Snowflake reports 32% product revenue growth in Q2 FY2026, strengthens AI platform leadership

Overview

Snowflake Inc., the AI-driven data cloud company, delivered a strong second quarter of fiscal 2026, with 32% year-over-year growth in product revenue to $1.09bn. The company also achieved a net revenue retention rate of 125%, expanded its high-value customer base, and increased remaining performance obligations, highlighting robust demand, platform stickiness, and near-term revenue visibility. Following the results, Snowflake raised its full-year product revenue guidance to $4.40 billion, reflecting accelerating enterprise investment in data and AI infrastructure.

“Snowflake delivered yet another strong quarter, with product revenue of $1.09 billion, up a strong 32% year-over-year, and remaining performance obligations totaling $6.9 billion. Thousands of customers are betting their business on Snowflake and more than 6,100 accounts are using Snowflake’s AI every week. Customers love that our platform is easy to use, connected to enable fluid access to data wherever it sits, and trusted by companies of all sizes and industries. We have an enormous opportunity ahead as we continue to empower every enterprise to achieve its full potential through data and AI”, said Sridhar Ramaswamy, CEO of Snowflake.

Q2 FY2026 vs. Q2 FY2025:

• Product revenue rose to $1.09bn (+32% YoY), outperforming expectations and reflecting strong demand for Snowflake’s AI Data Cloud platform.
• Net revenue retention stood at an impressive 125%, demonstrating Snowflake’s ability to grow revenue from its existing customer base through upsells and platform expansion.
• Snowflake now counts 654 customers with trailing 12‑month product revenue exceeding $1m, up from 606 last quarter. Exposure to 751 Forbes Global 2000 customers also increased year-over-year.
• Remaining performance obligations grew to $6.9bn (+33% YoY), signaling strong revenue visibility into future periods.
• Non‑GAAP operating income rose to $127.6m (11% margin), up sharply from $43.7m last year, illustrating improved profitability.
• GAAP operating loss narrowed to $340.3m, improving from prior-year levels, with non‑GAAP results underscoring operating leverage on scale.
• Free cash flow totaled $58.2m and adjusted free cash flow came in at $67.8m, indicating solid cash conversion despite reinvestments.

For Q3 FY2026, Snowflake expects product revenue in the range of $1.125bn-$1.130bn (+25-26% YoY) and non-GAAP operating margins of approximately 11%. For the full year, guided product revenue is $4.395bn, representing 27% growth, along with a product gross profit margin near 75% and roughly 9% operating income margin. Management emphasized continued strong customer adoption of the AI Data Cloud and a healthy financial runway as momentum continues into FY2027.

Snowflake shares exploded higher after the latest earnings release, jumping +20.2% in a single trading session, their strongest move in months. This surge pushed the stock not only well above the 50-day SMA ($211.25), a level not seen in about a month, but also to fresh multi-week highs, solidifying a clear bullish reversal. While the RSI has now climbed above 70 (71.71), indicating overbought conditions that could lead to short-term pullbacks, the momentum shift is undeniable. On a year-to-date basis, Snowflake has delivered an impressive +51.5% gain, underlining the strength of its uptrend and renewed investor optimism going into the next quarter.

Author: Ionuț-Adrian Lazar