Summary
Snowflake's fiscal 2026 second quarter revenue reached $1.14 billion, up 31.8% from the prior-year quarter. Revenue growth was driven by increased consumption of the platform by existing customers. Product revenue grew 32% year over year, a key metric that reflects consumption of the AI Data Cloud. Net revenue retention rate was 125% as of July 31, 2025, compared with 126% as of January 31, 2025. Gross profit was $773.15 million, up 33.1%, and gross margin improved to 67.5%, up 0.7 percentage points. The quarter still produced an operating loss of $340.28 million and a net loss attributable to Snowflake of $298.02 million. Diluted loss per share was $0.89. Operating margin was negative 29.7%, up 11.2 percentage points from the prior-year quarter.
Operational metrics showed scale and expansion. Remaining performance obligations were $6.90 billion, up 32.7% from the prior-year quarter. Deferred revenue, current portion, was $2.27 billion, up 22.7%. Snowflake had 654 customers with trailing 12-month product revenue greater than $1 million and 751 Forbes Global 2000 customers. Total customers were 12,062 as of July 31, 2025, up from 11,078 as of January 31, 2025. Management said more than 6,100 accounts use Snowflake's AI every week. The company expects about 50% of RPO to be recognized as revenue in the 12 months ending July 31, 2026, and the weighted-average remaining life of capacity contracts was 2.4 years.
Cash generation was positive but mixed against the year-to-date trend. Operating cash flow was $74.90 million in the quarter, up 7.2% from the prior-year quarter. Capital expenditures were $16.66 million, up 230.5%. For the six months, operating cash flow was $303.27 million, down 28.7%, while capital expenditures were $61.65 million, up 185.9%. Non-GAAP free cash flow was $58.2 million, and non-GAAP adjusted free cash flow was $67.8 million. Free cash flow is a non-GAAP measure and differs from operating cash flow. Snowflake held $4.6 billion in cash, cash equivalents, and short-term and long-term investments as of July 31, 2025. The company acquired Crunchy Data for $164.5 million in cash on June 6, 2025, and it did not repurchase shares during the quarter. About $1.5 billion remained available under the stock repurchase program.
Guidance points to continued growth. For the third quarter of fiscal 2026, product revenue guidance is $1.125 billion to $1.130 billion, representing 25% to 26% growth. Non-GAAP operating margin guidance for that quarter is 9%. For the full fiscal year 2026, product revenue guidance is $4.395 billion, representing 27% growth. Full-year non-GAAP guidance includes product gross margin of 75%, operating income margin of 9%, and adjusted free cash flow margin of 25%. Weighted-average diluted shares guidance is 374 million for the third quarter and 372 million for the full year.
Risks remain centered on consumption variability and cost structure. The 10-Q cites adverse macroeconomic conditions, customer budget rationalization, shortened contract durations, and consumption optimization as pressures. Competition, cybersecurity threat activity, and regulatory standards for AI adoption are also named risks. Snowflake continues to invest heavily in research and development and sales and marketing. The company maintained a full valuation allowance against its U.S. and U.K. deferred tax assets. Management expects net revenue retention rate to decrease over the long term as existing customers become a larger part of the base. Those factors could keep GAAP profitability under pressure even as revenue and RPO expand.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2026 | Q1 FY2026 | QoQ | Q2 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $1.14B | $1.04B | +9.9% | $868.8M | +31.8% |
| Gross profit | $773.2M | $693.3M | +11.5% | $580.7M | +33.1% |
| Gross margin | 67.5% | 66.5% | +1.0 pp | 66.8% | +0.7 pp |
| Research & development | $492.0M | $472.4M | +4.1% | $437.7M | +12.4% |
| Sales & marketing | $502.0M | $458.6M | +9.5% | $400.6M | +25.3% |
| General & administrative | $119.5M | $209.6M | -43.0% | $97.8M | +22.2% |
| Total operating expenses | $1.11B | $1.14B | -2.4% | $936.0M | +19.0% |
| Operating income (loss) | -$340.3M | -$447.3M | +23.9% | -$355.3M | +4.2% |
| Operating margin | -29.7% | -42.9% | +13.2 pp | -40.9% | +11.2 pp |
| Net income (loss) | -$297.9M | -$430.0M | +30.7% | -$317.8M | +6.2% |
| Net margin | -26.0% | -41.3% | +15.2 pp | -36.6% | +10.6 pp |
| Diluted EPS | -$0.89 | -$1.29 | +$0.40 | -$0.95 | +$0.06 |
Risks
Snowflake disclosed that in May 2024 a threat actor accessed a number of customer Snowflake accounts because those customers failed to implement MFA and network access policies, and additional similar cyberattacks have since been reported. The company faces numerous lawsuits, regulatory investigations, and lawmaker inquiries, with reputational harm even where no platform vulnerability was found.
Snowflake is investing significantly in AI Technology and competitors may develop, adopt, or implement AI faster due to greater resources or branding. Success depends on access to GPUs and recruiting and retaining AI-skilled personnel, while customer adoption depends on evolving regulatory standards and internal compliance reviews.
AWS, Azure, and GCP are both critical infrastructure providers and primary competitors, and a substantial majority of Snowflake's business runs on AWS. They could embed competing capabilities, bundle competing products, provide unfavorable pricing, or exclude Snowflake, while open data formats reduce switching costs.
The filing says revenue growth rate has slowed in recent periods and customers may 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.
The filing discloses recent executive transitions, including the CEO retirement in February 2024, the EVP Engineering and Support resignation in July 2024, the CFO's planned retirement in February 2025, and the CRO's planned retirement in March 2025. Competition for AI-capable engineers and experienced sales personnel is intense.
MD&A reports net revenue retention rate of 125% as of July 31, 2025, compared with 126% as of January 31, 2025, and says it expects the rate to decrease over the long term as longer-tenured customers become a larger portion of the base.
Sales to large customers involve longer sales cycles, stronger customer leverage on pricing and terms, more extensive compliance and vendor diligence, and substantial upfront costs. Consumption growth from large enterprises has historically taken longer than from smaller enterprises.
Snowflake sells to federal, state, local, and foreign governments and heavily regulated organizations, which brings FedRAMP High and DOD Impact Level 5 requirements, bid protests, termination for convenience, False Claims Act exposure, and audit risks. It is also expanding in financial services and healthcare, where customers and regulators may audit its systems.
Snowflake is named in a securities class action in federal court and numerous class actions related to cybersecurity matters. Defense could be costly, divert management attention, and insurance may not cover all claims.
Snowflake issued $2.3 billion of 0% convertible senior notes due 2027 and 2029, and conversion into shares could dilute stockholders or depress the stock price. It also faces counterparty risk if the capped call option counterparties default.
SaaS KPIs
All quarters →Net Revenue Retention Rate
Total Customers
Remaining Performance Obligations
Non-GAAP Operating Margin
Adjusted Free Cash Flow Margin
Free Cash Flow 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
Non-GAAP Product Gross Margin
Customers with Trailing 12-Month Product Revenue Greater than $5 Million
Customers with Trailing 12-Month Product Revenue Greater than $10 Million
Non-GAAP Operating Income
Non-GAAP Gross Margin
Summary, forecast, risks and KPIs are extracted from Snowflake Inc.'s SEC filings for Q2 FY2026 (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.