Selling to U.S. federal, state, local, and foreign governments and highly regulated organizations requires certifications such as FedRAMP High and DoW Impact Level 4 and 5, involves bid protests, contract termination rights, and compliance with data sovereignty and supply chain restrictions. These requirements increase costs and can delay or block sales.
Sales to large enterprises have longer cycles, stronger customer leverage on pricing, more compliance diligence, and substantial upfront costs with less predictability. Large customers often deploy on a limited basis while demanding discounts and implementation services.
Snowflake is subject to securities class actions, a class action alleging copyright infringement in connection with large language model training, and numerous class actions relating to cybersecurity matters. Defense costs and management distraction could harm results.
Because revenue is recognized on consumption and customers control timing, Snowflake has less visibility than subscription software companies; unexpected consumption fluctuations can cause results to differ from forecasts. RPO was $9.20B as of April 30, 2026, up 37.3% versus the prior-year quarter, but RPO does not account for timing or consumption beyond contracted capacity.
SaaS KPIs
All quarters →Net Revenue Retention Rate
Total Customers
Remaining Performance Obligations
Non-GAAP Operating Margin
Adjusted Free Cash Flow
Product Revenue
Customers with Trailing 12-Month Product Revenue Greater than $1 Million
Forbes Global 2000 Customers
Free Cash Flow
Customers with Trailing 12-Month Product Revenue Greater than $5 Million
Customers with Trailing 12-Month Product Revenue Greater than $10 Million
Summary, forecast, risks and KPIs are extracted from Snowflake Inc.'s SEC filings for Q1 FY2027 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 6, 2026.